MILK (FAT CONTENT)

HC Deb 15 January 1976 vol 903 cc743-73

11.0 p.m.

The Minister of State for Agriculture, Fisheries and Food (Mr. E. S. Bishop)

I beg to move That this House takes note of Commission Document No. R/2861/75 relating to fat content of whole milk and of the Government's intention to ensure that arrangements are satisfactory for imports into those Member states where sales of whole milk are unstandardised. I welcome the opportunity, even at this late hour, to debate this important question of the fat content of whole milk and to inform the House of the position reached in our negotiations with the Commission and other member States.

The proposals in Document R/2861/75 would amend the provisions of EEC Regulation 1411/71 concerning the minimum fat standard for whole milk in the Community. Before I go into detail about their implications for the United Kingdom, I think it would be helpful to hon. Members if I gave a brief summary of the background to the proposals.

EEC Regulation 1411/71 requires whole milk to have a fat content which is naturally equal or superior to 3.5 per cent. or which has been brought to that level. This provision was intended to ensure a guaranteed high quality for milk delivered to consumers throughout the Community and to set a common standard for intra-Community trade. In the United Kingdom milk is sold with its natural fat content with nothing added or taken away. The annual average fat content is around 3.7 per cent. to 3.8 per cent., but of course it varies seasonally. That is why a derogation was negotiated under the Treaty of Accession allowing the supply to consumers in the United Kingdom until the end of 1975 of whole milk with a natural fat content of less than 3.5 per cent.

The original Community of six should have implemented the 3.5 per cent. standard from the end of 1973. However, because of the possible effect on consumer prices in some of them which standardise at lower fat levels, the Council of Ministers decided to defer the implementation of the minimum standard. When the deadline was extended to the end of last year, the Commission was asked to carry out a review of the general question of tat standards for whole milk.

Document R /2861/75 takes account of the results of the Commission's review, which included consultations with the major interests concerned throughout the Community. Opinions were sought from representatives of dairymen, co-operatives, consumers and trade unions throughout the Community, as well as an independent group of experts. The proposals put forward by the Commission in the light of these consultations show a welcome flexibility of approach. They envisage freedom for individual member States to choose in relation to their national markets between "standardised whole milk" with a fat content of 3.5 per cent. and "non-standardised whole milk". The first alternative fits in with normal practice in the original Six and Denmark where whole milk is already standardised at one level or another; the second is based on the system currently followed in the United Kingdom and the Republic of Ireland.

The proposals provide that a member State which chooses not to standardise whole milk for its home market should not prevent the preparation of standardised whole milk for export to another member State where standardisation is the rule. I am sure the House will agree that this is a reasonable requirement. They also provide that a country which opts for non-standardisation should not prohibit the marketing on its territory of non-standardised whole milk from another member State. Whilst, on the face of it, that, too, might seem to be a reasonable proposition, there could be problems.

The natural fat content of milk can vary significantly from one country or region to another. In the United Kingdom it is relatively high. Our industry and trade consider that there could be a very real risk of unfair competition from whole milk with a low fat content, and appropriate arrangements will be needed to ensure that any trade between member States is on an equitable basis.

This point has been appreciated in Brussels. The Commission has now suggested that its proposals should be modified to provide that whole milk imported into a non-standardising country from one which chooses to standardise should contain at least the weighted average fat content of milk produced in the importing country during the preceding year. This would go a long way towards solving the problem. However, it could leave a difficulty of imports of lower-quality whole milk from the Republic of Ireland, where average fat standards are not as high as ours. We shall, therefore, need to consider this point further in the forthcoming discussions to be held in Brussels. I can assure the House, however, that we shall want to satisfy ourselves that the arrangements finally adopted are fair and take full account of the United Kingdom's special position.

In deciding on our approach to these negotiations, we have had detailed consultations on these issues with the various interests concerned. My right hon. Friend met representatives of the farmers' unions, the milk industry and the marketing boards on 11th December. We have, of course, had regard to other views that have been put to us, including those from consumer interests.

I must tell the House that the balance of argument for maintaining the system of non-standardised milk is not clear-cut. Indeed, the terms for our accession to the European Community envisaged that we would have moved to the Community system by the end of last year. There are certainly those within the industry who take the view that we should adopt a system based on the minimum fat content of 3.5 per cent. in the Community regulation.

On the other hand, it is the present practice for trade in milk between the boards and the milk industry to take place on a volume basis without regard to the fat content. This method of trading is, of course, related to the fact that a high proportion of total production in the United Kingdom is required for the liquid market. But a change to a system based on an absolute minimum fat standard for liquid sales would, in the view of the industry, lead to the pricing of milk on the basis of its composition and to changes in the practices and equipment of the industry, particularly for some of the smaller distribution businesses.

Mr. Peter Mills (Devon, West)

The Minister said that certain sections of the industry do not agree with these proposals and would prefer a reduced solid butter fat content. It is important that we should know where these disagreements are.

Mrs. Gwyneth Dunwoody (Crewe)

Normandy.

Mr. Mills

In this country.

Mr. Bishop

In some parts of the industry the arguments are evenly balanced. I shall come to that later.

Mr. Mills

Where?

Mr. Bishop

I shall give the hon. Gentleman the information a little later.

Mr. Hamish Watt (Banff)

Will the hon. Gentleman give way?

Mr. Bishop

I would rather get on with my speech and let hon. Members put forward their observations later, so that they may have a more comprehensive reply.

As my right hon. Friend announced on 18th December, the Council of Ministers decided at its December meeting to defer taking decisions on the Commission's proposals until early this year. Meantime it agreed to extend until the end of March the provision in Regulation 1411/71 which enables member States to continue with their existing arrangements concerning the fat content of whole milk. This allows us to maintain in the United Kingdom our system of supplying whole milk to consumers with its natural fat content unaltered.

As I have said, there are differences of view on where the balance of advantage lies. The Government concluded, however, that we should press in Brussels for arrangements which would enable us to keep our present system at least until there was a clearer and more compelling case in favour of change. That is the basis upon which we have been pursuing the negotiations in Brussels.

