HC Deb 25 March 1970 vol 798 cc1574-91

10.40 p.m.

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

I beg to move, That the Fertilisers (United Kingdom) (Amendment) Scheme 1970, a draft of which was laid before this House on 18th March, be approved. The Amendment has two main purposes. It extends for one year the provisions of the 1969 Scheme, which would otherwise expire on 31st May, 1970, and it provides for the subsidy rates on fertilisers delivered to farmers from 1st April, 1970, to 18th March, 1971, to be increased.

The House will be aware that an important part of the Annual Review package which my right hon. Friend announced last week was a cash injection of £10 million into the industry through the mechanism of the fertiliser and lime subsidies. The draft Scheme is designed to give effect to this award in so far as the fertiliser subsidy is concerned. It will add £9 million during the year in question to a subsidy commitment that would otherwise be about £33 million.

The average increase in rates of subsidy works out at about 20 per cent. The calculation of individual nutrient rates takes account of an expected increase in demand for fertilisers, resulting from the increased subsidy and from the long-term trend in demand. As a proportion of gross cost, the subsidy will rise from 22½ per cent. to 27 per cent.

The Government's aim in giving this temporary boost to the subsidy is that farmers should derive immediate benefit. We have, therefore, proposed that it be paid from the day after the Review announcement, 19th March. To do otherwise would in any case cause a serious hold-up in deliveries of fertilisers—and at a peak time of the year—with farmers asking that their deliveries be delayed until they could claim the higher rates of subsidy.

The nature of the legislation does not enable us to alter the subsidy retrospectively, hence the starting date of 1st April given in the Scheme. But we believe that it would be the wish of Parliament to avoid delay in introducing the higher rates of subsidy and we therefore propose, subject to the approval of the Scheme, that the higher payments in the period 19th March to 1st April be made ex gratia. I think that the House will agree that this is a desirable and sensible way to proceed.

I should like, in passing, to refer to the prices of fertilisers. Hon. Members will be aware that these have remained commendably steady for some time. We should not wish to see the increase in subsidy to farmers dissipated through higher prices and are glad to have the assurance of the principal fertiliser manufacturers that, exceptional circumstances apart, they will hold their prices in the coming twelve months.

It has often been stated in debates on the fertiliser scheme that the general policy of the Government is to contain the cost of the subsidy as consumption of fertilisers increases. Over the last ten years, the subsidy has averaged about £32 million a year and has varied but little from that figure from year to year. That general policy remains unchanged. The increase for which this Amendment Scheme provides is intended as a once-for-all addition to farmers' resources, and without further change the rates of subsidy will return to their 1969–70 level on 19th March, 1971.

These proposals are, therefore, that the fertiliser scheme be continued for a further year until 31st May, 1971, and that there should be an increase in subsidy rates for a period of one year. I am confident that the House will wish to approve these desirable measures.

10.44 p.m.

Mr. Michael Jopling (Westmorland)

On behalf of the Opposition, I am grateful to the Joint Parliamentary Secretary for explaining the Scheme, but he left a number of matters unanswered. As he said, the background is the Price Review and I shall make suggestions and ask questions about the review and the impact of these proposals.

Paragraph 3 of the Scheme contains an amendment to the principal Scheme, which is the Fertilisers (United Kingdom) Scheme, 1969, to delete in paragraph 5(2) of that Scheme the words "in special circumstances". This amendment allows the Minister to receive applications more than three months after delivery in other than special circumstances. Under the original Scheme he could do this only in special circumstances. Why is this necessary? Have some claims had to be disallowed because they did not constitute special circumstances? None of us would wish to stand in the way of payments in these circumstances.

Secondly, will the Minister say why this bonus on the fertiliser subsidy has been made only for one year? The Price Review, of which this Scheme is a part, is full of these short-term bribes. Never in any previous Price Review have there been so many short-term concessions over a one-year or two-year period.

Mr. Deputy-Speaker (Mr. Sydney Irving)

Order. The hon. Gentleman cannot discuss the Price Review on this Scheme.

Mr. Jopling

I am referring to the Scheme, which relates to the Price Review. The general trend of fertiliser subsidy rates over the years has been down. It has been the stated policy in successive Price Reviews that it has not been necessary to keep expenditure level as fertiliser usage has risen. The rate is now to go up, and the Minister has said that on 19th March next year it will drop again. Rates which fluctuate in this way are extremely disruptive in the farming industry. The Labour Party has always had a rooted objection to the "stop-go" policy; yet this is a classic example of it. There is an old saying that a farmer should live as though he would die tomorrow but should farm as though he would live for ever. This yo-yo approach is extremely bad for farming and for the manufacturing industry.

