HC Deb 22 March 1974 vol 870 cc1523-9

12.53 p.m.

The Minister of State for Agriculture, Fisheries and Food (Mr. Norman Buchan)

I beg to move, That the Calf Subsidies (United Kingdom) Scheme 1974, a draft of which was laid before this House on 13th March, be approved. The object of this scheme is to encourage the rearing of calves for beef production. Hon. Members will be disappointed to see that the scheme retains the lower rates introduced last year by the previous administration. They were left unchanged in this year's annual review settlement, which came out during the election. That settlement was the responsibility of the last Government. I must explain why we are recommending the scheme in its present form.

My immediate objective is to act as quickly as possible to preserve the continuity of the grant, which means that I must have the scheme operating from 1st April. If there is a desire to change the level of grants at a later date steps can readily be taken to produce a simple scheme to do this.

There are two small changes. Since 1969, subsidy has been payable at stage B on the carcases of young bulls which reached the required standards of eligibility. Because at that time bull beef production was a relatively new development it was considered that certifying officers would find it difficult to judge a young bull's beef potential on the hoof. Beef calves develop bullish characteristics which are not apparent until slaughter.

The Advisory Council for Agriculture and Horticulture in England and Wales recently produced a comprehensive and useful report on bull beef production. Its view is that by making it impossible for the producer to obtain subsidy when his bulls are alive we are putting him at a disadvantage. We have accepted that there is no longer any justification for refusing to certify young bulls live. We shall allow them to be eligible under stage A instead of only under stage B. Stage B continues the existing scheme dealing with the payment of subsidy on carcases of any home-bred clean cattle which did not attract the subsidy as calves.

The second administrative change in the scheme was also the subject of a recommendation by the Advisory Council. Although the subsidy is already being paid on eligible bull caracases it has been conditional upon the bull being slaughtered before the appearance of its incisor teeth. This dentition requirement was felt to be necessary in the early days of bull beef production to encourage producers to have bulls slaughtered at a relatively early age. The industry is now sufficiently experienced in this type of production to be able to manage without this condition and we are accordingly removing the "teeth test"—known as the dentition test, according to my notes. Thus producers will be able to send bulls for slaughter at whatever age they consider most suitable to meet market requirements.

The House will no doubt want some expenditure details. During the last financial year the total spent was £31.9 million, with the expenditure then divided as follows—England and Wales, £21.2 million; Scotland, £6.4 million; and Northern Ireland £4.3 million. Estimated expenditure for 1973–1974 is almost exactly the same, at £31.8 million, and, because of the slight reduction in last year's level of subsidy, it will be lower in 1974–75.

12.57 p.m.

Mr. Charles Morrison (Devizes)

No one would deny that the calf subsidy has played an important part in encouraging an expansion of beef production. That is particularly true of times when the return from beef has not been very good, such as the period we are passing through now due to the fall in beef prices, the high cost of store cattle, until a few months ago, and very high feed prices. It is to be hoped that the subsidy will act as an encouragement and incentive to farmers and help maintain their confidence. This is necessary if trends in beef production are to be maintained.

It is remarkable that in the last two years of Conservative Government the beef herd expanded by 10 per cent. and 14 per cent. The total breeding herd expanded by 6 per cent. between June 1972 and June 1973. To a considerable extent those statistics give the lie to what the Minister said in his closing remarks at the end of the short debate on the last order. In spite of expansion, this year's Farm Review White Paper shows that home production of beef still provides only 86 per cent. of total home supply.

There remains considerable scope for expansion. The calf subsidy is an aid and I welcome the extension of the Scheme under Stage B to cover carcases of fat bulls. That should help to stimulate bull beef production. It should assist in increasing home beef supplies and also provide a possibility of a growing bull carcase export trade as and when opportunity arises.

I should like to ask the hon. Gentleman three brief questions—the first on a matter of clarification. On page 9 of the Schedule, in the second line, referring to stage B carcases, there is mention of fat steers, clean fat heifers, bulls and other male cattle". It would be useful if the hon. Gentleman could clarify what is meant by "other male cattle", in view of the earlier reference to fat steers and bulls.

Secondly, paragraph 4(a) of the Schedule refers to ineligible bull carcases. It is important that farmers should appreciate that some bull carcases will still be ineligible, and I should like to ask what estimate has been made of the proportion or the type of carcase which will be ineligible for the subsidy.

My third question refers to an item in the explanatory note, and perhaps the hon. Gentleman could clarify it. The third paragraph in the note says: …rates of subsidy at stage B are such amounts as are determined to be approximately equivalent… Can we be told what is meant by "approximately equivalent" in terms of the average payable at stage A? It seems to me that they will either be equivalent or not equivalent, and if they are not equivalent will the Minister specify in what way they are not equivalent?

We all constantly emphasise the need for confidence in agriculture if an increase in production is to be maintained. I make no apology for emphasising this point yet again now. The calf subsidy is a help, but the wider actions of Ministers are still more important. The Government and the Ministers will be judged on those actions, whether they occur at home or arise from deliberations in Brussels. So far it is fair to say that the right hon. Gentleman the Minister of Agriculture's words have been mildly encouraging, but so they were when the Minister was last in office—yet only too often his words were belied by his actions. This time it is even more important, in the interests of the consumers, that his actions should match his words. This is as true of the beef scheme as it is of any other scheme. Only then will farmers have confidence to continue to expand production.