I do not want to take too long over these opening remarks. The importance of this debate is that hon. Members should be given a chance to state their points of view. I can assure the House that any views expressed will be taken fully into account when the time comes to take the final decision on the Commission's proposals.

Mr. J. Enoch Powell (Down, South)

Will the Minister explain to the House what benefit, if any, this Regulation, even with the improvements that it is sought to obtain in it, will confer upon the United Kingdom?

Mr. Bishop

The point I have been trying to make is that the arguments one way or the other are very finely balanced. The Community is anxious to have the standardisation of milk but has accepted that in the United Kingdom our system is what we call "from the cow", and because of the variation of the fat content during certain seasons of the year we are seeking to ensure that our industry has the right to opt for the system most beneficial to us.

We recognise the consequences which may be involved in the change from non-standardised milk to standardised milk. While the Community as a whole is anxious to bring about the standardisation to which I have referred, we wish in this country to ensure that any changes are not to the disadvantage of our own industry.

11.12 p.m.

Mr. Nicholas Winterton (Macclesfield)

Let me make it clear at once that it is my view that the Minister's opening remarks have been somewhat disappointing, and I have no doubt that hon. Members who have indicated disagreement from the Back Benches will be making their comments known to the Minister during this short debate.

This late-night debate is yet another chapter in the saga of the British "pinta". The pint of milk and its daily appearance on the doorstep of virtually every home in the United Kingdom and Northern Ireland is an institution like the pint of beer. It is an institution which in recent times has been under constant harassment, for no constructive reason other than that some faceless bureaucrats want to standardise everything.

Last year we debated an EEC document on the quality and marketing of milk. The contents of that document as it stood would have done great damage to the structure of the dairy industry in this country. On that occasion both the Government, in the person of the Minister now facing me, and the main Opposition in this House put down very clear markers that the proposals as drafted were unacceptable to the United Kingdom and Northern Ireland.

The document on health and hygiene covers another area in which I foresee certain difficulties. But the document of which we are asked to take note this evening is somewhat different, because it is quite clear—at least I thought it was clear until the Minister spoke—that the EEC, of which we are now a confirmed and fully participating member, recognises that we have unique features which do not and cannot fall into line with the European system. We have our own system of dairying, milk production and milk distribution, and the daily "pinta" is one of the unique features.

The proposal requiring the butterfat content of whole milk to be harmonised throughout the Community at a minimum level, as the Minister told us, of 3.5 per cent. was drafted before this country, Denmark and Ireland were admitted to the EEC. Consequently we were not consulted.

The fact is that over 60 per cent. of the milk produced in the United Kingdom is consumed in liquid form, and people in this country drink over 40 per cent. of the total liquid milk consumption of the European Economic Community. This makes it perfectly clear that our situation is very different from that prevailing in many of the other countries comprising the Community.

The Commission has carried out a review of this Regulation. Recognising that consumer habits, tastes and preferences vary in each country, it has recommended to the Council of Ministers that the United Kingdom and the Republic of Ireland be permitted to continue to sell milk as it comes from the cow. We on this side welcome this change of attitude and I pay tribute to the Minister and his officials for their part in bringing it about. There is no doubt that they had fierce arguments in Europe, but it seems that they have won the day.

The European policy on standardisation of milk would destroy the healthy United Kingdom liquid milk market and the consequences would undermine the whole structure of dairy farming. Milk rounds would become uneconomic, many smaller dairies would be put out of business and it would cause unemployment in a sector where it is virtually unknown. The loss of the natural image of milk, with the clear bottle delivery which permits one to see how much cream is at the top of the bottle, would destroy consumer confidence and increase the cost to the housewife for an inferior product.

United Kingdom dairies are specialised either to process liquid milk or to manufacture products. Processing dairies are not equipped to standardise milk or to manufacture residual butterfat economically.

From the overall EEC viewpoint, standardisation here would result in additional surpluses of butterfat and skimmed milk in the Community. The experience of other countries which have standardised clearly shows that sales of liquid milk will drop. Sales in Holland are down by 10 per cent., in Germany by 7½ cent., in Belgium by 5½ per cent. and in France by 4 per cent. In contrast, sales here have been well maintained, even before the consumer subsidy was introduced, and have risen by between 2 and 3 per cent.

A study of the effect of standardisation on the balance of payments has estimated that the additional cost of plant, processing and transport would largely negate any saving, especially as any resultant swing from doorstep delivery to shop sales must necessarily involve the extension of the use of non-returnable containers, which generally require imported raw materials and machinery.

What I have said might imply that the document holds no dangers or problems for this country. Unfortunately that is not so, for the reason that the Minister gave. We are disturbed by the proposal that countries which permit the sale of non-standardised full-cream milk must also allow the sale of such milk imported from another member State. That does not for this country establish the condition of fair competition, as might appear at first sight.

In the other EEC countries the value of milk depends largely on its fat content, because manufacture is the main outlet. In this country milk is sold at a price independent of the compositional quality of the milk. If other member States, most of which use their prime grade milk for manufacture, are allowed to send their relatively low butterfat natural milk to this country they will have a competitive advantage over domestic supplies, which under the EEC system will be priced in line with the average fat content.

The extent to which competition would be thus distorted is easily shown by reference to the butterfat calculated in accordance with the intervention price for butter, which would be the basis on which dairies in other member States would price milk for sale here. At present this is 0.6p per gallon for every 0.1 per cent. of fat. Given the average butterfat content of milk in this country, which is about 3.8 per cent.—actually, 3.76 per cent.—a dairy in another member State which would be free to sell milk into this country with a butterfat content of, say, 3.3 per cent. would have an advantage of 3p per galion—a substantial margin relative to the profit margin on the sale of liquid milk. I am sure that the Minister will agree that this situation would inevitably be an attractive inducement to buyers in this country to purchase such supplies.

It is essential, for the reasons I have given—I could give others—that liquid milk imports into the United Kingdom should contain a butterfat content not lower than that of the United Kingdom weighted average of 3–76 per cent. Such imports should also be of the same hygienic quality to avoid the possibility of lowering our hygiene standards by importing inferior milk. This would ensure that competition would be fair at the raw material stage. That is an important point.

