Commons Sitting of 11 May 1977

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  TRANSPORT

    White Paper
    Mr. Moateasked the Secretary of State for Transport when he now expects to publish his White Paper on Transport.
    Mr. Muddasked the Secretary of State for Transport when he intends to publish his White Paper on Transport.
    Mr. Newtonasked the Secretary of State for Transport when he intends to publish his White Paper on Transport.
    The Secretary of State for Transport (Mr. Wiliam Rodgers): Shortly.
    Mr. Moate: Does the right hon. Gentleman recall that the foreword to the consulation paper led us to believe that his White Paper would have the same momentous significance as the invention of the wheel and the introduction of the camel into Africa? Having laboured for three years to produce a White Paper, let alone a policy, does he expect any significant change in the trend of the past three years, namely, that of massively increasing subsidies in return for a rapid deterioration of public transport services?
    Mr. Rodgers: The hon. Gentleman must await the publication of the White Paper. I shall not make the rather lurid comparisons that have been made by others, but I think that it will be interesting.
    Mr. Mudd: Would the Minster care to hazard a guess whether his White Paper will give consolation to those of us who
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    are opposed to the further curtailment of the rail transport network?
    Mr. Rodgers: I think that it will give consolation to some, joy to others and disappointment, perhaps, to a third group. I do not think that I can anticipate what will be an excellent White Paper, which the House should judge for itself when it sees it.
    Mr. Newton: Will the right hon. Gentleman give an assurance that the White Paper will deal in a clear and open way with the problem of commuter services? Specifically, will it spell out in a clear-cut fashion the implication of the Government's policy for future fare increases?
    Mr. Rodgers: I am reluctant to say "Wait and see" to the hon. Gentleman. I prefer to say that I understand his point entirely. I hope that the White Paper will be as explicit as possible, given the changing circumstances. We know that, in transport, what is the case today may not be the case tomorrow. The White Paper will be as explicit as possible, within a reasonable length. It is getting rather long even now.
    Mr. Ioan Evans: Will my right hon. Friend bear in mind in the White Paper the suggestion made by the TUC about the setting up of a national transport planning authority? Will he also bear in mind the need to maintain public transport, which is essential to get people back and forth from work, because private transport cannot meet their needs?
    Mr. Rodgers: Yes. I totally agree with what my hon. Friend says about public transport and its importance. I have been giving careful consideration to the proposals that have been made by the TUC and others about the best way of ensuring an effective transport policy.
    Mr. Donald Stewart: Without anticipating details, will the right hon. Gentleman say whether there is any reference in the White Paper to the acceptance of the principle that rural and distant areas should have a fair chance of survival with a fair transport system?
    Mr. Rodgers: The right hon. Gentleman will find that particular attention is given to the problems of rural areas. As he will know, we debated the matter last

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    week. At that stage I tried to give an indication of the direction of my thinking. I agree that it is important to give some new help to the rural areas, and I shall do my best in the White Paper.
    Mr. Russell Kerr: Is my right hon. Friend aware that the long-awaited report of the Select Committee on Nationalised Industries on the rail industry is being published tomorrow? Therefore, he has no further reason for continuing to delay the publication of his White Paper.
    Mr. Rodgers: I am grateful to my hon. Friend for telling me that the report of the Sub-Committee of which he has been a distinguished chairman will be available tomorrow. I shall read it with great interest. I shall wish to take account of it, as far as possible, in the White Paper. However, as my hon. Friend and the House will know, it is the normal practice for the Government to give due and full consideration to a report of a Select Committee before giving a formal reply.
    Mr. Norman Fowler: Is the right hon. Gentleman aware that there is considerable concern in the transport industry about the future of Freightliners and the suggestion that majority control should no longer rest with the National Freight Corporation? Does the right hon. Gentleman agree that the most important people who will be affected by the decision are those who work for Freightliners and those who are its customers, who are overwhelmingly opposed to any change in control?
    Mr. Rodgers: I agree that Freightliners has an important function and that it must be an effective and efficient part of the public sector transport system and pay its way. There have been arguments about where the ownership should lie—for example, whether it should remain with the National Freight Corporation or lie with British Railways. As the hon. Gentleman knows, this is only a part of the problem of the whole future of the National Freight Corporation. I shall take account of everything that is said, including what the hon. Gentleman has said today.

    Parking (City Centres)
    Mr. Durantasked the Secretary of State for Transport what representations
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    he has received in the last six months about the problem of private nonresidential parking in city centres.
    Mr. William Rodgers: None, apart from the response to the consultation document issued on private non-residential parking in July last year.
    Mr. Durant: Does the right hon. Gentleman agree that the results in the recent local elections were in part votes against the rather stupid and harsh policies of certain cities in squeezing the motorists out of city centres? Does he accept that it is necessary to encourage short-term parking for shopkeepers and housewives? Will he give more encouragement in this direction?
    Mr. Rodgers: I agree with the second part of the hon. Gentleman's supplementary question. But, although it might be nice to believe that we could attribute responsibility for election results to local decision-making, they are more likely to be an indicator of the general mood of the country mid-term. I do not, therefore, think that the second part of the hon. Gentleman's supplementary question follows from the first.
    My view, irrespective of political control, is that local authorities should have very wide discretion. I believe that they are best able to judge what is required in their localities for parking purposes and for any other action, and that, by and large, Parliament should seek to provide enabling powers. As the hon. Gentleman implied, there is always the redress that the electorate can exercise if local authorities make unpopular decisions.
    Mr. MacKay: Does the right hon. Gentleman appreciate that residents in many of our suburbs are grossly inconvenienced by non-residential parking, particularly those living adjacent to factories, as is the case in my constituency? Is there any possibility of having residents-only parking sectors?
    Mr. Rodgers: This is a complicated matter. Some areas have inadequate parking, but it is fair to say that the extent of non-residential private parking creates problems of traffic management. In my judgment, what the hon. Gentleman has said is further reason why Parliament should provide enabling powers. But discretion should lie at local level.

    Rural Transport
    Mr. Temple-Morrisasked the Secretary of State for Transport what plans he has for improving rural transport; and whether he will make a statement.
    Mr. Wakehamasked the Secretary of State for Transport what plans he has for improving rural transport; and whether he will make a statement.
    The Under-Secretary of State for Transport (Mr. John Horam): During the debate on rural transport on 2nd May, my right hon. Friend announced that the forthcoming White Paper will provide a new charter for the rural are as. Meanwhile, the Government's rural experiments, relying on the Passenger Vehicles (Experimental Areas) Bill, are exploring what can be done by community self-help.
    Mr. Temple-Morris: Will the hon. Gentleman bear in mind that the last Conservative Government were beginning to deal, and deal well, with rural transport problems in their 1973–74 measure, which fell with the February 1974 General Election and has not been revived by the Labour Government? Apart from four proposed experiments which are still before the House and have not yet begun, what have the present Government done for rural transport in their three years of office?
    Mr. Horam: The last Conservative Government achieved nothing in three and a half years. Not only that, but the previous Conservative Governments throughout 13 wasted years achieved nothing either, part from one small change in 1956. Since the war, Conservative Governments have made no substantial alteration to bus licensing of any kind. I think that we shall improve on that.
    Mr. George Rodgers: Does my hon. Friend agree that since January 1974 the cost of motoring and motor cycling has increased by 79 per cent. whereas the cost of travelling by public transport has increased by 104 per cent? As the rural areas are particularly dependent on public transport, will my hon. Friend focus his attention on this issue?
    Mr. Horam: I think that my hon. Friend is on the right point. Fares in rural areas have gone up steeply in the
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    last two or three years, partly because they were held down artificially in the early 1970s. There has, therefore, been a catching-up process, for otherwise the subsidies would have been even larger. We have tried to ease the problem by helping to raise subsidies for those services which could be helped in no other way.
    Mr. Wigley: Does the hon. Gentleman agree that increased bus costs in rural areas hit particularly hard pensioners, disabled people and others on fixed incomes? Good schemes are available in inner city areas to help pensioners with their bus travel costs, but, by and large, they are not available in rural areas. Will the hon. Gentleman examine the possibility of such schemes being made available in rural areas?
    Mr. Horam: It is true that the rural areas—by and large, Tory-controlled—have not the same generous concessionary fare schemes as are widespread in metropolitan areas controlled by Labour local authorities. We intend to deal with this aspect in the White Paper.
    Mr. Eldon Griffiths: I look forward to the Secretary of State's new deal for the rural areas with great interest. Will the hon. Gentleman accept that in many places there is now a bus desert, with large numbers of people marooned, and that what is required—I hope that it will be forthcoming in the White Paper—is a practical programme to allow people to help themselves by reducing some of the restrictions which exist, quite unnecessarily, on the part of the traffic commissioners?
    Mr. Horam: The hon. Gentleman has put that point, which is often put to me by the Opposition, in the best way I have yet heard, if I may say so, and I entirely agree with him.

    Buses (Licensing Laws)
    Mr. Hal Millerasked the Secretary of State for Transport whether he has plans for relaxing licensing laws for buses.
    Mr. Shepherdasked the Secretary of State for Transport whether he has plans for relaxing licensing laws for buses.
    Mr. Horam: During the debate on rural transport on 2nd May, my right hon. Friend indicated that the forthcoming White Paper will include proposals for changes to the bus licensing system. Meanwhile, the Passenger Vehicles (Experimental Areas) Bill includes modifications to the present licensing law.
    Mr. Miller: Is there any recognition by Ministers that the most efficient and effective form of public transport, particularly in rural areas, is not necessarily a heavily-subsidised 32-seater bus, and that there are other forms which should be allowed to show that they can produce the service that the public requires?
    Mr. Horam: Yes, Sir. In the debate on rural transport, the hon. Member for Dorset, West (Mr. Spicer) made precisely that point. We are aware that subsidies are not the whole answer to the problem, although at the moment they are an inescapable part of it. If subsidies are sliced, as has been done in some parts, to the great detriment of rural bus services, there is a speedy effect on fares and the level of services. Some support is inescapable. Nevertheless, I agree that we must look anew at the responsibilities of the traffic commissioners and the licensing system.
    Mr. Shepherd: Is the hon. Gentleman aware that many of us from the rural areas will be pleased to have heard what he said? Will he recognise the extreme urgency of tackling this problem, because the lack of flexibility available to county councils makes their life difficult? Will he undertake to bring forward his proposals as early as possible, and give them the maximum possible flexibility, to tackle the question of rural transport?
    Mr. Horam: We are anxious that local authorities should have the maximum power and flexibility to tackle these problems, which, fundamentally, are best solved by local people because they know them best. We accept that action is urgently needed.
    Mr. Roy Hughes: Will my hon. Friend direct his attention to the number of serious accidents involving buses that have taken place in recent months? In the light of that figure, does he not agree that there must be no lowering of safety standards which would endanger the public or the employees?
    Mr. Horam: I accept that point. The safety check must be preserved—that is accepted on both sides of the House. Indeed, the hon. Member for Sutton Coldfield (Mr. Fowler) referred to it in his speech in the rural transport debate.
    Mr. Norman Fowler: Is not the only reason why the licensing revisions of the Conservative Government are not on the statute book now that the incoming Government, in March 1974, disreputably scrapped proposals which, only a few months previously, they had supported when in opposition? The next Conservative Government will reintroduce these revisions—and, following the local elections, nothing is more certain than that there will soon be a Conservative Government.
    Mr. Horam: The hon. Gentleman is indulging in some wishful thinking. I find his explanation of what the right hon. Member for Yeovil (Mr. Peyton), who was the Minister then, was doing somewhat curious, to say the least. The fact is that the Conservative Government themselves had grave misgivings about their 1973 Bill, which itself was a heavily modified form of the consultation document, and even after Second Reading the right hon. Gentleman announced that he would have further consultations. All we got in three and a half years was the promise of more consultations. I assure the House that we will take some action.
    Mr. Ronald Atkins: Will my hon. Friend beware of allowing flexibility to destroy existing public services, particularly stage services? It would be folly to allow existing services to be destroyed, thus creating the transport desert to which the hon. Member for Bury St. Edmunds (Mr. Griffiths) referred.
    Mr. Horam: My right hon. Friend is right. The whole point of policy here must be to strike a balance between preserving existing stage services, including protecting them by the bus licensing system and adequate levels of subsidy, and getting a reasonable degree of flexibility whereby unconventional means of transport can be used in those areas where they are most right for people's needs.
    Sir A. Meyer: Will the hon. Gentleman exert his considerable powers of persuasion on the large bus companies to try

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    to get them to accept that it is far better to provide really cheap fares in the middle of the day than to run large buses which are completely empty?
    Mr. Horam: I accept the hon. Gentleman's point. We shall be coming to this later when the hon. Member for Christchurch and Lymington (Mr. Adley) has a Question about the National Bus Company. I think that the hon. Gentleman is on to a very fair point. If we can utilise capacity in off-peak periods in a more imaginative way—this is true of the railways as well as buses—we can make some considerable progress.

    British Railways (Chairman)
    Mr. Tim Rentonasked the Secretary of State for Transport whether he will make a statement on his last meeting with the Chairman of British Railways.
    Mr. William Rodgers: Not unless pressed.
    Mr. Renton: I press the right hon. Gentleman to make a statement. Further, will he please now answer the Question, which he totally dodged when he last answered Questions on 6th April, and state whether he and the Chairman of British Rail will ensure that British Rail does nothing to obstruct the granting of licences to commuters who now seek to travel to work by coach?
    Mr. Rodgers: If I wanted to obstruct them I could not do so, because it is not within my statutory power. I am all for encouraging endeavour and I think that British Railways provide excellent services, including their service to commuters, and could face the sort of competition that the hon. Gentleman has in mind. Certainly the Chairman of British Railways has not raised this as a matter that causes him anxiety.
    Mr. Robin F. Cook: Will my right hon. Friend tell the House whether he has given any reply to the Chairman and Board of British Railways in their request for the investment programme to be put on a rolling basis, which would give British Railways better value for money and more security to the supplying industries? When can we expect a response to this reasonable and realistic request?
    Mr. Rodgers: There is a later Question on the Order Paper about investment and
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    it may be more appropriate to give a full reply then. But, of course, investment is one of the matters that I discuss with the chairman. It is difficult to make regular statements to the House, because the House would get bored with them. I have what I think the popular jargon calls an ongoing relationship with the chairman. For that reason, questions of investment are regularly discussed. I hope that my White Paper will help deal with the question that my hon. Friend clearly implies is a very important one both for the Board and for those who work on the railways.
    Mr. Adley: When the Secretary of State next sees the Chairman of British Railways—
    Mr. Speaker: Order. The Question deals with the right hon. Gentleman's last meeting with the chairman. I think I had better call the next Question.
    Mr. Renton: On a point of order, Mr. Speaker. In view of the totally unsatisfactory nature of the reply from the Secretary of State, I shall seek to raise the matter on the Adjournment at the earliest opportunity.
    Mr. Martenasked the Secretary of State for Transport when he will next meet the Chairman of British Railways.
    Mr. Hendersonasked the Secretary of State for Transport when he next intends to meet the Chairman of British Railways.
    Mr. Arthur Jonesasked the Secretary of State for Transport when he next intends to meet the Chairman of British Railways.
    Mr. William Rodgers: Soon.
    Mr. Marten: Good. In that case, in one of his ongoing meetings, will the right hon. Gentleman raise with the chairman the fact that many passengers are rather browned off with diesel engines constantly breaking down, and will he therefore raise the question of equipment or repair of these machines? [Interruption.] No, not expenditure. Will the right hon. Gentleman also draw the chairman's attention to the long time that he has taken over coming to a decision about pigeons and the carriage thereof?
    Mr. Rodgers: Certainly I have discussed the first matter with the chairman

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    from time to time. Indeed, the chairman is very anxious to run an efficient railway within the cost limits allowed to him to meet the needs of passengers so far as he possibly can. I am very impressed by what he and the reconstituted Board are seeking to do.
    I know the hon. Gentleman's particular interest in pigeons. As he knows, and as I told him, the matter has now been discussed by the Central Transport Consultative Committee, and I am sure that decisions will be made by the Board as soon as it gets a reply.
    Mr. Henderson: Will the Secretary of State convey to the chairman that there is considerable concern about British Railways' attitude towards the increase in charges for unaccompanied livestock, such as pigeons and puppies, which is regarded as a mean, spiteful and vindictive retaliation following the thwarting of the Board's efforts to stop this traffic altogether? Will he ask the Chairman of British Railways whether he is willing to open his cost accounts to independent inspection, since he claims that he requires to put up the charges to this extent?
    Mr. Rodgers: I know that this is one of the matters that have perhaps caused disproportionate concern from time to time. It has been well aired in the House, and the Chairman of British Railways was as surprised as I was at the strength of feeling on the matter. I do not think that there is anything vindictive about his action and I would like to believe that the hon. Gentleman is not endorsing such ungenerous thoughts. The chairman is aware of these matters, and if information can be made available to the House to enable it to see how the Board arrives at its figures I shall certainly make clear to the chairman and the Board that this is what the House would like to know.
    Mr. Jones: I hope that the right hon. Gentleman has got some useful ideas for his agenda when he goes to see Mr. Peter Parker. May I suggest that he raises also the question of double manning on the footplate, particularly on diesel engines, which I know, from my own observations, is widespread? The right hon. Gentleman will be aware of the publication of "Railway Rescue", referred to in the Press on 18th April,
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    suggesting that the manning of footplates could be reduced by over 50 per cent. Does he think that is a useful matter to discuss with the Chairman of British Railways?
    Mr. Rodgers: Questions of manning are ones that come up from time to time. I see no reason why, if this is something that is worth discussing, we should not discuss it. I must make it absolutely clear, and I repeat, that I do not believe it is the right course of the responsible Minister to get himself involved in detailed day-to-day matters. Equally, I think that the chairman is quite capable of dealing with matters raised by the public on, for example, the question of manning.
    As the hon. Gentleman will know, the chairman does make a point of seeing that the great majority of trains are no longer double manned. He is anxious to improve productivity, and so are the unions. If there can be discussions, and if there can be changes, so be it.
    Mr. Heifer: When my right hon. Friend next meets the chairman, will he explain that some of us believe that the time has come for some experimentation with regard to fares? For example, on the inner city runs we would like to see the reduction of fares for a period of time in order to see precisely how this works out. Many of us believe that if there were a real reduction for a period we would see people coming back to the railways rather than using their own transport or other forms of transport.
    Mr. Rodgers: My hon. Friend may know that I made clear some time ago that I would welcome experiments in reducing fares on British Railways. That would have my blessing. I have also said that to the trade unions involved and I have said that it seems to me to be a proper business risk to try to reduce fares to attract traffic back to the railways. As my hon. Friend will also know, the Chairman of British Railways has recently announced a very interesting scheme for main lines between London and Scotland, and we must hope that it succeeds.
    Mr. Stephen Ross: As my representations have failed elsewhere, I wonder whether the Secretary of State will be kind enough to make a plea to the Chairman of British Railways to treat rather

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    better than they do at present passengers who unfortunately have to travel on Sundays. People who unfortunately have to use the Portsmouth line are regularly unloaded half-way down the track and put into totally unsuitable carriages. Many of them are old ladies with heavy bags. That is no way to attract people back to the railways.
    Mr. Rodgers: I shall draw the chairman's attention to the hon. Gentleman's point. We have all been victims of the delays from time to time involved in Sunday travel, but most are due to essential engineering work. To be fair, if we are to maintain the track we must close it at some time.
    Mr. Adley: Is the right hon. Gentleman aware that on the Southern Region—the hon. Member for Isle of Wight (Mr. Ross) mentioned the Portsmouth line—the recent timetable changes appear to have been introduced without consultation with either passengers or staff? In the circumstances, is he surprised that some of the staff have threatened industrial action? Does not he agree that British Rail—indeed, all the nationalised industries—should set the best example of discussions between staff and management? When he sees Mr. Parker, will he ask for assurances that in future, before major timetable changes are made, the outline of the proposed changes is discussed with regular customers and with the staff concerned?
    Mr. Rodgers: I agree that the public sector should set an example in consultations with the trade unions and customers. However, this is very much the case. The level of consultation between the unions and the British Railways Board today is better than it has ever been. I do not know the details of the case mentioned by the hon. Gentleman but I shall make sure that the Chairman of British Rail looks into it.

    Preston Docks (Report)
    Mr. Ronald Atkinsasked the Secretary of State for Transport if he will make a statement on the report on Preston Docks by the National Ports Council.
    Mr. William Rodgers: I have seen a copy of the National Ports Council's report to the Preston Borough Council about the port of Preston. It appears
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    to make a number of useful suggestions which I hope that Preston Borough Council will consider carefully.
    Mr. Atkins: In view of the fact that the report contradicts the assessment on the viability of Preston Docks by the Preston Borough Council, which still wants to close the docks, what action is the Secretary of State prepared to take to keep this valuable national asset open?
    Mr. William Rodgers: As my hon. Friend knows, the port of Preston is and must remain the responsibility of the Preston Borough Council. I have no powers in this respect. I agree, however, that the report from the National Ports Council is significant and indicates that there could be advantage to the ratepayers of Preston if it was adopted. It is not for me to take an initiative at this stage, but I shall be interested to know whether the borough council feels able to adopt the proposal of the National Ports Council.
    Mr. George Rodgers: Does my right hon. Friend agree that the survival of the docks at Preston is of consequence to people far removed from the Conservative-controlled council and that the economic welfare of the North-West generally is tied up with the docks? Will he take an initiative in this matter?
    Mr. William Rodgers: The interest in maintaining the port goes very wide, and this is a factor which the Preston Borough Council should take into account. But I must work within my statutory powers. The port is the responsibility of Preston Borough Council. I think that it would be wise to discover whether the council intends to take an intiative and act upon the advice which it appears to have been given.

    South Humberside (Road Construction)
    Mr. Brothertonasked the Secretary of State for Transport if he will make a statement about the road construction programme on the south bank of the Humber.
    Mr. Horam: The whole of the M180 South Humberside motorway from Thorne to east of Brigg is now under construction and is expected to be completed early in 1979 in time for the

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    opening of the Humber Bridge. A preferred route for the extension of this road to Grimsby was announced last summer and, subject to completion to the statutory processes and the availability of funds, it is planned to complete it by the end of 1981. With regard to the associated county road improvements, the link between the M180 and the Humber Bridge is at an advanced stage of construction and preparatory works are continuing on the remaining projects.
    Mr. Brotherton: Does the hon. Gentleman appreciate that that is a totally unsatisfactory reply? What is required on the south bank of the Humber for the port of Immingham in my constituency, which is the sixth largest port in the United Kingdom, and for the port of Grimsby, which is smaller but very important, is a decent east-west road system. The money wasted on the Humber Bridge would have been better spent on building a decent east-west road system on the south bank of the Humber.
    Mr. Horam: My reply, far from being inadequate, was over-generous, certainly in its length. It indicated the massive amount of road building which is now in progress on both banks of the Humber in an east-west direction as well as in a north-south direction. I was on the M18 last Saturday, and I can say from my own knowledge how rapid the progress is.
    Mr. John Ellis: Does my hon. Friend accept that, although we are grateful for the extent of this motorway which has been completed right across my constituency, the granting of development area status to Grimsby means that to capitalise on the investment that has taken place it would be as well to complete the motorway network through to Grimsby and allow the county council to build a spur road through my constituency, thus giving relief to the villages of Ulceby and Ulceby Skitter, to Immingham?
    Mr. Horam: I refer my hon. Friend to my original reply, in which I said that a preferred route for an extension of the road to Grimsby was announced last summer. We are making rapid progress on that, so we are going right to the heart of the area about which my hon. Friend is concerned, although I cannot comment on his second point.

