EGGS (Hansard, 2 May 1963)

§ The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. James Scott-Hopkins)
I beg to move, That the Eggs (Guaranteed Prices) Order, 1963, a copy of which was laid before this House on 25th March, be approved. This Order, which is made under Section 1 of the Agriculture Act, 1957, revokes and replaces the Eggs (Guaranteed Prices) Order, 1957, as amended in 1960, in so far as that Order related to hen eggs.
It gives effect to changes in the guarantee arrangements for hen eggs which were decided upon at this year's Annual Review and were announced in the White Paper following that review. I do not wish to weary the House with all the details of the past arrangements of the guarantee, which is paid to the British Egg Marketing Board. But the drawbacks of the old arrangements made it apparent over the years, and our experience of these arrangements has been sufficient to convince us that, despite the complexity and, perhaps, in part because of them, the system was not working too well and that changes were required.
For example, the use of the conventionally estimated market price could lead to fairly considerable changes in returns to producers, irrespective of the level of the guarantee; and, conversely changes in the guaranteed price were not necessarily reflected in changes in producer's returns.
Moreover, we have been faced by a situation in which, despite a series of cuts in the guranteed prices, production has been rising more quickly than demand, causing the appearance or threat of very low market prices and heavy calls upon the Exchequer. For a number of years we have been virtually self-sufficient in egg production and repeated references have been made in White Papers after Annual Reviews to the threat of this over-supply position. In fact, for most of last year, 1962–63, the market was undoubtedly over-supplied from home production and, although the Board removed large quantities of eggs from the shell egg market for breaking out and manufacture, prices were extremely low.

§ Colonel Sir Harwood Harrison (Eye)
Is my hon. Friend saying that there was over-supply on home production?

§ Mr. Scott-Hopkins
Yes, at that time there was the danger—indeed, the position—of over-supply. As I said, the Board removed a considerable quantity of eggs from the shell egg market. If it had not been for a recent check, largely due to heavy slaughtering in consequence of fowl pest, there might have been even more formidable surpluses.
Because of the situation that has existed over the past few years it was natural for us to consider the possibility of some kind of standard quantity system analogous to the one we have for liquid milk—another commodity in which we are self sufficient. I need hardly say that this is wholly within the concept of the Agriculture Acts. Indeed, I noted that the noble Lord who was responsible for the 1947 Act said about the new arrangement on 27th March in another place that there seemed little or no sense in adding to the volume unless there was a market, here or elsewhere, at an economic price for the excess. He went on to observe that the National Farmers' Unions had agreed to the proposal. This is, of course, true. The unions have accepted both the principle of the scheme and its various details, although we have agreed with them that there should be a review of its operation during the course of its third year.
It would not be practicable to operate a standard quantity system for eggs similar to that for milk because the guarantee for eggs relates only to eggs which go through packing stations, and the proportion of these to total production varies from one year to another to an extent that would be significant.
We have, therefore, adopted a parallel approach which provides for what is called an "indicator price." This is a price that the Board might be expected to receive for its eggs from a market that was not over or under-supplied. In determining this indicator price at a level of 3s. 2d. a dozen, we have had regard to experience over the past six years, since the Board was first established. The price during those six years has fluctuated between 3s. 6d. at the top and 2s. 10d. at the bottom, and the Union has 1453 agreed that this determination is fair and proper. This indicator price will be open to review in future years, but we do not expect that there will be any need to change it frequently.
The guaranteed price will, of course, continue to be fixed in the usual way at the Annual Review, and the basic rate of subsidy payable to the Board on all eligible eggs will be the difference between the guaranteed price and the indicator price, or the difference between the guaranteed price and the actual market price if this is above the indicator price.
The essential concept, therefore, is quite simple. It is that the Board will continue to receive the full guarantee price for all eggs if the market price is net depressed by over-supply, but, if it is depressed at all, this will to some extent be reflected in the sum paid to the Board and, therefore, in returns to producers.
We felt it right in taking this essentially simple idea to write into the Order three refinements. The first is that we recognise that it would be desirable to phase in this new system over a period of years during which the Government would continue to pay a proportion, although a proportion diminishing over the years, of any deficiency between the indicator price of 3s. 2d. and the actual price on the market that is realised by the Board. Article 7 (2) of the Order provides that we should start this year by paying 60 per cent, of this deficit, should it arise, and that in subsequent years the proportion should be reduced to 50 per cent., 40 per cent., and so on, until, in the end, no part of the deficit is borne by the Exchequer.
The second refinement to the indicator price system—the basic idea—comes in when the actual price realised by the Board is above the indicator price of 3s. 2d. If, in these circumstances, the subsidy were confined to the difference between the guaranteed price and the actual market price, the Board would derive no advantage from any further improvement in the market situation even though the Board was helping to bring that improvement about—perhaps at considerable expense to itself. In recognition of this, Article 7 (1) provides that, when the Board's realised price is above the indicator price, it should pay to the Government only two-thirds of the ex- 1454 cess, and should retain one-third as an incentive to get the best return on the market.
The third refinement is of a rather different kind. It refers to the level of imports, and is dealt with in the proviso that hon. Members will find in Article 4. As I have said, we are virtually self-sufficient in eggs, and although there have been some imports in recent years they have represented only about 2 per cent, or 3 per cent.—about 2½ per cent.—of total supplies, and since these imports have, in fact, been arriving, they have been reflected in our calculation of the indicator price. On the other hand, we recognise that in introducing this variant on a standard quantity system, we ought in some way to allow for the possibility that the volume of imports could increase, adding to total supplies on our own market and depressing prices. Therefore, in order to do this, we have provided that Ministers may reduce the indicator price and thereby increase the rate of subsidy to the Board in certain circumstances.
The Ministers would need to be satisfied on two counts before they raise the subsidy paid to the Board. First, they would have to be satisfied that during any part of the year imports have risen above the normal level; and, secondly, that such an increase in subsidy was justified having regard to the Board's average selling price during the part of the year in question and over the whole year.
This legal provision is in the general terms which I have indicated, but I should go on to say that the precise way in which the provision would operate has been worked out and agreed with the farmers' unions. It will be set out in full in the annual financial agreement which will be between the Ministers and the Board, copies of which will be placed in the Library of the House in lue course. An indication of the way in which this will work out is also to be found in outline in Part II of Appendix 6 of the White Paper. I do not think, therefore, that I need go into further details.
Assuming that in any one month imports are above a normal level, and assuming also that in that month the market price is below the seasonal equivalent of the annual indicator price, advance payment will be made to the 1455 Board in respect of the excess imports. This advance payment will be confirmed at the end of the year if the Board has not finally achieved the indicator price for that year. The payment will be the equivalent of 36s. per box coming into the country, which is an estimate of the loss which the Board might sustain if it were obliged to break out eggs rather than sell them in shell.
Some people may say that we have replaced a very complex Order by one of equal complexity. I do not think that this is true. The arrangement is essentially simple. There is the indicator price, the guaranteed price and the three refinements which I have explained to the House. I think that this system represents a fair and proper arrangement appropriate to the present circumstances where hen eggs are concerned. I hope that the House will accept this and I recommend the Order to the House.