I believe that it might be proper to mention now the Conservative view that no EEC quality and marketing regulations should be accepted until draft proposals of health and hygiene governing production on farms are adopted. It is also our view that uncertainty about standardisation should not be allowed to continue by the provision for a further review in two years' time. I hope that the Minister will give attention to these points when he replies to the debate.

I emphasise that the milk producers and dairy industry in this country have together served the consumer better in the United Kingdom than similar industries in other countries have served their consumers. Our consumers have been given the highest quality of milk at the lowest price and delivered—I emphasise this—to the doorstep of virtually every house in the country. In return, the consumers' faith in the product and in the people behind its production led them to accept milk rationing and the total absence of fresh cream from the family table for many years rather than that the product should be tampered with in any way. We do not wish to jeopardise a long-established traditional form of milk distribution, rendering a unique service to United Kingdom consumers.

I hope that when the Minister replies he will answer the points which I have put to him and will give us an assurance that the unique needs of this country will not be neglected. To use the words of the "take note" motions, we support the Government's intention to ensure that arrangements are satisfactory for imports into those Member states where sales of whole milk are unstandardised. This is an important debate and I am sorry that it has begun at this late hour. I urge the Minister to give the replies that are necessary not only for this House but for the people of this country as well.

Mr. Neil Marten (Banbury)

If the Minister is unsuccessful in his protests and in getting what he wants at the Common Market Council of Ministers, is it the Conservative Opposition's policy that they will demand the resignation of the Minister? One of the safeguards which was always held out to us was that we could get the resignation of the Minister if he failed to get what the British Parliament wanted in Brussels.

Mr. Winterton

My hon. Friend is an expert at asking hypothetical questions. I remember the first occasion I stood at this Dispatch Box. Indeed, this is only the second occasion I have done so, but I hope it will occur more often.

We have laid down some firm markers to the Minister this evening. It would be premature for me to indicate whether I shall demand the Minister's resignation. I rather like the Minister. We faced each other this morning in Committee. Inevitably this document will come back to this House, and we shall then have another opportunity—

Mr. Marten

No.

Mr. Winterton

We on the Opposition side will certainly have an opportunity to look at the document again, whether it be in this House or not.

Mrs. Dunwoody

No.

Mr. Winterton

On that occasion it will be for us to decide what action we should take and what action we should press upon the Minister.

11.25 p.m.

Mrs. Gwyneth Dunwoody (Crewe)

I am delighted to follow the modest Member for Macclesfield (Mr. Winterton), not least because he has given us a classic demonstration of the real problem of the Conservative Front Bench. It is no use coming here and making the kind of speech that he has just made if he is not prepared to follow it through and say to the Minister "We do not think that you ought to be asking us to take note of this incredible mess of rubbish which you have brought before us. You ought to be asking us to reject it." If the hon. Gentleman is not prepared to do that, there is no point in the emotive terms he has used tonight.

The hon. Gentleman did not say that the whole basis of the documents before us is the capitalist assumption that we should widen the market for some dairy industry products. We are talking not about improvements for the consumer, the health standards of milk or the advantages for the British dairy industry or for the people who want milk delivered to their doorsteps, but about increasing the market for some EEC countries other than the United Kingdom which wish to benefit from the money to be found in this country.

Mr. Nicholas Winterton

I am grateful to the hon. Lady for giving way, particularly as she is a fellow Cheshire Member. However, she is talking absolute nonsense. The motion asks us to take note of the Government's intentions. I have the full support of my colleagues on the Opposition Front Bench in saying that if the Government's intentions do not come up to our expectations we shall want to discuss the whole matter again.

Mr. Nigel Spearing (Newham, South)

It will be too late.

Mrs. Dunwoody

I am delighted to hear what the hon. Gentleman said. It will be the first time that the Opposition have made the slightest attempt to bring such a matter back to the Floor of the House after the Government have not obtained terms which they consider acceptable. If I were being unkind—which heaven forfend—I might say that it is rare for the Opposition to put forward arguments of that kind. But it is delightful when we find them on the side of the angels.

I want to turn to this "take note" document. I have the greatest respect for my hon. Friend the Minister, who finds himself in the exceedingly unfortunate position of having to speak for this nonsense. He is a man of taste, charm, understanding and intelligence. Therefore. I hope that he will not mind my saying that his speech was the biggest load of good old British rubbish that I have ever heard in this House.

This document is a classic example of what is wrong with EEC policies, particularly relating to agriculture. What, in effect, is it saying? It is saying that at present the Common Market has about 1 million tonnes of skimmed milk. It was not contributed to by this country because, as has already been said, we drink most of our butterfat in the form of liquid milk. However, other countries do not do so. They have a policy of skimming milk and of creating more butter than can be used. They possess such a large amount of skimmed milk and are so desperate to get rid of it that they are considering feeding it to animals.

When those of us who are involved with the agricultural committees of the Common Market ask why this should not be considered as a form of food aid, we are told that the Commission does not feel that skimmed milk beyond a certain amount should be fed to human beings outside the Common Market, irrespective of their needs and the fact that many of them are starving to death. The Commission apparently feels that this skimmed milk should be put into animal feed, no matter what the cost to the people wanting to use that animal feed or the effect it will have on the livestock industry or the consumer—because the price must be absorbed somewhere. It will be absorbed not by the industry but, as always, by the unfortunate housewife.

In effect, the Commission is saying "Britain, which has not up to this point contributed to the skimmed milk mountain, should in future open her market to other dairy industries. Because of her habit of retailing natural milk, it is exceedingly difficult for other industries easily to enter the market. Therefore, we feel that we should fix a form of standardisation which is below the existing butterfat content of the natural milk and is only that which will he convenient for other EEC countries." That is really what we are being asked to consider. We buy natural milk. We have it delivered in glass bottles to our doorsteps. Other EEC countries do not. Our milk has a high butterfat content. Some other EEC countries skim their milk.

What the Minister has not made clear is that, although he is asking us to take note of this document, he is suggesting that there has been a delay, that negotiation has still to take place and that Britain still has a degree of flexibility. But he has told us already that we have only four months before this policy will be decided, because, although it has been put off severeal times, it is clear that the other member countries will not continue to accept what he calls a derogation. I thought that that was a French word, but if the French want to get rid of "Franglais" we should get rid of "Frenglish". Within four months, we shall be asked to take that decision.