Normal trading in the fertiliser industry will be disrupted when this 20 per cent. bonus on the subsidy rate stops on 18th March next year. The rates are to rise to the level of five years ago, although over the last five years the Government have gradually been bringing them down. Before the middle of March, 1971, farmers will rush to buy fertilisers so as to have the benefit of the higher subsidy rate. This is what happened in May last year when there was a much smaller fall in the rate from 1st June, 1969. There will be a flood of orders before the rate drops by 20 per cent. in March, which will be only three months earlier than the normal period of ordering. This sudden panic rise is bad for fertiliser manufacturers. It is also a little unfair to farmers, certainly to the prudent farmers who have already bought and taken delivery of their fertilisers for this season. It will do little to help the majority of farmers.

Has the Parliamentary Secretary seen the report in today's Eastern Daily Press by Mr. James Christie in which he says: A leading Norfolk merchant told me last week that in his view about 90 per cent. of the compound fertilisers and 70 per cent. of the nitrogen required for 1970 had been delivered before the Review decisions were announced. If we accept these figures it means that the benefit farmers will derive this year from this arrangement will be about £2 million and not £10 million as the Minister suggested. That is not strictly right, because on fertilisers it is only £9 million, but the point is entirely relevant.

I turn to the question of fertiliser usage in general which is so much influenced by the rates of subsidy in the Scheme. What is the long-term position of fertiliser usage? I hesitate to embarrass the Parliamentary Secretary by referring to the National Plan, but his Department is almost the only one left which reckons it is sticking to that Plan. 'The projections in that document were that between 1964–65 and 1970–71, to which the Scheme refers, it is estimated that the usage of fertiliser will rise from £125 million to £150 million—a rise of 20 per cent.

As the Minister embarks on the final year of the National Plan projections, I hope we shall be told whether we are on a course to achieve those objectives. Are we on the course suggested by the "Little Neddy" projections suggesting an increase of £41 million per annum in fertiliser expansion between the years 1966–67 and 1972–73? It is important that we know whether the industry is moving towards these targets which were set.

There is no doubt that usage of fertilisers is now slowing down. The Minister's White Paper admits this in paragraph 44, on page 20 where we are told Fertiliser usage has increased steadily but the rate of increase has slackened off during 1969–70. My eyebrows were raised on seeing that statement, because it has been an open secret in the fertiliser industry for a long time that up to a few months ago deliveries were considerably lower than at present. It is no use the Parliamentary Secretary saying that it was because of shortage of credit that farmers had not taken delivery of fertiliser during last year and in the early part of this year. He as a practical farmer knows that farmers have a choice between the early delivery rebates and the farm storage scheme. Under that scheme it is possible to take delivery of fertiliser in June or July, to receive the subsidy from the Government in August and to pay the merchant in March the following year. There is no excuse for farmers to say that, because of shortage of credit, they did not take up delivery of fertiliser in the summer and autumn of last year. If farmers had wanted fertiliser, shortage of credit should have been no barrier. Under the farm storage scheme more money would have been generated by the payment of the subsidy.

It is obvious that, having cut back on other things, farmers doubted if the extra expenditure could be carried. Lately we have heard about the number of tractor registrations being down—I understand that they were down by 20 per cent. in January compared with January last year—and now we are cutting back on the use of fertilisers, which represents probably the most dangerous cut-back of all. Would the Minister give the figures of fertiliser uptake for the 1969–70 season?

The projected figures relating to last year's fertiliser subsidies given in the Price Review White Paper are disturbing. The latest forecast for last year, 1969–70, gives the total at £33.7 million. But we have been told that the estimated total for next year, 1970–71, is £32.8 million. There will, therefore, be a drop of about £900,000 between last year and next year; and this, of course, has a direct bearing on the Scheme we are discussing.

My guess is that there will be a drop in fertiliser subsidies next year. I hope I am wrong. I will be delighted, though surprised, if the Minister says that fertiliser usage in 1969–70 will prove to represent an increase over the previous year.

