HC Deb 22 January 1971 vol 809 cc1551-60

Motion made, and Question proposed, That this House do now adjourn.—[Mr. More.]

4.11 p.m.

Mr. John Wells (Maidstone)

My hon. Friends from all parts of the country have expressed grave fears for the future of British horticulture if the Eastern European quotas increase further. If this pattern of counter-trade is encouraged they will also be alarmed. I call on my hon. Friend to control it and to honour the spirit of our manifesto at the last election, which contained these words: Farmers are frustrated and disgruntled … We will provide new opportunities for the farming community to increase production, improve their incomes, and make a further massive contribution through import saving to the balance of payments. The manifesto went on to say: We will continue to encourage the development of British horticulture … By contrast, I fear that the officials of the Department of Trade and Industry have led Ministers to continue the precise wrong policies of the previous Administration, and British horticulturalists can hardly be blamed for thinking that it is officials rather than Ministers who rule us. It is hardly surprising that growers should fear the greater bureaucracy of Europe if we should join the European Economic Community.

My complaint is about the excessive imports of horticultural produce from Eastern Europe as a whole and from Romania in particular. This complaint is not mine alone but is echoed by my hon. Friends throughout the country.

I do not doubt the arguments of the Department that it wishes to trade with Eastern Europe and that, if that trade is to take place, we must take in return some primary produce. Why should we not take the produce that is beneficial instead of the produce which harms, such as horticultural and pig products? Let us take hard wheat, olive oil, maize or wine. Some excellent wines are available in the Eastern European countries. None of these products would harm the United Kingdom producers, all would help the Eastern European producers, and so horticulturalists both in the East and the West would gain. It would be better still if we could take iron ore or oil.

The other traditional feeble argument of the Department is that this Eastern European sensitive trade is so slight that it cannot do any harm. May I remind my hon. Friend that it is the last straw that breaks the camel's back? Or I remind him, as this is human food we are considering, that the human stomach can hold only about 1½ litres. If one offers it any more, disaster ensues. That is exactly what is happening to our horticultural trade. The cucumber trade last year was ruined by a quite small amount of dumped, or near-dumped, goods. The market, once ruined, takes weeks to recover, because it is a very sensitive market.

I want now to enumerate some practical suggestions. First, we should take those commodities, already mentioned—oil, wine, hard wheat and maize—rather than sensitive horticultural and sensitive pig products which are so damaging to British farmers and growers.

My second suggestion is that, though small—and I underline the word "small"—the supplies of horticultural products that we do accept should be properly phased. Cucumbers might well be brought in from Romania or anywhere else from January to March, before our cutting season begins. This point was made by my hon. Friend the Member for Haltemprice (Mr. Wall) in a most excellent letter dated 14th January of this year arising out of a suggestion made to their Member of Parliament by the Humber growers. I mention that because it shows that this complaint about the trade comes from all parts of our horticultural community.

Again, I was disappointed that my right hon. Friend the Member for Argyll (Mr. Noble) should have given such an unhelpful Written Answer on 30th November last to my hon. Friend the Member for Blackpool, South (Mr. Blaker), who made the very sensible suggestion that there should be month-by-month quotas, thereby avoiding flooding the market at any one time. Reverting for a moment to the cucumber situation last summer, if supplies had come in regularly the market would never have been damaged.

My third suggestion is in the matter of sub-quotas. Let me give an example. This country is virtually self-sufficient in mushrooms. In 1964–65 and the sub sequent year the Romanians were given a £30,000 quota of dried mushrooms. This was subsequently increased to £40,000. This sub-quota has now been merged in a total quota for dried vegetables, and that quota has been raised in its turn from £300,000 to £500,000. It is now theoretically permitted for the Romanians to send us £½ million worth of dried mushrooms in a year. It can be argued that they would not do so—that it would be silly if they did, because it would wreck their market as well as ours—but this is precisely what happened in the cucumber flood last year. This shows that they can be pretty silly.

I have given this as a single example of the potential risks in giving up sub-quotas, but this can be seen again in the Hungarian fresh fruit quotas, now abolished, under which the Hungarians could lawfully send us 2,000 tons of strawberries.

Turning to top fruit, I recognise that fresh apples and pears present no great problem, but pulp is a different matter. The quotas have steadily gone up at a time when the British top fruit grower can scarcely make ends meet. One of these quotas was 2,200 tons last year against 1,000 tons three years ago.

I turn now to the direct counter-trade deals. Here, the Wimpey irrigation deal seems very hard to the British growers. Could not Wimpey have sold some of its other products—roads, bridges, or something like that—rather than irrigation equipment which will further exacerbate the position of the British horticultural community? If there are to be further direct deals of this sort, then I hope that they will be strictly scrutinised by Ministers and that the quotas will be cut back.

The present defence of the Wimpey deal—that it is the fault of the last Administration—is all very well so long as the next counter-trade deal is clearly accepted as the fault of this Administration. I hope that my hon. Friend will cut back on quotas if the counter-trade is to continue.