What is it that Mr. Lardinois asks us to think about? He says: The Commission has concluded that, in the present situation, Member States should be allowed to choose one of two solutions. That is what I like about the Commission. It is always so gracious. The first is the marketing of full cream milk with a fixed fat content, obtained by standardisation. The other solution is the marketing of a full cream milk whose natural fat content would not be altered by the addition or removal of fat, or by mixture with milk whose natural fat content has been altered. So far so good, but then we come to the nasty sting in the tail: The designation 'full cream milk' applied to the milk in question by virtue of Article 3(2) of Regulation (EEC) No. 1411/71 would be qualified by a term which will provide consumers with a fair description. In other words, on the market we shall have the natural milk to which we are accustomed. We shall also have an inferior milk at a cheaper price which might tell us in very tiny letters that it is not of the same standard as ordinary milk to which the consumer is accustomed but which would also be considerably cheaper and could undercut the existing product.

What is really important in the Commission's view is that freedom of movement must be affected as little as possible in trade in full-cream milk between member States which have chosen the solution of standardised full cream milk and those which have chosen that of non-standardised full-cream milk.

The Commission also says: In the light of experience acquired the marketing conditions for standardized full cream milk originating in other Member States in regions of the EEC where standardization is not permitted shall have to be established at a later moment. In other words, what we are really talking about is that the Commission knows that the policy would mean having two standards of milk on the market in this country. It knows that this situation would produce a price differential. It knows that by saying "It has been labelled in such a way that the consumer understands it", it will be able to suggest that there is no damaging competition when that is precisely what will happen. What is more, there is no indication that the other EEC countries will be forced to comply with our health and safety regulations or whether the consumer will be protected in any way.

It is very likely that we are talking yet again about the poor housewife being conned, because she will not be aware that all that has happened is that a group of people in the dairy industries in other EEC countries have decided that they wish to expand their trade and that the good market is in this country.

While I am on the subject, let us suppose that we conform to this 3.5 per cent. butterfat content. Are we to skim milk? If we do, will that contribute to the skimmed milk powder mountain? If it does, what is to be done with it? Will it be fed to animals, or shall we export it? If we export it, in what form and where will it go? After all, the Commission has said that it may not be part of the food aid programme above a certain level.

My hon. Friend is not being 100 per cent. honest with us in coming here to say that we still have decisions to reach and a certain time before we need take a decision. I think he knows that the pressures on the country are considerable. He knows that it is probably typical of the way in which so many Community policies are implemented that measures of this kind are brought before the House late at night when nearly everyone has gone home and there will not even be any Press coverage. It will be a miracle if one word that is said by any hon. Member in this debate is reported to the general public. The policy is to slip these matters in at night and thus make it difficult for people to get to know about them; and by the time they get to know it will be difficult for them to take any effective action.

Mr. Nicholas Winterton

Is not the hon. Lady showing an unfortunate lack of confidence in the ability of her own Government to negotiate on Britain's behalf in Europe? The Labour Government have already got our European partners to move substantially over the matter of standardisation. I have put down a marker tonight indicating that the Opposition want the present situation to continue in the future.

Mrs. Dunwoody

That is typical of the schizoid attitude of hon. Members opposite. This is something that always fascinates me. On the one hand, hon. Members are prepared to say that the Government are not implementing the exact policies which they want to see pursued. On the other hand, they assert that they do not have any confidence in the Government.

If I were to be honest I should say that I have as much confidence in Ministers as I have in any hon. Members. I had the doubtful pleasure of listening to several days of debate in the European Assembly during which I heard nothing factual about what is involved for the individual member countries concerned. If the hon. Gentleman is asking me whether I have any faith in the Government, I have to say that I have more faith in this Government than I have in any other Government in the Community. This is mainly because I can stand behind Ministers here and say what I believe, in the confident knowledge that Ministers accept that some of us are deeply concerned about these issues.

The British public are being cheated in many instances by policies of which they are not fully informed. Those of us who are here tonight will speak of these things because we know that those on the Government Front Bench will respond to the pressures from democratically elected Members of Parliament. Unfortunately, this did not always apply when the Conservative Party was in power.

I am very worried that this small policy matter which will affect the consumer is typical of the policies emanating from the Community. In many instances the so-called compromise is not a compromise. The Community merely states "You have one standard. Eight other nations have another standard. Therefore, you will lower the standards that you have built up over, in some cases, hundreds of years" so as to pay lip service to a policy which manifestly is not working.

I refer, of course, to the nonsense of an agricultural policy which builds skimmed milk mountains, butter mountains and apple mountains. That policy is not working. There are not many housewives who can stand in the House of Commons tonight and express great distress about this matter as I am able to do, but I assure the House that that distress is felt and that housewives will not sit by quietly and have this nonsense perpetuated on the British consumer.

Several hon. Members

rose—

Mr. Deputy Speaker (Mr. Oscar Murton)

I would remind the House that this debate will end at 12.30 a.m.

11.40 p.m.

Mr. John Davies (Knutsford)

I shall be faithful to your implication, Mr. Deputy Speaker, and keep my few remarks to the minimum.

I enter a word of caution about the line taken by the hon. Member for Crewe (Mrs. Dunwoody). It surely is a little irrational to see a great depth of Machiavellian intent by this country about an instrument which saw its origin in 1971, long before we were a member of the EEC, and the amendment to which has now been brought about by the diligence of our Government. That would seem to confound entirely the hon. Lady's wholly irrational approach to this matter.

However, it was not for that purpose that I sought to catch your eye, Mr. Deputy Speaker. It was to venture a certain criticism of the Commission, which is unusual for me. The truth is that I have found no fault with the intention to move towards a unification of the market. The unification of the market is highly beneficial to the consumer in practically every respect and product. Therefore, I welcome it and I see no objection to that happening within the Community, even if that unification has no particular reference to this country, provided that this country does not suffer thereby.

The debate this evening is being correctly conducted to ensure, through the influence that this House can bring to bear upon the Minister, that whatever may suit the rest of the Community in attaining some measure of standardisation in its milk production should not be allowed to damage our dairy industry or our consumers of milk. I believe that that is a proper attitude of mind and it is the one that we are discussing.