§ Mr. Frederick Peart (Workington)
We on this side of the House will certainly not oppose the Order. I detect from mutterings from the benches opposite that there are certain hon. Members in the Conservative Party who dislike it. I trust that in that case they will have the courage to vote against it. I always find in agriculture that Tory rebels are prepared to wound their Ministers but not to kill them.
Consequently, I still believe that those rebels who dislike the Order will not have the courage to go into the Lobby against it. I hope, therefore, that they will not waste the time of the House with long speeches which may have some bearing on their own position in their agricultural constituencies but which will not be effective. If they believe in their criticism they should have the courage to oppose the Order, though I am delighted that some of them oppose the Ministers who have put forward the scheme.
This is a new procedure and the indicator price system is complicated. I think that every hon. Member would agree that at this late hour the Joint Parliamentary Secretary has done very well in trying to explain how it will work. The Order is made under Sections 1, 35(3) and 36(3) of the Agriculture Act, 1957, and the introduction of the indica- 1456 tor price system, which was foreshadowed in the White Paper, represents a new and complicated egg-marketing procedure. We sometimes used to taunt those who believed in the Common Market about target prices, intervention prices, sluice-gate prices, and so on, but here the indicator price must be just as complicated as any of those.
In certain circumstances, when there is a danger of over-supply, there will be, virtually, a regulator. This is the purpose of Article 4 of the Order which provides that, for each guarantee year, the Ministers will determine in respect of hen eggs a guaranteed price per dozen and an indicator price being an estimate by the Ministers of the average price to be received by the Board on the sale of hen eggs on the basis that production thereof is sufficient but not excessive. and that imports are normal. I accept from the Minister the statement that imports have been in the region of 2 or 3 per cent, and have not been a problem. Nevertheless, we face here the possibility of over-supply.
It affects many small producers. Are we to encourage the small producers by exhortation to increase their efficiency and produce more? This is the fundamental issue. If they do produce more, will they then be penalised by a deliberate act of Government policy? By the mechanism which we are asked to approve tonight, we shall say to the small farmers of this country that, if they produce more, they will suffer as a consequence.
This is the crazy situation in which we are now. We are asking our small producers to produce more eggs. Eggs are important not only for home consumption but, in a sensible arrangement, could be of value to the outside world also. Here we are to have a policy of restriction. That is what it comes to in the long run. The Minister and hon. Members opposite must appreciate that this is the underlying principle we are now endorsing. We can argue about the effect of the indicator price but, in the end, the Government are worried that there will be too many eggs produced by our farmers the majority of them small fanners. How are we to prevent the effect of this over-supply on the market?
I take the view that, somehow, we must fit our British farming structure into 1457 an international arrangement. It is not being idealistic to remind the House that many parts of the world are hungry today. We need an international arrangement, and, above all, we need international commodity agreements and a world food board. In this country, we must make our contribution along with that of the Western world to the production of food which, though there may be a surplus, can be disposed of to those parts of the world which want it.
What better opportunity have we than in egg production? Will the Government give the lead? I do not elaborate the matter because I do not wish to delay the House, and I know that the rebels who will wish to speak against the Government are rather "phoney" rebels because they will not vote against the Minister but accept what he says kindly and will even invite him down to their constituencies to support them on agricultural policy. I accept the Order, but for the long term it is not good enough. It is restrictionism. We must think, in bigger terms, of our small farmers producing commodities and, even though there may be a surplus, being able to dispose of it through international arrangements. I want the Government to take the initiative in the F.A.O. to create the sort of body which, I believe, could be created if only we had the will and leadership so to do.
I ask the Parliamentary Secretary and his Minister to accept that this Order is a stop-gap measure and no more. There is in the Order a reference to 30th March, 1969, but, of course, the Government will not be there then. There will have to be a new approach, and it is necessary that the Minister, in his negotiations now with the producers and the National Farmers' Union, adopt a wider approach rather than the policy of restriction which is typified by the Order. I ask that those hon. Members opposite who may be critical will really have the vision to see that we need not only a new Government but a new agricultural policy and a new and wider approach.