    Railways (Investment)
    Mr. Robin F. Cookasked the Secretary of State for Transport whether he has received any representations from the British Railways Board on the need for increased investment in the railways over the next five years.
    Mr. William Rodgers: Yes, Sir. Investment levels are among the matters I have discussed with the Board.
    Mr. Cook: Has my right hon. Friend seen the paper from the Board stating that the present level of investment means that it will have higher maintenance in the future, speed restrictions on perhaps as much as one-quarter of the track, and fewer high-speed trains—in other words, a less reliable service covering a smaller part of the country? Does my right hon. Friend have any basis for rejecting the professional judgment of British Rail management?
    Mr. Rodgers: I have seen the paper to which my hon. Friend refers. There has to be a sense of proportion both about the extent to which there is bound to be a dialogue between the Board and the Government over matters like investment and about the Board making its best case. We also have to look for a cost-effective railway. Obviously, we have to have a higher level of investment in it. But we must not assume that it can in every way and at every point be maintained to the standards which may be appropriate on certain lines.
    Mrs. Winifred Ewing: In considering the investment programme, will the right hon. Gentleman comment on the plans for the provision of food on journeys lasting a considerable number of hours? Is he aware that, on recent journeys which my hon. Friends have made from Scotland to England, there has been no food—not even a mini-buffet and not even a glass of lemonade for thirsty children?
    Mr. Rodgers: I am sorry if there has been neither lemonade nor any other refreshment on trains recently leaving Scotland. They must be very poverty-stricken if they are not able to provide the minimum sustenance for their people leaving the country to come to happier places. That having been said, although we can all criticise food on British Railways—and I do it regularly—and although there are occasional lapses, the

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    Board is doing its very best. But I am sure that the chairman will note what the hon. Lady said. Indeed, if she and her hon. Friends care to send a letter to the chairman of the Board setting out exactly where the railway is falling short, I am sure that he will take action on it.
    Mr. Noble: Does my right hon. Friend accept that the lack of investment on many branch lines, especially the one up the Calder Valley, is seriously damaging the morale of employees and seriously inconveniencing the public? Will he ensure that in the next investment programme many of these branch lines are brought up to scratch, and will he secure in that programme a guarantee that the line to which I have referred will remain open?
    Mr. Rodgers: This is not the occasion to give a specific undertaking about any one line. I note what my hon. Friend said, and I appreciate the importance attached by his constituents to that line, as I do the importance attached to many lines of British Railways throughout the United Kingdom. I have not doubted the need for a high level of investment. On 26th April I announced very important new plans for high-speed trains to the West Country and for new electric multiple units for the London commuter area. The level of investment in British Railways is high. It could be higher. This is a matter which I discuss regularly with the Chairman of British Rail, and I shall continue to do so.

    Railways (Electrification)
    Mr. Tom McMillanasked the Secretary of State for Transport what is his policy towards trunk route electrification on British Railways.
    Mr. William Rodgers: I look at any schemes the Railways Board submits to me on their merits.
    Mr. McMillan: Is my right hon. Friend aware that Britain ranks only sixteenth in Europe in terms of rail network electrification? Is there not a lesson to be learned from this about the better use of scarce oil resources?
    Mr. Rodgers: My hon. Friend makes a very important point. We must, in all our responsibility, consider the energy problems as a background to the decisions which have to be made. I would only say that there are no proposals for
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    electrification before me at present. I think my hon. Friend will agree that electrification is not always necessarily the best formula. The British Railways Board should be free to make proposals in the light of its own judgment and experience.
    Mr. Eldon Griffiths: Does not the Secretary of State agree that British Rail faces a painful dilemma in building what it believes to be an operationally and financially secure base for the railways with the pressures of the public and Parliament to go on spending money on uneconomic services? Would it not be much more realistic for him to say that if we want electrification, the advanced passenger train and better rolling stock, we shall not be able to continue to support wholly unremunerative branch lines or continue with overmanning?
    Mr. Rodgers: I do not think that I agree with the hon. Gentleman, although he tries to put his question in a persuasive way. The whole House has agreed that it is important to maintain a national rail network. That is the starting point, and to do that we must rely on support out of the public purse as well as support from fares. There are choices and the British Railways Board must face them. Unless we are able to spend much more than we are spending now, which means spending less in some other areas, the only way to increase revenue is to increase fares. Either we increase fares or we increase taxes. If we do not do that, at the end of the day there will have to be a reduction in the present standards or, alternatively, in some way in the quality of services.
    Mr. Thompson: Does the Secretary of State realise that the electrification of a route gives one at least the possibility of a decent service? Will he take care that in future electrification plans we do not get daft mistakes such as that in the South of Scotland when the line from Glasgow through Beattock to Carlisle was electrified in order to suit the inter-city whizz kids while neglecting the line through Kilmarnock and Dumfries to Carlisle, which goes through many more centres of population and which would have served many more people in the South of Scotland?
    Mr. Rodgers: I am not entirely sure what conclusions I draw from the hon.

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    Gentleman's question, whether he thinks that investment went into the wrong place or whether he thinks that there should have been more of it. We must, however, keep a sense of perspective about this. There are some first-class main lines which are not electrified. I enjoy one up to the East Coast. Electrification is not the be-all and end-all of an efficient system. My hon. Friend was right to ask his Question, but let us retain a sense of perspective and leave it to British Rail to bring forward proposals that it can make within the ceiling available to it.
    Mr. Spriggs: When my right hon. Friend meets the chairman of the Board, will he refer to the question of the second man on a locomotive? Several hon. Members have today criticised overmanning. Will my right hon. Friend inform the chairman that the second man plays a very important part in preventing accidents when the train is moving?
    Mr. Speaker: Order. I allowed the hon. Member to ask his question, but really it was related to another Question on the Order Paper.

    Motorway Network
    Mr. Edwin Wainwrightasked the Secretary of State for Transport if he will make certain the network of motorways planned for the 1980s will include a motorway between Sheffield and Manchester; and if he will make a statement.
    Mr. Horam: No, Sir. On 18th February my right hon. Friend announced that proposals to build up an entirely new road linking Manchester and Sheffield could not be justified economically. I am satisfied that bypasses of Mottram, Hollingworth and Tintwistle to the west and Stockbridge and Deepcar to the east, together with selective and limited improvements to the existing A628 between the western and eastern bypasses, will be sufficient to meet traffic needs for the foreseeable future.
    Mr. Wainwright: Is my hon. Friend aware that that is a most disappointing reply? Many people are unhappy with his Department and British Rail about the railway system across the Pennines. Has he ever driven a car or a lorry or
    1322
    even walked along this tortuous road across the Pennines? Will he consider including in the next programme the building of this motorway, and will he include in that consideration the provision of a good service station with a large car park so that people using the road can take advantage of the beautiful country around there?
    Mr. Horam: I thought that the people who supported the rail line were in favour of the decision made by my right hon. Friend. I understood that they argued that a decision to provide a road system where a rail system already existed would have been a strange one. As for the beauty of the countryside, the whole point is that the section where a motorway will not be built includes a national park. That was one of the factors that my right hon. Friend took into account, and rightly so.
    Mr. Giles Shaw: Does the Minister recognise that not all of us in Yorkshire disapprove of some of his recent decisions about motorway planning? On the point raised by the hon. Member for Dearne Valley (Mr. Wainwright), will the Minister bear in mind that, when he says that we should not have a motorway through a national park, it is equally worth preserving a green belt area between two metropolitan areas? Perhaps he will bear that in mind in relation to Pudsey and Dishforth.
    Mr. Horam: I visited the interesting area between Bradford and Leeds, which is so important to the hon. Member, electorally and otherwise, and I looked at the whole alternative to the east-west route connecting the A1 and the M1, so I know the problems.
    Mr. Andrew F. Bennett: Is my hon. Friend aware that many people, certainly on the Manchester side, were delighted with my right hon. Friend's original announcement and were very pleased that he decided not to allow a national park to be spoiled by the intrusion of a motorway?
    Mr. Wainwright: Bunkum!
    Mr. Horam: I am grateful to my hon. Friend the Member for Stockport, North (Mr. Bennett) for his restrained support, and I shall ignore seated interruptions.

    M25 (Micklefield Green—South Mimms)
    Mr. Dodsworthasked the Secretary of State for Transport when he anticipates that up-to-date road traffic information will be available for a decision to be taken on the choice of route for the Micklefield Green to South Mimms section of the M25 motorway.
    Mr. Horam: We hope that preliminary traffic information for this section of the M25 will be available before the end of the year.
    Mr. Dodsworth: I am grateful to the Minister for that reply. May I have his assurance that he will make sure that any information that is published appears after the completion of any remedial roadworks but certainly before any public inquiry, to make sure that the greatest possible accurate information is available to the public? Will he bear in mind the problems that have arisen on the existing section of the A405, between Maple Cross and Hunton Bridge, in view of the effect that that will have in altering the traffic flows?
    Mr. Horam: I undertake to take into account the traffic flows when the A405 and the A41 have been improved before the other section of the M25 begins to be constructed.
    Mr. Raphael Tuck: Will my hon. Friend resist any siren voices of persuasion to the contrary and appreciate the urgent need for this road to be built, because of the misery being caused to the people of Watford? Will he bear in mind that my request has nothing to do with my being the Member of Parliament for the area but refers exclusively to the discomfort suffered by these people because of the traffic conditions?
    Mr. Horam: Whenever I think of my hon. Friend, I also think of the M25 between Micklefield Green and South Mimms. I know of the extreme importance of this to my hon. Friend's constituents and of his personal campaign in support of the building of that road. I am sure that he will deeply appreciate the misery that such a road will certainly alleviate.

    Railway Accidents
    Mr. Buchananasked the Secretary of State for Transport in how many railway
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    accidents, in each of the last five years, locomotive failure has been the cause or a contributing factor.
    Mr. Horam: The number of train accidents, excluding fires, caused by the failure of locomotives or multiple units over the five most recent years for which confirmed figures are available was: 1971, 28; 1972, 11; 1973, 21; 1974, 16; 1975, 15.
    Mr. Buchanan: Is my hon. Friend aware that the figures that he has just given are a tribute to the skill and dedication of the people who care for and maintain the rolling stock on British Rail? The ageing nature of that rolling stock is presenting grave problems to these people. I appreciate the significance of my hon. Friend's announcement last month, but will he seek further to improve the rolling stock?
    Mr. Horam: I support my hon. Friend's tribute to the efforts that have obviously led to the reduction in the number of accidents involving engines. The figures are a tribute to British Rail, in view of the existing state of its rolling stock. My hon. Friend will have noted my right hon. Friend's remarks about the importance of rolling programmes and investment levels generally. We take that to be an extremely important point.
    Mr. Flannery: I compliment the dedication of British Rail and its splendid record on having so few accidents, but may I call my hon. Friend's attention to a central line, not a branch line, up to Sheffield, with its increasing deterioration of rolling stock? It has more breakdowns of engines than it should have and has had in the past. Will my hon. Friend bear in mind that more investment is necessary for that line in order to improve its whole service?
    Mr. Horam: Yes, indeed. I think that there will be some electrification on that line in the near future. I believe that there are plans for electrification, and my hon. Friend will then see some improvement.

    Driver and Vehicle Licensing Centre
    Mr. Rhodes Jamesasked the Secretary of State for Transport whether he is satisfied with the efficiency of the Swansea Driver and Vehicle Licensing Centre; and whether he will make a statement.
    Mr. Eyreasked the Secretary of State for Transport whether he is satisfied with the efficiency of the Swansea Driver and Vehicle Licensing Centre; and whether he will make a statement.
    Mr. Horam: There has been a substantial improvement over the past year—though all concerned at the centre would readily admit that there is still room for further improvement.
    Mr. Rhodes James: I thank the Minister for that reply and accept that there has been a considerable improvement, but is he aware that I continue to receive a considerable number of complaints from my constituents about the work of the centre, and that there is clearly room for considerable further improvement?
    Mr. Horam: The hon. Gentleman has raised three cases since he came to the House and in only one was the centre at fault.
    Mr. Eyre: Is the hon. Gentleman aware that he should not brush aside complaints, as they are widespread, repeated, and received by many hon. Members? Is he further aware that he will not satisfy the public criticism of the operation of the centre unless he orders an immediate independent—and I stress "independent"—inquiry into the working of the centre to try to make good these faults?
    Mr. Horam: I am aware of the complaints, because I have to answer them. I am constantly aware in detail and in depth of the sort of problems that have been caused. We take this matter seriously, but, given the volume of work that the centre deals with, the improvement has been quite marked over the last 12 months, and rather than our setting up an inquiry it would be better for the improvement to continue. If it does not, I shall look at the matter again.
    Mr. Penhaligon: Does the hon. Gentleman agree, on reflection, that the whole concept of this centralised Government bureaucracy was a disaster?
    Mr. Horam: The Government of the day believed that the system in operation at that time—a system that was popular—of the local taxation offices handling these matters could not continue because of the increasing number of motor cars
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    and the additional licensing involved. A decision had to be taken on that basis, and whatever the merits of the previous system we cannot go back to it.
    Mr. Hodgson: Is the hon. Gentleman aware that there have been a number of cases of people applying to Swansea for provisional licences and being issued with full driving licences? Can he tell us how many such cases there have been and how many people are now driving on the roads without ever having taken a driving test?
    Mr. Horam: This is a new one on me. I thought that I had seen everything in the way of complaints about the centre. I shall certainly look into this matter if the hon. Gentleman will write to me, or perhaps I can speak to him about it later.

    Lorry Drivers (Working Hours)
    Mr. Goodladasked the Secretary of State for Transport what discussions he has had with the EEC Transport Ministers on the question of drivers' hours and distances.
    Mr. William Rodgers: Since the last meeting of the EEC Council of Transport Ministers on 16th December I have had informal meetings with several colleagues. There have been regular discussions at official level in preparation for the next Council meeting, which is planned for next month.
    Mr. Goodlad: At the next meeting of EEC Transport Ministers, will the right hon. Gentleman impress upon his fellow Ministers the fact that implementation by this country of Community Regulations 534 and 642 is liable to cause substantial disruption to freight transportation and a substantial increase in rail fares? Will he urge that there should be considerable changes made to these orders and urge upon the Leader of the House that we should debate the matter soon?
    Mr. Rodgers: My right hon. Friend will have heard the hon. Gentleman's question. We had a discussion on 4th April on various matters relating to drivers' hours in the EEC and there may not be a great deal of parliamentary time in the immediate future in which to discuss the matter again. I agree with what the hon. Gentleman said. This is a matter of

    1327
    great concern to our road haulage industry and it is something on which we shall have to negotiate to get the best possible deal. I shall be acting in the spirit suggested by the hon. Gentleman.
    Mr. Raphael Tuck: Can my right hon. Friend say whether the introduction of tachographs, and if I were persuaded that accidents? Will he consider their introduction, despite the opposition from certain quarters?
    Mr. Rodgers: My hon. Friend is not referring to the regulations affecting drivers' hours and distances travelled. There are many arguments concerning tachographs, and if I were persuaded that they would have a significant effect on road safety I might have dealt with the matter in different terms. I am not convinced that they are more central to road safety than are many other matters to which we could give much higher priority.
    Mr. Moate: Will the right hon. Gentleman say what is the Government's estimate of the total cost that would be likely to fall on our bus and road haulage industries if the Community requirements on drivers' hours were implemented in full?
    Mr. Rodgers: It is difficult to say. I have tried to get estimates that convince me, and the industry has its own views. It could be more than£100 million.

    Concessionary Bus Fares
    Mr. Adleyasked the Secretary of State for Transport if he will make a statement on his discussions with the National Bus Company on the question of concessionary fares for the elderly.
    Mr. Horam: I am told that the National Bus Company's studies will necessarily take some months to complete; therefore, I cannot yet add to the reply that my right hon. Friend gave to the hon. Member on 21st March 1977.
    Mr. Adley: Will the hon. Gentleman confirm that, although he has tried to make the difference between rural and urban areas a matter of party politics, this has nothing to do with the problem, and that it is related to the fact that in many urban areas the municipal bus services are run by local authorities which are free to make their own arrangements, and that Bournemouth, which is not, I
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    think, a Labour-controlled area, has a scheme for concessionary fares? Does he agree that my suggestion that the National Bus Company should sell bus passes on a similar basis to the scheme operated by British Rail would not involve extra public expenditure and that it would help to eliminate the unfairnesses that exist among ratepayers in adjacent local authorities served by the same bus company where some enjoy concessionary fares while others do not?
    Mr. Horam: I can confirm what the hon. Gentleman said about such a scheme not adding to public expenditure. If we could get a sensible scheme within the overall financial regime of the NBC, that would help. I am anxious to encourage it, as the hon. Gentleman knows because we have talked about this. Indeed, the initiative that the NBC is taking arose partly from our discussions.
    Mr. Skinner: When discussing concessionary fares for the elderly, will my hon. Friend also bear in mind those at the other end of the age scale, namely, schoolchildren over 14 and up to 17 or 18 who are being charged the full adult fare by most bus companies, both public and private? Does he agree that there is a widespread wish in the House and outside that a concession should be granted to these schoolchildren?
    Mr. Horam: My hon. Friend is right. As a result of the raising of the school leaving age, a problem has been created for schoolchildren, who do not benefit because the age limit for concessionary fares has not been raised. My right hon. Friend the Secretary of State for Education and Science is looking into the matter, and local authorities have discretionary power to help children who have to travel more than three miles.
    Mr. Emery: Will the hon. Gentleman encourage the public enterprise bus services to introduce, before the report, concessionary fares on certain days when some country buses travel all but empty during mid-morning and mid-afternoon? Would this not be of great assistance to elderly people living a long way from towns, and should it not be done immediately?
    Mr. Horam: The NBC has taken this point on board. That is why it is undertaking the study. It is an important

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    matter, and I am sure that the whole House would urge the NBC to do something about it.

    Railways (Productivity)
    Mr. Spriggsasked the Secretary of State for Transport whether he is satisfied with current levels of productivity on British Railways.
    Mr. William Rodgers: I always welcome improved productivity in transport, as we must all do, throughout British industry.
    Mr. Spriggs: Has my right hon. Friend read the recent Press reports about the claim of Railway Rescue that British Railways are paying railwaymen for doing nothing? This is a load of rubbish. Let me assure my right hon. Friend that the railway trade unions are co-operating with the Board on productivity deals. I can assure the House that railwaymen are working rest days and—
    Mr. Speaker: Order. Does the Minister wish to answer?
    Mr. Rodgers: I certainly saw the report to which my hon. Friend referred. I think it is important to say that there is a great deal of unfair comment about moves towards productivity on the railways. My hon. Friend is quite right to draw attention to the co-operation that has existed between the rail unions and the British Railways Board on important productivity agreements, including those related to signalling. The record is a good one. That is without prejudice to whether it could be better.

PARLIAMENTARY PAPERS
Mr. Pym Mr. Pym (by Private Notice) asked the Leader of the House whether he will make a statement about the present state of the printing of parliamentary papers.
The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): The printing of parliamentary papers has been disrupted because of a dispute about flexibility and overtime working involving the National Graphical Association and NATSOPA machine room staff at the Parliamentary press. Discussions between officials of Her Majesty's Stationery Office and
1330
representatives of the staff concerned have taken place and are continuing. Existing arrangements will ensure that essential parliamentary papers continue to be available. I naturally very greatly regret the inconvenience which is still being caused to Members in all parts of the House.
Mr. Pym: Obviously the Leader of the House is aware of the great inconvenience and the seriousness of any interruption of the normal supply of parliamentary papers. Will he agree that it seems to some of us that these disputes have become rather more frequent in recent years, which is extremely unfortunate? Can he hold out any hope that there will be an early settlement to this particular dispute, and can he hold out any hope that there will be a more lasting settlement, so that the House of Commons and Parliament do not suffer from the interruption in the supply of papers in the future?
Mr. Foot: I agree with everything the right hon. Gentleman has said about the seriousness of the interruption in the supply of papers for the House. I do not think that anybody in the House can doubt that. But let us try to settle this dispute, and then we can see how we can prepare for the future. The most immediate concern is to try to get a settlement of this dispute.
Mr. Heffer: Will my right hon. Friend explain to the House precisely who are the people doing the copying in the House? Are they members of a trade union? Have they been accepted to do the job by the trade union in dispute? Have they been checked for security? Are they issued with security passes? What is the cost of using these people in comparison with a settlement with the trade union concerned?
Further, is my right hon. Friend aware that many of us are most disturbed that hon. Members are not allowed to use the rooms downstairs while they are being used by people whom we might well consider to be blacklegs?
Mr. Foot: I fully acknowledge the inconvenience for Members of the House arising from the use of these rooms, but the general arrangements for the operation that is required to deal with the situation were announced in the House

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by my predecessor and the House was able to consider all aspects of the matter then.
I do not think that any question of blacklegging arises. Certainly the question has not been raised at all in any of the discussions which have arisen in the last day between my hon. Friend from the Civil Service Department and the representatives of those working here. Since they have not raised the issue, I do not think, therefore, that it is wise for the House to raise it.
Mr. Thorpe: Is the Leader of the House aware that we are very grateful to those downstairs who have produced our Order Papers, whether they have had fingerprints taken or blood tests, or any other tests that hon. Members might think relevant?
Will the Leader of the House, in view of the exchanges yesterday—this is a serious point—consider whether it might be possible for at least one copy of the proceedings of this House to be made available in typed or duplicated form in the Library so that right hon. Members who wish to refer with greater accuracy to the events of the previous day can do so?
Mr. Foot: The right hon. Gentleman will see that we have done our best under these operations which are now in effect and which have been used on previous occasions to produce a form of the reportwhich is available to the House. Many copies of that were available yesterday, not merely in the Library but for the House generally.
Mr. Loyden: I support the statement made by my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) concerning the uneasiness felt by hon. Members on the Government side about the present printing arrangements. Will my right hon. Friend not agree that had the questions asked by my hon. Friend been answered, it might well have been possible to remove some of the fears that we have about the alternative printing arrangements used in the House at the moment?
Mr. Foot: There has been no complaint by any of those working here about the emergency measures which the House has put into operation. I think it is therefore unwise for us to raise those questions. We are seeking a settlement
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of the dispute. In the meantime, the measures which were put to the House and explained to the House by my predecessor are now in operation.
Mr. Emery: Will the Leader of the House convey to those who are concerned with the printing of parliamentary papers that they normally do a most excellent job in frequently very difficult and time-limited conditions? Because of that, this House should be the best possible employer of any in the country.
The statement that the Leader of the House made to the House is very similar to that which has been made by many Leaders of the House previously—in other words, "Let us settle this dispute and then deal with the overall problem". The overall problem has not been dealt with. May we have an absolute assurance from the Leader of the House that he really will now deal with the problem on a longterm basis?
Mr. Foot: There is a difference between saying that anyone standing at this Dispatch Box, or any Leader of the House, will try to find a long-term solution and in seeing that it is put into operation.
I fully accept what the hon. Gentleman said about the very great skills used by those who produce the papers for this House and the speed with which they are normally produced. I pay the highest tribute to those who are engaged in these operations. But I think it is essential that the papers for this House are supplied. That is why the emergency operation system was described to the House earlier, and why occasionally, unfortunately, it has had to be brought into existence.
Mr. Heffer: On a point of order, Mr. Speaker. May I have your guidance on this matter? Hon. Members, when they put serious questions, which they are entitled to ask, as to who is doing the printing, whether these people are members of the trade union, what is their pay, and so on, ought surely—[Interruption.] I am not asking Opposition Members for their advice. I am asking Mr. Speaker for his guidance. Are we or are we not entitled to an answer to these serious questions? Many of us on the Government side, if not on the Conservative side, would like to know the answers.
Mr. Speaker: Order. The hon. Gentleman well knows that I am not responsible for the content of answers.
Mr. Steen: I had Interview Room H booked for 4 p.m. today for a meeting to discuss pre-school education. I have received a note from the Serjeant at Arms telling me that the meeting room has now been lost. There is nowhere to go. Will you advise me, Mr. Speaker, where such a meeting could take place?
Mr. Speaker: Order. I was afraid that the hon. Gentleman was about to ask me to tell him where to go. It is obvious that, with the difficulties facing us, special steps have to be taken. This House must be allowed to function.

