HC Deb 20 March 1969 vol 780 cc879-86

10.0 p.m.

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

I beg to move, That the Eggs (Protection of Guarantees) Order 1969 (S.I., 1969, No. 187), dated 17th February, 1969, a copy of which was laid before this House on 20th February, be approved. This Order is solely concerned with the protection of the eggs guarantee. The guarantee arrangements themselves are unchanged by it. It carries out the Government's intention to remove the obligation to stamp eggs eligible for subsidy which was announced by my right hon. Friend in reply to a Question in the House on 19th December.

In recent years an increasing proportion of eggs has been sold unstamped. The stamping requirements have been criticised by most sections of the industry on the ground that consumer preference for the unstamped egg as such has operated as an artificial handicap to the sale of eggs through the packing station where they have had to be stamped.

The Reorganisation Commission for Eggs noted the existence of a consumer prejudice against stamped eggs and considered that the obligation to stamp had had the effect of creating two separate markets for eggs—stamped and unstamped. The Commission believed that this would inevitably continue to be the case so long as the stamp was retained and it felt that it would be quite inconsistent with the achievement of a smooth transition to a free market—which it regarded as of fundamental importance.

The Commission thought that the strain which this situation placed on the viability of the system of marketing through packing stations was undesirable. It therefore recommended the removal of the obligation to stamp and this conclusion was endorsed by the industry generally. It was against this background that the Government decided last December to remove the obligation to stamp.

The 1969 Order makes only one major change in the provisions for the protection of the egg guarantee which was contained in the Eggs (Protection of Guarantees) Order 1958 as amended. The change is in Article 3 which removes the obligation on the packing stations to stamp first quality eggs on the shell with the weight grade—if they are hen eggs—or the word "duck" and the packing station code number and instead requires the bulk container into which the eggs attracting subsidy are packed at the packing station to be marked. This is necessary so that checks can continue to be made on the testing and grading of eggs at the packing station.

A consequential change which is made by the Order is contained in Article 4, which, subject to a modification in the wording made necessary by the removal of the stamp, effectively continues a prohibition which has been in operation since 1961 on the sale or use for hatching of eggs which have attracted subsidy. This prohibition continues to be necessary because a proportion of hatching eggs are used to produce table birds, eggs for this purpose cannot be distinguished from eggs for eating, and the intention is to pay subsidy on eggs for human consumption and not on poultry.

A further consequential change is the addition of a definition of "container" in Article 2.

The remaining Articles of the Order, as in previous Orders, deal with such matters as the keeping and production of records, the right to demand the production of books, accounts and records, and the service of notices. These Articles are primarily concerned with audit requirements.

The provisions of the 1969 Order were first contained in the Eggs (Protection of Guarantees) Order, 1968, which this Order revokes. The reason for making the 1969 Order is a technical matter. It was made to meet a criticism by the Select Committee on Statutory Instruments of this House.

The Select Committee pointed out that Article 7 of the 1968 Order required persons engaged in certain types of egg business to produce on demand, books, accounts and records relating to the purchase and sale of eggs. The Article as drafted, however, did not specifically say that these records should be in the possession or control of the person to whom the demand was addressed.

Article 7 of the 1969 Order makes it absolutely clear that the records to be produced by such persons are those in their possession and control.

In relation to the protection of the guarantee it was part of the original justification for the stamping requirements that they operated as an automatic safeguard against the fraudulent representation of eggs which had already attracted subsidy. This particular argument has, however, lost much of its force since for some years the prices the Board has paid to the producer have normally been below the Board's wholesale selling prices so there is effectively little or no financial incentive to offer eggs to packing stations a second time. The effectiveness of the arrangements for quality and audit control at the packing stations will not be impaired by the removal of the stamp on the egg itself.

10.6 p.m.

Mr. Peter Mills (Torrington)

We welcome this proposal and believe that it will benefit the egg industry. But our criticism, of course, is of the delay in doing this, which has been serious. Weeks passed before the Minister made up his mind; the industry has, consequently, been kept waiting much too long, and there is nothing more damaging than delay like this. The Minister may have had his own problems, but the delay is to be regretted. It is true that this is only a partial measure. This Order, coupled with a subsequent measure, will require a much longer debate at another time and certain aspects, like the decline in the subsidy payments to remote areas and the social problems, must be probed very fully. We have certain reservations on this, and our concern that they were not taken together—

Mr. Speaker

Order. But they are not taken together; we are talking about this Order.