§ Mr. Marcus Kimball (Gainsborough)
The hon. Member for Workington (Mr. Peart), I would respectfully suggest, has completely misjudged the feelings of many people on these benches this evening. We are certainly not going to do 1458 his dirty work for him because he has not got an alternative policy to offer.

§ Mr. Peart
It is not dirty work to point out that we must have egg production related to some wider agreement. I would think that a constructive approach. If the hon. Member chooses to use that epithet "dirty", I can only assume it is because of the colleagues he mixes with.

§ Mr. Kimball
The hon. Member should have let me finish my argument. Surely this Order comes at a very important time. We have just had a report from N.E.D.C. indicating the scope for increased agricultural production and important comments in some of the more serious Sunday newspapers. We are here to welcome particular aspects of this Order and, in particular, the third refinement which my hon. Friend has just mentioned. I think that this is a very important moment for those who represent agricultural constituencies, because at long last we have got the Government to accept the fact that if they decide they are going to allow import of eggs into a market which is already over-supplied, then there is a reflection in the guarantees which they pay the farmers.
The hon. Gentleman the Member for Workington has completely misjudged people. He just does not appreciate how very important this is to some constituencies. Here is an Order marking a future shape of our agricultural guarantees, and I hope that it will be reflected in my right hon. Friend's thinking of fat-stock and cereals, because I believe that this indicator price principle we are here to welcome tonight marks one of the most important moments in our agricultural history.

§ Mr. Harold Davies (Leek)
We have just listened with interest to all that praise of the Minister. There are one or two things in what the Minister said and in the Order I would ask about. Things need to be defined. We have now reached the pitch where the average fanner must also be a high-powered mathematician to work out these formulae coming before us.
Let us come to the nub of this, paragraph 4, "Guaranteed Prices and Payments". We have this statement that 1459 an indicator price, being an estimate by the Ministers of the average price to be received by the Board on the sale of hen eggs on the basis that production thereof is sufficient but not excessive having regard to the national demand therefor and to normal imports into the United Kingdom during the year of hen eggs produced outside". How are normal imports to be judged? Are we to have our arm twisted by people from Denmark or the European Economic Community? Has Dr. S. L. Mansholt twisted the arm of the Minister when they dined the other Friday? These are things the public want to know. What are normal imports? Has the Minister to bow down to the Treasury before he makes his decisions? On what formula is the word "normal" here based? There is no answer here.

§ Mr. Scott-Hopkins
The "normal" in this context means 950,000 boxes a year.

§ Mr. Davies
That is a little more information that we have extracted. Let us now move a little further. This seems to be the law of the Medes and Persians. How was it arrived at?
Will the industry, with this formula, be able to bold the home market in eggs with benefit both to itself and to the housewife? Also the egg industry is a really serious business. Taking this Order together with the 1963 Price Review, am I absolutely correct in assuming, without being dogmatic, that the Government share in losses below the indicator price by 1969–70 will be nil? That is what was said, and I believe it to be correct. What happens to the industry, which is assumed at the moment to be in an affluent position, after that period? How far-seeing is the Government's policy in this regard? There is no indication of farsightedness.
The Minister said that a proportion of the eggs go through the Board. Am I right in assuming that 40–50 per cent, of eggs are sold illegally at the moment? For the little man in some areas—I am grateful for it on behalf of some of the small farmers and egg producers in my area—there is a bonanza going on with the supermarkets and large stores. But it should be remembered by the farming and poultry industry that though there may be a bonanza now and those concerned 1460 may be selling their commodities to one large combine or store, the squeeze may suddenly be put on them and, if they are out of the Board's organisation, they may be in the hands of an unscrupulous group which is concerned first and foremost with the amount of profit that it can get out of the purchasing of these commodities.
An example comes from the pre-war pottery industry. There was a terrific depression, and many small potters were delighted to sell the old 6d. brown earthernware teapot to the big stores, and their output was diverted to them. Suddenly the price was forced lower and lower for large quantities. So the danger may be that when we come to 1969–70, unless the Government have a far-sighted policy, we shall once again have the pathetic free market for all of the thirties.
Applying common sense to this, I do not think that there is any need, in spite of the differences that we have had across the Floor of the House, to divide against the Order. We want it to be introduced. I am sure that all hon. Members present want a square deal for this struggling industry.
I want to extend a point made by my hon. Friend. We must be certain about the issue of over-production. The other day the Minister spoke about a world food plan. Whatever Government are in power, we must link our agricultural policy to the underprivileged parts of the world and have a world food plan.
Do not let us, therefore, axe the small producer of what is one of the most nourishing and important products in the world and one which can be easily transported. I have not the "know-how" about how this can be done, but others have and we know that it can be done. I hope, therefore, that when we introduce a policy like this we shall not also discourage people who have enterprise from coming into the poultry and egg-producing industry, because the world will want the help of all the Western world's surplus foods and we can find a formula for distributing them.