Turning to the more general tariff situation on lettuces and tomatoes, does my hon. Friend intend examining the suggestion of the Parliamentary Secretary to the Ministry of Agriculture, as reported in column 13 of the OFFICIAL REPORT for 27th October last year, and the further Written Question of my hon. Friend the Member for Blackpool, South at column 248 on 30th November last?

I realise that this matter of East-West trade is only small in the great matter of world diplomacy, but it is of vital consequence to some of the small, and indeed some of the not-so-small, business men in Britain. I believe that this is only the third time in 50 years that the United Kingdom has a surplus balance in visible trade. Therefore, it seems particularly silly at the moment to do further damage to our horticulturists who give real help in import savings and perhaps more important help in import substitution.

4.22 p.m.

The Under-Secretary of State for Trade and Industry (Mr. Anthony Grant)

First of all, I should like to congratulate my hon. Friend the Member for Maidstone (Mr. Wells) on securing an Adjournment debate on this very important matter. It is proper that he should have been the Member to secure this debate because I know only too well his great interest in this matter. I assure him that we in my Department will look extremely carefully at his suggestions and at the points which he has referred to us. Indeed, I may well be referring to some of them later in my speech.

First of all, may I look at the broad picture as we see it. As East European countries make more contact with the industrially developed countries of the West and look towards the possibilities of economic reforms, they are becoming increasingly conscious of their need to develop modern technological industries and of the difference that will be made to their international trading prospects by a change in commodity structure in their exports away from traditional products.

This process which will entail major investment, redeployment and retraining of labour, and social changes must take a number of years and for economic reasons can start only slowly: in its entirety it will present a wide variety of substantial opportunities to British exporters and we have, therefore, a real need to maintain the closest possible commercial contacts and trading relationships with these countries. Once British industry is positively established as a major supplier of equipment and technological assistance for this process of industrial development, and the countries concerned have raised their standards of living and built up a sound capability for earning convertible currencies, they can be expected to become markets of real substance for United Kingdom exports.

Payment for our exports to these countries—both our present exports and the greater quantities which we hope to achieve—can, because of their lack of convertible currency reserves, be made only if these countries can export an equivalent value of their own goods, which at this stage of their development consist in the main of raw materials, agricultural and of course, horticultural products. This is true whether they first sell these products for convertible currencies and then pay our exporters in cash or, as is nowadays frequently the case, they insist that a British firm seeking an order must at the same time arrange for an equivalent value of that country's produce to be exported. Of course, many of these goods are disposed of in third markets without ever entering the United Kingdom at all.

I have commented in these opening remarks on the general trade prospects with East European countries because, although I am fully aware of those aspects of trading in horticultural items that some believe to lead to problems for the United Kingdom industry, we should not be doing justice to a subject on which I realise that a number of hon. Members as well as my hon. Friend, feel deeply unless it were set in its proper perspective.

The problems to which it has been suggested this trading leads fall, as I see them, into two categories—problems of timing and those of quantity. It has been suggested at times that price levels of this imported produce have caused difficulty for the British industry. Although this has happened, they need not amount to problems of any significance if proper use is made of the procedure that leads to the imposition on imports at apparently dumped prices of an immediate but provisional charge pending a full anti-dumping investigation. Experience at the time of the dumping of Romanian cucumbers last year—a subject to which my hon. Friend has referred—showed that, provided the United Kingdom industry produces adequate evidence in the first instance, an order imposing the pro visional duty can be brought into force within less than a week.

Turning then from price levels, I can still see, as I said, problems of timing and quantity—

Mr. Wells

Before my hon. Friend leaves that point about the speed of getting anti-dumping orders, may I put this to him? I appreciate what he says, and so does the farming community, but would he bear in mind that the cucumber industry is one of the most compact and efficient sections of horticulture and that it is, therefore, comparatively easy for the unified cucumber growers to present their case, whereas strawberry growers and apple growers would not be able to do so with the same sense?

Mr. Grant

I accept that there are wide divergencies in this respect, and this is something which we shall consider very carefully indeed.

As I was saying, turning from price levels, I can still see problems of timing and quantity. Hon. Members will be aware that the East European countries' seasons differ comparatively little from our own and that, as a result, unless suitable protection is afforded to our growers, there is a risk that they will find themselves marketing their produce at the same time as quantities are reaching United Kingdom markets from those countries.

This protection is provided in two ways: firstly, to a very wide variety of horticultural products, by the imposition of tariff rates that are varied seasonally. The many different products need different treatment. But since these varieties are particularly sensitive to market conditions, hon. Members may be interested to know that fresh raspberries, loganberries and blackcurrants are each allotted two different seasonal rates. Fresh strawberries, dry-bulb onions and shallots have three such rates; and fresh or chilled tomatoes are accorded nine different rates.

These are only examples—the full variety of produce covered is consider able—but it will readily be appreciated how complex the system is; and it is a system of direct benefit to the United Kingdom industry, since it is designed to adjust import prices to those levels at which the incoming produce will not compete unfairly with that of the United Kingdom, while consumers will still enjoy the benefits of competition between a number of producers.