RHODESIA
The Secretary of State for Foreign and Commonwealth Affairs (Dr. David Owen): With your permission, Mr. Speaker, and that of the House, I shall make a statement about Rhodesia.
Discussions of the Rhodesian question have taken place with the United States Government over the past three weeks. I met Mr. Secretary Vance on 6th May. We were in full agreement on the best way to carry matters forward.
Both Governments wish to reiterate their determination to work for the independence of Rhodesia under majority rule in 1978. They have been encouraged by their contacts so far to believe that detailed consultations about an independence constitution and the necessary transitional arrangements could be a satisfactory way to achieve this. They have therefore agreed that Britain and the United States should now enter into a phase of intensive consultations with the parties.
For this purpose, Her Majesty's Government have decided to establish a consultative group to make contact with the parties, which will visit the area as necessary, including Salisbury. It will be headed by J. A. N. Graham, Deputy Under-Secretary at the Foreign and Commonwealth Office. He will leave for Africa next week.
Mr. Vance has agreed to appoint a senior United States official to work with the head of the British consultative group.
Mr. John Davies: While not wishing to take an unduly "told you so" attitude, may I congratulate the Secretary of State on step-by-step moving closer to the views which we on this side have expressed for a considerable time past? I assure the right hon. Gentleman—I am sure that he will understand this—that we welcome the setting up of the consultative group and the proposed United States participation in it, which we have long thought desirable in any such event. Is the right hon. Gentleman prepared to say more about its precise terms of reference and the time scale which he has laid down for its work?
Will the right hon. Gentleman recognise that, as part of this system, the presence of a mission in Salisbury on a resident basis to keep the group and the Foreign Secretary himself fully informed seems to us to be continuingly desirable? Further, may we have an assurance that the setting up of this group will in no way lessen the right hon. Gentleman's personal involvement in the solution of these matters, to which also we attach importance?
Will the right hon. Gentleman acknowledge that, in the way they have handled these matters from the time of the Kissinger initiative, the Government have seemed to us too frequently to accept the reality of events rather late and to react to them rather late? We have had to refer to this already. We hope that the right hon. Gentleman is aware of the extreme urgency which we now believe surrounds this problem. Will he be able to tell the House soon how he means to consult the whole people of Rhodesia, in accordance with the fifth principle, to which both the Government and the Opposition are deeply attached?
Dr. Owen: I thank the right hon. Gentleman for his welcome. As to the precise terms of reference. I have deliberately not set precise terms of reference, and I do not think that to do so would help at this stage. As to the time scale of the consultative group's activity, I certainly attach a great deal of urgency to the matter—the right hon. Gentleman emphasised that—and that is why it is starting next week. It will stay in Africa and hope to report back to me in early June.
As to when or whether we should establish a mission in Salisbury, I have made

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clear to the House throughout that I have been open-minded on the matter. I do not judge it the right moment to do so at present, but the consultative group will be visiting Salisbury. As for my own personal involvement, I assure the right hon. Gentleman and the House that I still stand ready to chair any conference were it to be decided that that was the right way of proceeding, and I shall also stay very closely involved in the whole issue.
I recognise that the House has always wished to be satisfied as regard consulting the whole people of Rhodesia. Again, I think that it is too early to decide the precise arrangements—whether they would be through a General Election or some mechanism such as a Pearce mechanism, or whether the House might be satisfied by the sort of activity done through the consultative group. I recognise, however, that the House will wish to be satisfied that any solution commands majority support inside Rhodesia.
Mr. Thorpe: Will the Foreign Secretary take it that we welcome the Government's continuing efforts to achieve a peaceful solution of this problem? Can he say a little more about the consultative group? Will it be all-British or will it be multinational? Will the Americans be there on purely a consultative basis or will they be members? Where will this body be based, and will it merely report to the Government or have powers to negotiate?
Dr. Owen: The British representatives on the consultative group will work under my authority and will be answering to me, and if it makes any major decisions they will be decisions which I shall make on behalf of the Government in consultation with the whole of the Government. Those members of the consultative group who come from the United States will operate under the same arrangement. Throughout this procedure there has been and will continue to be the closest working relationship between Mr. Vance and myself and between Her Majesty's Government and the American Administration, as well as the close involvement of my right hon. Friend the Prime Minister and President Carter also. It is a joint enterprise.
What we are trying to do is to sound out opinion. We shall be putting forward suggestions, but we shall also be listening
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and trying to reach a consensus about a peaceful transition to majority rule under a constitution and a method of election which will give an independent Zimbabwe in 1978.
Mr. Faulds: Does my right hon. Friend agree that he is talking not about the independence of Rhodesia but about the independence of Zimbabwe, and will he confirm that the requirement of "one man, one vote" for majority rule remains the core of any settlement?
Dr. Owen: I have made clear on a number of occasions that I think that the franchise should be on the widest possible basis, and I have indicated also that it is not just one man who might wish to vote. There are also women in Africa. The question of the franchise is obviously an issue which will have to be discussed in the negotiations. As to my hon. Friend's reference to Zimbabwe, in fact, Zimbabwe is the name which most black nationalist leaders and most black Africans think of for an independent country, but, of course, it will be for the people of that independent country to decide its name, and traditionally that has usually been one of the issues which have been decided on the first day of independence.
Sir Bernard Braine: Is it not unrealistic to think that much progress can be made in this direction unless there is a guarantee of an underpinning of the Rhodesian economy during the transition to majority rule? I find it surprising that the Foreign Secretary made no mention of that in his statement today. Could he give any details of what he has in mind?
Dr. Owen: What is often referred to as the Zimbabwe development fund, which was initially suggested by Dr. Kissinger, is still very much part of the package of proposals which we should wish to discuss. This is one of the many reasons, though one of the central reasons, why I think that United States involvement with Britain is necessary. I agree with the hon. Gentleman that it is important to ensure the independence of Zimbabwe in economic prosperity and stability, and in the sense that a development fund could make a contribution to that, I believe that it would be extremely important.
Mr. Flannery: Does not my right hon. Friend realise that when the American Kissinger proposals were forthcoming the front-line Presidents categorically rejected the involvement of America in anything to do with Rhodesia, and does he not realise also that, on the last occasion, for the second time the front-line Presidents again made clear that they did not want the involvement of the United States of America in Africa? Does not my right hon. Friend recognise, therefore, that the attempted involvement of America now, implying that we cannot go ahead on our own, is definitely slowing down the whole process of democratising Rhodesia, and that, if the Americans were to come in, undoubtedly the Soviet Union also would want to come in?
Dr. Owen: There was undoubtedly some misunderstanding on the proposals put forward by Dr. Kissinger between what he appreciated and what the frontline Presidents appreciated, but even at that stage there was the closest co-operation.
Mr. Flannery: What about Vietnam?
Dr. Owen: My hon. Friend must recognise that there is a new Administration in the United States, an Administration which, I believe, is extremely committed to the whole concept of no racial discrimination and a freedom for the nationalist movement in Southern Africa. My hon. Friend suggests that the frontline Presidents object to the proposals which I have put forward. That is not the case. I went and spoke personally to all the front-line Presidents. I visited President Machel in Mozambique, and I went also to Angola and talked personally to President Neto. That is not what they told me. They said that they would continue to support the Patriotic Front, but they wished my initiative well. They wanted a peaceful transition to majority rule. They expressed scepticism about the intentions of the Rhodesian Front, but they did not object to the proposals; in fact, they positively supported them.
Mr. Brocklebank-Fowler: Will the right hon. Gentleman take it that many of us on this side are extremely concerned at the increasing escalation of violence in Rhodesia and that we wish to be assured that he will treat these necessary negotiations with great urgency? Can he say
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when he expects the mission to report to him so that he can begin to take some of the essential decisions which have to be made if further violence is to be avoided?
Dr. Owen: Of course I wish that the existing level of violence would stop and certainly that it would not escalate, but unfortunately there is a tragic history surrounding the whole issue of Rhodesia and there is no way in which we can wave a magic wand and stop the violence. We must have a considerable measure of urgency, but at the same time we must move at a pace which will ensure that we get the support of all parties involved. That is extremely difficult. As I said before, I hope to have a report back from the consultative group early in June, and I shall keep the House informed from time to time.
Mr. MacFarquhar: Will the Foreign Secretary explain more fully the attitude of black Africans to the question of American involvement, in view of the reported statement by Mr. Nkomo? Is it the case that the United States, in the light of his representations, has made any step backwards in its involvement with our Government?
Dr. Owen: No. The United States is still firmly committed to joint action on this problem. There has been some confusion here, because some black nationalist leaders thought that American involvement meant co-chairmanship of the conference. That was never suggested. Also there have been certain misunderstandings, which I can well understand, over the constitution. The constitutional proposals always would have to come to this House. They would have to be presented by the Government and would be subject to amendment or revision by the House. In these circumstances the British Government would, of course, take a central lead.
There are other aspects—not least the development fund, and the whole question of democracy in the transitional period—where the United States' involvement is very helpful, and broadly speaking most black nationalist leaders have supported that involvement.
Mr. Walters: The Foreign Secretary has confirmed that he remains in close touch with the United States Secretary of State, Mr. Cyrus Vance. Will he bear

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in mind that one of the main reasons for the failure of the original Kissinger initiative was that we did not involve the United States in the subsequent negotiations? Will he ensure that the Americans are involved fully now, and will he not agree that it is regrettable that the United States will not be co-chairman of the conference?
Dr. Owen: We discussed this with the United States and we jointly agreed that co-chairmanship would be wrong. The exact form and the means by which and when the conference can be called are issues that must be discussed, but that is something that comes later down the track. I assure the hon. Member and the House that the United States is fully and firmly involved in this. This has been shown in the last few days by the close conversations and involvements.
Miss Joan Lestor: Is the Foreign Secretary aware that, despite his play on words about men and women voting in Rhodesia, he has left a distinct impression that he may be thinking in terms of a limited franchise? Will he confirm or deny this?
Dr. Owen: I have already supported women voting. I emphasised it because, while we all support the case for "one man, one vote", there is also a strong case for "one man, one woman, one vote". I think that some women think that they should have two votes and men should only have one.
This is a new venture in many African countries, as my hon. Friend knows, and it is an issue which must be discussed. I have made it clear that I believe that the franchise should be on the widest possible basis. I must accept that this will be one of the issues to be discussed. If and when it is necessary to give some safeguards for minority opinion, we are prepared to discuss the matter at that stage. It is easier to see it against a complete and open franchise, and I have expressed that opinion many times to Mr. Smith, to the Rhodesian Front and on Rhodesian television.
Mr. Blaker: Will the Foreign Secretary make it clear to the front-line Presidents that it is inconsistent with the practice that we have adopted in giving independence to 30 countries over 30 years
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for them to think that they can nominate the future rulers of Rhodesia as they were purporting to do a few weeks ago? Is that point accepted by them?
Dr. Owen: I do not quite understand the hon. Member's question. The whole purpose is that future leaders of an independent Zimbabwe will come as a result of elections fairly held inside Rhodesia, and supervised to make sure that they are fair. The leaders will be chosen by the people living under the new constitution.
Mr. Alexander W. Lyon: Will the Foreign Secretary recognise that the question of the franchise is crucial but that in any settlement, unless the agreement is accepted by the people of Zimbabwe as a whole, it does not matter at all whether it is accepted by this House, by the whites or by the five front-line Presidents? It is essential to know whether they have accepted that the franchise must be based on "one man, one vote" in order to ensure that the people of Zimbabwe have accepted the settlement.
Dr. Owen: Of course the franchise is central to the discussion, and the widest franchise will win the widest acceptance. Any attempt to limit it will run into severe problems and will raise doubts whether the settlement has been acceptable overall to the people of Zimbabwe.
Mr. Luce: Will the Foreign Secretary agree that we should be grateful to the United States for providing practical economic aid to facilitate a peaceful transition in Rhodesia, and is this not in sharp contrast to the activities of the Soviet Union in this area?
Dr. Owen: This is one challenge which the Western democracies have to face. They have to be prepared to stand up for democracy and democratic values and the peaceful transition to majority rule in Africa and other areas. It is noticeable that the Soviet Union's involvement in Africa has been largely confined to supplying arms.
Mrs. Castle: Is my right hon. Friend aware that his repeated reference to "the widest possible franchise" is increasing anxiety on this side of the House? We believe that the right to universal suffrage for both men and women is quite a separate matter from the protection of minority rights, which can be dealt

1341
with in other ways. Will my right hon. Friend tell us categorically that there will be no qualification in any way of the principle of "one man, or one woman, one vote"?
Dr. Owen: My right hon. Friend the Member for Blackburn (Mrs. Castle) is an experienced negotiator and she knows that it is unwise to enter discussions laying down the criteria before starting. I have made it clear that I believe that the ingredient for a successful settlement is the widest possible franchise. In the past this House has often given independence on a restricted franchise, and that has usually been shown to be wrong by history, and has soon been changed. I agree with my right hon. Friend that the whole climate of world opinion at the moment believes that each individual above a certain age has the right to choose the Government under which he or she lives.
Mr. Michael Latham: Has the latest initiative been discussed in advance with parties in and around Rhodesia, and, if so, with what result? Will the Foreign Secretary confirm that the purpose of the initiative is to take soundings and not to negotiate on the Richard plan?
Dr. Owen: The purpose is to take soundings and to produce proposals and ideas and to reach a consensus. Having made the decision, with the American Secretary of State, Mr. Vance, we thought it right to inform the many interested parties who will be visited by the consultative group of our intentions. This has been done throughout Africa.
Mr. Ioan Evans: In view of the fact that the illegal Rhodesian régime has been sustained by the support of South Africa, what representations have been made by the Americans to the South Africans to stop giving support to the Rhodesian régime? The Rhodesian régime would collapse without South African support.
Dr. Owen: I have made my views about this very clear to Prime Minister Vorster in Cape Town, and the United States has repeatedly made its views clear. In fact, Vice-President Mondale has made it known that he will reinforce these views and himself make the position clear.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: I propose to call two more hon. Members from either side. We have a lot of business to do today.
Mr. Brotherton: If the Government really want a peaceful solution in Rhodesia will they do two things to show that they are in earnest? Will they go to the United Nations and say that sanctions have failed and should be dropped; and will they cease giving aid to the Government of Mozambique, which harbours guerrillas who are murdering Rhodesians—black and white?
Dr. Owen: The first matter is a decision which is primarily for the United Nations. I have made it clear that I think it unrealistic to attempt to lift sanctions while there is any question about the practicability of and total commitment to the transition to majority rule. We shall not get the support of the United Nations for lifting sanctions until it is clear that irreversible procedures are under way for majority rule.
In relation to aid to Mozambique, it does not serve the interests which the hon. Member espouses to drive Mozambique or any other country ever increasingly into the arms of the Soviet Union. Many of these countries are ruled by nationalist movements which have fought bitter battles against repressive colonial rule. They want to be genuinely unaligned, and it is in our interests to restore good relations with them, and that includes Angola as well as Mozambique.
Mr. Clemitson: Would my right hon. Friend not agree that we would not be having a statement like this today if sanctions had been properly and effectively applied in the first place? Given that oil supplies have been vital to the survival of the Smith regime, what progress is being made with the inquiry into alleged sanctions-busting by oil companies, especially by British Petroleum?
Dr. Owen: Mr. Bingham has been appointed and I believe has started work. I have explained to him the importance and the urgency that I attach to the inquiry, but it is, of course, a very complicated issue.
I totally agree with my hon. Friend: had sanctions been applied in the full intention of the United Nations, there would not have been this tragic history

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and loss of life and we should not now still be debating the possibility of achieving a transition to majority rule in 1978.
Mr. Temple-Morris: I welcome the right hon. Gentleman's initiative and I wish him well, as I think will many hon. Members in all parts of the House. But one of the main difficulties that the Foreign Secretary has is that the Rhodesian nationalist movements have all to agree upon reasonable demands by Mr. Smith. One of those points of agreement has to be the willingness—we have heard a lot about a ballot, a referendum or an election—to stand for elections on a "one man, one woman, one vote"—or "two votes"—basis. Has the right hon. Gentleman had any indication that the Patriotic Front at the moment, in its component parts, is more willing than it has been recently to stand in such elections?
Dr. Owen: I put that issue straight to Mr. Mugabe and Mr. Nkomo. They both said that they would be prepared to take part in democratic elections and saw democratic elections as a way of achieving a transition peacefully to majority rule.
Mr. James Johnson: Since on the Government Benches below the Gangway there still appears to be some confusion about the status of the Americans in the African continent, can my right hon. Friend sincerely and clearly say what is the attitude of the front-line Presidents? Do Seretse Khama, Kenneth Kaunda, Julius Nyerere and Jomo Kenyatta—all these Commonwealth men—support the Anglo-American initiative in this matter?
Dr. Owen: Yes, I think that, in the form in which I have announced it, it will get their full co-operation. A variety of differing opinions have been expressed about some aspects of the constitution. Many of them, of course, got their independence through a constitutional Lancaster House-type procedure, and I think that many of them would
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wish to see that play a part, particularly in respect of the constitution. It should be possible to meet that anxiety, but there is no doubt that the broad outlines of this initiative, as I explained it to them myself, are supported by them. The procedure which I have just announced to the House will, I think, have their ready support and their full co-operation.

BALLOT FOR NOTICES OF MOTIONS FOR FRIDAY 27TH MAY
Mr. Graham Page: On a point of order, Mr. Speaker. We are about to draw a Ballot for Private Members' motions on 27th May. The Leader of the House has announced that he hopes that the House will rise on that day. Clearly, of course, that would be the day for Adjournment debates, when Back Benchers have an opportunity to raise their own subjects in debate. It seems that, unless the Government move to alter the day for the Private Members' motions, Back Benchers will be deprived of one day of business. Therefore, Mr. Speaker, I ask through you whether the Government are prepared to restore that day to Private Members.
Mr. Speaker: I believe that discussions are under way on this matter, but it is not, of course, a point of order for me. I am fulfilling the instruction of the House to hold a Ballot today.
Members successful in the Ballot were:

Mr. Michael Brotherton.

Mr. Spencer Le Marchant.

Mr. Donald Stewart.

WELSH AFFAIRS
Ordered,
That the matter of Small Businesses in Wales, being a matter relating exclusively to Wales, be referred to the Welsh Grand Committee for their consideration.—[Mr. Harper.]

