HC Deb 21 June 1967 vol 748 cc1645-52

10.46 a.m.

The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. James Hoy)

I beg to move, That the Calf Subsidies (United Kingdom) (Amendment) Scheme 1967, a draft of which was laid before this House on 10th May, be approved. All that this Amendment Scheme does is to give effect to the increase of £1 a head in the subsidy for calves announced in this year's Annual Review. This increase is to apply to calves born on or after 1st January, 1967, so as to include all spring-born calves.

I should, perhaps, draw attention to the fact that the Scheme we are amending covers calves born only up to and including 29th October, 1967. A new Scheme will be required to continue the payment of subsidy on calves born after that date and to provide for the alternative form of payment permitted under Section 10 of the Agriculture Act 1967. In other words, it will provide for the payment of the subsidy on the carcase of any steer or heifer born in the United Kingdom provided that it is certified on a deadweight basis as eligible for the fatstock guarantee and that payment was not made on the live animal when it was a calf.

These payments have been made over the past 18 months under the authority of the Appropriation Act. In the mean- time, I invite the House to approve the amendment of the existing Scheme necessary to authorise the higher subsidy for calves born within the period covered by the existing Scheme.

10.48 a.m.

Mr. Michael Jopling (Westmorland)

We are grateful to the Minister for explaining the purpose of this Amendment Scheme, but I must put to him a preliminary matter of some importance. Will he convey to the Leader of the House knowledge of the difficulties which many hon. Members have in attending business this morning on these three Agricultural Orders at a time when the Select Committee on Agriculture is meeting for a most important session? I say no more about it, but I hope that he will tell his right hon. Friend of the great difficulties which many of us are in. My hon. Friend the Member for Rye (Mr. Bryant Godman Irvine), my hon. Friend the Member for Torringtón (Mr. Peter Mills), who hopes to speak on the next Instrument if he catches your eye, Mr. Speaker, and I myself are all members of the Select Committee, and we have been put in the greatest difficulty this morning.

This is the first time for two years that the House has had a chance to debate the Calf Subsidies Schemes, and this Amendment Scheme alters the 1965 Scheme, which lasted for three years. It is worth while this morning looking at the background to the changes proposed. They were first suggested in the Price Review a few months ago, and it is as well to recall what the Minister said in paragraph 23 of his Price Review White Paper: As regards the beef herd, confidence needs to be restored and some further incentive is required if the rate of expansion is to be maintained.… The Government have therefore decided … to increase the calf subsidy by £1 a head which will encourage further retentions of calves". Therefore, this Amendment Scheme is one of the measures taken by the Government to deal with the crisis last winter that was of their own making.

I am very surprised that the Joint Parliamentary Secretary did not tell us what was going on to encourage further retention of calves, and what was happening to restore the confidence referred to in the Price Review White Paper.

Mr. Speaker

Order. The Minister could talk only about this Order, as the hon. Gentleman can.

Mr. Jopling

I am sorry, Mr. Speaker, but I felt that this was an important part of it.

Perhaps I could ask a specific question with regard to the estimates of the cost of the Scheme in 1967–68. In the Price Review White Paper it was suggested that the total cost would be £25.5 million. Yet a Written Answer which I received this week contains an estimate for 1967–68 of £26.7 million. That is a considerable increase in the estimates in the past two or three months, and perhaps the hon. Gentleman could give an explanation.

Perhaps he will also tell us the Government's basic strategy in increasing the calf subsidy in this way. When the increase was announced the probe to join the European Economic Community was under way, and if we enter it the calf subsidy might have to go and the return on the finished product for beef would be increased. In the Price Review the beef subsidy was increased by only 5s. a cwt., whereas the calf subsidy has been increased by £1 a head. We have not yet had an explanation that I have been able to trace to show why the Minister is working in a rather opposite direction to the trend which might be expected if we were to join with Europe. I hope that we shall have an answer on that point.