The second seasonal measure takes the form of special limitations, even within annual quantitative restriction totals, on the import of certain horticultural products during "home seasons". In 1970 the annual quotas for the import of tomatoes from East European countries totalled 3,250 tons, but in the "home season"—April to October—these imports were limited to only 250 tons; and, again in 1970, the imports of onions and shallots from these countries was limited to 73,650 tons, but only 21,450 tons were allowed to enter the United Kingdom within the "home season"—August to November.

Through these measures—and particularly when, as they are, operated within a framework of annual quantitative re strictions—a widespread general control over access to the United Kingdom market can be developed: but hon. Members—or, at least, my hon. Friend, the Member for Maidstone—may question the effectiveness of that control in relation to the arrival of Romanian cucumbers last year—an episode that was unfortunate for a number of persons both in the United Kingdom and abroad but not, as a careful and detailed investigation showed, of sufficient dimensions to cause material injury to the industry as a whole.

Certainly the dumped Romanian cucumbers caused injury to some growers, but the rapid imposition of the provisional duty immediately stopped any development of the threat and the matter came under control. This was not an instance of mass unloading on to the United Kingdom market—as it has some times been depicted—but of unfair pricing which, possibly through inadequate marketing, had an impact on our market at an unfortunate time: the Romanians have been strongly warned about their marketing practice in this and subsequent years; and a new official has already visited this country.

I see the risks of any similar difficulties in the future as much less than they were, and they can also be further reduced by better contact between industrial organisations in this and the exporting countries: I am therefore glad to hear of the likelihood that representatives of the National Farmers' Union will visit Romania in the spring, and I hope that they will find time and opportunity while there to discuss matters of this sort: such matters are handled with far better prospects of understanding between men "in the trade" than between officials.

As I have explained, we already have a system for control of factors that bear on timing problems that has been developed with care and is of some complexity. Any introduction of stricter control—as, perhaps, was suggested by my hon. Friend—would be bound to result in greater complexity, at greater expense, and in the development of inflexibility which exporting countries would certainly see as further interference with their already limited freedom to trade with us. Relating this system to the quantitative aspects to which I am turning next, I cannot see any justification for greater control than we already exercise on timing aspects.

In turning to problems of quantity, I think it important, as I said in my opening remarks, that these aspects are seen in perspective. In 1970, our global imports of those natures of horticultural produce which are imported from East European countries totalled £324 million, while the quantities from East European countries added up to just over £6 million—slightly less than 2 per cent. of the global total. Looking at produce of particular sensitivity—the same figures for tomatoes are £27 million global and just about £250,000 from East Europe, the proportion being I per cent.—for fresh fruit, £111 million global against just over £250,000 from East Europe, this being 0.3 per cent.—for onions and shallots, £27 million global, with £660,000 from East Europe or 4.2 per cent.

My hon. Friend may say that this is a small straw but that straw breaks the camel's back. I do not take that view. It is always unfair to accuse one straw, especially when it is, perhaps, the smallest. As a more vivid example, any percentage increase in, say, East European tomato or frozen vegetable quotas would increase our total tomato or frozen vegetable imports by only 1/100th of that percentage.

These examples show why I have laid so much emphasis on the need for seeing these matters in broad perspective—not only in the perspective of the general export prospects that we look towards in East European countries; but also in the perspective of the relationship between global imports into the United Kingdom and the quantities exported to us from those countries under—and this I must stress—a very severe quantitative restriction régime.

However, I would not wish to leave this matter without recognising this country's immense consumption of imported horticultural products, the resultant effect on our balance of payments and the value in this context of import-saving, on which my hon. Friend rightly laid great stress, in which our horticultural industry has a rôle of real value. And if in playing that rôle the industry really is appreciably threatened by over-supply of horticultural products then there are good grounds for looking at the whole range of our suppliers and for seeking solutions other than by concentrating all attention on one straw, a group of suppliers representing a very small part of the whole supplying population, and a group of suppliers with special meaning for us in the context of our general export prospects.

My hon. Friend was absolutely right to raise this Adjournment debate. I understand that there is considerable concern in the industry, in which he is particularly interested. But the Government's rôle is to maintain a balance between our export prospects and the vital import-saving rôle in which the horticultural industry contributes very much.

Mr. John Wells

With the leave of the House, I should like to put a small point to my right hon. Friend. I very much welcome what he said about the possible phasing and seasonality, which was very helpful. I am also very grateful for what he said about the N.F.U.'s investigations.

My hon. Friend mentioned the home season for onions of August and November. Both the "Little Neddy" and the Horticulture Sub-Committee of the Select Committee on Agriculture, of which I had the honour to be Chairman, urged our home suppliers to produce more onions. Could not the home season for this purpose be lengthened?

Mr. Grant

With the leave of the House, may I say that I understand that that is the case. Very careful note will be taken of what my hon. Friend has said.

Question put and agreed to.

Adjourned accordingly at twenty-three minutes to Five o'clock.