We were told in the Price Review White Paper that the higher rates would be paid on all deliveries made on or after 19th March, so that farmers would begin to benefit at once. The Minister's remarks tonight underlined that assurance. However, from reading the White Paper we gather that this bonus on the fertiliser subsidy will become effective only from 1st April. I appreciate that the Minister went some way towards explaining this when he said that no hon. Member would object to the period between 19th March and 1st April being an ex gratia payment period.

I assure the Minister that I would be the last to stop farmers who took delivery of fertilisers in this 12-day period from receiving this payment. However, I am extremely unhappy about the way in which we have been asked tonight to give the Government power to make ex gratia payments of this sort. I am reluctant to agree to this course of action. The Minister implied that there was no other way of doing it, but it should not be beyond the ingenuity of the Government to find a constitutional, Parliamentary way of making these retrospective payments. The course proposed horrifies me.

The Government are behaving unreasonably in this matter. The Minister should reconsider the issue and find a constitutional way of allowing these payments to be made. I have no objection in principle to the payments being made, and I assure the Minister that if he proposes a parliamentary, constitutional course of action, my hon. Friends will facilitate its speedy passage through the House. I strongly object to Parliament being circumnavigated in this way, and I trust that the Minister will think again. Generally speaking, we welcome this scheme. It is perhaps not done in the right way and it would have been better, instead of making one large influx, to have had a longer term solution on the end price paid to the farmer for his product. I hope the Minister will answer my questions.

11.0 p.m.

Mr. Jeremy Thorpe (Devon, North)

I would make three comments on the speech of the hon. Member for Westmorland (Mr. Jopling). He is on good ground when he says that it is not a reprehensible but a regrettable principle to make ex gratia payments for which there is no authority in the Statutory Instrument dealing with them. I am not certain that those payments could not be challenged in the courts. I hope, because I want these payments to run from the date in March which the Minister mentioned, that he will look at this and see if he can put it in proper form.

I do not share the horror of the hon. Member for Westmorland at the prospect of farmers going to buy fertilisers in vast quantities because the price might go up. I thought that it was one of the principles of the Conservative Party to have a free market.

Bulk purchase on a fixed price system would be more acceptable to the benches opposite than to the Tory Front Bench, on whose behalf the hon. Member for Westmorland spoke.

Mr. Jopling

The difficulty is entirely with the manufacturers who have been very disturbed this year about facing the problem of moving fertilisers out of the factories on to the farms, in view of the shortfall in output last autumn. If, on top of that, there is to be increased demand, I was disturbed that those who wanted fertilisers next spring might not get them.

Mr. Thorpe

I do not have the same compassion for the fertiliser manufacturers and the same concern about the terrible conditions in which they operate, behind a 19 per cent. tariff and antidumping duties passed by this Government at the drop of a hat, but we of course do not have the same close relationship with Fisons as the Conservative Party if their balance sheets are to be believed.

I welcome the Statutory Instrument because I welcome the extension of the Fertiliser Scheme. It is introduced against the backdrop of a £10 million contribution under the Price Review. Particularly in respect of nitrogenous fertilisers, I ask whether the 6s. 3d. rate of contribution gives the taxpayer, the farmer and the Treasury value for money.

When I heard the Minister flourish in a supplementary, like a rabbit out of the hat, a statement that the manufacturers had agreed to a standstill for a year, I could think of no industry which could better afford it. It is common knowledge that with modern techniques, the manufacture of nitrogen from waste products of oil refineries is becoming much cheaper, and for many years—I refer to nitrogenous fertilisers—I.C.I. had a virtual monopoly which is now shared by Fisons with which the hon. Gentleman is familiar, and Shell and Albright and Wilson.

Although there are no formal price-fixing arrangements in this country, there is price leadership, and farmers are compelled to pay the price listed by the manufacturers, subject to merchants and farmers getting any discount. The fact remains that enterprising merchants and co-operatives have been getting calcium ammonium nitrate from the Continent in increasing quantities. Notwithstand-the 19 per cent. duty, devaluation, and import deposits, they have been able to do so at a price still below that of British manufacturers. Many of us hoped that as major manufacturers would be reducing their list price. If it had done so, the figures in this Statutory Instrument for nitrogenous fertilisers might have been different; farmers' prices might have been reduced, and there might well have been a smaller sum under this head in the Price Review and there might in consequence have been more money for other desirable objectives.