However, I am worried about something of a more general nature. The truth is that the Commission is set up to look most carefully at the interests of all member countries and to arrive at a conclusion, which it then embodies in an instrument or a draft directive. I find it daunting that in respect of instruments and directives which originated before our membership the diligence, determination and courage of Her Majesty's Ministers should always be required to ensure that the British interest is secured.

It should be a proper part of the Commission's work, particularly in a case of this kind when it has a remit to review the instrument in question, that it should review the instrument having due regard to the particular conditions applying to an important member country, namely, our own. In many ways it is unacceptable that each case should have to be presented as a kind of struggle between a British interest seeking to get justice and reason into instruments which the Commission has apparently put forward without due regard to those considerations and the interests of the other member States. I believe that that is wrong.

I hope that in whatever way the Minister conveys the objections or the recommendations of Her Majesty's Government—and I believe that the recommendations will be broadly supported in their general intent tonight—he will none the less convey to the Commission the disappointment of even such a convinced believer in the future of the Community as myself that the Commission has waited until such time as the British Government bring force and pressure upon it so to modify matters which may well have originated before our membership in order that they should comply with our basic interests.

11.44 p.m.

Mr. Wm. Ross (Londonderry)

It is noticeable that it is principally the countries—mainly ourselves—which have always had straight, honest-to-God cow milk that have been opposing the standardisation of the liquid. We do this for several reasons, some from the consumer's point of view and some from the point of view of those who have to work within the industry.

To skim off milk or to add to it would require the installation of costly machinery which would not be used to the full. It would inevitably add to the butter surplus Also, we have a totally different pattern of production and milk sales in the United Kingdom. It would lead to the disruption of the whole United Kingdom system and it could lead to considerable cost to our Exchequer.

As the Minister very kindly remembered, we in Northern Ireland have a particular interest in this matter because we share a land frontier with another member State. Eire does not have the production pattern which we have in the United Kingdom. Eire has the production pattern that is found in the rest of the Common Market countries on the Continent. This is very largely a pattern of production that is aimed at manufacturing quality rather than high-quality liquid sales.

Different qualities of milk are found in various parts of the Common Market. I understand that in 1974–75 the weighted average for England, Wales and Northern Ireland came out at about 3.77 per cent. and that for Scotland at about 3.83 per cent. The House will not that it is far above the standard that is proposed and far above the standard set down in the document before us.

Like the hon. Member for Crewe (Mrs. Dunwoody) I object to the sting in the tail, where standardisation is to be rammed down our throats if the Common Market can manage it at some time or other. As the hon. Lady says, there will be two different qualities of milk on sale which will not be discernible to the general public and which will be vastly different in price.

This is a very serious matter for the whole milk industry and perhaps for the Exchequer if Exchequer subsidies or support are to be continued. That is a matter on which I should like the Minister to comment tonight.

The document states that 3.5 per cent. would be a fair solution. I doubt that, because later on it points out that standardised milk originating in other member States may be marketed throughout the Common Market. Here is a grave danger for all our people in the industry. There is no guarantee that conditions of production will be the same or that conditions of hygiene, buildings and all the rest will be the same. There is no guarantee that health standards will be the same for other member States.

There are also the different patterns of production and sale to be considered. In the United Kingdom we have always had to aim for a fairly even level of production throughout the year because of the tremendous amount of our milk that goes for liquid sale. Other countries have been able to go for a cheap summer production. Eire does this—and in the border countries, which is very serious for us.

What does this mean in relation to the role of the milk marketing boards in England, Wales, Scotland and Northern Ireland? Has that aspect been taken fully into account, and will the Minister do everything possible to protect those bodies?

I should like to return especially to the problems that we should have in Northern Ireland if milk were permitted to flow across the land frontier. Unless the regulations on health and hygiene are standardised throughout the Community, and standardised at our high level, for all milk, we shall have no guarantee that disease will be properly controlled. We have no guarantee as to the standards of production anyway.

For several months past the Eire Government have had a long-standing quarrel with their veterinary surgeons. That has led to the suspension of certain vital safeguards. Animal health is suffering and it will continue to suffer until the dispute is resolved. That is the sort of thing that can happen in future and over which we shall have no control. Not only do we have no control over hygiene, but we have no control over buildings and the capital expenditure and capital investment involved in the production of milk.

In Northern Ireland, as in the rest of the United Kingdom, there is a high level of capital investment. We produce the highest possible quality of milk to the highest standards of health and hygiene, and those standards need to be protected. I believe that the Minister should give us a guarantee that the Government will get what our industry needs. We must have our health and hygiene regulations adopted throughout the EEC. That will mean that total investment costs in the production of milk will eventually be broadly equal throughout the EEC. Other member States will not be very happy about that, but until that state is brought about we should allow into the country only that milk which is equal to the United Kingdom standard of the preceding year.

The Minister mentioned that point in passing but I have yet to see any determined effort on the part of the Government Front Bench to bring that about. I hope that the hon. Gentleman and his right hon. and hon. Friends will be prepared to take some positive action. If that action is not taken, we shall find ourselves importing from other member States not their highest standard of milk but their second-quality milk. If they have to sell us their highest standard of milk, I do not believe it will be possible for them to produce it—bearing in mind the gross inefficiency that exists in some areas—any cheaper than our producers are able to do. They can produce a low standard of milk much cheaper than we produce it because in some cases, to mention just one factor, they have a more favourable climate.

There is a tremendous variation in the standard of hygiene and buildings, for example, throughout Eire. In the border counties most of the milk that is produced goes for manufacture, but if there is no frontier the milk can be taken into Northern Ireland. That will have a serious effect upon the milk marketing board and upon the price of milk and a serious impact on the income of the highly efficient producers in Northern Ireland. If that situation should come about, what will be the effect on Exchequer payments in this country? The manufacturing price could also be under attack in Northern Ireland in those circumstances. That is a matter to which we hope the Minister will give his attention.