§ Colonel Sir Harwood Harrison (Eye)
On Thursday afternoons, when my right hon. Friend the Leader of the House has answered questions about future de- 1461 bates, I have often listened to hon. Members, from all sides, pressing him for a debate on the Agricultural Price Review. Tonight, we have the opportunity of debate unlimited by time—it is exempted business; there is no need to hurry it—and yet we sec a rather thin House, with no members of the Liberal Party present. [An HON. MEMBER: "That is usual."] An hon. Friend of mine says that that is usual, but we know that the Liberals have no interest whatever in the farming community.
It is, I think, generally recognised that there is quite a lot of dissatisfaction in the farming community that in the last three years their incomes as a whole have not kept pace with the incomes of those employed on the factory floor and of those in the professions, like doctors.

§ Mr. Peart
That is because of the Government's agricultural policy.

§ Sir H. Harrison
If the hon. Member for Workington (Mr. Peart) will let me develop my theme, I will come to that.
When considering eggs, we should think of the many people who are engaged in the industry. It covers nearly the whole of agriculture and a great many more people beyond. Even today, many farmers' wives still keep poultry, but not in the old-fashioned way with a few hens scratching around and being given some surplus grain. Many farmers' wives have deep litter houses and are efficient.
There is a second section of the industry consisting of poultry-keepers who are full-time on the job. Many of them have built up their businesses from small beginnings and are extremely efficient people. There is a third category amongst men who have retired from another occupation on a small pension and who, in late middle age, have taken to supplementing their income by having a laying stock of 200, 300 or even 500 birds. They form an important part of the industry. Fourthly, there are a number of people who do full-time jobs but in their spare time run a small flock of 50 or 100 laying birds as part-timers.
Very often, cheap jokes are made in the papers about the easy way of losing money by taking on a chicken farm because a playboy or playgirl has started at it. The vast majority of people in 1462 in the industry, however, are decent people who earn, if not their full living, at least part of their living from keeping poultry. We owe a great debt of thanks to the industry for the way in which it has expanded. I remember that when I came back from being a prisoner of the Japanese it was difficult to get one egg a week, and we have to thank this industry for what it has done.
We are not only considering egg producers. We must also think of those in the ancillary trades—if the egg producers are making a profit these trades do well—and these include carpentering, steel, glass, plastics and rubber appliances. Before the war I was for many years in the feedingstuffs trade in East Anglia and called on many poultry keepers. It was difficult for them then, as they often had to sell their eggs at 20 for one shilling. What they want now is not an exorbitant or high return for their endeavours but a fair return.
Time and again they see increased costs of distribution being put on to the price of eggs and a good case made out for the increase. But it is a lot more difficult for them to gain an increase. I believe many of the distribution costs could be cut. I was a little disappointed in my hon. Friend's speech, but he has plenty of time to reply. Although he dealt with the intricacies of the Order he did not give me an assurance that the producers in the industry will have a higher income in the forthcoming year than in the past two years. That is what matters to them more thany anything else.
Quite recently, this House, led by the Minister, following a Report of the Estimates Committee, decided that the whole cost of combating fowl pest could not continue to fall on the Exchequer. This has thrown £6 million a year on to the poultry industry. I agree that some of it falls on the broiler industry but a great deal is on the egg producers. Many of them feel that they are guinea pigs being tried out in experiment. Many big farmers have followed the Minister's request, and have carried out vaccination and believe the dead vaccine to be very good. But some of them have suffered loss of production, when they have had the disease.
In calculating this new price, has any allowance been made for the cost to the 1463 industry which it will suffer by loss of production if flocks suffer from fowl pest? We have also had a recent case of disease in liquid eggs coming on to the market. This is rather distressing because of the disease spreading from them. Is there any control over liquid eggs?

§ Mr. Speaker
Order. We have heard of bonanzas and pottery and other things, but disease is very difficult in relation to eggs. If it affects the indicator price, by all means, but disease does not affect it in the ordinary way.