But, instead of reducing their prices, the manufacturers troop along to the Board of Trade and ask for an anti- dumping duty. The Board of Trade, helpfully and obligingly, says that there is a prima facie case; and as from 19th February there is a provisional duty of £9 a ton on imports of calcium ammonium nitrate, ammonium sulphonitrate and ammonium nitrate from Belgium and Germany and as from 12th March, a similar duty in respect of imports of those substances from Austria, Italy and Sweden, and £6 a ton from the Netherlands; and behind that the British manufacturers, who in this Statutory Instrument we are being asked to pay money to, are sheltered.

Mr. Deputy Speaker

Order. The right hon. Gentleman is getting away from the Scheme and discussing the antidumping tariff.

Mr. Thorpe

Obviously I bow to your Ruling, Mr. Deputy Speaker. I am merely suggesting that it is because of the current prices prevailing in Britain for nitrogenous fertilisers that we are being asked to provide a certain sum of money in this Statutory Instrument. I am suggesting that the figure which we are being asked to vote tonight at the rate of 6s. 3d. a ton could be considerably reduced were there adequate competition in the market. I believe that that point is relevant when we are discussing the particular financial provisions which are part of the £10 million scheme announced in the Price Review, to which the Joint Parliamentary Secretary has made reference, and contained within the Statutory Instrument.

Mr. Michael Noble (Argyll)

I hope that I am not leading the right hon. Gentleman further astray. His point is an interesting one which the House should discuss fully, even if not on this occasion. Is it not a fact that the only method by which the Board of Trade can operate anti-dumping laws is if the fertiliser is imported into Britain at below its cost of production? If that is so, is not part of the right hon. Gentleman's argument against Fison and I.C.I. not relevant?

Mr. Thorpe

I hope that you will allow me to answer that question briefly, Mr. Deputy Speaker, because the right hon. Gentleman is in error.

Mr. Deputy Speaker

What troubles me about the remarks of both right hon. Gentlemen is that they are now getting into argument for or against the question of protection for the industry. This is not the purpose of the Scheme. An incidental reference may be in order, but no more.

Mr. Thorpe

I bow to your ruling, Mr. Deputy Speaker. May I, incidentally and parenthetically, say to the right hon. Gentleman that Section 4 (2) of the Customs Duties (Dumping and Subsidies) Act, 1969, stipulates that the criterion involved, and certainly involved in the case of fertilisers in this case, is the price at which the goods are sold for consumption or use in the ordinary course of trade in the country of origin. By that criterion I do not think that the Board of Trade has a very strong case.

All I am saying is that before we vote a certain sum of money for this Scheme, with which I find myself in principle wholly in agreement, it would certainly be more comfort to know that the price which the farmer will have to pay for these fertilisers, and therefore the share in this subsidy which will be enjoyed by British manufacturers, was a price which was competitive in world markets and was not artificially subsidised by a 19 per cent. tariff, and now by a temporary £9 a ton duty which, under a protectionist Government—one such Government seems to follow another—we shall probably see made a permanent feature of the Secheme when that expires after three months.

Finally, I see that for those who are keen about the price of nitrogenous fertilisers referred to in this Statutory Instrument, objections to the proposed antidumping duties have to be put in in writing to the Board of Trade by 31st March. Accordingly I propose to post to the Board of Trade a copy of my speech in HANSARD tomorrow.

11.15 p.m.

Mr. Marcus Kimball (Gainsborough)

The Scheme follows the Price Review. In effect, it is a terrible admission about the effect of the credit squeeze and, above all, of the shortage of merchant credit now available to farmers in the fertiliser industry.

The White Paper on the Annual Review and Determination of Guarantees, 1970, at page 21, paragraph 45, states that farmers have tended to delay their purchases". This is because farmers have not had the available money for their purchases of fertiliser.

Cutting out the farm storage scheme, which is not a very attractive proposition for many farmers, let us take the case of the farmer who in the past has had the money available to buy and pay for his fertilisers. The cheapest time to buy fertilisers is in June for use in the following autumn or spring. The average June rebate on a ton of fertiliser or plant food is 45s., but for 100 tons or more the special discount averages £5. This is what I am advised by most of the merchants. So that fertiliser bought in June for use in the coming year, instead of costing an average of £34 12s. 1d., taking off the June rebate and the £5 a ton special discount, will cost a farmer in a reasonably sound business position to buy fertiliser about £27 7s. 1d. a ton. In the revised Scheme which has been brought in, all that the Government are offering is an increase in the subsidy of approximately 30s. a ton.

