HC Deb 27 November 1963 vol 685 cc276-81

3.30 p.m.

The Minister of Agriculture, Fisheries and Food (Mr. C. Soames)

With your permission, Mr. Speaker, and that of the House, I should like to make a statement about horticulture.

It is the continuing policy of Her Majesty's Government, as it has been for many years, to promote the well-being of the horticultural industry, as it is for agriculture. To this end the Government consider that all practical steps should be taken to bring our horticultural production and marketing to a higher state of competitive efficiency; and we propose to offer substantial aid to the industry to reduce costs of production and improve marketing. The effect of this should be to strengthen the competitive position of the industry and thereby to reduce its dependence on the tariff, which has been the principal means of support. It should thus create conditions in which reconsideration of the tariff would be possible.

Our proposals, which are embodied in the Agriculture and Horticulture Bill presented yesterday, include grants towards the cost of a wide range of production equipment—including replacement of glasshouses—for existing viable holdings, towards the reorganisation of such holdings, and towards the establishment of marketing cooperatives. Arrangements are also proposed to provide guaranteed credit facilities for horticultural producers.

In addition to the grant-aid already available to growers and co-operatives towards equipment for the better marketing of horticultural produce, we propose to offer grants towards the cost of redevelopment of a number of wholesale horticultural markets throughout the country. We are also seeking powers to require the grading to prescribed standards of certain horticultural produce passing through wholesale channels of trade.

Introduction of these substantial forms of assistance will enable the Government to consider making changes in the tariff on horticultural items, where these would be in the national interest. The timing of any such changes would, however, be of great importance.

Some products are in a favourable position to withstand competition from imports because, for example, their perishability, or their bulk in relation to their value afford a high degree of natural protection. For these, early reductions in import duties could be made without damage to the industry.

Other products, however, are at present more sensitive to overseas competition and enjoy a significant level of tariff protection during the home season. For these, we shall feel free to bind the duties at their current levels if we consider this to be in the national interest. There will, however, have to be a period of about four years before any reduction in the tariff on these sensitive items could be considered. This should give the industry time to benefit from the assistance offered, and thereby enable it the better to withstand any normal competition from imports. After this standstill period the Government will be free to make reductions in the duties on sensitive items if they consider this to be in the national interest.

We recognise that the specific duties on a number of horticultural products have not only offered protection against normal competition from imports, but have also been a safeguard against abnormal competition from imports at unrealistically low prices arising from surpluses of varying degrees. It is likely that such surpluses will reappear from time to time, so means to prevent them from undermining our market will continue to be necessary. We consider that such means would best be devised in consultation with other countries.

In considering possible tariff reductions and safeguards against abnormal competition, the Government will, of course, take the views of the industry fully into account. It is also our intention that there should be periodic examination, in consultation with the farmers' unions, of development within the industry, including the evidence available on such matters as costs of production and the trends in prices and imports, and the progress made towards achieving a higher degree of competitive efficiency.

Mr. Peart

We welcome the Minister's statement, but, as there is to be a major Bill, and obviously a Ministerial speech, very soon, why have we been given this statement today?

What consultation has there been with the industry? Has agreement been reached? On the question of redevelopment grants, is there to be a regional plan? Has the Minister made up his mind about Covent Garden? How will the improvement scheme continue? Will it be developed and will aid be pumped into it?

I come, finally, to the point made by the Minister about seeking powers with regard to grading to prescribed standards of certain horticultural produce. The Minister will be aware that on many occasions we have pressed him and the Government to take executive powers to deal with this matter. We are glad that there has been this conversion, but is the Minister intending to create a new type of machinery to administer this?

Mr. Soames

As to the reasons for the statement, I felt that the House would have wished me to explain the conclusions that we have reached following the thought that we have been given to horticultural policy, in consultation with the industry.

We have devised these new ideas in close consultation with the industry. It will be for the industry to express its views on them, but I have every reason to hope and believe that it will support them.