I should like to make a few remarks about the system of inspection by the Minister's inspectors when the calves are certified for subsidy. In my experience the work is usually well done, and I think that the arbitration is reasonably fair. I understand that the Meat and Livestock Commission will take over the administration and supervision of the Calf Subsidies Scheme, whilst the payment and enforcement side will remain with the Minister. Who will be the chairman of the Commission? We have waited some time to know, and is the person who will ultimately be responsible for the administration and supervision of the Scheme.

In the 1965 Scheme there was provision for the removal of the minimum age of calves to receive subsidy, but we were told at that time that inspection would not take place in general until eight months, though calves for the autumn sales might be inspected at six months, and we were told by the hon. Gentleman then that inspectors might come just a few days before. It would seem that for inspection for subsidy it would be better if there were a greater degree of latitude for the Minister's inspectors. Will the hon. Gentleman examine this and tell us whether he can grant a greater degree of tolerance to his inspectors?

The hon. Gentleman referred to the provisions to cover heifers, which were introduced some time ago. In the original Scheme which this Amending Scheme changes there is a specific exclusion under Stage A for Jersey, Guernsey, Friesian and Ayrshire heifers, which cannot receive the calf subsidy when the animals are alive. The Ministry has been asked this question before but has never given us an answer: why is not the Dairy Shorthorn breed excluded? It seems rather a strange omission and rather odd that whereas Friesians are specifically excluded when alive at Stage A of the scheme the Dairy Shorthorn is not.

The hon. Gentleman referred to Stage B with regard to the way in which the subsidy can be given to a carcase provided it qualifies for the beef deficiency payment. This is not a very satisfactory system at the moment. During the Committee stage of the Agriculture Act, 1967 the Joint Parliamentary Secretary, the hon. Member for Enfield, East (Mr. John Mackie), referred to it as a rough-and-ready method of assessment because of the time lag between the date of birth and slaughter. It is a rough-and-ready method. How is it working out? Nobody has been able to produce a better alternative, but would not the hon. Gentleman agree that it would be much simpler if all these animals could be passed for the beef subsidy when alive at Stage A, as laid down in the original Scheme of 1965?

It would get over a great number of problems, for instance, if the inspectors when they come round to certify calves for the subsidy could in some way—perhaps by a simple form of injection—sterilise heifers so that there is no chance that they could creep back into the dairy herd. We all agree that we do not want that to happen, and that is why we must have Stage A and B. If there were a simple method of sterilising heifers permanently when they are passed for subsidy it would get us over a great number of difficulties.

I have asked the hon. Gentleman a number of questions and I hope that he can give answers, because some of them have been rather evaded over the past couple of years. We should be grateful to know his views.

10.57 a.m.

Sir Frank Pearson (Clitheroe)

I think that every time the Minister hands out more taxpayers' money to agriculture there is wide support from both sides of the House, and this morning is certainly no exception. I welcome this increase in the calf subsidy, but I have a doubt at the back of my mind that we may be reaching a size of subsidy of this nature which must make us ask whether such assistance could not be given much more effectively, easily and cheaply to the industry by raising the subsidies payable on the final product.

Mr. Speaker

Order. I am being very generous this morning but we must debate only this Order, under which we are deciding whether the subsidies under the parent Scheme shall be increased. That is the subject of the debate.

Sir Frank Pearson

I am sorry, Mr. Speaker. I shall try to keep within the Scheme. I shall leave the wider question of whether the subsidy might not be better paid on the end product and touch briefly on the point raised by my hon. Friend the Member for Westmorland (Mr. Jopling) about the administrative difficulties that sometimes arise in the payment of the subsidy. I hope that that will be in order.

Anyone who has had practical experience of grazing beef calves from a dairy herd which is calving over the six months of the winter, with probably the predominant part calving before Christmas and a certain proportion calving after Christmas, knows the difficulties involved with the existing age limitations at which the calves may be passed for the increased subsidy. I fully support my hon. Friend's request that the question of the minimum age for passing calves be given close scrutiny. In many cases it means that instead of all the product of a herd being passed at one visit from the Ministry's officials two visits must be paid. That must be a waste of time for the officials and the farmer concerned. I therefore hope that the Minister will see whether it is possible to lower the age, perhaps to six months, which would greatly facilitate the administration of the Scheme.