FISHERY LIMITS (EMERGENCY PROVISIONS)
4.5 p.m.
Mr. A. J. Beith: I beg to move,
That leave be given to bring in a Bill to make further provision for the protection of fish stocks within fifty miles of the coast of the United Kingdom.
By seeking leave to introduce this Bill, I seek the clear and visible support of this House for a 50-mile British fishery limit within the EEC.
Less than a year ago Parliament passed the Fishery Limits Act, which set a 200-mile limit around Britain's coasts, with great and unusual urgency. The emergency leading to that Act has not ended and will not end until the job is completed, and the job cannot be completed unless there is some real safeguarding of British interests in waters within those 200 miles.
Our real fishery limits, so far as our neighbours in the EEC are concerned—they represent most of our neighbours with fishing fleets—are not 200 miles at all. Our real fishing limits in practice are only 12 miles, and in some cases, including my own constituency, only six miles. In 1982, unless a new common fisheries policy is negotiated, there will be no limits at all. In the absence of any new provision, the right would exist to fish right up to our beaches, but even the limits of 12 miles and six miles, which are all that we have now, are totally inadequate.
The common fisheries policy was concocted on the eve of British and Irish entry of the EEC to suit the needs of the then member countries, which had for the most part fished out the resources in their own waters and would like to deploy their catching fleet in our waters. Britain has the biggest food fish market of any of the EEC countries. It has the biggest fishing fleet of any of the EEC countries. It has many more communities dependent on fishing than have other countries in the EEC, and whether one considers the small inshore fishing ports of a constituency like mine or the large fishing ports of the deep sea industry on the Humber Estuary, at Fleetwood and elsewhere, one sees communities with a heavy degree of dependence on the fishing industry. Perhaps most
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important, more than half of the EEC's total fish stocks are within the 200 miles of waters which surround the coasts of the United Kingdom.
I deplore, of course, the fact that the common fisheries policy was ever agreed to in the first place and was not either the subject of a stronger stand at the time or made a part of renegotiation, as I believe it should have been. I say to those hon. Members who share my strong feelings on the subject that all that has all happened now. The original negotiations have passed, the renegotiations have passed and events have overtaken us, and 200-mile limits of the kind now in existence were scarcely thought of then.
Mr. John Mendelson: The hon. Gentleman has a nerve.
Mr. Beith: We must work together—I hope that all hon. Members will agree with this—to secure a decent settlement for Britain, even at this admittedly very late hour.
The member countries of the EEC do not recognise that we mean business in getting a realistic fisheries policy. That is why the House must act. The fishing industry, after all, has not been extreme in its demands for what exclusive British control should extend to. The general cry for a long time was for 100 miles, but now a limit of only 50 miles is being sought. Hon. Members who do not know the fishing industry well should take something of the measure of the frustration which is felt.
I should like to quote from a statement made by the British Fishing Federation and quoted recently in the Trawling Times:
"It's the indignity of it that hurts most. Fishermen are proud people and one can understand their frustration when, through the failure of the EEC to sort out fisheries problems and no fault of their own, they see foreigners walking off with their pockets stuffed full of our money, while our own vessels head for the scrapyard and some of the world's finest fishermen are made idle. The fact that, with the EEC's blessing, the Icelanders are thumbing their nose at us makes it even harder to bear. Lunacy is the only word to describe it. Talk about food from our own resources! As far as fish are concerned, they're being carved up for the benefit of the rest of the EEC, while we fork out badly-needed sterling to buy from third countries."
My Bill is an emergency Bill. I shall explain why. Fish is a superb protein

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source that is self-sustaining. Fish stocks replace themselves, but they must be given a chance to do so. They have no chance of being self-sustaining if there is no adequate conservation. There is no chance of adequate conservation at present.
The conservation record of many EEC countries is poor. That is why they want to be in our waters. They have few fish in their own waters. The present activities of some EEC countries give every reason to fear for the future. If hon. Members do not know what is going on off Shetland they should consult my right hon. Friend the Member for Orkney and Shetland (Mr. Grimond) and The Shetland Times. The situation there is apparent to all who know what can happen when a massive industrial fishing effort is allowed to continue.
I quote from an article in The ShetlandTime:
"Foreign fishing fleets are robbing the Shetland fishing grounds of stock of haddock and whiting—and doing it quite legally. That is the evidence brought to light by an experiment carried out this week by the Whalsay boat 'Langdale'
The 'Langdale' made a two hour tow off Balta on Tuesday night, on the fishing grounds where the foreign industrial boats are working at present, and took about six tons of fish. Of the catch, about one ton was pout, and most of the rest mature haddock and whiting and other species suitable for human consumption.
The 'Langdale' was using a 16 mm net, the same as that used by foreign boats. The only check on what these boats catch is a by-catch limit of 10 per cent. of under-sized haddock and whiting."
A spokesman for the Shetland Fishermen's Association said:
"When a boat returns to port after nine or 10 days the catch is like soup and there is no way of saying what proportion of haddock or whiting, or anything else, has gone to make up the catch.
The only thing that can eliminate this kind of thing is an exclusive 50 mile limit for Britain, so that we can work out our own plan of conservation."
The EEC's own ideas about conservation show that it has no grasp of the situation. It puts forward proposals for catch quotas that every fisherman knows are impossible to enforce. Catch quotas have been shown to be ineffective. Some EEC member nations have demonstrated how easy it is to avoid them.
Conservation needs national enforcement. It is likely to work effectively only
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if it is being enforced by British authorities on British vessels landing fish in British ports. Only then can the catch be tested. That is one of the greatest difficulties. British fishermen will accept conservation if they can see that it is effective and if they do not have to stand by and watch other people defying it.
An emergency exists in another sense. We have a crisis in our own fishing industry. Many vessels are tied up. We cannot accept a situation in which our own distant-water and inshore vessels are fighting it out over a mere 12 or six miles of coastal waters. It is reasonable to ask for a 50-mile limit. We should still be making a massive contribution to the EEC "pond" with the rest of our 200 miles. We could meet the needs of our own industry within the 50-mile zone, even allowing for the contraction of distant-water fishing. The other EEC nations would still have access to the outer 150 miles.
The Bill would amend section 2 of the Fishery Limits Act 1976 so that full control of access to the 50-mile zone is assumed by the British Government. Access within 50 miles by vessels of EEC States would be restricted in the same way as that by vessels of other countries into the whole 200-mile zone. If passed, the Bill would be annually renewable until such time as the EEC incorporates provisions of this nature into a new common fisheries policy. Of course, legal clashes may well arise, just as they have over Ireland. We must be prepared to face that.
The industry supports the Bill. It also has the support of local authorities and hon. Members of all parties. I see no reason why, if the stalemate continues, the Government should not give time for the Bill. Even the passing of this preliminary stage today would be a clear indication that the House is serious about the future of fish stocks and our fishing industry. I hope that the Bill will meet the approval of the House.
Question put and agreed to.
Bill ordered to be brought in by Mr. A. J. Beith, Mr. J. Grimond, Mr. James Johnson., Mr. Walter Clegg, Mr. Hamish Watt, Mr. Alick Buchanan-Smith, Mr. Austin Mitchell, Mr. Douglas Henderson and Mr. Russell Johnston.

FISHERY LIMITS (EMERGENCY PROVISIONS)
Mr. A. J. Beith Mr. A. J. Beith accordingly presented a Bill to make further provision for the protection of fish stocks within fifty miles of the coast of the United Kingdom: And the same was read the First time; and ordered to be read a Second time upon Friday 17th June and to be printed. [Bill 118.]
ORDERS OF THE DAY
  SUPPLY
  [17TH ALLOTTED DAY]—Considered

  CIVIL ESTIMATES, 1977–78
  CLASS III, VOTE 7, CENTRAL AND MISCELLANEOUS SERVICES (MINISTRY OF AGRICULTURE, FISHERIES AND FOOD)
  Motion made, and Question proposed,
  That a sum, not exceeding£78,519,000 be granted to Her Majesty out of the Consolidated Fund, to complete the sum necessary to defray the charge which will come in course of payment during the year ending on 31st March 1978 for expenditure by the Ministry of Agriculture, Fisheries and Food on central administration including land management and small holdings, Royal Botanic Gardens, land drainage and flood protection and certain other services including subscriptions to certain international organisations.

  AGRICULTURE
  Mr. Speaker: Before I call any hon. Members to speak, may I tell the House my usual story when there is an agriculture debate? There is a very long list of hon. Members who wish to speak. We can fit everybody in if hon. Members exercise self-discipline. The only weapon that I have is a good memory about those who do not.
  Mr. Thomas Torrey: On a point of order, Mr. Speaker. I refer you to the Order Paper and the motion standing in the name of the right hon. Lady the Leader of the Opposition and a number of her right hon. and hon. Friends. The motion calls for a reduction in the salary of my right hon. Friend the Minister of Agriculture, Fisheries and Food, and others. You may not be aware, Mr. Speaker, that the present Minister of Agriculture, Fisheries and Food does not receive a salary as Minister of Agriculture. He is paid as an ordinary Member of Parliament, as I am. Therefore, how can a salary that does not exist be reduced?
  Mr. Speaker: The whole world knows the poor state of the right hon. Gentle-man and sympathises with him.

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  I have selected the motion in the name of the right hon. Lady the Leader of the Opposition.
  4.16 p.m.
  Mr. John Peyton: I beg to move,
  That Subhead A1(1) (Salaries &c., of Ministers) be reduced by£6,500.
  I was already aware that the right hon. Gentleman the Minister slaves in the national interest for no reward. This must be taken as evidence of our lack of malice towards him. Perhaps it is also a reflection of the rather quaint procedures of the House.
  The Government should have initiated this debate. I regret that they did not do so. I also regret that they did not offer a supplement to the White Paper produced early in January to round off the tale of events since then. That would have helped the House to bring the events into focus and into a reasonable relationship with each other. It would have shed more light on the Minister's views of the present situation and of his intentions. We offer this opportunity to him to reconcile the hopes and aspirations which were expressed in "Food from our own Resources" with the present situation and with what looks likely to happen in the future.
  The right hon. Gentleman has been most punctilious about informing the House of what has happened in Brussels—but whether the content of his reports was acceptable is another matter. The sporadic, serial-story nature of the way in which the tale has unfolded leaves much to be desired and has many disadvantages.
  In January an interesting White Paper revealed the present state of the industry. It was slightly unworldly because it did not say anything about future prices. In March we had an announcement about sheep meat and wool prices. In April, after a few hiccups, we had the EEC prices. In May, with such discretion and in almost a whisper, we had the late announcement about milk and potatoes—on a Friday. News of that has not yet penetrated through to the pages of Hansard. That is unsatisfactory. I hope that the Government will not think that that conduct is acceptable.
  I do not wish to underrate the Minister's difficulties. He faces many, both in
  1352
  Brussels and here. I have the impression that during this saga of events the Minister has almost gone out of his way to add to his difficulties. We joined the EEC after much thought and almost endless debate. We then undertook certain serious treaty obligations. I do not believe that it is particularly suitable or worthy for us now always to seek—or as the Minister does—to blame the CAP for all our ills, many of which arise from causes much nearer home. I quite understand that the Minister does not want to talk about the errors and shortcomings of his colleagues and that perhaps it is nice to seize upon the CAP as a scapegoat.
  Mr. John Mendelson: Complete rubbish.
  Mr. Peyton: The hon. Gentleman is a specialist in rubbish. We all know that.
  Mr. John Mendelson: I am listening to one.
  Mr. Peyton: I believe that it is unworthy to seek to blame the CAP for all the ills that come upon us, when we know very well that most of them derive directly from the economic mismanagement of the present Government.
  Mr. Nicholas Ridley: On a point of order, Mr. Deputy Speaker. The hon. Member for Penistone (Mr. Mendelson) has been shouting loudly from a sedentary position in a most offensive and off-putting way. As I am extremely interested to hear my right hon. Friend the Member for Yeovil (Mr. Peyton), will you protect the House from the bad manners of the hon. Gentleman?
  Mr. Deputy Speaker (Mr. Oscar Murton): The Chair is always ready to afford its protection when it is needed.
  Mr. Peyton: I am the last person to underrate the capacity of the Chair to do such things, but I am sure that the Chair would be very unwilling to take upon itself the responsibilities for performing miracles.
  I should like to remind the Minister and the House of what the original purposes of the CAP were. When one looks at them, one finds that they are not at all unacceptable. There is, first, the intention to increase production by means of

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  technical improvements and rationalisation. There is then the aim to provide a decent standard of life for the agricultural population. [Interruption.] There is the aim to create stable markets and the aims to ensure secure supply and to provide goods at reasonable prices. [Interruption.]
  Mr. Deputy Speaker: Order. What the Chair said earlier the Chair meant seriously. The hon. Member for Penis-tone (Mr. Mendelson) may have the opportunity to make his own speech should he catch the eye of the Chair, but I should be grateful if he would not interrupt from a sedentary position.
  Mr. John Mendelson: On a point of order, Mr. Deputy Speaker. It is within the recollection of the House and the Chair that there have been many debates when right hon. and hon. Members of the Opposition have interrupted the Minister much more often than I am doing now. We have a right to hear the truth.
  Mr. Deputy Speaker: Order. That is a matter for the Chair's decision. I ask the hon. Gentleman to await his turn.
  Mr. Peyton: What upsets speakers in this place more than anything else is being surprised. If the hon. Member for Penistone were to start to behave with courtesy and sit in his place in silence—
  Mr. Mendelson: We want the truth.
  Mr. Peyton:—I am bound to say that I would be considerably upset by the shock. As it is, the hon. Gentleman's present conduct tells more about himself than it worries me.
  I am sure that I take the right hon. Gentleman the Minister with me when I say that if one criticises something like the CAP, it is only right to acknowledge the progress that it has made. Over the 20 years since the treaty was signed, the agricultural population of the original Six has been just about halved. Over the past eight years the added value per man employed by the agricultural industry has risen in real terms by 28 per cent. I do not think that that sort of thing should be ignored. Nor, also, should we ignore the fact, before we hasten in to blame the CAP for everything, that it would be decent and courteous
  1354
  if we were to acknowledge that we in this country have been receiving from out of its purse£1 million a day in subsidy over a period of months. It is hardly surprising if a combination of new entrants, the rocketing of commodity prices, the spiralling upwards of oil prices and the mere passing of time has thrown up some problems and revealed some defects.
  I think that most of the difficulties derive from the fact that the original purposes of the CAP have tended to be overlaid by what has happened since, and this has made it harder to move forward and easier to slip back into bad habits, to adopt unsatisfactory devices and to allow horse trading to prevail over statesmanship. I draw attention to the article that Mr. David Wood wrote in The Times this morning:
  "Therefore, as this year, the pattern of negotiation developed in the Council of Ministers shows minister X consistently accepting substantial price increases for particular products of special concern to minister Y, 'so long as minister Y similarly concedes substantial rises for the products which most acutely worry minister X'."
  That is a very good description of horse trading. I think that it is most undesirable because, as I have said, it overlays the statesmanship that we require. [Interruption.] My hon. Friend the Member for Westmorland (Mr. Jopling) should not worry about the hon. Member for Penistone. He cannot help it.
  A considerable bureaucracy has been built up in Brussels, and like other bureaucracies it tends to be insensitive and very hard of hearing. It acts again and again in an arbitrary way. It takes little account of existing commercial practices and agreements, and its decisions are promulgated without much warning and with the minimum of consultation and do harm to the very trading that could build up the prosperity of the Community—for, I think, no useful purpose.
  The green currencies were not introduced to facilitate trade, and in effect they have protected strong economies and exposed weak ones. They have, in fact, in my view, caused more problems than they solve, and I think that we have to look very seriously at how long they can usefully be continued.
  The fact that food and agriculture are handled separately by the Commission

  1355
  and in the Community seems to me to be wrong. It makes it very difficult to judge agricultural policy against the background of the market place, and it makes it much more difficult to recognise and deal with the problem of structural surpluses.
  It seems to me that those who frame policy in Brussels have not always remembered that the Rome Treaty requires them to promote efficiency and to ensure reasonable prices as well as to sustain producers. They do not seem to give adequate attention to the question of how much food we need or can sell. They seem more willing to face the symptom of unmarketable surpluses than the root cause—that they are producing too much. They put up with the embarrassment of too much butter, but they turn aside from the source of the trouble, which is that they have too many cows.
  The Minister himself, in the last exchange that we had on this subject, on 27th April, showed that he was a little confused about what was a structural surplus. If he cares to look at column 1242 of Hansard, he will see what I mean.
  I believe that too large a share of the total FEOGA budget, which itself absorbs 73 per cent. of the Community's expenditure, is applied to propping up the market; in other words, in encouraging the production of surpluses.
  Mr. John Lee: I do not want to interrupt the right hon. Gentleman's flow of humour, which is giving the Government side of the House a great deal of entertainment, but he was a member of the Government who negotiated on the original entry. Although he did not have portfolio reponsibility for it, can he tell us whether it was ever seriously suggested in those negotiations that the EEC should approximate to our agricultural system, under the 1947 Act, rather than the other way around?
  Mr. Peyton: I am not saying that at all. I see little point in taking up the matter with the hon. Gentleman, who is always dipping his hands into antiquity to find a rather outworn argument. I am concerned now with how we are to face some very difficult problems.
  Mr. Norman Buchan Mr. Norman Buchan(Renfrewshire, West) rose—
  Mr. Peyton: I shall not give way to the hon. Gentleman. I have learned my lesson about giving way. If the hon. Gentleman cares to try again in a few minutes, when I have recovered from the last intervention, I may then be more inclined to let him intervene.
  As I was saying, in my view too large a share of the total FEOGA budget, which absorbs 73 per cent. of the Community's expenditure, is applied to propping up the market, and that in itself encourages the production of surpluses. In 1975—and this is the serious point—only 5 per cent. of the budget was applied to the remedying of structural imbalance, to persuading and making it possible for the inefficient to go. Too much money and effort are expended in enabling the weak to totter on, too little in securing progress from which both producers and consumers can expect to see enduring benefit. The farmer in this country should remember that he has a great deal to fear from policies which keep the inefficient in business and much to gain from policies which make efficiency profitable.
  The Minister has spent a good deal of his time lamenting the existence of the common agricultural policy. We blame him for the fact that he does not appear to have faced, or used his time in the Chair to persuade others to face, the real difficulties of structural surpluses. His preoccupation with what he supposes to be the consumer's interest has hidden the consequences of his policies from even himself.
  Certainly, it has confirmed our partners in Europe in the belief that we are just bargain hunters, on the look out for cheap food whenever and wherever it is available. Even bargains go wrong. The right hon. Gentleman came home with his penny a pound for butter the other day. I do not know whether he was then aware that this would cost the Exchequer£23 million in levelling off the price of New Zealand imports. We should very much like to hear from him on this point when he replies.
  We believe that the right hon. Gentleman has failed to make clear to the Community that we are just as concerned as the Community is to sustain food industries in this country which are vital to us. The weakening of these

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  industries would impose an insupportable burden on our balance of payments.
  The fact that we are the biggest single buyer of food in the world, and certainly in the Community, does not mean that we are a slop-pail available to take everything that others produce but do not themselves want. We criticise the Minister for his failure to stake out a claim for British farmers to be recognised in Europe as highly efficient producers. Moreover, we believe that in all this process he has attracted and generated much which will only add to our difficulties and must considerably have added to his.
  I should like to refer briefly to some particular sectors. I know that the Minister will not be surprised if I deal first with pigs. He has on many occasions protested his concern, but many people feel that, at least at the beginning, he has not been all that unhappy to see imports pour in. His mind was closed for too long to the dangers which were building up.
  Mr. Eldon Griffiths: Will my right hon. Friend emphasise that the Minister's present policies are as damaging to the pigmeat consumer as they are to the producer? Will he also accept from me that his own visit the other day to the most important pig-producing area in the country—West Suffolk—was received with great warmth, because he at least has an open mind, while the Minister's is totally closed?
  Mr. Peyton: I am much obliged to my hon. Friend for his advice and for what he was kind enough to say about me.
  Mr. John Mendelson: Dear, oh dear.
  Mr. Peyton: I should like to say a word to the hon. Gentleman. I wonder whether he thinks that he is a good advertisement for himself or the House of Commons. I shall be delighted to give way if he would like to intervene.
  Mr. John Mendelson: If the right hon. Gentleman had started on his first serious point earlier I should have listened with great respect, especially if he had cut out all the cheap propaganda and untruths about my right hon. Friend.
  Mr. Peyton: When it comes to cheap propaganda and humbug, I could not possibly instruct the hon. Gentleman, who is a real expert.
  The relief which the right hon. Gentleman finally brought to the pig industry was, when it came, insufficient. The manner in which he brought it obviously created considerable difficulties for himself in his relations with the Council of Ministers and aroused doubts as to how long that relief could endure. I should particularly like to ask him this afternoon to say what he can about how long that subsidy will remain in operation and whether he intends to increase it, bearing in mind the state of collapse which the industry now faces.
  The symptoms of what is happening are all too well known. The breeding herd has been reduced by 10 per cent. in six months and more menacing is what is happening in the young end of the herd. In-pig gilts are down by 19 per cent. on a year ago. I should very much like to know what the right hon. Gentleman thinks the consequences of these developments will be upon pork and bacon prices in the autumn. He has told us again and again—I think 10 times in the House—that the industry, which is one of high investment and very great skill, must wait for its problems to be solved at next month's meeting of the Council of Ministers. With repetition, the message to wait for next month is a pretty meagre comfort.
  Mr. Buchan: The right hon. Gentleman has made an extraordinary speech so far and has convinced me about the Common Market. On a more serious point, concerning pigs, the right hon. Gentleman said that the subsidy was insufficient and created opposition in Europe. Is he therefore suggesting that a bigger subsidy would have caused less opposition, or is he saying that he would have introduced a bigger subsidy despite that greater opposition, or that there is an alternative way of dealing with the matter, simply by putting the price on to the consumer?
  Mr. Peyton: I said that I thought that action should have been taken earlier.
  Mr. Buchan: What action?
  Mr. Peyton: The introduction of the subsidy—[HON. MEMBERS: "Oh."]—or

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  efforts in the Council of Ministers to persuade the right hon. Gentleman's colleagues, as I believe could have been done at that time, that the whole basis of the MCAs should be revised. That is the real cause of the trouble.
  The Minister of Agriculture, Fisheries and Food (Mr. John Silkin): The right hon. Gentleman and I understand the gravity of the situation. The right hon. Gentleman said that in the autumn when I was first appointed I should have done something in the Council of Ministers which would have brought about a great change in the situation. Will he be more explicit and say what I should have done?
  Mr. Peyton: Yes. What we have said all along is that he should have agreed to a marginal devaluation of the green pound—[HON. MEMBERS: "Oh."] The right hon. Gentleman has now taken that course himself. He has recognised the facts—and obviously many Labour Members find facts unpalatable. If he had taken that step, we believe—and there is some evidence to indicate this—he would have had a reasonable chance of securing a total renegotiation of the basis on which the MCAs for pig meat are calculated. It would have saved the industry a great deal of anguish. I wish to ask the right hon. Gentleman whether the subsidy will be continued. I hope the right hon. Gentleman will answer that question and say what he thinks are his prospects when he gets to court.
  I turn to the subject of beef. Production this year is expected to be down by 12 per cent. Again, we face the threatening figure relating to the developments among young stock, because the in-calf heifers of normal breed for beef purposes are down by 19 per cent. against the situation a year ago. The discrepancy between the Irish green pound and our own has opened the door wide to a flood of imports which are highly damaging to our beef industry.
  I turn to the subject of milk. I have already commented on the way in which the price announcement was made. It leaked out, with proper modesty last Friday. It was an announcement that came late. It covers an incomplete year and does not begin to cover the increased costs of the industry. Will the right hon. Gentleman say what will happen after
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  January, because the industry would like to know that as a matter of urgency?
  Mr. Nicholas Winterton: Will my right hon. Friend highlight the point that dairy farmers have had a 5 per cent. increase when they have had to meet a 20 per cent. increase in costs? How long can that situation continue? If that situation continues, how are we to maintain the supply of fresh liquid milk for the consumer?
  Mr. Peyton: I thank my hon. Friend for his help. I was just about to make that point, and my hon. Friend has saved me the trouble of repeating it.
  We have the same menacing message in regard to young stock. In-calf heifers in terms of milk are down by 14 per cent. against the figure a year ago. Time prevents my going into the subject of potatoes, but I regard it as a little shabby that there was an announcement about price when 85 or 90 per cent. of the crop had been sold.
  The confidence in this important industry is now at a low ebb, as are its resources. The consumer has been, and is being, encouraged to live, as do the Government, from day to day. In our view the Minister has shown an inadequate understanding of the situation and little sign of anxiety. I suggest that he should be more forthcoming with agriculture and with the food manufacturing and processing industries. I hope that he will take them into his confidence and see whether it is possible, even at this late hour, to combine with them to form a sensible food strategy for this country. If the right hon. Gentleman will not do it, we shall do so at the earliest possible moment.
  4.44 p.m.
  The Minister of Agriculture, Fisheries and Food (Mr. John Silkin): I was a a little relieved to hear that the motion was framed as it was for procedural reasons—I suppose I can do without a ministerial salary. However, at one point I thought that the right hon. Member for Yeovil (Mr. Peyton) wanted me to pay to do this job.
  In a debate such as this it is agreeable to start on common ground. Both the right hon. Member for Yeovil and I, in our respective ways, have a responsibility