We have always given the consumers in the United Kingdom the very highest quality of milk. It has come straight from the cow with nothing added and nothing taken away. That is what people like. They have become used to that quality and I think that they will demand it in future. I do not want to see a lower-quality product foisted upon them. Other parts of the EEC should be persuaded to raise the quality of their product to our standard.

We should resist lowering our standard to that which applies elsewhere. We have a supply production system that have stood the test of time. Our producers are geared to that system and they cannot easily change. It is a system that must be maintained.

I think that regulations should be brought into effect to cover standards of health and hygiene not only for milk that is produced for liquid consumption, a situation which apparently obtains at present in the Common Market, but for all milk, as the present system would militate against our producers. We hope that the Minister has made the proper noises in Brussels on this matter, and we hope that he will continue to make them successfully so that our producers will be given a better deal.

If the Minister is not successful when he takes our proposals to Brussels—and we must bear in mind that this is a "take note" debate—will he give an undertaking that the document will be brought back to this House? Indeed, if that happens it will be the first such document to be brought back. There will then be an opportunity to test opinion in this House.

It is no good Ministers on every occasion taking the view "You have spoken on this matter on earlier occasions and note has been taken of what has been said." As the hon. Member for Crewe said, these matters are being slipped through late at night, and on this occasion the Regulation has been put on the Order Paper in a most obscure way.

11.57 p.m.

Mr. Nigel Spearing (Newham, South)

The House has only one and a half hours in which to debate this very important Regulation. This is symptomatic of the Government's attitude in the House. We hear many stories about the Government wanting to make this House more effective. If that is the case, there is no reason why we should not debate these provisions for two or two and a half hours. I fear that because of the present arrangement hon. Members with specialised knowledge may not have the opportunity to contribute to this discussion.

The hon. Member for Londonderry (Mr. Ross) referred to the way in which the Regulation had been dealt with on the Order Paper. One of the difficulties in our procedure is that the Regulation could have been put through in two or three different ways. This creates difficulties for hon. Members and also for organisations outside which are interested in EEC matters. I find it somewhat ironic that the subject of milk production in the United Kingdom should be taken at the end of the third day of the devolution debate.

The right hon. Member for Knutsford (Mr. Davies) said that the Scrutiny Committee, of which he is Chairman, had drawn attention to this matter, but the attention of the House has not been drawn to the activities of his Committee. It is interesting to note that the Committee had the opportunity to cross-examine the Minister. Unless one looked at the Report of the Committee, nobody would know what had taken place. That is another matter which from the point of view of procedure needs to be examined.

Mr. Bishop

My hon. Friend the Member for Newham, South (Mr. Spearing) says that the House has limited time to debate this matter. I would remind him that the matter has already been debated before the Scrutiny Committee, over which the right hon. Member for Knutsford (Mr. Davies) presided, on 9th December 1975. The proceedings are available. Therefore, there has been an opportunity for the House to debate the matter, the Minister has been cross-examined and the Report is available.

Mr. Spearing

I am grateful to my hon. Friend for making that point. I was referring to a previous occasion. In one respect, however, my hon. Friend was wrong. The Scrutiny Committee, under its distinguished Chairman the right hon. Member for Knutsford, cannot debate the merits of these matters. All it can do is to decide which documents raise matters of sufficient importance for us to debate them on the Floor of the House. It is ironic that a great deal more time and effort is spent in finding out the answer to that question than in debating the merits of the document, as well as the Government's guillotine which makes the situation even more difficult.

It was said that the document highlights the position in which we find ourselves. I am not sure from my hon. Friend's remarks whether, under the terms of the amended document before us, we are to allow, or cannot allow, imports of non-standardised milk of less than 3.76 per cent. butterfat. Perhaps my hon. Friend will make this clear. Did he say that he hopes to make that impossible or did he say that under the terms of the two Regulations it is impossible?

Page 3 of the document states: the marketing on its territory of non-standardised full cream milk originating from another Member State that complies with the conditions in question set forth in the second indent of para. 1(b)". I presume that "1(b)" refers to the substantive document, which is No. 1411/71. If that includes conditions which make it possible for us to say that imports must be not less than 3.76 per cent. butterfat, well and good. I hope my hon. Friend can tell us. Even if that operates, Article 1 says that the definition of non-standardised full-cream milk is as follows: Milk with a fat content that has not been altered since the milking stage neither by the addition or separation of milk fats nor by mixture with milk the natural fat content of which has been altered. The document says nothing about the minimum standard. We have our own domestic regulations which prescribe either average or minimum standards. Does this mean that these standards will remain or—because of the open-ended nature of the article—does it mean that they can be flouted if the Regulation is adopted?

My next point concerns the totally new regime of minimum milk quantities to which we will be subject. The Community regime for milk has either standard or full cream, semi-skimmed and skimmed. I understand that it is now legally possible for semi-skimmed milk to be built up in this country. I hope that this will not happen, because it would mean a general lowering of standards which no one wants.

If, however, anyone in some part of Britain wished to go to a semi-skimmed standard and distribute it at a lower price, he would be able to do so under the substantive Regulation, whereas under our domestic legislation he cannot? If this is so, what is to prevent it from happening? What is to prevent the lower standards driving out better standards? We can do nothing about it, as I understand it, under the Common Market Regulations to which we would be subject. It may be that the dairy industry would not want that to happen, but in times of tight competition someone might break and this would be regrettable. I do not think my hon. Friend could do anything about it.

I wish to deal with the question of timing. The document states in para. 7: Before 1 January 1978, the Commission shall report to the European Parliament and the Council on the conditions of application of paras. 5 and 6 above and propose in particular the conditions under which, from 1 January 1978, the standardised milk originating from other Member States may be marketed on the territory of the Member States specified in para. 6. The review could come within the next two years. We do not have long.

There is also the importance of the Regulations before their coming into force on, I understand, 1st March. Ministers have until March to renegotiate the matters to which they refer in a very unspecific way in tonight's motion, including the whole question of health and hygiene and the terms on which we may import unstandardised milk. If one negotiates under the duress of time one is at a disadvantage, and when the time runs out one has to accept whatever is said by the opposing negotiators.