Next, I deal with the hon. Gentleman's point about whether there is to be a regional plan, and which markets are to be assisted. Broadly speaking, the guide will be the throughput of particular markets. We shall concentrate on the major and more important markets. We are thinking in terms of a throughput of about £5 million, and this will include Covent Garden.

As to grading, we think that there is a widespread desire within the industry to have grading of produce, and that this is best done in the way shown in the Bill.

Mr. Bullard

While welcoming the provisions in the Bill for the improvement of grading, marketing, and production, will my right hon. Friend say whether he can give an absolute assurance that in revising the tariffs—I think that was the phrase he used—there will still be protection against dumped horticultural produce coming on to the markets here, and that these measures will be used quickly to prevent the flooding of markets with produce which would undermine any steps he proposes for improving marketing itself?

Mr. Soames

Yes, Sir. The whole object of this policy is to enable the horticulture industry to put itself in a much more competitive position and, therefore, to be less reliant upon the need for tariffs than it is at present, or would remain if we were to continue with our present policy without this infusion of help. It is one thing for industry to become competitive on fair terms with equivalent industries in other countries. It is another story when it comes to dumped produce. We appreciate that measures must be taken to ensure that dumped produce does not undermine the market.

Mr. Hilton

I am glad the right hon. Gentleman has been convinced that this industry is in a parlous state. Perhaps I might ask two questions. Dealing with grants for glasshouses and equipment, will the right hon. Gentleman bear in mind in particular the position of the smaller man? Very often when grants are provided for horticulture and agriculture the people who need the grants most are unable to take advantage of them.

The right hon. Gentleman referred to credit facilities. Will he consider making this credit available at a lower rate of interest than at present, because, after all, certain facilities are available now, but the small men are not able to take advantage of them because of the high rates of interest.

Mr. Soames

First, I would not accept—nor would the industry—that the industry is in a parlous state. This is not so. This is a sensible and realistic policy to adopt with regard to the industry in modern times, and is not being done because the industry is in a parlous state. It is being done to make it more competitive.

As to the smaller man to whom the hon. Gentleman referred, he will see that the Bill provides for the possibility of giving him business grants.

On the question of credit, and subsidised credit, the hon. Gentleman will see that in the Bill provision is made for the Government to underwrite credit for the industry. When one puts together credit for the industry, on the one hand—in other words, guaranteed credit—and, on the other, grants for 30 per cent, of what is being done, one realises that this is considerable aid, and will, I am sure, produce the desired result.

Mr. J. Wells

I warmly welcome this great step forward in the modernisation of the horticultural industry. Does my right hon. Friend see this as the heralding of an increase in the number of horticultural growers, or does he envisage the number of growers in the future remaining static, or being reduced?

Mr. Soames

I would not expect to see any appreciable alteration in the number of growers. This is not designed to increase the size of the industry; it is designed to improve its competitive efficiency.

Mr. Hoy

I was not quite clear about what the right hon. Gentleman said in connection with the setting up of a new marketing scheme. Is he taking powers to make this compulsory? The last marketing scheme failed dismally, because it was optional in character.

Mr. Soames

Is the hon. Member referring to grading or to the building of markets?

Mr. Hoy

To marketing.

Mr. Soames

The building of markets?

Mr. Hoy

Grading for markets.

Mr. Soames

If it is grading, it is to be compulsory. Unless grading were compulsory it would not be sufficiently effective.

Sir P. Agnew

As the representative of a district where many of the holdings are very small, I should like to know whether my right hon. Friend can say whether the new arrangements about credit will enable many of those small men to take advantage of this new scheme, as before they were not able to take advantage of credit facilities.

Mr. Soames

It is with this type of grower specifically in mind that we are introducing the credit scheme.

Several Hon. Members


Mr. Speaker

I think that we should pass on. The House will do doubt have an opportunity to debate this matter on the Second Reading of the Bill.