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  for the future of one of the most important industries in our economy. It is one of our greatest primary industries with an output of well over£6,000 million this year. By producing food efficiently, it helps the whole of our society and the economy. It helps to support employment in other sectors, such as food processing, fertiliser manufacture, transport and retailing, and it can make a growing contribution to our balance of payments.
  British farmers already supply us with over half of our food supplies and this contribution has grown over the years. The availability of the resources for agricultural expansion is being studied by the Agriculture EDC and I look forward to hearing its views shortly, but in any event my policy as the Minister responsible for this industry must surely be to help it to expand, to increase its import saving, and to sustain the part that it plays in our economy generally.
  I agree with the right hon. Gentleman that a vital ingredient in the industry is confidence. The right hon. Gentleman's view was somewhat doom-laden. However, confidence is judged not by the words of politicians, or even by the words of farmers—it is judged by deeds.
  Mr. Michael Jopling: Hear, hear.
  Mr. Silkin: I gather that I have the hon. Member for Westmorland (Mr. Jopling) with me on that point—a very unusual situation in which to find oneself. If the hon. Gentleman intends to wind up the debate, I should like him to answer why the applications for capital grants and farm development schemes have increased so sharply in the last year. Does this denote a lack of cash to invest, or a lack of confidence in the future? Perhaps he could tell the House why the price of replacement dairy animals and of cattle and sheep for fattening is so buoyant. Does this suggest that farmers are uncertain about the future of the livestock sector?
  The fact is that, despite the right hon. Gentleman, our farmers are making their own judgment about the future in the most practical way they can, and they can see that they have good reason to feel confident.
  Mr. Andrew Welsh: Is the right hon. Gentleman aware that a survey conducted in Aberdeenshire by the NFU showed that farmers were showing their confidence by cutting back on animal numbers? Does that not plainly show that they are not confident about the future?
  Mr. Silkin: It is for that reason that changes have been made in the guaranteed milk price. I shall come to that matter in due course, and to the subject of beef.
  Last week I announced guaranteed prices for milk and potatoes because those were not covered by the Luxembourg agreement. The full list of new prices for the farmer gives substantial increases for all main commodities.
  Let me deal with the subject of milk. This is a central feature of United Kingdom agriculture, as was recognised in "Food from Our Own Resources", as also is the expansion of efficient dairy farming. Our aim must be to ensure profitability at a level that will encourage the expansion we want. Production was expanding rapidly before last summer's drought and the price was increased last October to offset the drought's effects on costs. Incidentally, agriculture was the only section of the economy to receive any reimbursement in respect of drought.
  Lack of confidence, did the right hon. Gentleman say? If the House requires an objective test of the real effect of the milk guarantee, I would remind hon. Members that there has been a 13·5 per cent. increase in United Kingdom milk production between March 1974, when the Conservative Government went out, and March 1977. After taking full account of the subsequent rise in prices, the guarantee is now 3 per cent. higher than that determined by the Conservative Government in February 1974. Of course, that was a significant date: they knew that an election was coming at the time.
  Mr. Cledwyn Hughes: Is my right hon. Friend aware that milk producers in Anglesey and other parts of the country are concerned not only about the cost of feed, which has risen and has not been covered, but about the uncertainty of their position from 1st January 1978? I appreciate the strength

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  of the case that he is making, but if today, or at a fairly early date, he will make a statement that amounts to the milk producer being given some assurance in respect of his position next year, that will strengthen the confidence of the milk sector.
  Mr. Silkin: My right hon. Friend is on to a valid point. By 1st January 1978 transition will have ended. Clearly, the milk producer wants to know where we are going. The answer is that I am already having consultations with all the various interests. I hope to be in a position to make an early announcement after I have consulted all the various interests and come to a conclusion. Obviously, the sooner that I can make it, the more reassurance there will be in the milk sector.
  There was a difficult decision to make this year on potatoes. I suppose that the circumstances were exceptional in every way. Costs have been sharply distorted by the abnormally high seed prices and consumption has been reduced because of high shop prices. There is the probability of unrestricted imports from the EEC after 1st January 1978.
  With potatoes, however, it is the market rather than the guarantee that provides the main incentive to producers. That was borne out by last year's planting figures, which reflected the previous forward trend and achieved the target. The guarantee that we have given is about 16 per cent. above this season's level. It maintains, therefore, the value of the current guarantee in real terms.
  In March I announced guarantees in respect of sheep and wool. For fat sheep there has been an increase in the guarantee of 24 per cent.—and for wool an increase of 31 per cent.—over the figures announced after the last review. Sheep production underlines the excellent market prospects for the coming year.
  Farmers have also had a good deal for commodities covered by the CAP. For arable farmers the aplication of the transitional steps will mean that support prices for cereals are a substantial improvement. The intervention price for wheat from January 1978 will be about 23 per cent. higher than in the previous year. For barley the increase is about 24 per cent. For sugar, where the transitional steps do not apply, the price for the coming
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  season was settled by the BSC before the CAP price negotiations. The contract price is about 12½ per cent. higher than last year.
  The right hon. Gentleman expressed some anxiety about beef. The dual support system for premiums underpinned by intervention is to continue throughout the whole of the marketing year. That will enable producers to plan forward with full confidence. The average target price over the year will be nearly 14 per cent. higher than the published average target price for 1976–77.
  We have adjusted the seasonal scales to provide the maximum incentive to over-wintering. By March 1978 the weekly target price will have reached£32 per live cwt. As a test, and as with the guarantee for milk, our present guarantee for beef is 9 per cent. higher in real terms than the 1972–73 guarantee obtained by the Conservative Government.
  Mr. Nicholas Fairbairn: Has the Minister received the representations sent to his colleague, the Secretary of State for Scotland, from the Scottish National Farmers Union on all commodities, including beef, to the effect that another£4 per cwt. on top of the£32 will be necessary to cover costs?
  Mr. Silkin: I do not accept that figure. I shall deal quickly with the point made by the right hon. Member for Yeovil, which has some bearing on the matter. The right hon. Gentleman was worried about the difference between the level of the United Kingdom green pound and the Irish green pound. He felt that it might have its effect in future on beef production within the United Kingdom. I tried to explain that I did not accept that as a basis for altering the level of the United Kingdom green pound. I thought that the whole point of the Irish devaluation in respect of beef was to enable the Irish to play their part in the markets of the Continent, especially in Germany and the Benelux countries. So far as I can see, everything seems to be leading that way.
  Mr. John Farr: There is no doubt that the difference in the green pounds has eroded the British beef industry. However, will the right hon. Gentleman look into the situation that

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  we have in the North of Ireland, where cattle are coming across the border from the South at a rate of 5,000 a week and where importers in the North are in receipt of the slaughter subsidy that the British Government are now providing to the extent of£400,000 weekly? That all tends to weaken the market for the British home producer.
  Mr. Silkin: I know that my right hon. Friend the Secretary of State for Northern Ireland is watching the situation carefully. The hon. Gentleman has raised a specific matter and it was one that required to be dealt with specifically last year, as he knows.
  The right hon. Gentleman mentioned two areas of his concern. The first was pig meat. It was rather interesting that when pressed on what should be done the right hon. Gentleman took refuge in generalities. He gave no specifics. I shall deal with the specifics that he did mention. Perhaps I am doing him an injustice—if I am, no doubt the right hon. Gentleman will correct me—but he said, first, that I should have put on the subsidy earlier, although I am being challenged in the courts on that very point. If I am asked to give a judgment, I am bound to say that I always believe that whenever we go to court we must win. However, as the textbooks tell me, there is always a plaintiff and a defendant. Presumably, every plaintiff and every defendant thinks that he will win. As the right hon. Gentleman pointed out, there was no doubt about the reaction of others when I introduced the pig subsidy.
  The right hon. Gentleman said that the alternative—he was rather vague on the matter—was to act on the basis of the good will of my colleagues in Europe, a marginal devaluation of the green pound and the use of any charm of influence that I might have. The right hon. Gentleman appeared to suggest that that course might have affected my colleagues in the Council of Agricultural Ministers.
  Mr. Emlyn Hooson: I approve entirely of the basis on which the right hon. Gentleman goes to court, namely, that he intends to win. He must have taken legal advice. It appears that he has been advised that he will win and I believe that advice to be right. If that is so, why cannot the right hon. Gentleman
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  increase the pig subsidy now and so relieve the position of many British pig farmers?
  Mr. Silkin: That is a very fair point to make. However, the fact is that the European Court differs in some respects, as the hon. and learned Gentleman well knows, from the courts with which he and I are more familiar in this country. It has a slightly political colour to it as well as a judicial colour. That is bound to be so. The court's terms show that that is to be so. When a matter of this consequence is put to it, namely, that a subsidy that the United Kingdom has imposed is illegal, I cannot believe that it would take the friendliest view if the United Kingdom increased the subsidy before the case had been heard.
  The right hon. Gentleman gave the impression that I was not concerned about the pigmeat situation. He said that I must have been glad to see greater imports coming in. That is against the whole tenor of everything that I have been saying.
  Mr. Peyton: I said that many people in the industry thought that the right hon. Gentleman was behaving as though he was not all that unhappy in the earlier stages to see a flood of cheap imports coming in.
  Mr. Silkin: I take it that the right hon. Gentleman will correct them. He can do so if he dissociates himself from them. Since last September, I have been pressing for changes in the way in which mcas are calculated so as to stop the totally unfair competition in pigmeat. The right hon. Gentleman said that no progress had been made. He has forgotten that progress was made initially in October. At that time, when the Commission implicitly recognised the justice of our case, it agreed to the 8 per cent. reduction in mcas. That was the maximum that it could do under its own steam. It was equivalent to a reduction—not very much, I agree—of£28 per tonne on the bacon mca.
  Of course we were concerned, and when, having pressed for a change in mcas in September, there appeared to be no movement in the Council, I announced the temporary subsidy at the end of January because the state of the industry

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  had become extremely serious. This subsidy amounted to the equivalent of over£50 per tonne on pigmeat. I was taken to the European Court. Now, in the Luxembourg package the change in the green pound as far as pigmeat is concerned—the change for cereals comes in the autumn—is equivalent to a reduction of a further£22 per tonne on the bacon mca. So, since October we have reduced the bacon mca by more than£50 per tonne and have in addition provided our own national aid, worth rather more than another£50 per tonne, through the temporary subsidy on pigmeat.
  I intend to go on fighting to get the whole basis of the pigmeat mca recalculated. I have never said that at the next meeting of the Council it will be done—I challenge the right hon. Gentleman to say where he got that from. I have said that I am under no illusions about the difficulty of the task.
  But the House must recognise that the market prices in other member States have also fallen. In West Germany, for example, market prices are 10·5 per cent. below the level of a year ago, and in Denmark they are 5·6 per cent. down, compared with a fall in the United Kingdom of 4 per cent. That, of course, is the reason why other member States said at the outset that they would oppose any change in the way pigmeat mcas are calculated.
  The right hon. Gentleman knows that such a change has to be agreed unanimously in the Council. He said that all I had to do last time was agree to a small devaluation of the green pound, wave a magic wand, and everyone would have agreed to recalculate the mcas. I am afraid that that one must take its place with many others in the Peyton books of fairy stories for tiny Tories.
  Mr. Nicholas Winterton: Is it not true that last autumn the situation was very much better for changing the basis upon which pigmeat prices were decided, because the Danish bacon market was at a much higher level then and the Danes would have been more amenable to the change, which should have been made last October?
  Mr. Silkin: I am always grateful for the hon. Gentleman's friendship. I am always grateful for the ease with which he walks into every trap laid for him.
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  Following our proposal that the mcas should be recalculated in September last, the Danish representative in London wrote to us saying:
  "The British proposal, under no circumstances, could be accepted by the Danish government as it is a question of vital economic and political importance to Denmark."
  The wording is clear and carefully considered. There is no qualification. There is not a single hint that at that time the Danes would think again if we made even a substantial devaluation of the green pound. On the contrary, there was just total opposition.
  Mr. Nicholas Winterton: I did not walk into it. Is the right hon. Gentleman saying that he believed that the Danes' first word was their final word and that he was not prepared then to press the matter somewhat harder than he did? My understanding of the situation on both sides of the sea is that perhaps if he had pushed harder he might have got what the pig farmers wanted.
  Mr. Silkin: The hon. Gentleman may get the Danish representative into some trouble. That gentleman was clear and unequivocal. There was no doubt about the view he expressed.
  If I am asked whether I think that there might be a change in the future, my reply is that it will not happen immediately but that we shall continue pressing. There are factors which might help—for example, a favourable judgment in the European Court—and other countries, particularly France, have become aware of the difficulties of the situation of which they were not aware at the time.
  Mr. Eldon Griffiths: One appreciates the very great difficulties with which the right hon. Gentleman is confronted in negotiations in Europe, but would he also address himself—and I speak as one who has produced a large number of pigs—to the reality that a large number of our farmers are humping ever-more expensive grain to their pigs, which are converting that grain more efficiently than ever before, but that those farmers are still losing between£3 and£6 on each pig produced? That is the unacceptable situation. I welcome what the right hon. Gentleman is doing to help, but, with respect, he is not doing enough.
  Mr. Silkin: I fully accept what the hon. Gentleman said up to his last sentence, when I had expected him to tell me what I should be doing other than what I am doing—that is, to press as hard as I can for the change, to look for allies who can help, and to rely in the meantime on what may happen in the European Court. I shall put our case as robustly as possible.
  Mr. Fairbairn: Does not the right hon. Gentleman feel that, if he cannot really hold out much hope for the pig industry—which is losing money on every pig produced—he should say so in frank terms, so that the farmers can make an assessment, and, if necessary, cut their losses?
  Mr. Silkin: I think that the pig producers are well aware of two things—first, of the seriousness of the position, which I have never tried to disguise, and secondly, of the difficulties of making the change. It is an assessment that they must make themselves, and they must do so in plain economic terms. I am certainly not going either to boast, which I cannot do, or give up hope and give up fighting before the game is finished.
  The second point of concern of the right hon. Member for Yeovil was connected with the green pound itself. I thought that he was on rather dangerous ground. I do not know how far he has developed his own thinking on the matter, but it seemed to imply a total end to the green currency, at any rate in the near future.
  I cannot imagine anything that would throw both British agriculture and probably the whole of European agriculture into more disarray than a speedy end to the green currency system. That system came into being long before we joined the EEC. I believe that it was introduced in the late 1960s as a result of the difficulties that the French were experiencing, and to my mind it is the only thing that makes it possible to continue at this moment with the common agricultural policy as it is, because it means that there are national cushions and, therefore, the ability to make nation decisions, which are very important in this matter.
  I have said that any change in the value of the green pound was not a matter that I regarded as of any great
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  ideological significance either one way or the other. But I have said also that every change should be dependent upon getting more for it than the change itself, and, secondly, that the extent of any change should be what we deem to be necessary and not a penny more. I believe that we achieved both those objectives at Luxembourg.
  A larger devaluation would have greatly increased food prices—and this is something that the right hon. Gentleman had better face. A further 10 per cent. devaluation, for example, of the green pound would have added another lip in the pound to the cost of the shopping basket. Is the right hon. Gentleman really advocating that? It is worth noting that we import a large proportion of our food, so that the net benefit of a green pound devaluation to our own producers is only about 60p out of each pound paid out by the housewife.
  There are certain sectors of agriculture which hardly benefit or do not benefit at all by any change in the green pound. For example, it does not affect horticulture at all. Again, the livestock producer is merely faced with higher feed bills for his product. So on this occasion we did all that we could to make the green pound devaluation suit our own interests.
  The devaluation has been brought forward for pigmeat to 1st May, thus making a small reduction in MCAs immediately, as I pointed out to the House. We have deferred the devaluation for milk producers so that half takes effect from this September and the other half not until April next year. That has the effect of delaying the consumer price increases flowing from it.
  Is the right hon. Member for Yeovil, either now or at some other time, really advocating larger further prices for the housewife? Does he not think that the two increases we have had to make, which his Government ensured when they signed the Treaty of Accession, are enough for the moment?
  I must also say that the right hon. Gentleman is a welcome convert—we seem to get a lot of converts these days. Let us forget the polemics and ill-will that I am supposed to have caused among my European partners. I have not noticed that or good will makes a button of difference when it comes to

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  negotiating. They are very hard gentlemen, indeed. I hope and trust that ill-will and good will will not affect their view of their own countries' convenience and requirements.
  Mr. Hooson: Surely the right hon. Gentleman is not going to end his speech without dealing with the future of the Milk Marketing Boards. In my part of the world farmers have a total and justified faith in the future of the boards. Will the right hon. Gentleman give an undertaking that he will fight all the way to maintain all the powers, including the statutory powers, of the Milk Marketing Boards after 1st January next year?
  Mr. Silkin: The list of converts is getting larger and larger.
  Mr. Hooson: I have always said that.
  Mr. Silkin: Perhaps the hon. and learned Gentleman will allow me to come to this in my own good time. I can understand his impatience at my coming to the end of this speech, but I had intended to deal with that matter.
  The right hon. Member for Yeovil made a serious point when he asked what we shall do about the CAP in future. He felt we should set out to achieve what we have in mind. I entirely agree. My basis has always been, and this has been the view of my right hon. Friends right from the start, that the CAP should operate for producer and consumer alike. That is why the latest price settlement in Luxembourg was not, as the hon. Member for Cardigan (Mr. Howells) said, a holding operation. It was much more than that. It was the beginning of a radical change in the whole of the CAP. I believe more changes are needed. Incidentally, if one is talking about there was no personal I am sure that the controversy engendered did a great deal to focus attention upon what changes must be necessary. Let us have a look at what these changes are.
  First, food must be produced for people and not for stores. In the end this comes down to a question of prices. We must try to hold down CAP prices to as low a level as possible, particularly for commodities in surplus. This was the theme of the United Kingdom approach to the CAP price negotiations.
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  This year's price increase of 3½ per cent. is the lowest for years and the lowest since we joined the EEC. It represents a considerable reduction in prices in real terms. There will be a considerable disincentive, particularly when we take into account the co-responsibility levy of 1½ per cent., which begins in the autumn, to the production of milk in parts of the EEC where farmers are inefficient.
  One must also look at the butter subsidy in the light of that, because the butter subsidy of 8½p a lb. has caused a much greater reduction in the level of food prices—a very significant fact—than the subsidy itself. That subsidy goes on until March and then a subsidy continues until 1st January 1979 at a level still to be decided. We must look at this in the context of the surpluses and the mountains, because this represents more sensible use of the funds of the EEC than sales at even greater cut prices to Russia, or anywhere else outside the Community. It will result, and is already beginning to result, in a considerable increase in consumption by British consumers.
  Incidentally, there was nothing nationalistic in my approach. My original suggestion to the Nine was that it should include any other country which felt it could increase its consumption of butter, particularly the Irish. I was therefore disappointed when the Irish initially rejected that suggestion but later they asked to have the subsidy and were given a smaller and different subsidy.
  It is worth comparing the increase in the common milk price with the effect of the butter subsidy itself. If there had been no increase in the common milk and butter price the consumer of this country would have been saved about£25 million over the year. But the butter subsidy is worth at least three or four times that figure. The fact that we got such a low increase in prices and a butter subsidy was one of the great achievements of this price negotiation.
  The third point is that we must aim for greater flexibility, and this flexibility applies in particular to intervention. With regard to cereals, bread-making wheat is no longer subject to automatic intervention from 1st August 1977. That is an