§ Sir H. Harrison
I will try to keep in order, Mr. Speaker. The effect of disease, even in liquid eggs, can affect prices of shell eggs, and that is what is worrying many producers in East Anglia.
I am very perturbed that this Order still continues to allow the import of foreign eggs.

§ Mr. Peart
Then vote against it.

§ Sir H. Harrison
I hope that the hon. Gentleman will allow me to continue. He may find that I shall do so. We are told that the position is a little better, but why tinker about with the problem of imports? According to my hon. Friend the Joint Parliamentary Secretary, we produce enough ourselves. Why, then, allow foreign eggs to be imported? The total is about two per cent, but our industry can produce that amount more perfectly well. This country is in a strong enough position to prohibit the import of foreign shell eggs. I believe that this would benefit not only the egg producer but the taxpayer who has to find the money by way of support prices, and what the consumer wants is stable and steady prices.
If there is over-production of eggs, they can be held in cold storage. If we have a total ban on the import of eggs and there is a shortage, the President of the Board of Trade can allow eggs to come in for a short period, just as, following the hard winter, he allowed foreign vegetables to come in.
I remind my hon. Friend, and I should like him to remind my right hon. Friend, that the Conservative Party fought the 1950 election on the basis that the British farmer came first.

§ Mr. Peart
The Conservative Party lost that election.

§ Sir H. Harrison
The British farmer does come first, and I think that it is time——

§ Mr. Peart
The hon. and gallant Gentleman says that the British farmer comes first, but earlier he talked about the small producers and said that they had been in difficulties for some years. How does he square his two statements?

§ Sir H. Harrison
I do not think that the hon. Gentleman got me right, because they have been expanding all the time. I said that there was dissatisfaction with their income at the moment; not over the last eleven years. I have supported the Conservative Party's agricultural policy in the Lobby and elsewhere, and I think that the 1957 Act was a particularly good one. But a different situation exists today, and I believe that we should place the British farmer first and prohibit the import of foreign eggs. There was an excellent article on this subject by Mr. Rees Mogg in the Sunday Times.
At the last Price Review the Minister hinted at changes in prices, and I believe that the farming industry wants the import of all foreign food to be controlled. This is what I, too, want to see, and I ask my hon. Friend whether there is anything in this Order which prohibits the import of foreign eggs if the Minister wanted to introduce such a prohibition.
It is often said that we have to permit these imports because of the effect that a ban would have on our export trade. Most of these eggs come from Poland. We are under no obligation to that country, and I think that our export trade is strong enough to enable us to ban the import of shell eggs. If we had entered the Common Market, which at one stage it was the Government's intention to do, we could not have allowed the import of Polish eggs.

§ Mr. Peart
The hon. and gallant Gentleman said that if we had entered the Common Market we could not have accepted eggs from Poland. If we had gone in, we might have had to accept eggs from the countries of the Six. Would he have agreed with that?

§ Sir H. Harrison
I am saying that if we had gone into the Common Market we would have kept Polish eggs out, and I see no reason why we should not keep them out now.

§ Mr. Timothy Kitson (Richmond, Yorks)
My hon. and gallant Friend is talking about keeping Polish eggs out. If we produce only 15,000 tons of liquid frozen eggs, against a requirement of 30,000 tons, how would my hon. and gallant Friend make up the difference?

§ Sir H. Harrison
We are discussing shell eggs and not liquid eggs. It is generally accepted that most of the shell eggs that we import come from Poland and that they depress the market here at certain times of the year. I am prepared to vote against this Order on the narrow ground that it is time we prohibited the import of shell eggs. If this goes to a Division, I shall vote against it on that narrow point.

§ Mr. Peart
I am sure that the hon. and gallant Gentleman will not do that.

§ Sir H. Harrison
I shall.
I ask my hon. Friend, are poultry keepers to be better off in the coming year than they have been in the past? Has allowance been made for fowl pest? Will my right hon. Friend be in a position in future to prohibit import of foreign eggs?

§ Mr. J. M. L. Prior (Lowestoft)
I congratulate my hon. and gallant Friend the Member for Eye (Sir H. Harrison) on his speech. In past years when dealing with egg Orders he has not been so keen to continue the debate late at night. It is pleasant that he has now joined us in asking that justice should be done for British agriculture.
I wish to take issue with the hon. Member for Workington (Mr. Peart). At the moment the subsidy for eggs is £24 million a year. The hon. Member seemed to suggest that there should be no restriction of output and that we should use the additional output to supply under-developed countries on a world plan. Does he think that we should produce eggs in this country and pay our producers a price which involves a subsidy of £24 million a year and that that would enable us to send extra eggs to under-developed countries at a cost of 1466 that kind? That, in effect, is what he was saying. Does he consider that this is good value for money? Does he think it a right way to help the underdeveloped countries? Is this a good use of £24 million and a good use of our resources? If so, we have to accept that the right thing to do would be to produce 100 per cent, more eggs here.