Mr. Mills

To me, this is only the first stage in the reorganisation of the egg industry. Much more needs to be done, and it is vitally important to decide on a course and get it into action quickly. The removal of the stamped egg will have a profound effect on egg marketing. There will be no tears for the loss of the "little lion". It will be for the better. Very few people liked the little lion, and stamped eggs certainly have lot sold so well. The house- wife seems to have rebelled against them.

The most notable effect in the past of this dislike of the stamped eggs is that about 35 per cent. of direct sale eggs reach the shops, where they are in direct competition with the packing station eggs, and direct sale of eggs has gone on increasing. There were 12 million eggs sold in this way in 1964–65, 13.5 million 1966–67 and 15 million in 1967–68. This shows the trend and the dislike of stamped eggs. The Egg Reorganisation Committee made this very clear, and the N.F.U. has also expressed its dislike.

With the removal of the stamp from the eggs themselves and this Order, which insists on the stamp being on the box or the crate, several things will happen. First, it will mean that quality must come to the forefront as brand marketing is bound to be encouraged and will increase rapidly. Eggs will sell in branded cartons which will mean quality and reliability.

Also, the retail buyer will insist on this, I believe, because the housewife will only come back again if she trusts the branded carton of eggs rather than the stamped egg. This is vital, and the egg industry must turn its attention more and more to quality. The Order makes a start in that direction, and that is a good thing.

The third effect will be that packers will be more choosy in selecting their producers. They will be looking for producers who will guarantee both regularity and quality of supplies. Indeed, egg producers who have, so to speak, chopped about in the past and have used the packing stations as a dumping ground for their surplus eggs are less likely to get away with that in future.

Although on the surface this seems a simple Order, it is designed to make important changes and its effect on the whole industry will be great. For some years the quality stamp—that is, the little lion—has been a bit of a farce and has tended to frighten away the housewife. The little lion did not reassure her, as it was supposed to do. This farce will now be at an end, and perhaps this freedom will mean that the "farm egg" will no longer be so desirable compared with the "shop egg", which was stamped. In future both farm egg and branded carton egg will be competing against each other, and quality and freshness will be the key words.

I notice that the Order is brought in by the Ministry of Agriculture, Fisheries and Food and by the Secretaries of State for Scotland and Northern Ireland. This is important as well as significant, for under the Order and the reorganisation in the egg industry Scotland and Northern Ireland producers will be in difficulty and the situation will need watching. One just cannot leave them without a period of readjustment.

On the subject of the marking of containers, the Order says that it must be an approved mark. It is difficult to see how this can be done except by means of a label; otherwise empties will have to be stacked or graded into different types because the marks will still be on them—that is, large, standard and small. It will be a different matter if they are in cardboard because they can then be easily destroyed. Labels are probably the best way of ensuring that eggs are properly graded. Perhaps the Minister will clarify the matter, since it could lead to confusion and perhaps even to the consumer being deliberately misled.

There is also a restriction on the sale of eggs for hatching. How will this be implemented and what safeguards are there? It seems likely that some people will put their eggs through a packing station for subsidy and then use them for hatching purposes. This could be a danger.

The Order refers to subsidies. Packing stations only will get the subsidy. This presents a problem for the producer-retailer. I draw the Minister's attention to the concern that is felt by the National Egg Producer-Retailer Association. In a letter to me, the Association states: While we welcome the Minister's statement that the industry is to move to a free marketing system, we regret that the Minister has failed to mitigate the effect upon producer-retailers of removing the obligation to stamp eggs while retaining the subsidy for packing station eggs only. … Thus the Minister's action may damage producer-retailers' businesses, but it is accompanied neither by mitigating factors nor by the prospect of any compensation". Can the Minister reassure the Asociation in this matter?

We look forward to the future, which will remain uncertain for producers until we have seen and debated in detail the Minister's proposals. I repeat that we welcome this proposal, although we await the larger proposal. This action will get rid of the little lion, and I hope that the industry will get down to the task of taking quality most seriously. It must pay attention to the type of egg the housewife wants. It is high time that we began to worship at the shrine of the housewife more than concentrating on what the producer wants and what he wants to produce. We must in future produce what the housewife wants: the right type of egg at the right price. This is a challenge to the industry, and I hope that it will accept it.

10.15 p.m.