The real hardship that arises under the Scheme is that early purchase has been made impossible for many farmers because of the shortage of merchant credit and the credit squeeze as a whole. Because of Government action, farmers are losing about £7 5s. a ton on fertiliser, and the Government, by way of a makeup for the Price Review, make the measly offer of 30s. a ton. This is the state of the industry.

I asked my own suppliers of fertilisers about merchant credit. They said that last year the average time for people paying their bills for fertilisers, even with the extra bonus for settlement within the month, was two to three months; but such is the credit squeeze and the difficulty that farmers and merchants are expecting that the average time for settlement of fertiliser bills is now about five months.

I should like to press the Minister on the question of dates. I understand that in the past the fertiliser year, as such, has operated from 1st June to 31st May in any single year. The White Paper, on page 21, para. 45, makes a song and dance about the extra 30s. being effective from 19th March. My hon. Friend the Member for Westmorland (Mr. Jopling) and the right hon. Gentleman the Leader of the Liberal Party have already pointed out that there is no legal authority for the payment of the extra subsidy between 19th March and 1st April, which is the date given in the Scheme. Therefore, the Minister must find some way to authorise this payment. If he is able to authorise the payment for the 12 days from 19th March, and if he wants to help people, why cannot he back-date the payment to 1st June last year? This is the only way to make the Scheme effective. If he can deal with 12 illegal days, he had better get down to dealing with the whole year if he has any intention really to help the industry.

Merely increasing the use of fertilisers will not restore fertility to farming. The Minister knows this, as a farmer in a large way himself. We shall not restore fertility to the industry by increasing the fertiliser subsidy. We need constructive Government action to help us with a profitable break crop. The depressing feature of the Scheme is that there is no encouragement to help with break crops. Sugar beet and beans were totally neglected in the Price Review. The one crop which helps in my constituency to restore fertility is sugar beet. Sugar beet is a big user of fertiliser, about 7 or 8 cwts. per acre, but all that the Scheme does is to help sugar beet by about 10s. an acre—a pretty poor compensation. That will do nothing to restore fertility to the land or help with break crops.

There is no point in feebly tinkering about with production grants. The only way to help the industry is to increase the price of the end product.

11.18 p.m.

Mr. Michael Noble (Argyll)

I shall not detain the House for long, for by good fortune my hon. Friend the Member for Gainsborough (Mr. Kimball) has taken up the matter which I wished to raise. Apparently, the Minister is able to make an ex gratia payment back to the date of my birthday—which gives me no great satisfaction as I put on all my fertilisers early, as other farmers may have done. This is a curious state of affairs, since in all the discussions at the time of the announcement of the Price Review the right hon. Gentleman the Minister of Agriculture explained that it was impossible to back-date payments before 19th March. If that was impossible, will the Parliamentary Secretary explain—I am not prepared to pass the Scheme until he does—how he can ask the House to approve the making of ex gratia payments for 12 days, or whatever it may be. It is parliamentary nonsense.

In the earlier debate, we heard his right hon. Friend the other Joint Parliamentary Secretary explain that it was not possible for him to talk about some I.R.C. report. That was nonsense. He was deliberately dodging the issue at the time. Now, we have another Minister from the same Department. I hope that he will not dodge this issue.

This fertiliser Scheme is concerned only with nitrogen, phosphates and potash, and we shall at a later stage in the year discuss the whole problem of lime. I suggest seriously that, if we are concerned about the fertility of a great deal of our land, particularly in Scotland, it is nonsense to talk about fertilisers which have an effect only after the lime has been put on and not talk about the lime problem. I am trying carefully to keep within order, Mr. Deputy Speaker, but I seriously suggest for a future occasion that the Minister should take this point into account, in order to help the farming community.

Now, a passing reference to the question of dumping, which was raised by the right hon. Gentleman the Member for Devon, North (Mr. Thorpe). I know, because I have been in the export market for a considerable period, that if one tries to export goods to other countries at below the price at which one is selling them in this country they will refuse to accept them. So I think that the right hon. Gentleman may be on a fairly good point, but I am not sure that it is as good as he thinks.

11.20 p.m.