§ Mr. Peart
The hon. Member has asked a direct question which is reasonable and fair. He has asked it before. I take the view that from a long-term point of view the answer would be yes. I believe that the affluent countries of the West with their surpluses must help the under-developed countries. I am glad that the National Fanners' Union and the producer organisations take this view. In their farm and food policy they have pledged themselves to support a world food board. I was trying to spell out what should be Government policy. Egg producers on a small scale have no future unless we link our own agricultural system to a larger concept, not just in the Europe of the Six, but a larger community and a world food board. I hope that, instead of criticising this view, the hon. Member will be as constructive as he usually is and support it.

§ Mr. Prior
I am trying to be constructive, because I believe that this is an important point, but we have to recognise that it will not be just £24 million if we produce at the present rate, but it could be £50 million or £60 million. Is it right for this country to produce eggs at perhaps 110 per cent, or 120 per cent, above our own needs and send the surplus to under-developed countries when it would cost £50 million or £60 million to do so?
That would be a bad use of our national resources and a bad use of resources available to under-developed countries. If we are to help those countries we must do so in the right way. The wrong way would be by sending them dried eggs at a cost to this country of perhaps £40 million or £50 million. It would be wrong to send eggs which perhaps they could themselves produce. I accept that an affluent society has a responsibility towards them, but our duty is to help them to produce more of the protein foods themselves. If, as is suggested, we allow every small producer in this 1467 country to produce eggs ad lib and pay what we can call an encouraging price, then I think we should be guilty of folly in the extreme and that the Conservative Party would not support such a policy.

§ Mr. Harold Davies
The hon. Member says that he wants to be constructive, as indeed he always is; but he says things tonight which make me think he is putting up Aunt Sallies to be knocked down. He draws a picture of unlimited egg production in Britain to such an extent that everywhere we go we shall be treading on eggs. The hon. Gentleman must remember the important factor of day-old chicks and— —

§ Mr. Speaker
There are some limitations to the possibilities of an intervention in somebody else's speech.

§ Mr. Davies
I am sorry, Mr. Speaker, but there is the old question of which came first—the chicken or the egg.

§ Mr. Speaker
That can be very briefly stated.

§ Mr. Davies
I will simply say that it is no use the hon. Member speaking as he has been speaking without thinking of the by-product of eggs.

§ Mr. Prior
To reply to the hon. Member's intervention, if prices are to be on such a level as will encourage producers to produce at a high rate— which is, in fact, what would happen if we had not reduced the price over recent years—we shall be in danger. After all, it is very noticeable that in all the products where we have reduced prices in the last few years eggs have taken the biggest knock. By better processes, and more research and more investment, we have been able to produce eggs at a much cheaper price over recent years. Do let us get that point quite straight in our minds. I put it to the Minister that the present scheme is an improvement on what we have had before, but does it make sense that in this country we should put on a subsidy of between £20 million and £40 million a year for what is, really, the privilege of keeping out of this country only 3 per cent, of our total production of eggs? That is, in fact, what we are doing for reasons of trade.
We want to trade with Poland and with China, and, in the case of China, 1468 one of my hon. Friends is righting a battle to try to keep out her eggs because of the paratyphoid disease factor. If we are to pay this subsidy, it ought to be for the industry of the country as a whole, because this subsidy is no more than a subsidy to enable trade to exist between this country and Poland and China.
The main point of this subsidy is to allow our exports to be sold to Poland and China, and it is not for the benefit of British agriculture which could quite easily produce a hundred per cent. of its own requirements and need no subsidy at all for the purpose for which it is given. Eggs will still sell quite well up to a price of 6s. a dozen without any falling off of price, and there is no need for any artificial stimulation to keep egg prices down.
In this Order, which as I have said is an improvement on what we have had before, we are giving a subvention, not to British agriculture, but a subvention to British trade with other countries.

§ Mr. John Mackie (Enfield, East)
I intended asking only a few questions, but the hon. and gallant Member for Eye (Sir H. Harrison) and the hon. Member for Lowestoft (Mr. Prior) have raised so many points that I am tempted, within the rules of order, to enter the debate in a much fuller way. The hon. Member for Lowestoft has put his finger on an important point—for we cannot divorce the liquid egg market from the whole egg market. It affects it to a considerable extent. I was interested to hear that the Conservative Party were talking about controlling imports; that shows that their education is improving as the years go by.
We see the same picture with the Milk Marketing Board and the manner in which the surplus milk, which goes to manufacture, is used, for that is equivalent to the liquid egg market. In dealing with eggs, however, we have the added difficulty of considerable uncontrolled imports—and imports which are not steady. There is not a steady flow of imports of Polish eggs, for example; they may be large in number one year and small the next year. This creates a problem, and the only solution is to arrange a steady flow of imports, and that can be done only by controlling imports.
1469 As a member of the Committee which recommended the fowl pest control which the Minister introduced, I want to reply to the hon. and gallant Member for Eye. The £6 million was compensation paid for chickens which were slaughtered, and I am sure that the First Secretary hopes, as I hope, that this will not be a loss to the industry and that the only cost to the industry will be part of the cost of the vaccine, which is heavily subsidised.