Mr. Graham Page (Crosby)

I thank the Parliamentary Secretary and his Department for the action they took over the Order which this Order supersedes. The Select Committee on Statutory Instruments, when examining the Eggs (Protection of Guarantees) Order, 1968, considered that the then Article 7 was an unexpected and unusual use of the Minister's powers and might have been an unnecessary encroachment on the liberty of the subject. As is normal when the Select Committee has a doubt about an Order of this sort, it asked for a memorandum from the Department in explanation of the way in which that Article was drafted. The House would like to know how rapidly the Department moved. The Select Committee considered the memorandum from the Department during one afternoon, and it happened to be the afternoon when the Order was on the Order Paper for debate that evening. When the Committee had considered the memorandum and was still dissatisfied and considered that the drafting of the Article was defective, it reported at once and informed the Leader of the House. Within half an hour the Order was taken off the Order Paper for that day.

I am grateful to the Department for treating the report from the Select Committee with the seriousness it deserved. As a result, that Order was withdrawn and the present Order is now before the House in a form which is satisfactory. Not only that, but similar kinds of Orders have come from that Department since with the correct drafting of similar provisions to those contained in Article 7 of the present Order. This had a very happy result. The Department and the Select Committee working together have produced an Order which is no longer a possible encroachment on the liberty of the subject.

10.17 p.m.

Mr. James Scott-Hopkins (Derbyshire, West)

I join in the welcome given to this Order and say how glad I am that the litle lion is at last going. It had a long service in the egg industry and served a useful purpose.

Mr. Speaker

Will the hon. Member please speak up? Then the Official Reporters can hear him better.

Mr. Scott-Hopkins

I apologise, Mr. Speaker; I did not want to shout.

I welcome this Order. The "egg" sign served its purpose during the years, but I am certain that the Parliamentary Secretary has taken the right action in bringing in this Order. The only qualifying point I make, and I made it about the original Orders, is that in Article 4 we still have the word "dirty" in relation to hen eggs and duck eggs. What a pity it is that we still have to use the term "dirty" and what a pity that the eggs come from the farms in that state. I know that this is inevitable at present but I hope that in due time this word will drop out of the vocabulary.

10.19 p.m.

Mr. Hoy

I wish to reply to the points that have been raised. Another Order will come before the House very soon. Perhaps we can discuss the point which hon. Members have raised when we have that Order.

In answer to the hon. Member for Crosby (Mr. Graham Page), we were grateful to be able to co-operate with the Select Committee on Statutory Instruments in putting this Order right. The hon. Member will realise that we inherited the Order from our predecessors. It had gone on for a number of years. If we were doing things which were not correct I am sorry that we followed the example of those who went before us, including the hon. Member for Derbyshire, West (Mr. Scott-Hopkins). When the hon. Member for Crosby and the Select Committee drew our attention to this matter, we were happy to co-operate. I do not think it is any secret that I was involved, and I decided that if there was this defect we should withdraw the Order and put the matter right by putting another Order before the House.

Having done so, I got a complaint from the hon. Member for Torrington (Mr. Mills) that we took too long to produce the Order. We must not be blamed for doing what was right. We cannot be congratulated for doing what was right and then be blamed for taking some time to do it. The hon. Gentleman knows that when the recommendations were made the Minister had to consult certain people about them and about the findings of the Commission. This took time. If the Government of the day do not take time to do these things, they are accused of having rushed something through without consulting all those concerned.

On the question of stamped eggs, I want to say a few words about the little lion. It has been a sturdy little creature which has lasted a long time. On its demise, let us remind ourselves of its original purpose. It was introduced to give some sort of guarantee. Its main purpose in life was to protect the guarantee itself. It was not a guarantee that the egg was a good one. The protection was to protect the guarantee.

Under the new system the boxes will have to be stamped so that the person who produced the eggs for the market can be traced. The customer will have a great say in the matter. The buyer has already expressed his preference for a particular type of egg. He will still have his protection. If anybody attempts to sell eggs which are not what they are claimed to be, there is the protection that the Act passed in 1968 gives to the consumer.

I am grateful to hon. Members opposite for coming and saying even these few words. We know that this is a short Measure and that another one will have to come. I am grateful for the co-operation of hon. Members opposite. I hope that I can now have the Order.

Question put and agreed to.

Resolved, That the Eggs (Protection of Guarantees) Order 1969 (S.I., 1969, No. 187), dated 17th February, 1969, a copy of which was laid before this House on 20th February, be approved.