I fear that the Minister is at a great disadvantage in negotiating the details of what might otherwise be regarded as a document that was not too bad, but it is the details that count, as we know only too well. Whatever the intentions of the Government or the wording of the motion, we are not necessarily being given any safeguards at all. I hoped that my hon. Friend would be more specific in opening the debate.

The hon. Member for Macclesfield (Mr. Winterton) said he hoped that we would get a limit of 3.76 per cent. It is a pity that the Opposition did not put down an amendment to add that specific point to the unspecific assurances we have been given. Hon. Members from Northern Ireland could have put down an amendment but they did not do so. Perhaps the Opposition parties would like to look carefully at these matters. It is their duty.

Mr. Nicholas Winterton

Why did not the hon. Member put down an amendment himself?

Mr. Spearing

I have often put down amendments and been told that I was a Euro-nut for doing so. I thought it was about time that somebody else did it. The resources available to the Opposition are much greater than those available to the few of us on this side who take a particular interest in these matters.

We can derive very little hope from this document. We have had some success on the non-standardised point, but it should never have existed. We should never have had to renegotiate it. The Minister has a difficult job to get the details right. I only hope that he succeeds.

12.7 a.m.

Mr. Hamish Watt (Banff)

I do not intend to keep the House long, but I am to persuade the Government to strenghen their resolve to seek complete derogation for the importing of non-standardised milk.

As an unrepentant anti-Marketeer, I strengthened the resolve of my party to oppose British membership because of the implications of the common agricultural and fisheries policies. I have long been aware of the effect that the CAP would have on milk producers in this country. If we allow the document before us to pass, it will do untold damage to our milk producers.

I know that Community milk producers have long had their covetous eyes on the British liquid milk market and that many producers in Holland, Belgium and France are nearer the large market of London than are producers in the South-West, Wales, Northern Ireland or Scotland. It would be to the advantage of many dairies in the EEC to have the right to bring their milk into this country. I hope that the Government will be firm in their resolve that no milk other than that of a standard to which we are accustomed will be allowed in. I hope that the Government will also find other methods of keeping liquid milk out of the British market, for instance by the use of hygiene standards.

There is also the ridiculous attempt by the Common Market countries to get rid of their surplus skimmed milk mountain by forcing feed producers to include 2 per cent. of skimmed milk powder in their products. That will push up the cost of feed stuffs to British dairy farmers by about £4 a ton, and that they cannot afford.

I am much more concerned with the humane aspect. That powder is desperately needed in the diets of many people in the under-privileged and underfed parts of the world, and I regard it as a downright shame that this potential food for humans is to be used to feed animals.

I am pleased that the British dairy industry has once again in some way found its feet. I and many others were very much afraid last August and September that there might be a shortage of milk over Christmas, and I am delighted that that did not happen.

May I say how fortunate are the dairy farmers in Britain—and I am one of them—in having men of the calibre of the Minister of State and the Minister himself fighting our case in Brussels. Long may they both be spared to retain their present positions.

12.12 a.m.

Mr. Peter Mills (Devon, West)

I do not intend to pursue the line adopted by the hon. Member for Banff (Mr. Watt) at the end of his speech. I do not take such a rosy view of the activities of Ministers in Brussels. There is an old saying among dairy farmers that some herds produce such poor milk that milk of the first cow is used to wash the udders and the milk from the last cow is used to wash the dairy utensils.

The British housewife wants milk with a reasonable butterfat content straight from the cow. I do not think that she will ever accept milk which has been "mucked about". It is for that reason that the Select Committee, of which I am a member, was concerned with standardisation. We felt that the consumer would not only not want it but would react very strongly against it. That was why we brought the matter to the attention of the House.

I do not always stick up for the Minister of State, but he has done a reasonable job in Brussels on this matter. We are here tonight to strengthen his hand and to see that he is supported. A lot of nonsense has been talked about this matter and now it is almost concluded. The assurance which we have not had concerns the whole question of possible imports of milk at the different standards. We want the Minister to continue the fight about that. It will be a long time before there are imports of milk because of the factors of hygiene, quality and standards. That battle will have to be fought and it must be won.

Even though I am pro-EEC, I believe that we are involved here with stupid harmonisation. The Minister does not realise that big money is involved, which is why the Community wants harmonisation. European farmers want to be able to sell their liquid milk and at the same time retain some of the butterfat to make butter. Much is at stake. Each country should be allowed some variation. I do not see why we should harmonise everything, and there is no need to harmonise the fat content of milk. We are here tonight not to criticise the Minister but to strengthen his hand in dealing with future imports of milk.

12.15 a.m.

Mr. Ralph Howell (Norfolk, North)

I begin by declaring an interest as a dairy farmer. I congratulate the Minister in his efforts to make the Regulations more flexible. Those who have been destructive in their criticisms should think again. The Regulation originates from Regulation 1411/71. which is a relic of past thinking in the EEC. It was thought out long before we joined and has no relevance to the three countries which joined later.

A great deal has been done to improve the Regulation, but more should be done and I urge the Minister to go on working, as he has done, towards a more acceptable Regulation. It is no longer the fashion in the EEC to harmonise everything. It was the fashion in 1971, but now the Commission and the Council are more worried about butter mountains and skimmed milk mountains than about harmonisation and insisting on everyone drinking the same type of milk.

Now is the time to exert the utmost pressure. The European Parliament has not yet discussed the matter, and that suggests that the Commission is having second thoughts. We are awaiting discussion of the report of the working party which has been considering the matter, which was published on 9th January. That report recommends that only milk of equivalent butterfat content should be allowed to be imported into a non-standardised country. The report gives us all we ask for, and if it is implemented we shall have all that we need.

Mrs. Dunwoody

Is the hon. Gentleman, having listened to the debate, saying that those recommendations will be accepted? If so, why is it necessary to put off discussion of the report? If the report were as simple as that, it would have been debated and wholeheartedly accepted.

Mr. Howell

The report was published after the date on which the European Parliament intended to make a decision. The matter should have been decided in November, and should have been through to the Council in December, so that the Regulation could take effect from 1st January. As the hon. Lady knows, the European Parliament did not discuss it in November, and in December it agreed that the existing Regulation should continue until 31st March. We must have an opportunity in the European Parliament to discuss this fully before any further Regulation can take effect.