§ Sir H. Harrison
There will be a loss to the industry because where there has been fowl pest, egg production will have fallen during that period.

§ Mr. Mackie
There is fairly strong evidence that, as we all hope, the killed vaccine will be successful. We hope that the £6 million will fall neither on the taxpayer nor on the industry.
The House will be glad to know that I now turn to the questions which I want to ask. How does the Minister arrive at a normal figure of 950,000 cases, which I think is 37,500,000 dozen eggs? That is seven or eight eggs per person per year. One remembers what the hon. and gallant Member for Eye said about people after the war getting only one egg a month. How do the Ministry arrive at this curious "normal" figure?
Is this a start to controlling imports—for they cannot handle the situation without controlling imports? Why have a guaranteed price and an indicator price? What is the difference between the two? If there is a guaranteed price, could it not also be the indicator price? It seems to me that the prices could be the same.
I want a clarification of paragraph 7. The Minister said that he worked out the differences on a monthly basis, but there is nothing to that effect in the Order, which reads, If for any year the average selling price of hen eggs is higher than the indicator price thereof, the Board shall pay to the Minister two-thirds of the difference in respect of each dozen hen eggs packed in that year: Provided that the total amount payable by the Board to the Minister under this paragraph shall not exceed the total amount which may be paid by the Minister to the Board … in respect of the same year. I do not understand where these two do not tie up, but, if I am given that clarification then, like my hon. Friends on the Front Bench, I may support the Order.

§ Mr. R. J. Maxwell-Hyslop (Tiverton)
I was most intrigued when the hon. Member for Workington (Mr. Peart) gave political advice which I took it was directed at my hon. Friend the gamekeeper turned poacher. I could not help casting my mind back to the Committee stage of the Agriculture (Miscellaneous Provisions) Act, when the hon. Member charged to my support when I put forward what I thought to be a worthy Amendment. The hon. Member was followed faithfully by his hon. Friends until the moment came when it appeared that there would be a Division, whereupon his followers fled through the door, leaving two behind who abstained. This did not seem quite to conform with the advice which the hon. Member gave us earlier today.
I should prefer to see the figures in Article 7(2) of the Schedule to the Order read successively from 1964 as 60 per cent., 70 per cent., and 80 per cent., and so on, in that ascending order. Then there would be brought home to the Treasury, and through it to the Board of Trade, the need to control the imports of eggs, whereas the way in which the figures are published gives the impression that there is a decrease rather than an increase with the passage of time. This may be due to a printers' error, but I would ask that when next year the percentage is shown as falling to 50 per cent, my hon. Friend the Joint Parliamentary Secretary should introduce a new Order to alter the figures in the way I have suggested. It would be extremely helpful.
I was horrified by the idea expressed in the debate that the £24 million eggs subsidy represents a subsidy of £24 million worth of imports from Poland. This is a shocking allegation. This is the right moment to remind all of us that the only point of trading with a country is that it sends us the goods we want, or else pays in convertible currency. As Polands sends £19 million worth of exports to us out of the £24 million worth of exports in products covered by the Agricultural Price Review, this is obviously a thoroughly unprofitable form of trade which we should do everything in our power to discourage and minimise rather than encourage.
This goes for practically all the Iron Curtain countries and is the best reason for diminishing rather than increasing 1471 East-West trade. I hope that hon. Members opposite will trouble themselves to look at the proportion of East-West trade in agricultural products covered by the Price Review and thus swallow their political nostrums and do everything in their power to discourage this damaging form of trade.

§ Mr. Harold Davies
This is pathetic. We have just had a £26 million order from the Soviet Union. Orders which have nothing to do with agriculture provide work in places like my constituency, which at the moment are suffering from unemployment under Tory rule.

§ Mr. Davies
East-West trade.

§ Mr. Maxwell-Hyslop
I did not say that it was diminishing or increasing. I was referring to the proportion of their exports to us which are covered by the Agricultural Review. If the hon. Member goes to the Library and does his homework, he will find these interesting facts for himself. This is worth putting on record because many of those who, purely for political reasons, advocate East-West trade do not bother to find out the facts about the effect on our own agricultural industry.

§ Mr. Mackie
If the same calculation were made it would be found that exactly the same applies to Canada.

§ Mr. Maxwell-Hyslop
I do not know, but I would doubt it very much. I would doubt it very much, because we take considerable quantities of basic raw materials from Canada—for instance, oil; for instance, asbestos; for instance, nickel, just to mention a few, and aluminium, which are not to the best of my knowledge—I am open to correction-covered by the Annual Price Review. All this can be very easily checked by those who care to go to the Library and do their own homework.

§ Mr. Scott-Hopkins
By leave of the House, I would reply to the main points made in this debate. The hon. Gentleman the Member for Workington (Mr. Peart) made a rather strange charge at the beginning of his speech when he said that 1472 we had been encouraging the small producer to produce more eggs. This is indeed not the case. We have not been encouraging the egg producers as a whole to produce more.
The hon. Gentleman seems to be completely at variance with what his noble Friend whom I quoted said when speaking next door. His noble Friend said that there was no point in producing eggs if there was no market in which to sell them. Nevertheless, I can well under stand the hon. Gentleman——

§ Mr. Peart
The hon. Gentleman has mentioned my noble Friend speaking "next door". I am not sure what he means. It is strange. Next door!