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  example where we have been able to take the rigidity of the old intervention system and change it.
  The hon. and learned Member for Montgomery (Mr. Hooson) asked about the Milk Marketing Boards. I shall also tell him a little about other marketing boards as well. With regard to the Milk Marketing Boards, I am well aware of the concern of the House. I myself share it. I need not go into the reasons why we want to preserve the Milk Marketing Boards, beyond the fact that we, above all countries, rely upon liquid milk consumption and, as was pointed out by Mr. Jack Jones only the other day, the social effects of the milkman's daily round. This is a vital question to us.
  We have discussed this matter with Commissioner Gundelach on more than one occasion. I am glad to say that he has notified me that he is studying how the functions of the boards can be maintained and I am more hopeful—more hopeful than I was a month or two ago—that we can preserve the Milk Marketing Boards without the tremendous fight that at one time I thought we should have. I feel that the Milk Marketing Boards, and other boards as well, could be of great use in the Community as a whole.
  While we were about it we managed to preserve the Hops Marketing Board. Perhaps because this is such a wide price package, the House did not notice that fact. But what has happened is that the Hops Marketing Board is, by a curious alchemy, recognised as a producer group for the next four years and, rather than destroyed, as was the fear at one time, is eligible for the grants of the producer group.
  The third thing we managed to do, because this also affects United Kingdom institutions and methods, is to keep the beef premium. This had in fact been in doubt and perhaps could have been destroyed in July of this year. We have now managed to get it for the whole of the year and it looks as though it will become permanent. Again, this is something which we believe could be used in other countries, and perhaps for other commodities as well.
  The next thing we should do is to get a more liberal importation of foodstuffs. I would have thought that the House
  1374
  would have a great deal of sympathy for this. It is a feature that is traditional to us and it preserves some of the links in trade, aid and kinship that this country has had for centuries.
  The right hon. Member for Yeovil asked me about the£23 million cost to the Exchequer, as he put it, of the butter subsidy because of the New Zealand levies. Of course we knew that the effect of going for the butter subsidy would be to cut the levies on New Zealand imports. It happens to be a matter of accountancy that this was done, instead of a straight cut in levies, by applying the same amount of levy and a subsidy which balanced it. But it is exactly the same, and my colleagues and I were aware of it.
  I have never disguised from the House—and I hope that I carry a great deal of support in the House on this—my view that the levies were too high and that it was our job to bring them down. That is what we have been trying to do in Brussels. I have reported to the House on a number of occasions such changes as there have been. The right hon. Member for Yeovil rather gracefully paid tribute to my reports to the House and acknowledged that I was talking about levies and their reduction. We do not find this odious or irksome. On the contrary, it is part of our programme.
  So what should our programme be for the future? First, we should expand British agriculture. I have tried to say so.
  Mr. Eldon Griffiths: The Government are not doing so.
  Mr. Silkin: The hon. Member for Bury St. Edmunds (Mr. Griffiths) says that we are not doing so. I did not notice his objecting to my bringing back from Brussels the end of the suggestion that we should suspend national aids in dairy farming. The only purpose of that when we are dealing with a contraction of milk production throughout the Community as a whole is that the Community has had to recognise that there are areas which are efficient, where the climate is good in this country, and where such aids are in this country, and where such aids are of help—in other words, where there may be expansion in one area and contraction in another.
  Mr. Nicholas Winterton: If that is the situation, why in Italy, for example, do dairy farmers get up to 80p a gallon whereas in this country they get less than 50p? Is that fair? Is not the right hon. Gentleman seeking to give our dairy farmers a fairer return for their labour and for what they produce? They are highly efficient producers.
  Mr. Silkin: I am not mentioning which country, but the hon. Member for Macclesfield (Mr. Winterton) has put his finger on one of the basic defects of the common agricultural policy as it is, which is that it rewards the most inefficient farmer and does not reward the most efficient.
  Perhaps I might take that argument a little further and mention another objective for which we must aim. Prices should not be burdened with the effects of social needs. High prices on the Continent of Europe are very often due to the fact, understandably, that there are poor farmers and that one does not want to destroy them or to treat them as brutally as perhaps we did 100 years ago, or even less. But we do not want to burden the price of food with that, either. This should be a national concern, and not one which goes on the European farm budget. Therefore, we must apply constant pressure on price levels.
  Finally, as I have tried to show, we must end the rigidity of the present system. I have tried to show how we have moved a little in that direction. I do not claim that we have done anything so remarkable that it ranks as a revolution, but it is the beginning of a radical change.
  The Opposition have chosen to move a motion calling for a reduction in, I suppose, the salaries of all the Ministers in my Department, although primarily they mean my own. Therefore, this is not merely an academic debate about agriculture. It is what might be described as a life or death debate about the competence of the Government in their handling of the price negotiations in Europe.
  Let me remind the House of the advice which we received from the Opposition Front Bench before the March meeting of the Council of Ministers. We were advised that, despite the fact that the Opposition objected to this or that in
  1376
  the proposals—and they fairly set out those to which they objected—nevertheless we should accept the Commission's proposals in their entirety as a package.
  Let me remind the House what that would have meant. It would have meant a 6 per cent. devaluation of the green pound, a food price rise of 1¼p in the pound and not the ⅓p which we obtained, no butter subsidy, an end to the variable beef premium in July, a penal levy of as much as twice on isoglucose, a margarine tax of 2·5 per cent., exclusive use proposals on milk coming into force, and a ban on investment aid for dairy farmers. That was the Opposition's policy. It is that policy which I hope the House will censure today.
  5.26 p.m.
  Mr. Colin Shepherd: The Secretary of State made light of the achievements of the common agricultural policy over the last few years. There is no doubt that the CAP has acted as a highly stabilising influence in Europe for 20 years and that for many years it provided a stable basis for intra-Community trade and for predictability among the farming population. The CAP has laudable aims, it has succeeded, and it can succeed again.
  The CAP was not designed to deal with the circumstances which are pertinent today. It has become imbued with stresses which are being used for national gain rather than for Community gain and to the long-term benefit of Community producers.
  The real nuts and bolts of this issue are that this Government inherited a situation whereby the pound sterling stood at approximately $2·40, with equivalent ratios to the other European currencies. Today, we have an exchange rate of $0·70 to the pound, representing a monumental drop over a period of three years, the greater part of its having occurred in the past 18 months. This is the mechanism which has set up the stresses that the common agricultural policy is trying to beat.
  Some time back, the discrepancy between the green pound and the pound sterling was as much as 42·5 per cent. That was a monumental discrepancy due entirely to Government policies, principally the policy of pursuing cheap food at

  1377
  any price to try to overcome the difficulties which the Government were experiencing in other directions.
  It may be laudable to go for cheap food at any price. I cannot see that it is laudable to do it for the benefit of one sector of the population rather than for the whole population. If the Government are to act for the benefit of all, they must take account of the producer as well as the consumer.
  In October 1974, the Labour Party said in its manifesto:
  "Labour will encourage the maximum economic production of food by the farming and fisheries industries."
  That is a laudable intention, but I cannot see any evidence of this having occurred in the farming sector. Food production has dropped while this Government have been in office. The source of my information is Economic Trends 1976. During the period of the Labour Government from 1964–70 there was a 1·6 per annum increase in food production. So far so good. During the Conservative Government of 1970–74 there was a 3·6 per cent. increase per annum. During the Labour Government 1974–76 there has been a 4·5 per cent. per annum drop. The decline in livestock over the past two years has been cattle at 8 per cent., sheep at 1 per cent. and pigs at 7½ per cent.
  Mr. Robin Corbett: Let me get this straight. Is the hon. Gentleman blaming my right hon. Friend or his predecessor for the drought? Is he also asking my right hon. Friend to volunteer to accept responsibility for little hiccups, for example in the pig industry, which go under the name of the pig cycle?
  Mr. Shepherd: I am not taking account of the drought, just as the Minister did not take it into account in his remarks. The drought does not happen every year. It happened last year and it is only since then that there have been circumstances to be overcome. The pig cycle has its effect. Many people invested on the wrong side of the pig cycle and failed accurately to predict it. I am not taking account of bad commercial judgments among certain elements of the pig sector. I am making a plea for recognition of
  1378
  the fact that many people in the pig and beef sectors are trying to make an honest living in circumstances and in a climate which have been set by the Government.
  In their White Paper "Food from Our Own Resources" the Government make certain analyses and commitments. One of these is that
  "the objective of Government policy will be to provide farmers with a prospect of stability in their returns at levels encouraging the greater home production which would give the country an insurance against periods of shortage and higher prices"
  The Government's own figures set out in the annual review and in Economic Trends show that this is not happening. The Government deduce in their White Paper that
  "The likely levels of world and Community prices for major foodstuffs between now and the early 1980s, and the risks of possible shortages and sharp price fluctuations justify a policy of expansion of food production in the United Kingdom"
  They say also,
  "The net product of the agricultural industry should be capable of a continuing expansion of about 2½ per cent. a year on average, and this is the objective at which the Government and industry should aim".
  Will the Minister reaffirm his commitment to that White Paper? It might not be his personal document, but the whole agricultural industry is awaiting his reaffirmation of its intentions. He mentioned it in his speech, but I do not think his words constituted a firm commitment.
  Mr. Peter Temple-Morris: Does my hon. Friend acknowledge that it is a matter of considerable concern to the farmers of Herefordshire, whom he and I both represent, that the marketing boards, particularly for potatoes and milk, should be preserved? Bearing in mind what the Minister has told the House, will my hon. Friend seek an assurance from the Minister that he will at the end of the day take a firmer stand on this issue than he seemed to indicate? He seemed to indicate that there was a battle to come, but he did not show how far he would fight that battle.
  Mr. Shepherd: I am grateful to my hon. Friend for demonstrating the concern felt in Herefordshire farming circles about the continued existence of the Milk, Potato and Hops Marketing Boards. I had overlooked the Minister's comments about the future prospects for the Hops

  1379
  Marketing Board. Herefordshire is a major hop-growing area, and we were pleased to hear what he had to say. May he continue his work towards ensuring that at the end of the four-year period the Hops Marketing Board will have a secure future.
  The Milk Marketing Board is of specific and particular interest to the county of Herefordshire. Its milk production facilities include one of the largest dairy units in the country, and there has been great worry about that. We should all like to see the Milk Marketing Board strengthened, but I recognise the difficulties that the Minister has faced under the terms of the Treaty of Rome.
  The Government have to create a climate of confidence in which the farmer can work. If they do not create that climate the industry will not provide the goodies which we, the consumers, need. I should like an explanation for the delay in announcing the potato guarantees. The Minister should not allow such a delay to occur again. What sort of an Administration is it that announces the guarantees after the potatoes have been planted for the year?
  Such action by the Government calls for an act of true confidence in them by the industry, but that confidence has not been expressed to me in farming circles. It is wrong that farmers should be expected to take such a step when they do not know what the form will be later. Perhaps the Government are prepared to take a gamble on a potato shortage and on high prices. If there is a surplus this year, however, the potato industry will find itself in difficulties. That industry trembles at the prospect of a potato surplus. Production costs are up substantially more than the 16 per cent. which the Minister has added to last year's price of£40.
  Many of the calf pens in Herefordshire are empty on those farms which are heavily committed to beef production. The producers cannot see the end of the tunnel. There is no confidence or predictability in that sector, and it is therefore not surprising that they are holding off from buying calves.
  The pig sector gives rise to great concern. The pigman recognises the pig cycle, but he is in business to produce pigs for tomorrow and he must know that
  1380
  he will be in business tomorrow when his pigs come to maturity. I asked the Minister at Question Time whether he would have himself hanged for a sheep as for a lamb. He accused me of being frivolous, but I was not being frivolous. If the Minister is to do the job, let him do it properly. Let him go to the European Court, because the case for£l is at least as good as the case for 50p, and if he acts in that way at least we shall have a pig sector in the future.
  I have tried to indicate some of the points of concern, points which cannot be taken in isolation from the Government's total policy. The Government's policy is at fault, and agriculture cannot be regarded separately from their overall policy.
  If the Minister does not persuade his colleagues that this country must come to terms with reality, that it must pay the going price for food, that it can no longer treat the green pound as a cushion or a lever, and that the Government must recognise that there is a proper price to pay, the industry will find itself in the same position as the railways in which higher prices will create a lower demand. He will find that there is less home production. The trends are showing that now. This will lead to less efficient production and higher unit costs which, in turn, will lead to lower demands and higher imports and will negate the whole policy contained in "Food from Our Own Resources".
  Mr. Buchan: The flaw in the hon. Gentleman's argument that the Minister should ensure that the country faces up to paying the going price for food is that this price is an artificial creation of the nonsensical policies of the CAP, which artificially inflates prices.
  Mr. Shepherd: That argument is fallacious. When Community prices were below the level of world prices, the hon. Gentleman was not complaining so much. He wants to eat his cake and have it. He does not want stability of supplies. He wants to catch as catch can and is playing with the future of our food supplies. He ought to follow a steady line.
  The Minister has a responsibility to ensure continued supplies. He should give us stronger affirmations and actions and a better performance in Cabinet

  1381
  against his colleagues who put the price of food first.
  5.42 p.m.
  Mr. Thomas Torney: I was surprised at the early remarks of the right hon. Member for Yeovil (Mr. Peyton). I am sorry that he is not here because I should like to remind him that although I agreed with his criticisms of the CAP, he was a member of the Government that took us into the Common Market and accepted carte blanche the policy that he is now criticising. He must have forgotten that.
  The hon. Member for Hereford (Mr. Shepherd) expressed concern about the marketing boards. I can assure him that he need have no fear about the views of hon. Members on this side of the House. We are behind the Minister in demanding the retention of our marketing boards. Only today, the Back-Bench group of which I am chairman, has been to Thames Ditton to see the work of the Milk Marketing Board. We gave the people there an assurance that we would do all that we could to ensure the continuation of that Board and we assured them that our view was shared by hon. Members opposite.
  If it were not for the pressures and commitments of our entry into the EEC and the operation of the CAP, there would be no need to worry about the future of the marketing boards. The Government are not causing the fear. The Minister will not discontinue the boards. It is the possibility of action by the EEC that we have to fight.
  Mr. Temple-Morris: The hon. Gentleman has spoken about retaining the marketing boards, but the Minister has not yet said that he will retain them. He did not even mention the Potato Marketing Board.
  Mr. Torney: No doubt that point will be dealt with in the ministerial reply. The Back-Bench group and I have had discussions with the Minister and we are satisfied that he intends to retain the marketing boards, but my right hon. Friend can answer for himself.
  Mr. Anthony Nelson: The right hon. Gentleman is shaking his head.
  Mr. John Silkin: I was shaking my head at the apparent deafness of hon. Members opposite and wondering whether anything could be done to assist them to hear what I say.
  Mr. Torney: The Minister has to work under difficult conditions that are not of his or the Government's making. My criticisms are not levelled at my right hon. Friend or the Government. The acceptance of the Treaty of Rome and the CAP was nothing short of treason against our nation. Let no one forget—least of all the Opposition Front Bench—that a Tory Government accepted impossible terms and took us into the EEC.
  The NFU should remember that it campaigned for our entry and continued membership and it must also accept some of the responsibility for the chaos that the CAP causes for British farming. Even today, the union clings to the outworn argument of a world food shortage as the reason for our paying food prices that are greatly in excess of world prices. This argument was a gimmick designed by those on both sides of the House and outside to hoodwink the electorate into voting "Yes" in the referendum.
  Mr. Welsh: In his catalogue of interest groups, will the hon. Gentleman mention that the one political party to oppose entry to the Common Market was the Scottish National Party?
  Mr. Torney: The mass of the rank and file of the Labour Party and of Back Benchers on this side of the House were opposed to our entry and to our continued membership. The hon. Member for Westmorland (Mr. Jopling) knows that I campaigned actively at the time of the referendum to keep this country out of the EEC. The hon. Gentleman and I met across the floor of television stations many times.
  Mr. Buchan: The hon. Member for South Angus (Mr. Welsh) is wrong. Although the Government were not opposed to our entry into the Common Market, the Labour Party was. The SNP did not oppose the EEC. It came up with the crooked slogan: "No entry on anyone else's terms."
  Mr. Torney: Let us look at the facts on commodity prices. Last year, wheat in the Community cost between 25 per cent.

  1383
  and 45 per cent. more than the world price. Is it suggested that this is a minor difficulty that can be ironed out soon? The price of maize, a major foodstuff, was 28 per cent. higher in the Community than outside. The Community price for beef and veal was 58 per cent. more than the world price, and milk powder prices in the Community were 166 per cent. of world prices. The price of butter—if one dare mention that again—was 220 per cent. more than the world price. The price that we pay in the Community is three times the world price. Is that a sensible and proper way of conducting our farm and food policies? These are the Commission's own figures, on page 98 of the agriculture report for 1975–76.
  We all know of the butter scandal. New Zealand, if she were allowed to do so, could land butter here to sell at 26p a lb. The common agricultural policy prevents New Zealand from doing this and forces us to pay upwards of 50p a lb. By the end of the year or by early next year the EEC will force us to charge anything up to 70p a lb. for our butter.
  All this takes place while mountains build up, and to clear away the stocks the EEC has to sell outside the Community at give-away prices, while the French farmer continues to be subsidised for his inefficiency. He is partly subsidised by the British taxpayer. We pay fantastic, high prices in the shops, and we make up the difference in price by taxation, although the surplus can be sold outside the EEC at 17p a lb.
  I did not intervene when my right hon. Friend was speaking. I thought it would not be fair to do so as I was hoping to catch Mr. Deputy Speaker's eye. But I ask my right hon. Friend why we are importing butter from France and Germany when we have many tons of British-made butter which has been put into store because it cannot be sold.
  My right hon. Friend is fully aware that we produce only a very small portion of our butter needs. Why, in Heaven's name, can we not at least consume the small amount that we produce, and thus save a little of our vital foreign currency? I do not expect my right hon. Friend to give the answer to that off the cuff, but could it he that there is some kind of racket here, with butter being stored away while prices go up, so that there is more
  1384
  profit made? I do not know. That is why I ask the question. At least we should be able to consume the 20 per cent. of butter that we are producing here, thereby saving some of our foreign currency.
  The position with regard to other foodstuffs is equally grim. Australian and New Zealand cheese is taxed to the extent of 60 or 70 per cent. We pay a tax of over 50 per cent. on Canadian wheat. That is as high as it ever rose under the old Corn Laws. Maize could be landed in this country now at£74 a ton. The present EEC levy is£30 a ton, and it will go up to£49 a ton later this year, making a tax of 70 per cent. on maize.
  These phenomenally high taxes on food, forced upon us by the Common Market, are higher than the value added tax on the general range of our inessential goods. Beef carries a 20 per cent. import duty plus a levy. The EEC forces the housewife to pay double the price that she would pay if we were outside the EEC. Beef is now a luxury on our Sunday lunch tables. The surpluses—250,000 tons of beef, 250,000 tons of butter, and phenomenal quantities of skimmed milk powder—are the result of prohibitive prices.
  The consumption of beef, lamb, butter and milk has actually fallen in the United Kingdom in the past year. Some figures of consumption have fallen to the level of rationing which we were told was such a miserably low standard 30 years ago. This is what membership of the EEC means—a real fall in the standard of living for a large section of our people.
  Outside the EEC, prices fell in the past year. In America they rose by only 1·5 per cent., whereas in the EEC as a whole they rose by 14·6 per cent., and in the United Kingdom by 20 per cent. Our food prices have risen by 16½ per cent. since last August, and half of that rise was directly due to the common agricultural policy. This is absolutely ridiculous.
  This year the mad escapades of the Commission authorities with dairy products alone mean that£1,100 million is being spent from the EEC budget, to which we contribute, on buying up EEC surpluses. According to the Commission's own figures, the estimated extra cost of importing our food at EEC prices rather than at world prices amounted in 1976 to about£900 million on our balance of

  1385
  payments. By means of mcas and the green pound we got back£400 million.
  The net burden, therefore, was an additional£500 million, purely because of the ridiculous common agricultural policy. This is in addition to the£1,000 million deficit on trade with the rest of the EEC in non-food goods. Our net payment to the EEC budget in the current financial year is£447 million. If we add that to the other figures I have given, this means that we have a deficit of£2,000 million on our balance of payments because of this stupid policy.
  I was very glad indeed to hear my right hon. Friend list the things that we need to do to change the common agricultural policy, for the benefit not just of the British consumer, who needs these changes, but of the farmer as well. How much better it would be if the Minister were able to subsidise the pig farmer in the way in which I am sure he would like to do. My right hon. Friend is put into court by the EEC because he wants to do what he knows has to be done but cannot do because the common agricultural policy and our membership of the EEC forbid it.
  Let the Conservative Party and the National Farmers Union, who are criticising the Minister and the Government, remember that they wanted the EEC. They wanted the common agricultural policy. Maybe they did not think it out properly—I do not know—but the NFU told its members to support it. The Tory Party took us into the EEC in the first place and then said that we should stay in. It must bear a large percentage of the responsibility for the fact that we are in this mess.
  The trouble that the farmers are in is due to a large degree to the common agricultural policy. How much better it would be if we were able to operate as we operated before we went into the EEC and to buy our food in the best possible markets of the world. If there were unfair competition with our own home food producers, we could subsidise our farmers and help them with deficiency payments. That system worked well then and it would work well today.
  I do not believe that my right hon. Friend will meet with a great deal of success in pressing for the demands that he
  1386
  rightfully puts forward. I support him in these demands, but I believe that the only way forward is for the Government very quickly to press for the complete abolition of the common agricultural policy. If we cannot get it, let us get out of the EEC.
  Mr. Deputy Speaker: Before calling the next hon. Member, may I remind the House of Mr. Speaker's statement at the beginning of the debate about the length of speeches?
  6.0 p.m.
  Mr. Geraint Howells: Once again, I declare my interest. I am a farmer, and I am vice-chairman of one of our marketing boards, the British Wool Marketing Board.
  I have listened with interest to right hon. and hon. Members on both sides. I respect the views of the hon. Members for Bradford, South (Mr. Torney), and I know that he always respects mine. However, I hope that during the rest of the debate, whether we are in favour of the common agricultural policy or not, and whether we are pro-Europe or anti-Europe, we shall recognise that it is our duty to look ahead and to create an agricultural policy which will be of benefit to consumer and producer alike. In doing that, we shall, I am sure, strengthen the Minister's hand when he is negotiating in Brussels.
  When the Government published their White Paper, "Food From Our Own Resources", some time ago, they were aiming to encourage the British farmer to increase production and thus make his contribution towards an improved balance of payments. I remember what was said at the time by the then Prime Minister, the right hon. Member for Huyton (Sir H. Wilson):
  "The Government's policy is to establish a framework which can give confidence for the future—for the consumer and for the producer so that he can plan and invest."
  I have to say that since those words were spoken some two years ago I have not seen the increased confidence which was promised or the increased production which is so necessary.
  The figures for the past year or so have shown that agricultural production is decreasing. On the other hand, our import bill for food and feeding stuffs is escalating rapidly. It has risen by about 400

  1387
  per cent. over the past 15 years. The aim of any Government, therefore, should be to reverse this trend both for the sake of agriculture and for the sake of the country as a whole.
  Over the past few years agriculture has suffered greatly as a result of what one may call short-sighted planning. No Government over the past few years have put forward a long-term plan, and it is my belief that this is the basic weakness of present policy. The farmer is never able to plan beyond the next price review. If we are to produce more of our own food we must have a programme for 10 years ahead, so that the farmer may plan ahead, invest and expand with confidence.
  It is important to provide proper incentives for producers so that more food is readily available in this country and we can avoid the need to bring in expensive imports.
  To judge from the letters and telephone calls that I have received from farmers since last week, they feel at present that nothing has been done to encourage their productivity. Time will tell.
  It is my wish to see the industry stabilised on the basis of a 10-year programme, which should encourage forward planning on the part of the farmer, cause production to rise and eventually contribute to a steadying of prices in the shops.
  We must continue to urge our Common Market partners to see the wisdom of improving the common agricultural policy so that it is more acceptable to the various participants. We shall continue to encourage the Minister to affirm the wisdom of keeping our support system in this country and maintaining our marketing boards. We must stand firm on that.
  Without doubt, it is in the nation's best interest to have a thriving agriculture making a vital contribution to a stable economy. It is essential that the nation be aware of this and make every effort to encourage it.
  I suggest to the Minister, and to others, that we should have a Select Committee on Agriculture, similar to the one set up under the Chairmanship of Lord Watkins, then the hon. Member for Brecon and Radnor, in the late 1960s. Such a committee could work out a long-term policy for the benefit of the
  1388
  industry, and I stress that long-term planning is essential. I am one of those farmers who respect Lord Watkins and the members of that Select Committee for the good work they did in the service of agriculture in the late 1960s.
  I put in a plea also on behalf of those who wish to enter the industry but cannot do so largely for lack of capital. Many advantages would flow from action in this regard, and I urge the Government to study the system in France where farmers are able to borrow at advantageous rates of interest. On several occasions in the House I have stressed—I am a strong advocate of a land bank—that there are many young farmers in Wales and elsewhere in Great Britain who, if capital were made available to them, could be the farmers of the future. I know that we have an excellent capital grants scheme under the common agricultural policy, but, if a particular scheme would cost£10,000 or£20,000, the farmer has to find the first 50 per cent. If capital were made available, it would, I am sure, help many who are in dire trouble, and who are unable to find the capital.
  I admit that the low bank interest rate has helped farming this year. For example, a farmer with an overdraft or a mortgage loan of£50,000 will now save about£50 a week in interest charges. That is a step in the right direction, but many farmers are afraid to invest. They are worried lest the interest rate should rise again within six or 12 months.
  I turn now to this year's price review and, first, to the position of the sheep farmer. I always believe in giving praise to anyone who has done good work for that sector of the industry, and here I congratulate the Minister. I speak as a sheep farmer, and I have declared my interest. I believe that this year's price review is the best we have ever had for the sheep farmer—an increase of 31 per cent. on wool and 24 per cent. on lamb.
  Some hon. Members may argue that increasing the price on lamb by 24 per cent. in this year's price review will not cost the Government a penny, but the price in the market this week is declining rapidly and it may well be down to the guarantee price of 50p within the next fortnight.
  I ask the Minister to look at the system now operating in France. The French