11.0 a.m.

Mr. James Davidson (Aberdeenshire, West)

I welcome the Scheme which, I believe, will provide the necessary incentives for increased beef production. I have frequently asked a question—not in the House, although I am sure that it has come to the Minister's attention—to which I have not received a satisfactory reply. I want to know what is the official thinking behind the differential on the payment of the heifer and stot price, bearing in mind that it is a matter of luck as to which arrives and that a loss will be made when the heifer is sold at six months or later, anyway.

11.1 a.m.

Mr. Paul Hawkins (Norfolk, South-West)

I, too, wish to express my gratitude for some extra money being made available to the beef industry. This money may very shortly be badly needed. The price of beef has recently been dropping again and anything that we can do to increase returns to the beef producer must be to the good. However, like other hon. Members, I am not sure that this is the way to tackle the problem.

Most farmers would, I suggest, prefer an increase in the end price. In this connection, I should like to know whether the Minister has discovered if the number of stock has, in fact, been increasing as a result of the various incentives that are offered. Does he feel that the future price for beef will be sufficient? I am referring to the market price, along with the subsidy, and I want to know whether he considers that these amounts will keep the beef industry in a proper and viable state. In my constituency it is in a very unhealthy state.

Despite the calf subsidies and other incentives, more and more farmers are going out of beef production. I therefore do not believe that this proliferation of the different forms of subsidy is tackling the problem in the right way or is likely to lead to the amount of increased production we need.

11.3 a.m.

Mr. Hoy

I assure hon. Members that their remarks about the difficulty of meeting in the morning will be noted. In view of the prolonged discussion about birds which took place last week, the House must accept that hon. Members on both sides wish to debate their various interests. I give an assurance that the remarks and complaints made today will be noted.

Although reference has been made to the European Economic Community, I cannot find anything in the Scheme which would enable me to discuss that subject. I have no doubt that hon. Members will wish to discuss it on another occasion, but certainly it cannot be discussed today.

We are discussing one of a number of measures taken by the Government to try to restore confidence in the industry. Questions have been asked about the cost. I know that the estimate of last year was a little high, but we have increased the estimate this year by about £1 million to meet the new need.

I hope that hon. Members will not have to wait much longer for an announcement about the appointment of the chairman of the Meat and Livestock Commission. The House will agree that we must obtain the best man for the job. He will be performing an extremely important task and it must, therefore, take us some little time to find a suitable chairman. However, I assure hon. Members that they will not have to wait much longer for this announcement.

The question of inspection was discussed fully in our earlier discussion. We felt that the time laid down was about right. We are not aware of any general dissatisfaction with the way in which the Scheme is operating. Some complaints have been received from Surrey, and these are being investigated. Generally speaking, however, the Scheme appears to be working fairly well. If we went in for earlier inspection, that might mean a return visit on the part of our inspectors, which might result in more time being spent than is the case at present. I should have thought that those who are interested in getting the Scheme working efficiently will appreciate that a considerable sum of money is involved in this operation.

I was then asked why the dairy shorthorn had not been specified. The answer is that it is regarded more as a beef animal. That is why it was not specified in this way. To answer the question about whether all animals could be certified at Stage A by a sterilising process—to ensure that they were not passed back to the herd—I assure the House that this and other suggestions are considered. However, the Department considers that, so far, the Scheme has, on the whole, been working satisfactorily.

The hon. Member for Aberdeenshire, West (Mr. James Davidson) wondered why a distinction was made between the two breeds of animal. I am informed that the heifer usually kills out at much less a weight and, hence, a difference in price results. I was asked whether this policy was bringing us into line with the E.E.C. As I said at the outset, I do not wish to go into that subject today, particularly since it has nothing to do with the Scheme.

I am grateful to hon. Members for expressing their welcome for this extra money. Not everybody agrees that the farming community should be given more. It is my job to prove that it should, and I hope that I have done that today.

Question put and agreed to.

Resolved, That the Calf Subsidies (United Kingdom) (Amendment) Scheme 1967, a draft of which was laid before this House on 10th May, be approved.