Mr. James Scott-Hopkins (Derbyshire, West)

There is absolutely no justification and no authority in the Scheme for the Minister to pay a penny for the 12 days between 18th March and 1st April. That is clear. Presumably he will tell the House that after the Recess he will come back to us to get retrospective authority.

Last weekend I received a deputation of farmers in my constituency, and they particularly talked about the increase in the fertiliser subsidy. The point they made was that most of them had already ordered fertiliser and had had it delivered, although they had not paid. They are excluded from the increase unless the Minister can find a way to make it retrospective to 1st June, 1969. Yet these will be the fertilisers that will be used on the land now and later on in the autumn. It is wrong that they should be excluded.

The present situation regarding farm credit, and particularly merchant credit, is extremely difficult. The terms of credit which have been customary in the industry are now severely curtailed. There have been many cases of great hardship. The farmers who came to see me told me of many instances when they would have bought the fertiliser but had been unable to do so. Even this modest increase will not be sufficient to allow it to be bought in the quantities that it should, because the other side-effects of the squeeze and present conditions of restriction have not made things easy for the industry. This is a pity, because I do not believe that the increases in the Order will have the full effect which the Minister hopes, and which his right hon. Friend said they would in his Price Review statement, owing to the restrictions and difficulties outlined by my right hon. and hon. Friends.

11.23 p.m.

Mr. Mackie

The main point raised by hon. Members opposite has concerned the ex gratia payment for the period from the day after my right hon. Friend's Price Review announcement until 1st April. A great deal of consideration has been given to the method of paying this, and the method chosen is the only reasonable one to hand. Members connected with the legal profession, like the right hon. Member for Devon, North (Mr. Thorpe), have made the point that the payment might not be legal; but nothing will be paid until after the Order has been approved by Parliament. If there are any other suggestions—[Interruption.] Do hon. Members not want the farmers to receive the payment?

Hon. Members also asked why this date had been chosen. "Why not go back to January, or last June?", they asked. But, whatever date we chose, some farmers would complain that they had bought their fertiliser the previous month. Fertiliser take-up has been pretty well the same year in and year out. I have with me an average of the years——

Mr. Kimball

Surely, if the Government are going back 12 days, the convenient date to go back to is for the whole fertiliser year, to June, 1969.

Mr. Mackie

There is a great difference between 12 days and nine months. We are using the day after the announcement was made. It was simply to prevent a lot of farmers for those 12 days in the middle of spring, when many people are taking deliveries of fertiliser, holding up the taking of deliveries and embarrassing merchants and manufacturers for the two weeks concerned. Hon. Members opposite will realise that they are completely unreasonable about this when I show them a graph of fertiliser take-up during January, February, March and the rest, which shows that the fertiliser take-up is generally from the beginning or the middle of March onwards. If a farmer does not get it this year, he gets it next year. Those of us who have taken it in early could obviously afford it. Therefore, we will get it next year. If we like, we can take in two years' supply next year.

Mr. Jopling

I wish to question the hon. Gentleman about legality and Parliamentary procedure. Will he acknowledge that under paragraph 4 of the Scheme, to which I referred, the ex gratia payment is illegal, as the right hon. Member for Devon, North (Mr. Thorpe) suggested? Is the hon. Gentleman prepared to face the Public Accounts Committee? If he means to go on with what he proposes to do, I should feel constrained to write to the Public Accounts Committee about it. We are the first to want farmers to get this payment, but, above all, we must act in a proper parliamentary way and we must not condone any illegal payment of funds. Will not the hon. Gentleman agree that payment as he proposes would be illegal?

Mr. Mackie

There is nothing illegal about an ex gratia payment if the House passes the Scheme. [HON. MEMBERS: "We are not going to pass it."] If hon. Members opposite will not pass it, well and good, but——

Mr. Thorpe

I am grateful to the Minister for giving way. He is saying that he would like these payments to run as from 19th March. That is accepted. On that basis, anyone who tomorrow reads this Statutory Instrument, which I hope will be passed, will see that, in law, the payment can run only from 1st April. There is nothing in paragraph 4 of the Scheme which refers payment back to 19th March. That date is 1st April. No matter what the Minister says about wanting to make an ex gratia payment to anybody, unless it is provided for in the Statutory Instrument he has no authority for doing it.