  1389
  Government have the right to close the market if it is their wish. For the sake of argument, I give the example of a farmer with a flock of 500 ewes who had 100 per cent. lambing. If he sold the lambs when the market was open he would get£22 per lamb. If the market closed the following week, there would be a fall in the price of the market of about£2 or more per head. Therefore, the farmer who had worked hard for 12 months would lose about£1,000.
  As I say, I hope that the Minister will look at the situation in France and consider whether we could have a market open to which we could send our carcases during 12 months of the year.
  Two years ago I divided the House on the subject of the plight of the small hill farmer. While speaking of sheep farming, I think it right to mention this also. Under the common agricultural policy rules many small hill farmers were deprived of their hill sheep subsidy. The maximum was about£50 or£60, but to the small part-time farmer that£50 can be useful at the end of the year.
  It is a great shame that the hill compensatory allowance was taken away from the small part-time farmer on the hills of Scotland, England and Wales. Has the Minister considered increasing the hill compensatory allowance for hill sheep this year? At present hill farmers are being paid at the rate of£3·60 and the Minister has the right, with the consent of the Chancellor, to increase that subsidy to£4·20 or£4·25. I hope that he will have a look at the plight of the hill farmers.
  Many pig producers have come to see me recently about their plight and their fight for survival. Many are in dire financial difficulties. I hope that the Minister will do everything that he can to give them further assistance—by mcas or some other method. He has clarified the position on mcas and other means in a letter to my hon. and learned Friend the Member for Montgomery (Mr. Hooson) about the pig subsidy.
  I have been told by my hon. Friend the Member for the Isle of Wight (Mr. Ross) that there is a pig farmer in his constituency who is losing more than£2 on every pig that he has sold since last October. That farmer is a particularly efficient pig
  1390
  producer. In this regard I shall suggest something completely different. I have been told that there is a waiting market for our store pigs on the Continent. The market is closed, but it is claimed that British regulations are too stringent to export pigs. Under the EEC rules, which have been agreed by all the member nations, we can start exporting today. I am sure that if the Minister looked at our regulations and brought them into line with those of the EEC we would have a buoyant pig industry overnight.
  In relation to the dairy industry, I think that the guarantee price for milk for the next six months is too low. Many of our producers will not be able to recoup their costs, especially the small family farm unit. As a nation we are very dependent on family farms—both socially and economically. Nearly all of them are very efficient or they would not have survived for so long. As politicians we must make sure that their survival is secured for generations to come. Let us stand up to the challenge together. When we argue they suffer.
  I was disappointed to learn that the Government have done away with the consumer subsidy. I have stressed that the subsidy should be phased out during the year, but it was not to be. The price of milk to the consumer will go up by 2p a pint during this year. It is still cheap in comparison with other drinks, but milk consumption has gone down and is continuing to fall.
  According to the latest figures quoted by the Milk Marketing Board, liquid milk sales in the year ending 31st March 1977 totalled 6,802 million litres—161 million litres lower than the year ending 31st March 1976. That is the first time since the 1960s that sales have declined year on year.
  We know that the guarantee price system for milk ends on 31st December this year. I am worried, and so are many dairy farmers, about their future. The future of the Milk Marketing Board and the guarantee price system has been pressed in the House already. Having done away with the guarantee price system, does this mean that eventually we shall lose our Milk Marketing Board with its statutory powers? How on earth can our farmers have any confidence to invest unless they know how much they will get for milk next year and what will happen

  1391
  to their marketing board? Can the Minister give the dairy industry an assurance today that the retail price for milk will stay at the same level next year? If it does not, and there is no guarantee price system either, the industry will find itself in dire trouble.
  The majority of beef producers are pleased that the variable premium scheme has been extended for another year. Can the Minister assure us that it can be extended for another period of five years or so? I am delighted that he has secured the existence of the variable premium for another year at least. Personally I would like to go back to a guarantee price system, but that is not to be. Beef producers are very worried about their production costs escalating faster than the price they can get in the market for store and fat cattle.
  The beef cow herd has gone down in Wales by 8 per cent. and many more hill farmers will be keeping fewer cows next winter. The Minister will have to give urgent consideration to the plight of marginal hill farmers if we are to produce more beef from these areas. I urge the Minister to consider the plight of marginal hill farmers. It is very difficult to explain to farmers who live in an area of Wales, England or Scotland where one farmer may qualify for a hill compensatory allowance in full and his neighbour down the road, who farms just across the river, does not qualify. It is difficult to explain to farmers why one qualifies and the other does not.
  On the subject of the green pound, I have a news letter from the Farmers' Union of Wales, which was released on 5th May 1977. It reads:
  "EEC Agriculture Commissioner Finn Gundelach has told the President of the Farmers' Union of Wales, Mr. T. Myrddin Evans, that he intends to revive a Commission proposal to secure automatic readjustments of the Green Pound.
  "In a letter to Mr. Evans, Mr. Gundelach states: The proposal is still on the table of the Council and it is my hope that the member States will later this year reach an agreement on a system along the lines proposed by the Commission.'
  "Mr. Gundelach's comments are in reply to representations made by the Union regarding the problems created by monetary instability and inflation and the inadequacies of the green rates."
  1392
  This part is most important:
  "Mr. Gundelach said he was well aware of the Union's views on the outcome of the EEC Price Review and particularly its concern about insufficient profit margins for Welsh farmers."
  I hope that in winding up the Minister will comment on the green pound, and say whether it will be automatically readjusted every month or year as the case may be.
  Finally, I must advise my colleagues to vote against the Government tonight as a protest because we, as a party, are not satisfied that the Government are pursuing a long-term policy that will bring confidence to the industry. This year's price review is only a holding review. For the future we believe that the only way to reform the common agriculture policy for the benefit of consumers and producers alike. I assure the Minister that if the Conservatives were in government, we should vote against their present proposals, which are not acceptable to the majority of farmers. We need to pursue a long-term programme. That is Liberal policy for agriculture.
  6.20 p.m.
  Mr. Hugh Fraser: I have great pleasure in following the hon. Member for Cardigan (Mr. Howells), who has shown his political ambivalence by always voting in the national interest. I must apologise to the Minister for not having been here for his speech because of the confused arrangements in the House today.
  I join the hon. Member for Cardigan in saying that the thing which must most worry us is not "CAP or no CAP" but the long-term use of our land for agricultural and forestry interests. This is not a question of making party points. The Minister seems to have cultivated, even more than the late Mr. Whistler, the gentle art of making apparently profound enemies, but they are very much enemies on the surface, whether his co-Ministers in Brussels, his opponents on the Common Market or hon. Members.
  The argument which is now emerging is not whether one is for the Market or not. The real problem is that we do not have a certain long-term policy for agriculture, as the French, the Germans and even to some extent the Italians have. This is the problem which besets

  1393
  the industry more than anything else—the lack of a sense of continuity. It is totally essential for agriculture that there should be proper investment.
  Among my farmers in the West Midlands, perhaps especially in Staffordshire, the lack of confidence in the livestock industry is now at a high pitch. Investment is not taking place. I hope that what the Minister said about the Milk Marketing Board will reassure them, but next year there will be the grave problem of what the milk price will be. I have my own doubts about the milk policy in Europe. At one moment we in this country ask our farmers to build up the herd; at another in Europe they try to reduce the size of the farming herd. That makes little sense; these actions are difficult to reconcile.
  Therefore, I give not three loud cheers for the CAP but two rather muted ones and hope that we can improve it. But whichever party is in power must now make it clear to the farming community that there is a long-term policy.
  The Labour Party is essentially an urban party, with urban interests, and some of its trade union friends have a naturally emotional attitude towards landowners, and so on. That is not the issue before the House. The issue is how we make use of our only certain remaining asset, which is land. It is this question of land use, rather than land ownership, that we must face. I am sure that the Minister, who is extremely intelligent, will be facing it.
  One of the great fears today—I am sure that this must be in the back of the Minister's mind—is the weakness of the position of the Minister of Agriculture in the British Cabinet. I have felt since it was created that the Department of the Environment was a bogus Department, which talks a great deal but achieves little except in its separate portions.
  This country has to import over£4,000 million-worth of food and nearly£2,500 million worth of timber a year, and there is a danger that in future our land will not be put to proper use. Till we get these priorities right there can be no security and no real determination among the farming community to go ahead. The figures for the last few years are alarming.
  1394
  Offhand, I believe that the level of agricultural production, which stood at 120 in 1974, had dropped to 97 last year.
  There are one or two technical economic points that I should like to put to the right hon. Gentleman and then a much broader proposition. First, there is no way of achieving the sort of increase proposed in the 1975 White Paper, "Food From our Own Resources". The estimate of a 2½ per cent. increase per annum was too high. That will be difficult to achieve for a variety of reasons, which are recognised by well-known agronomists in the House.
  However, there must be a big investment if only a 1½ per cent. increase is to be achieved, and that can come only from the profits of the industry. They have dropped disastrously in the last two years.
  But the biggest issue facing the right hon. Gentleman and the Cabinet is the danger that siren voices will say that, with the impending improvement of our balance of payments because of the inflow and export of oil, we need not pay so much attention to producing timber and food from our own land. I regard that as much the most serious question, whether the right hon. Gentleman be in office or my right hon. Friend. Unless we get it right, we are storing up disaster for this country. Far too many people—not at the Ministry of Agriculture, but in the Treasury—are beginning to think that if we go for an export-led boom and sell our oil at high world prices we shall not need to bother so much about developing agriculture and forestry. That is the height of folly, because the oil boom will be short.
  As for the suggestion of an all-party commission or a group of distinguished people to consider investment in an export-led boom, it is questionable, from the national economic long-term point of view, whether that investment would not be better put into agriculture and forestry. Many of the so-called investment-led booms will be based on loans which will never be repaid. That is what is happening today. We should seriously consider whether the overall Treasury policy for agriculture, forestry and fisheries is correct.
  I have a few short suggestions for the Minister. Although we are attempting

  1395
  to reduce his salary, my suggestions will increase his importance. If he does not lose his head, and when my right hon. Friend succeeds him, these suggestions should be borne in mind.
  I believe that the Minister of Agriculture should be given much more power in Cabinet, that he should be on the major economic committees headed up by the Treasury, and that he and they should pay more attention to forestry. These are vital considerations, because he is more responsible than anyone else for our correct land use in a country with a third of the acreage of France—much of it Welsh and Scottish mountain.
  There must be a restatement of the Government's aims on a more realistic basis than that put forward in the 1975 White Paper. It should be put before Parliament as soon as possible. There must be an acceptance by the Government that at least£1,000 million has to be put into investment in agriculture and forestry over the next five years if there is to be any movement forward.
  There should be a proper assessment, especially in the hill areas, about the future development of forestry and hill fanning. I do not know about world prices, but I am certain that world prices of timber for this country will go up at an alarming rate over the next 10 years.
  The final requirement is the proper use of land. If one looks at projections such as those made by the Rothschild Committee and Reading University, whatever level of population is considered, whether it is the low projection or the high projection to the end of the century, one finds that there are between 750,000 and 1,200,000 acres of land required—unless checked—for urban use. I do not mean for housing and playing fields alone but for railways and motorways. At the same time, there are enormous areas of derelict land which could be used for proper development.
  These are the real problems of any Minister of Agriculture, Fisheries and Food, from wherever he comes—even if he comes from the Liberal Party. This is the essential condition for the maintenance of the only certain asset that we have in this country—the land, not just the Welsh land of their fathers, but of Scotland and England, too.
  6.33 p.m.
  Mr. Norman Buchan: I agree with some of the final arguments of the right hon. Member for Stafford and Stone (Mr. Fraser). I agree with him about the importance of continuity and planning. Land is of key importance. I agreed with the right hon. Member about enhancing the importance of the Minister so that he is seen in a more central position in Government and the economy. One way of achieving that aim would be to make him Minister of Food.
  The right hon. Member also mentioned the expansion of the hill sheep industry. That subject was included in my remit when I was a Minister and when I was involved with the central planning unit. With the world population doubling over the next 25 years, without planned protection and forward stability for the fanner we shall not achieve the necessary progress. The nonsense of annual price reviews must be ended. We must bring in a five-year rolling programme. That would give stability to the farming industry and could be operated within a certain range beyond which we would not go.
  The right hon. Member for Stafford and Stone said that land use is more important than land ownership. I disagree. Land is too important to be left as it is. Land is a national asset. We must plan its use properly. That must affect ownership.
  I turn to the main aspect of the debate—the common agriculture policy. I want to look ahead. Some surprising statements have been made in the debate. I object to the Common Market because of the amount of horse trading and the massive bureaucracy. Too large a share of the FEOGA budget is used to prop up the market. The Ministers involved tend to forget the protection of the consumer in favour of the producers. Too little is spent on the protection of the consumer and too much on propping up the market. Those are my reasons for opposing the Market. Those are the reasons given by the right hon. Member for Yeovil (Mr. Peyton). That is how he opened his speech. I welcome his confession.
  Mr. Peyton: The hon. Member is grossly misinterpreting what I said. The

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  hon. Member took out only part of what I said. I spoke of the aims of the CAP, which seemed to me to be unexceptionable. I objected to the practices and developments to which the hon. Member referred.
  Mr. Buchan: I, too, am against sin. There is nothing wrong with the Market itself; it is what the Market is that matters. The right hon. Member for Yeovil rejects categories of sin.
  When hon. Members take on agricultural responsibilities they get into certain habits. With the start made by my right hon. Friend, I am anxious in case he goes the same way. I hope that we shall have an assurance that he will not.
  I do not want to spend too much time on current matters, but I shall deal with the specific point made by the right hon. Member for Yeovil about pigs. When pushed by hon. Members the right hon. Member for Yeovil said that he had a suggestion to make. We do not know what the suggestion was.
  He said that the pig subsidy was too low. Does he want a bigger subsidy? Would he have given a bigger subsidy had he been in office? Would that subsidy have come too late, or would he have given a bigger subsidy earlier? He also said that there should be a marginal devaluation of the green pound. But the argument has been that the value of the green pound has been insufficient to help the industry. The Minister is on bail about that and the argument is empty to the point of ineptitude.
  The British Farmer & Stock-breeder states:
  "The UK's two EEC transition steps alone are expected to increase food costs by around£9 a tonne…Since cereals, together with derivatives like middlings, account for around 80 per cent. of a typical baconer ration and feed accounts for 70 per cent. of production costs, it would require a£60 a tonne increase in the wholesale bacon price just to keep pace with the cereal cost increases brought about by the two transitional steps."
  The situation causes a dilemma which is not felt by the rest of the Common Market countries because they have a background of a dear food policy. The main problem is that a CAP that could protect consumers would hurt the producers.
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  That is because the policy is based upon end prices.
  One of the problems is that a policy that will support, develop and expand the farming industry is one that will also harm our peoples. That contradiction cannot be avoided. It is the basic contradiction which poses the dilemma for us in relation to "Food from Our Own Resources". This was a programme designed not to plan expansion but at least to say that expansion is what we should like to achieve.
  The trouble is that as long as we have an end price policy, the cost of producing that expansion is one that we are not entitled to ask our people to bear. Therefore, we have to alter drastically the running of the CAP. If that fails, the time will have come when we must say "We shall go it alone. In or out of the Market, we shall administer our own agricultural policy".
  Whatever else may be said for the political or social advantages of the larger agricultural communities of Europe, this is a situation that over the past few years has increased our difficulties. It is increasing our difficulties. They are not being diminished. That is why we have now reached the stage—it has been dramatically highlighted over the last few weeks in the comparisons of the by-election results—when the British people, too, are seriously reconsidering their decision in the referendum.
  When we hear such a speech as that from the right hon. Member for Yeovil, with his wholesale attack on and rejection of the Common Market, while saying that he approved of its aims—[Interruption.] But that was his correction when interrupting me. He was saying that the aims were good but that the thing was rotten in practice. He might have said that during the referendum campaign. I have no doubt that this speech today will have given encouragement not only to those of us who argue on that basis then but those who thought that they could do no other than vote for entry and who now think that they have been hoodwinked when they hear the kind of speeches being made today.
  That is the dilemma and that is the political situation. The consequences are that if we cannot now strengthen our fight and if that cannot be done by the

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  Minister of Agriculture alone—he has put up a major battle to try to achieve what he can in the working of the Common Market—the Government must act to use their strength and to say "We can see little gain".
  What have the Government to lose? We know what the Market was. It was a deal between French agriculture and West German industry. We said that we should lose on both counts—that we should lose on the agricultural side because we are not suitable and on the industrial side because German industry was poised to come in with its manufactures. That is what has happened. There has been nothing gained. We have ended with massive food price increases and massive balance of payments problems. Neither on the economic and industrial side nor on the agricultural side has gain been proved, and there is no indication that that will be altered unless we scrap the CAP and its application to us.
  Having said that about the CAP, I want to look at the implications that it has for Britain. The first is that as long as we have an end price policy, whether inside or outside the Common Market, certain things follow. Someone talked about the going rate for food. What a nonsense that is. The cost of food is artificially created throughout the world, let alone inside the Market, where it is monstrously so created. The cost of an end price policy will lead to consumer resistance. I recommend the brief issued by the Consumers Association, in which it spells that out. That would be the cost to the consumer, and the effect upon producers would be the resistance.
  To farming it has an additional cost. If farm land is a national asset, as the right hon. Member for Stafford and Stone said, the problem of an end price policy is not only that it increases costs in the absolute sense, as I have been saying, but it brings in another cost, and that is the cost in relation to the asset of land. It distorts our agricultural policy.
  As soon as farmers are paid to produce that which gets the best cash return, they will be getting like business men—they will be producing that which gets the best cash return. There is very often no relationship between the best cash return and that which is neded by the community
  1400
  or that which is most suitable to be farmed on our land. Therefore, it distorts good husbandry, it distorts agriculture and it distorts planning, because when we then reach the situation that I have described, with the world's population doubling, we shall not find commodities abroad quite so easy to obtain.
  The obvious point in this, for example, is the question of moving over to grass—the question of beef. What a nonsense it is that we should be producing so much cereals for beef production! When we have so much grassland and potentially improvable and marginal land which has not properly been brought into grazing use, that is what the money should be spent on instead of artificially increasing the return to the cereal farmer in order to feed livestock. This begins to be a sane agricultural policy.
  In Europe itself the problem is not so great. In the first place, it is more self-sufficient than we are. Secondly, it is an area of traditionally high food prices. Thirdly—and this is all-important—Europe has a greater agricultural population than we have, for which that kind of policy has a certain political value, though not one that I welcome, and a certain social value. But it is not true of our situation.
  Thirdly, an end price policy distorts in another way if we need to expand correctly livestock and grass. If at some point we have to take a decision to say that cereals are too valuable to be used in this way, that they should not be used in order to have 10 tons of cereal for 1 ton of meat, we must move over to grass. This costs money.
  Throughout the Highlands and many areas of England there is waste land and marginal land which could be brought into production, but that will be expensive. It is nonsense for the SNP to say that in the Highlands there is land that would be easy to bring into use. It will not be easy. If an individual farmer has marginal land, why does he not bring it into production for grazing? It is because the costs to him are not of a kind which can be returned to him within 10, 15 or 20 years.
  Therefore, this is of immense importance to the nation and it should be a

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  national cost. The money that we are using artificially to prop up an end price policy pushes up the price of cash props uselessly, because at the end of the day it does not produce one more ear of barley. It merely costs more. The money used for this purpose should be used in the way that I have suggested, and£1,000 million investment should be seen in this way in future, as well as in reorienting our agricultural policy.
  The third point on this additional broader cost is the effect that it has on our national industrial economy, because it distorts our trading position in relation to our other imports. What a nonsense it is that we should have hooked ourselves up inside the Common Market on the arguments of economic benefits with people who are basically like ourselves and are natural competitors for our own products when of course we should be looking abroad in order to get the kind of trading pattern that suits both our industrial policy and our agricultural economy.
  Mr. Geraint Howells: I have been interested in the hon. Gentleman's comments on hill farmers and marginal land farmers. Does he agree with me that the present Government should pursue a policy of making capital available or that a land bank should be set up in Britain to help marginal and hill farmers?
  Mr. Buchan: I have no objection to that mechanism. One way of doing it would be a land bank, but the important decision would be that the nation should go into this in a large way and that we should spend the money in doing it. It is the decision of principle that should be taken first.
  I am concerned about the producer. My speech is as much about the producer as it is about the consumer. I am concerned with agriculture and not just consumers who will benefit.
  There is one point on the tax side. One simple thing that I should like to see the Government doing now is averaging out farmers' tax. The present system is nonsense, especially with the vagaries in the climate over the last three years. The curious period of climate that we have had over the last two or three years makes a nonsense of the present system of doing it on an annual basis.
  1402
  It will not lose anything to the Exchequer. The Exchequer will still get the return in exactly the same way when it is averaged out. More important, however, is that it will lead to intelligent investment by the farmer, because instead of saying "My money will be paid in tax unless I invest it", he will have the security. One possibility is a bank in relation to that so that investment reserves can be built up for the individual farmer.
  Clearly, there is now understanding of the cost and stupidity of a policy which encourages people to produce food in order to buy into intervention the surpluses built up. Most people in this country now understand that that is nonsense. Those of us who are concerned to achieve a sane agricultural policy must also now turn our attention to the levies. My hon. Friend the Member for Bradford, South (Mr. Torney) gave a complete list of prices that grossly exceeded world prices. It is a nonsense that we should be faced with fiddling on the pig side, when every time we try to devalue the green pound to help our own producers that pushes up the cost to us, and cheaper cereals that could be brought from abroad are increased in price by levies. It is nonsense that there is a levy of about 40 per cent. on wheat. We must pay a great deal more attention to this matter.
  I want also to say something about some of the cruder aspects. Someone asked where we should obtain the cheap food. Of course, there is not and will not now be the kind of cheap food policy that we have seen in the past—and thank God for that! We do not want it. The cheap food policy was based on a Third World in poverty. But there can be a policy of cheaper food imports.
  We should now set up commodity commissions to plan. First, we should estimate our needs and capacity and the possibilities of expanding home production, estimating from that the kind of long-term deals we should be making for imports. We should not suck in imports at the farmers' expense but seek, as a planned adjunct to national production, to achieve the necessary balance. There should be another look at the old planning suggestion that I made in 1974.