My assessment of the feeling in the European Parliament is that there is little interest in harmonising the butterfat content of milk. Most people in the European Parliament and in the Commission are more concerned about getting supply and demand tight in relation to milk production.

We have an extraordinarily difficult problem before us. The European dairy herd is yielding much more per cow, and yet the cow numbers are static. There is, therefore, a continual increase in milk, and this is the main problem with which we have to grapple.

Attitudes are changing, and changing rapidly, and I am very glad to be able to report to the House that, as a result of an initiative I took at a meeting in Paris last January, a delegation from the European Parliament will be coming here in April to visit the Milk Marketing Board. This is a great advance, because only 18 months ago the name "Milk Marketing Board" was almost unmentionable. A delegation is now to study what we have been doing, and this indicates that the Europeans are paying much more regard to the way in which we operate our excellent milk industry.

Mr. Marten

My hon. Friend said earlier that the tendency or the wish to harmonise was rather fading away, but has there not recently been an attempt to harmonise turkeys, which have nothing to do with anybody other than the British? Secondly, we have recently received a draft proposal to harmonise mayonnaise. Harmonisation goes on.

Mr. Howell

I do not think that those points are relevant. Nevertheless, if any further harmonisation is asked for it is my view that we should resist, and resist up to the hilt.

Mr. Marten

Including mayonnaise?

Mr. Howell

I urge the Minister that he should go on trying, and it is my belief that if sufficient pressure is applied we shall be able to get exactly what we are asking for and be able to continue in the way we have enjoyed in the past.

It is essential that we should have no interference in our milk industry. It would be a great pity if extra equipment were to be necessary. Most important of all, however, if this Regulation were to be shelved completely there would be uncertainty as to which of the two-year periods would be removed.

I make one other plea. Could we have more information and better briefing in the European Parliament? It would be very helpful if the Ministry were to give us more information about what is being done and about its attitudes on questions such as these.

12.23 a.m.

Mr. Bishop

The last point made by the hon. Member for Norfolk, North (Mr. Howell) will be noted, and I am sure that we shall be anxious to do all we can to help anyone trying to get more information.

It has been very important to get the views of hon. Members, who have been most forthcoming in the debate, and my right hon. Friend will be emphasising these various matters when the question comes before the Council in Brussels. I am well aware of the concern felt by many people in the industry on these points, and I assure hon. Members that we shall not overlook them.

We have had to weigh up the advantages of retaining the present system, based on the sale of milk to consumers with its natural fat content, against one which would require a minimum Community standard to be observed. In the light of all the various considerations, we concluded that we should seek to negotiate arrangements which would allow us to continue as at present.

As has been emphasised, it is necessary that the terms negotiated in Brussels should be fair and adequate to safeguard the interests of countries which decide to choose the non-standardised option.

The weighted fat content of milk in the United Kingdom in the year ended 31st March 1975 was 3.76 per cent. While the fat content in some member States is equal or superior to that level, in others it is significantly lower. Under the proposals in the document there could be unfairness between countries producing high and low fat milk if they were exporting to us. It would be possible for whole milk to be exported here with a fat content significantly below that of our product.

This difficulty has been recognised by the Commission in its suggested modification of the proposals, now being discussed in Brussels, which would provide that whole milk imported into a non-standardising country from one which chose to standardise should contain at least the weighted average fat content of the milk produced in the importing country in the year in question. If this suggestion is accepted and similar arrangements are applied to trade between the two non-standardising countries, the problem will to some extent be overcome.

The right hon. Member for Down, South (Mr. Powell) asked what benefit, if any, would be conferred by the Commission's proposals. Harmonisation of the national arrangements is part of the process of creating a Common Market system. The basic principles of the Commission's proposals are not the issue. We need to be sure that our requirements are taken into account in the final solution.

The hon. Member for Devon, West (Mr. Mills) asked what sections of the dairy industry were in favour of standardisation at the 3.5 per cent. fat content. There are some in the industry, particularly in the Scottish trade, who regard standardisation of whole milk as a logical development. Where milk production and cream manufacture take place in parallel in the same premises, standardisation would be relatively simple. Some would argue that consumers have an advantage in receiving milk with a relatively high guaranteed fat content and there would be no significant effect on palatability in removing the small difference between 3.5 per cent. and the average of 3.76 per cent. But the overall view of the United Kingdom trade and the strong preference of consumers is that our existing policies should be continued, provided that we are not required to accept imported whole milk on unfair terms.

My hon. Friend the Member for Crwe (Mrs. Dunwoody) asked about information being given. I said that my right hon. Friend appeared before the Select Committee on 9th December last, and I would add nothing to that.

On the question of butter and skimmed milk surplus, the continuation of our present arrangements should avoid adding to the Community's problems. But we need to keep this in perspective. A combination of more substantial measures in the Community as a whole will be required to achieve a better balance in the milk product market. My right hon. Friend is concerned to see that we have equality in relation to any surplus.

As for the dumping of cheap milk, the motion refers to the Government's intention to ensure that arrangements are satisfactory, and it would not be satisfactory if our market were left open to the dumping of cheap products.

The hon. Member for Macclesfield (Mr. Winterton) asked about bottling. I can only repeat my answer to my hon. Friend the Member for Crewe earlier in the week that, in the context of the proposed EEC legislation on the quality and marketing of liquid milk, the Commission and the other member States have accepted provisions on labelling to facilitate the continued use of the glass bottle. With the unique service of a daily supply of around 30 million bottles, this is important.

Mr. Nicholas Winterton

What about the uncertainty over the two-year review?

Mr. Bishop

This point was raised in the Select Committee last month. It is very difficult to be specific about the period of the review.

The hon. Member for Londonderry (Mr. Ross) asked about the Government insisting on United Kingdom standards of health and hygiene. As hon. Members will recall from the debate last February, common standards are being worked out by the Community—

It being one and a half hours after the commencement of proceedings on the motion, Mr. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 3 (Exempted Business).

Question agreed to.

Resolved, That this House takes note of Commission Document No. R /2861/75 relating to fat content of whole milk and the Government's intention to ensure that arrangements are satisfactory for imports into those Member states where sales of whole milk are unstandardised.