Mr. Mackie

I have been at the Ministry of Agriculture nearly six years and I have seen ex gratia payments made. I am quite sure that the hon. Member for Derbyshire, West (Mr. Scott-Hopkins) and other hon. Members, including the right hon. Member for Argyll (Mr. Noble), who has been in government, know very well that ex gratia payments are in order. I simply say that we shall make this ex gratia payment—it may not he in the bit of paper which the right hon. Member for Devon, North is flaunting about—for these 12 days on fertilisers delivered during that time. This has been done on many occasions.

If the House tonight says that we must not do it, well and good, but I presume that they want farmers to get payment. If they do not, they know what to do tonight.

Mr. Noble

I understand the Minister's problem. Ex gratia payments are made on a number of occasions to meet individual problems which do not fall within the category of whatever the problem is.

The point which I made to the Minister, however, but which he has not tried to answer, is that when these new arrangements were announced, the Minister of Agriculture was specifically asked why it was not possible to make payment back to the earlier date when a great many people had got it. He said that this was not parliamentarily possible. Now the Joint Parliamentary Secretary asks us to do some under-cover fiddle to get him out of the difficulty—[Interruption.] I am not exaggerating. This is a parliamentary under-cover fiddle to get him out of a slight difficulty. I should like the hon. Gentleman to say why his Minister said that it was impossible and yet he is proposing some ex gratia fiddle which he hopes we shall pass.

Mr. Mackie

The right hon. Gentleman has used some extraordinarily exaggerated language. It is not impossible. We could pay back for 20 years if we sat down to think about it. The point is irrelevant. [Laughter.] The hon. Member for Westmorland (Mr. Jopling) laughs, but it is irrelevant.

As I said earlier, how far back should we go? I pointed out that the take-up of fertiliser in the year is pretty level. The up-take has been less for various reasons—perhaps because of the credit squeeze. All those who have not taken it up will be better off this year. We gave a great deal of consideration to this point because it would have upset the whole thing not to have paid it from the day after the announcement was made.

To proceed——

Mr. Jopling rose——

Mr. Mackie

—and I am going to proceed. The hon. Member for Westmorland asked why it is proposed to omit the words "in special circumstances" from paragraph 5(2) of the principal Scheme. There have been circumstances in which we have had not to pay a fertiliser subsidy, and we want a flexible system in which we can allow the subsidy to be paid when farmers make mistakes, as they sometimes do.

The hon. Member for Westmorland asked why only one year? We made it plain that this was a cash injection. It has nothing to do with stop-go policies. It is a cash injection of £9 million. The hon. Member for Derbyshire, West used the expression "a fiddling little amount". It is a little over the average of the Conservative Party's price review for nine or ten years.

Several hon. Members have said that manufacturers will be embarrassed next spring. They have had a year's notice. They could warn their customers of what might happen. There need by no panic buying.

The hon. Member for Westmorland asked about the drop in the estimate. The reason is that last year we reduced the subsidy, which we have wanted to be a steady £32 million.

The right hon. Member for Devon, North mentioned manufacturers' profits. Their accounts for this year do not show that they are getting excessive profits. There is considerable competition now, where there was not at one time. I do not want to hide behind the fact that the Board of Trade deals with dumping, but farmers as well as fertiliser manufacturers take advantage of the anti-dumping Act, so they should not complain when other businesses get the benefit.

I have answered the point of the hon. Member for Gainsborough (Mr. Kimball), who also talked about a "measly" 30s., about going back over the whole year. He mentioned break crops. But they are outside the Scheme. The right hon. Member for Argyll said that lime was not mentioned. A lime scheme will be introduced later in the year. I agree that the two go together, but because of the increase in the fertiliser subsidy, we had to bring in this Scheme now.

The hon. Member for Westmorland asked whether the production of fertiliser was increasing. In 1965–66, there were 1,449,000 nutrient tons—this is taking the three together—and for this year the forecast is 1,765,000 tons, which is just about up to target.

I know that some hon. Members are not happy about the ex gratia payments, but I should like to hear any better suggestion. If they do not want the farmers to get this, they know what action to take.

Mr. Noble rose——

Mr. Deputy Speaker

Order. The right hon. Gentleman has exhausted his right to speak.

Mr. Noble

I was hoping that the Minister would answer the questions.

Question put and agreed to.

Resolved, That the Fertilisers (United Kingdom) (Amendment) Scheme 1970, a draft of which was laid before this House on 18th March, be approved.