§ Mr. Scott-Hopkins
The hon. Gentleman knows very well what I mean. If he likes I will quote what I quoted before from his noble Friend. The hon. Gentleman is not at one with the rest of his party. That seems to happen often in the Socialist Party.
The hon. Member for Leek (Mr. Harold Davies) asked how we estimated the normal import of eggs. I gave him the answer: 950,000 boxes per year. This is the average level of the 2 per cent, to 3 per cent, of imports coming into this country. I must emphasise once again that these arrangements have been agreed with the Farmers' Unions as fair and proper. It is on that estimate that this figure has been arrived at.
The hon. Member asked me about the 40 per cent. sold over the farm gate. It is extremely difficult to estimate what the full amount is, but I hasten to say there is no question of illegality here at all. The farmer is perfectly entitled to sell them——

§ Mr. Harold Davies
Yes.

§ Mr. Scott-Hopkins
—to the consumer if he wants to come to him. There is no illegality, and there is no black market as there happened to be under the regime of the Socialist Party between 1945 and 1950.

§ Mr. Davies
I did not mean it like that.

§ Mr. Scott-Hopkins
The other point he asked me about was the arrangements in 1970. I am sure he has read the part of the Order—the Schedule—which will answer him as clearly as I can.
I turn very briefly to what was said by my hon. Friend the Member for 1473 Lowestoft (Mr. Prior) who, unfortunately, has left us. No, he has not he is at the bottom of the Chamber. I thought for a moment he might have gone next door as well! He talked about a £24 million subsidy to allow free import coming in, particularly from Poland and elsewhere. That is not so. We estimate 2½ per cent, only as the amount of imports coming into the market. The reason for the subsidy running at this figure is the amount of over-production here at some times. This is what has depressed prices.
The hon. Member for Enfield, East (Mr. Mackie) said he could not understand why we should have an indicator price and a guaranteed price. This goes to the fundamentals of the matter. I will not weary the House by going over it all again, but it is the difference between the guaranteed price which is alterable and is determined at the Annual Review and the indicator price fixed at 3s. 2d. per dozen which one hopes will not be moved too often or too much, and probably will not be. It is the difference between these prices which the Board receives from the Government every year.
My hon. and gallant Friend the Member for Eye (Sir H. Harrison) asked a very pertinent question. He has been answered on the questions of farm costs and the disease element. These matters are all taken into account in the determinations at the Annual Review. He asked for an assurance that the industry would have a higher income. I cannot give that assurance. As he must appreciate, it depends on the level at which production runs, how the industry conducts itself and the level at which it fixes and runs its production during the coming years. It will be up to the industry whether these arrangements give it higher prices at the end of the year.
The Order provides for help to be given by the third refinement I mentioned earlier if disturbance is caused over the import situation. My hon. and gallant Friend asked me whether I would or would not prohibit imports. The answer is that I would not. There is surely no question of that. Indeed, sometimes we need these imports. The market is not affected by 2–3 per cent, in the way my hon. and gallant Friend suggested.

§ Mr. Prior
Before my hon. Friend says that the sum of £24 million is not 1474 the result of imports, would he answer this question? If we had no imports at all, surely the Egg Marketing Board would be able to regulate its price levels and ensure that there were sufficient eggs on the market? There is no question of our not being able to produce enough eggs at reasonable prices. Complete control over eggs coming in would save the country £24 million per year of taxpayers' money.

§ Mr. Scott-Hopkins
My hon. Friend is not quite right there. What influences the market is not necessarily the 2–3 per cent, of imports. The arrangements under the Order will be made, and are being made, so that the Board will be compensated if eggs come in in excessive quantities at any time. If there was a complete ban on imports, the Board could still be faced with overproduction in this country, in which case the price would be depressed and the liability to the Exchequer could be at a very high level. It is through over-production at home that the subsidy has been arrived at.
I cannot give my hon. and gallant Friend the assurance that he seemed to want, and I am sure that he did not really mean it in the terms in which he expressed it.

§ Sir H. Harrison
My hon. Friend has now said that we can produce these eggs here. He has produced no valid reason for allowing eggs in from Poland. I find his answer unsatisfactory, and on the point of imports I shall vote against the Order.

§ Mr. Scott-Hopkins
I am sorry that my hon. and gallant Friend cannot see the force of the argument that I am putting to him concerning the import position, namely that anything over 2–3 per cent. is being taken care of in the Order by the third refinement. The Board is being compensated for any imports which come in over and above the 950,000 boxes, and the N.F.U. is quite satisfied with this. Indeed, the N.F.U. has expressed its agreement with the figures and the arrangements under the Order, particularly concerning imports. I hope that my hon. and gallant Friend, on due reflection, will realise that we have gone a very long way to help the industry. I am convinced that the new Order will lead it to greater stability in the future.