1.5 p.m.

Mr. Stephen Ross (Isle of Wight)

The Minister said that he was an Orcadian; and I am sure he knows all about the problems which I am about to repeat to him ad nauseam. I respect the Minister's difficulties and appreciate what he said about the lack of time which the Government have had to take action on this matter. However, this instrument merely extends the payment of calf subsidies at a rate similar to those which have been in existence since 16th April last year.

The hon. Member for Devizes (Mr. Morrison) is in a difficult position, since it was a Conservative Government which agreed these figures at the price review. This is one of those payments which we expected to be phased out over the next few years if we were to comply with the common agricultural policy.

I feel strongly that an excellent opportunity is being lost to give a much-needed shot in the arm to our livestock-rearing industry. I welcome action taken over young bulls and bull carcases, but if there is not to be a complete lack of confidence it is essential that an immediate cash injection should be made. One way to do this is to restore the calf subsidy to those rates which pertained a year ago. Better still, this could be done by increasing those figures, and I wish to remind the House that the figures were £11.25 for steers and £8.50 for heifers.

My information is that calves, many of which are fit for rearing as beef, are being slaughtered at an ever-increasing rate. If we are not very careful, there will be a wholesale scramble to get out of livestock production altogether. That slide has already got under way in the pig industry. It can only lead to a severe shortage next year and a subsequent increase in imports, which we can ill afford at present. People who should know are predicting falls of up to £30 per head for suckled calves next autumn, if action is not taken now. If the Government are serious about encouraging the maximum economic production of food in this country, to which they referred in the Gracious Speech, they are hardly backing up their words by their actions today.

The long-term forecast is that the cost of feeding stuffs will remain at least at the present levels; and, although I agree that the long-term outlook for meat is also favourable, the short term is disastrous. It is the next year that is critical, and I hope that the Minister will think again about the proposals which he has brought before the House today. What is more, he should give serious consideration to extending the scope of the Livestock Rearing Act 1951 to enable this to apply to the whole of the country and therefore permit many more beef herds to qualify for the hill cow subsidy. It is action upon these lines, as well as some firm commitment on extended credit facilities, for which the cattle breeders are looking—men and women who have spent a lifetime building up herds of which we are justly proud. I trust that they will not have to wait in vain. In the long run, the inevitable fall in production which will follow if these measures are not implemented will mean higher prices to the consumer.

1.9 p.m.

Mr. Buchan

I should like to make a few comments, with your permission, Mr. Deputy Speaker, in replying to the debate.

I very much agree with the hon. Member for the Isle of Wight (Mr. Ross) that the next 12 months are critical, and I am sure that nobody would dispute the truth of that statement. I have found when answering these matters during the early days of the Government that one either does not know the answers to questions or one is unable to give information because other discussions are taking place. Most of the hon. Gentleman's points come within the latter category. At this stage I cannot say anything. The hon. Gentleman was right to take the opportunity to press the Government further, but he knows our difficulties. I must tell him that if I were able to give him an answer I should be very glad to do so.

The hon. Gentleman was right to say that the level of subsidy in the scheme is at the same rate as before but I pointed out that this was partly contingent on the necessity for putting the scheme through at all. If we desire to do so—and I am not saying that we shall do so—we shall have an opportunity to change the situation easily and rapidly—with the support, I hope, of the Conservative and Liberal minorities in the House.

I take the hon. Gentleman's point about the slaughter of calves. I do not want to make any propaganda point about previous happenings since we are responsible for these matters at present, though I hope the hon. Gentleman will not attribute previous actions to us. I was interested in his remarks about rejigging the hill cow subsidy scheme. We shall look at all possible means of dealing with the situation. I appreciate the problem the hon. Gentleman raised about the cash situation.

The hon. Member for Devizes (Mr. Morrison) raised a number of specific points, and he put up, this time from the Front Bench, the sort of defence of the Conservative Government's record which he used to put up as a back bencher. First, we have the curious phrase "other male cattle", and the hon. Gentleman wanted to know what was meant by that since we have already mentioned both steers and bulls. One of my hon. Friends suggested to me that it might refer to buffalo and bison. However, the other male cattle are immature followers which would not be called bulls. The suggestion is in some doubt, but I presume that it refers to age.

Second, there is the problem of some safeguard to avoid paying on carcases which do not come up to standard for slaughter. I think that this is a reference to page 12. There is a certain safeguard on this.

The hon. Gentleman also wanted to know what kind of proportion it would be. I am afraid that I cannot give him an answer. If I can get any closer to the proportion in the Department, I shall write to the hon. Gentleman.

Mr. Charles Morrison

The important point here is to make sure that farmers realise that there will still be some carcases which will not be eligible for subsidy. That is more important than the estimate.

Mr. Buchan

This is known. The hon. Gentleman wants figures about the proportion left in this category. I will see whether anything can be done about that.

Finally, the hon. Gentleman asked about the penultimate paragraph and this approximate rate. I think that we shall have to leave it as it is. Certain matters could arise which might make it difficult to put down the exact equivalent. The two items have been certified at different stages, and the factors involved might make it difficult to see that the equivalent at one stage was the exact equivalent at the later stage. We had better leave it in the form that it is, as an approximate equivalent.

Question put and agreed to.

Resolved, That the Calf Subsidies (United Kingdom) Scheme 1974, a draft of which was laid before this House on 13th March, be approved.