  1403
  Nobody in the Ministry paid any attention to it then, but I hope that attention will be paid to it now.
  We should also look at the boards' practice to learn the lesson of how to plan such production. My right hon. Friend referred to the Milk Marketing Boards. There will be unanimity in the House about the necessity for our fighting for those boards for consumer reasons as well as those of the industry. We should also look at the operation of the Potato Marketing Board, to which the EEC is not particularly favourably inclined. That is an interesting project. The board says "Let us try to examine what we expect the consumption of potatoes to be and then decide the acreage that we think can meet that, given the seasons of the year, because there will be early imports".
  Mr. W. Benyon: What about the weather?
  Mr. Buchan: I shall talk about the weather later. Of course, it will go wrong one year in X number of years. The board will never get it right, but it will set a target which can be coped with. In other words, if we are 100,000 tons short, we import 100,000 tons, and if we are 100,000 tons over, there is a guaranteed purchase of feeding stuff.
  To those who object to the Potato Marketing Board because it has intervention implications, I say that there is a world of difference between an intervention purchase because people have been encouraged to produce too much and intervention because we have gone wrong in our national planning and must support the industry. There is a massive difference. One is unproductive, agriculturally monstrous and immoral, in that it encourages people into pointless surplus merely to intervene. The other is saying that we are planning our production and that when we go over the top we have another use in the form of feedingstuff. I hope that we shall not reject this element of planning in the board and that it will be understood.
  I should like to make a final comment on the immediate situation. In Scotland we are apprehensive on the beef side and the milk side. Like other hon. Members, I have received telegrams about the matter. My local farmers in Renfrewshire
  1404
  are concerned about the increased cost to the producer compared with the return he receives from the milk award of last year. In the long run we must push more money into the dairy industry, but the method is not to put it on to the end price.
  My right hon. Friend, in his rôle as Minister of Food, should demand the restoration of food subsidies. We want the dairy industry for the sake of the nation, not for the sake of the dairy farmer, and therefore the nation must be prepared to pay for it. The right way to prevent an end price policy leading to a loss of consumption of liquid milk, which happens as soon as we increase prices, is to bring food subsidies back into the forefront of our thinking. By no means the least advantage is their effect on the argument about the social contract.
  The Opposition proposal is an impertinence not only because it is wrong in that the poor old Minister does not receive a salary to be reduced. The Conservative Party surrendered the interests of the British people and British agriculture in 1971 and 1972. We ourselves failed to renegotiate the common agricultural policy, if we ever attempted it, in 1974, and I make no excuse. But it is hypocrisy and impertinence for the Conservatives to attack the first Minister over the past five or six years properly to defend British interests in the Common Market and remember that his duty is also to the nation, and not only to the Tory Party. I hope that the amendment is rejected with the contempt it deserves.
  Several HON. Members Several HON. Members rose—
  Mr. Deputy Speaker (Sir Myer Galpem): At the beginning of the debate Mr. Speaker appealed for brevity because of the large number of hon. Members who wished to take part in the debate. I heard him say that he thought that he could accommodate them all. There has been a subsequent appeal for brevity. A speech lasting 24 or 25 minutes does not show brevity, in my opinion. There are still 20 hon. Members who are anxious to take part in the debate in the remaining two hours, and I should welcome any suggestions from the Floor on how I should discharge Mr. Speaker's undertaking to accommodate everyone.
  I call Mr. Welsh.
  Mr. John Wells: I shall endeavour to follow Mr. Speaker's request for brevity—
  Mr. Deputy Speaker: Order. I called Mr. Welsh.
  6.57 p.m.
  Mr. Andrew Welsh: shall try to heed your strictures, Mr. Deputy Speaker, in my usual fashion and with my usual speed.
  I welcome today's debate as another important occasion on which we can look in detail at agriculture. Sometimes I wonder whether the Government appreciate the value and status of our agriculture industry. It is important to recognise the place and stature of agriculture in Scotland and the United Kingdom as a whole. One recent estimate is that the production, processing and distribution of food in the United Kingdom account for 10 per cent. of the gross national product, with a total value of about£8,000 million a year, and the industry employs 15 per cent. of our total manpower. Those figures show agriculture to be a major industry.
  If this is true of the United Kingdom as a whole, it is even truer of Scotland, where a larger proportion of the population earn their living from agriculture. Agriculture is a crucial sector of the economy, and deserves a far better deal than has been forthcoming so far from recent United Kingdom Governments, whether Labour or Conservative. There has been a failure to recognise and to take proper account of the basic problems and the very nature of the industry. By definition, agriculture is beset with unknown factors of all kinds, such as weather conditions or international markets. These are formidable problems at the best of times, but added to them there are now the problems created by Government policies.
  For example, rightly or wrongly, the Minister has become known as the Minister of Food, not the Minister of Agriculture. His action in delaying the EEC price review has added fuel to that contention. His failure to act realistically over the green pound has further made farmers suspicious. I ask the right hon. Gentleman to accept reality, which he will have to do sooner or later, and bring about a further reasonable adjustment of the green pound by gradual steps as a
  1406
  matter of urgency. This can for example be done in 1 per cent. steps with minimum disruption for the consumer and producer. In total agriculture is now facing a loss of confidence. It does not know where it stands or what is being asked of it. The question before the Government is quite straightforward—do they want home-produced food or do they not?
  My colleague the hon. Member for Dunbartonshire, East (Mrs. Bain) has passed to me the fears expressed to her by small farmers in her constituency. They coincide with the fears of hill farmers and others in my constituency in South Angus. They are all worried by the Government's recent price agreements. Some of the farmers actually believed the White Paper "Food from Our Own Resources". They actually believed that the Government meant what they said. Many are now sadly disillusioned.
  Agriculture, by definition, is an industry which works on a long time scale., Its turnover is slow and its capital investment is both highly specialised and heavy in volume to meet the specialised needs of the industry, I ask the Minister to produce what United Kingdom Governments have so far failed to produce, namely, a clearly worded long-term farming policy. We have never had a real agriculture policy and it is about time that some basic, assured, long-term plan for agriculture was produced.
  The industry is a success story in terms of investment, productivity and modernisation and, if given the right treatment by Government, it will respond. But it can only fully respond if it knows where it is going. Farmers desperately need a much clearer view of the way ahead. The document "Food from Our Own Resources" was a completely inadequate publication in that it was a series of projections based on past production figures. It was not a concerted, viable agricultural policy, which is what we need as a matter of top priority.
  The Government, naturally and understandably, have an enormous obligation to keep food prices as low as possible, but at the same time that consideration does not release them from their obligations to an agriculture industry which has not let them down in the past. Present Government price policies are little more than

  1407
  short-term expediences which will have serious long-term results for us all.
  Examination of individual sectors of the industry shows this immediately. On the subject of the milk sector, farmers are being asked to cope with the twin evils of rising costs and inadequate returns. I hope that Ministers will comment on the accusation that, although all sides are agreed on the exact extent of costs, the actual price rise given in no way matches cost increases. The Minister is asking the industry to meet a 20 per cent. rise in basic costs with only a 5 per cent. increase in price levels. This is no way to treat the milk sector. Already drought and inflation have upset the April price calculation for an industry which has undergone an expensive winter feeding programme.
  The Minister must know the dangers ahead. Unless the industry is further assisted, this cost spiral and insufficient income situation will lead to a further exodus from the dairy sector later in the year when farmers, tempted by the EEC dairy to beef schemes, may reduce dairy herds, with all that means for the cereal market and beef supplies, as well as the effect on increased imports with their consequent effects on the balance of payments. The housewife and the farmer will eventually have to pay the long-term price for the Government's present short-term policy.
  The Government should remember earlier examples in 1974–75 when a 50 per cent. increase in imports of milk products took place following a shortfall in our market. The Government in a sense are gambling that this summer's weather will not let them down. Because of the past long winter, I am told that there is little or no stored fodder available for the coming season. If we have a dry summer, such drought problems will lead to massive food price increases and a consequent strain on the balance of payments. Those short-term gains will be paid for dearly in the long term.
  A glance at the price of Coca-Cola or beer sometimes makes me wonder what value our society places on the food we eat. The Government surely have a good case to put to the people of this country on the subject of milk, which, even after a few pence price increase, remains one of the cheapest and most nutritious foods available. The
  1408
  Government must give a lead in these matters and back our home producers if they really mean what they said in "Food from Our Own Resources".
  I turn to the potato industry, which is especially important to Scotland and certainly to South Angus. I assure the Minister that the Government's present guaranteed price proposals are looked upon by growers as little short of an insult. It leaves the Minister open to the accusation that its level is designed more to suit the Treasury than to encourage or in the long term to protect the potato industry.
  The present guaranteed price level is of no help to growers with an expensive crop already in their fields and with some planting still to be decided. This year planting costs have been higher than normal because seed has been relatively scarce, and growers will face a tough time when they approach their bankers in the coming months.
  I ask the Government to consider the special circumstances of the Scottish seed potato industry. I hope that they will consider the possible implementation of a separate guaranteed price for Scottish seed potatoes. A little foresight could give great rewards in terms of exports and our balance of payments. If the cards are played properly, this could be an export market winner.
  I wish to put directly to the Minister the fears of South Angus farmers in the beef sector. In the past two months they have been selling fat cattle at virtually the same price as those beasts were originally purchased at the store market last autumn.
  Mr. Paul Hawkins: I do not know the hon. Gentleman's opinion about the sales in his area, but he might be interested to learn that in my area practically every farmer who bought store cattle in the autumn has now, having fattened those cattle, lost£30 to£40 per head.
  Mr. Welsh: I accept that, and the hon. Gentleman contradicts the Minister's remarks about confidence. Confidence is seeping from the beef trade. If the present decline in cattle numbers is allowed to continue, the housewife will pay the eventual price when the consequent shortfall occurs.

  1409
  I wish to remind the Government that 75 per cent. of Scottish agriculture is in livestock and livestock products. That leaves us vulnerable to the Government's price agreements after a long winter involving heavy feed costs. I hope that the Minister will give further thought and will try to meet these acute sector problems.
  Much has been said about the pig industry. I plead with the Government to act and act now in mcas and the extra financial assistance which is urgently needed to save the pig industry. I would remind the Government that half Scotland's pig production comes from the North-East of Scotland by farmers who are now losing an estimated£6 on each pig produced. I would also remind the Government that the pig industry provides 10,000 jobs. I ask the Government to remember that they bear a heavy responsibility for the future of that industry.
  If we are to obtain a secure future for agriculture, the SNP believes that Scottish agriculture must concern itself with those commodities which it is good at producing and with those which it can produce more efficiently than can our European competitors. This means maintaining liquid milk production, increasing the beef and lamb sectors, plus the grain that is needed to feed them; it means maintaining a fair-sized pig industry and expansion of the horticultural sector. If we are to achieve those aims, the domestic food supply must be better safeguarded than it has been up to now. If that is not the case, over-dependence on Europe in certain sectors of the industry can only lead with increasing frequency to commodity shortages should adverse conditions affect European supplies.
  The SNP regards Scottish agriculture as a long-term priority investment, as an industry with a permanent export potential that can be realised only through expansion plans set against a determined Government policy of sustaining its growth through unavoidable periods of fluctuation. In that respect there is a worrying shortfall in the Government's attitude. The Government's present policy package will not achieve our policy goals. Therefore, they must be altered. That is why I will urge my colleagues to vote against the Government tonight.
  7.11 p.m.
  Mr. Gwynfor Evans: It is a pleasure for me to follow the hon. Member for South Angus (Mr. Welsh) as we have a great deal in common. One of the things that we have in common is our anxiety to defend our traditional way of life.
  As a rule agriculture is discussed solely from the economic standpoint, but we should not forget its social importance. In Wales its social importance is very great. For generations we have been fighting against depopulation. We have been fighting for the retention of the family farm, which is the basic unit. Today in Wales it is sad to see family farms finding their stock being reduced. Family farmers are very concerned about the decrease.
  Surely the authors of "Food from Our Own Resources" must be unhappy about the direction that affairs have been taking during the past year or two. Far from the development that is set out in "Food from Our Own Resources", we have seen decline.
  The beef herd has declined by 2·9 per cent. The pig herd has declined by 7 per cent. in six months. Gilts are down by 18 per cent. The drop for the year was 29 per cent. Especially distressing and disturbing was the drop in young stock. That is a matter that I stress because it is upon the young stock that our future depends.
  In 1976 heifers in calf mainly for milk were down 10 per cent. in 1976. Heifers in calf mainly for beef were down 12 per cent. in 1976. Cows in calf mainly for beef were down 9 per cent. in 1976. I ask the Minister to take the figures seriously and to consider their consequences. This is not the way to any sort of self-sufficiency.
  Many references have been made to beef prices. Fortunately in Wales they have been maintained on the whole by the market. If they had fallen to the guaranteed price level, we should have been in a bad way. Most people will recognise that farmers cannot possibly invest as they should in their industry unless they receive a proper return for their work. As the terms of trade go against the farmer, his position is bound to become more difficult. It is realised by only very few that investment in

  1411
  agriculture on a per worker basis is now as high as it is in the capital intensive steel industry.
  Welsh agriculture, like agriculture throughout the countries of Britain, is now controlled more from Brussels than from London. That is why it is so important for us in Wales to be directly represented on the Brussels institutions and committees.
  The EEC situation is normally called the Common Market situation, with freedom of movement for all produce between all the countries of the EEC. From the Welsh standpoint one of the most stringent tests of that free movement is that of Welsh lamb into France. As lamb is so important in Welsh agriculture, especially on the hill and marginal or less favoured land, we should be fighting alongside Ireland in Brussels for the freedom to sell our lamb to all parts of the EEC at all times of the year.
  In Wales 80 per cent. to 90 per cent. of our land comes into the category of marginal or less favoured land. It is livestock farming only that is found on that land. The Minister said recently that help might be available in the coming autumn for land of that sort. I hope that we shall hear his observations on his considerations of this, and on his reconsideration, I hope, of the present arbitrary subsidy line.
  As so much Welsh land is less favoured land it could possibly be easier to regard the whole of Wales as one special area for this purpose and then to withdraw the parts that are obviously not fit to be included. Only 2 per cent. of the land in Wales is in the grade 1 category. Much of the nutrients have been washed out of the better land because of the heavy rainfall in Wales.
  French farmers have added to the category of less favoured land and the development programme that has taken place in France could be carried out in the United Kingdom without adding unduly to the agriculture budget and without increasing prices at all. It would keep many family farms in being that would otherwise go out of existence. What is needed is the political will to act.
  We are approaching the end of the transitional period and there are some
  1412
  great difficulties looming ahead. In particular, there is a great deal of nervousness about the future of the marketing boards. We are all agreed that the boards must be retained. Perhaps the Milk Marketing Boards are the most important. In my constituency we have unused expensive machinery for making butter and it does not seem as if it will ever be used.
  But what of the marketing of milk itself? I do not refer only to the door-to-door distributor, although there is a danger that that form of distribution will disappear. Indeed, it is disappearing with every year that passes. I am referring to the Milk Marketing Boards themselves.
  Obviously there is a stiff fight ahead. Every marketing board cuts across the essential feature of a common market, namely, freedom of movement for produce from one country to another without hindrance.
  It is interesting that this afternoon we should find that those who have been so enthusiastic about entering the Common Market and staying in it are equally enthusiastic about retaining our national marketing boards. I hope that we can succeed in the fight. I hope that their support for the Minister will be enough for him to win the battle. However, I have my doubts because he has stern enemies. The right hon. Gentleman has to face them in Brussels when he meets the members of the Commission. He has to face the bureaucrats whose Bible is the Treaty of Rome. He deserves, and he should get, all the help that we can give him to keep the marketing boards in existence.
  7.18 p.m.
  Mr. Caerwyn E. Roderick: Obviously the Common Market has featured to a large extent in this debate. The common agricultural policy, being a central theme of the Common Market, must figure completely throughout the debate.
  I echo the comments of the hon. Member for Carmarthen (Mr. Evans). Surely one of the most fascinating aspects of the debate has been the support that has come for breaking the rules of the Common Market from those who were so energetically trying to get us into the Market and persuading us to stay in it. They have helped form the rules, but

  1413
  they have been insistent at every stage that my right hon. Friend the Minister of Agriculture. Fisheries and Food, who, I recall, was not very enthusiastic about remaining in the Common Market, should now bend the rules, break them or do anything he can to destroy the CAP.
  I am with them on that aspect of their speeches because I want to break the rules as well. I want to break the CAP. I want to see us not improve it but completely to re-organise it and to have a new set of rules.
  The CAP was never intended to lower prices. That is why there was such fury when my right hon. Friend managed to lower the price of butter. It was never intended to do anything like that. It was designed to protect the farmer, as I hope we should protect him without the CAP.
  Mr. Nelson: The hon. Gentleman says that the farmers would be protected if the Common Market did not exist, but would he not accept that, with the development of new markets by non-EEC food-producing countries and with the inevitable tendency of European countries to pursue independent incentives to production and the restraint of production, if we were not members of a common agricultural policy the position with regard to surpluses and deficits of food production in Europe would be substantially worse, and, therefore, the interests of neither the producer nor the consumer would be served if we were to return to the position of a few years ago?
  Mr. Roderick: I do not agree. We managed to protect our farmers long before the common agricultural policy, and I see no reason why we should not adopt such policies now. They were designed not to create surpluses. Indeed, there is something immoral about creating and subsidising surpluses and a system whereby the benefits of the investment by our own people, amongst others, go to other countries outside the EEC. There has been some success in getting the investment back to us—the butter subsidy, for example. But that could be done without the CAP as it stands.
  I am in favour of the deficiency payments that we used to have for livestock, and also of guaranteed prices. I am not in favour of the target pricing that
  1414
  we have in the present system. There is a conflict in the policy of supporting the CAP. The CAP will inevitably go for self-sufficiency for Europe in agricultural products, but in a membership of nine countries instead of the national self-sufficiency that we seek in the United Kingdom. We should be aiming for self-sufficiency in this country. We may never achieve it, but we should work more towards it.
  The danger of aiming for self-sufficiency within a membership of nine countries is that if one country produces something better than any other, that product will come wholly from that country and be abandoned in the others. There is room for variety in each member country. We have built up a European protectionism which is detrimental to the long-term interest of agriculture. If we continue to go for an increasing upward spiral of prices, the consumer will one day inevitably rebel, and that will not do the farmer any good. We have to try to achieve a meeting of the two, and we can do it outside the CAP.
  Our aim in agriculture should be as far as possible to remove uncertainty and fluctuations from the incomes of those employed in the industry. It is a pity that we cannot have longer-term agreements than we have. Having price agreements for a year only is not sufficient, because it means an annual period of uncertainty and lack of confidence. I would go for longer-term agreements wherever possible.
  There is a crisis in the pigmeat industry. I am aware of the concern about it of some of the farmers in my constituency who are pig producers. There is no question that they are in very serious trouble. I applaud my right hon. Friend for the assistance that he has given to the industry, but I urge him to go further. I urge him to keep the pressure up for changing the mca further.
  I appreciate my right hon. Friend's dilemma in having to go to the European Court and his argument that he does not want to disturb things too much until we get a settlement there. But, assuming that we get a settlement in our favour, I hope that he will do more in subsidisation. In this context I welcome to our ranks those pro-Marketeers who want him to increase subsidies, something that

  1415
  he should not be doing according to the rules. I hope that they will stay with us in the argument. The right hon. Member for Yeovil (Mr. Peyton) was for breaking the rules. What a law-abiding citizen! We hear a lot about law and order from hon. Members opposite, but here they want to break rules that they themselves helped to make.
  A problem is also arising in the beet sector, and again many of my farmers are worried about it. They are concerned that next year they will not get the full reward they need. There is evidence already that farmers in the beef sector are drawing in. It would be tragic if we ended up next year with a shortage of beef. We are efficient beef producers and we should continue to be so, so we must bend our efforts towards ensuring that confidence is gained in the beef sector. Anything that my right hon. Friend can do to reassure the beef farmers on this matter will be greatly appreciated, because fears have been expressed to me by my constituents about it.
  We owe my right hon. Friend a debt of gratitude for his success with the sheep industry. Sheep farmers have told me that they are quite satisfied with the situation at present in terms both of prices for wool and of prices for lamb. We have a good guarantee, and we are grateful for it.
  One constituent has expressed concern to me about the situation in potato marketing, in that prices are very high at the moment. In potato marketing we have experienced fluctuations more than in any other sector. We should try to level off if we can.
  One possibility worrying potato producers is that if the transition period comes to an end soon, we may be open to a flood of potatoes from other European countries. It has been represented to me that we should therefore have an extension of the transition period for potatoes.
  I agree with those right hon. and hon. Members who have spoken in favour of the retention of our Milk Marketing Boards. That is essential to a properly co-ordinated milk industry. We cannot allow our boards to be abolished at the dictates of Europe.
  Since this debate can be fairly broad, I want to return to a subject that we
  1416
  dealt with in detail last year—the plight of the tenant farmer. We put through legislation to protect the rights of succession of tenant farmers and to protect the tenant farmer in his holding as at present. But I was disturbed to read recently in British Farmer & Stock-breeder about the eviction of a tenant farmer as the result of an arbitration. We may think "arbitration is fair, and that is final". But I ask my right hon. Friend to consider whether it is not right for the tenant or the landlord himself to have the right of appeal against the decision of an arbitrator.
  Why should he not have such right? We have appeals in other courts, and it would be right and proper to do so in these circumstances because, good though the arbitrators may be, the judgment of one man alone often decides the issue. A second opinion must be available. I was disturbed that this tenant farmer had no right of appeal.
  I must repeat that there is a lack of confidence in the system of arbitration as it is. There is also fear of expense. The tenant farmer is afraid to go to arbitration because of the expense that he may incur—and such people are not usually among the wealthiest of farmers. There is a case for seeing that the service is provided without any of these fears attached to it. Many of my tenant farmers are agreeing to new rents which have escalated beyond all reason because of their fear of going to arbitration in order to get a reasonable settlement. I hope that this will be looked at.
  Finally, I agree that "big" is not necessarily "beautiful". I do not want my right hon. Friend to be carried away by the idea that "big" and "efficient" necessarily equate. We do not necessarily find high productivity on the bigger farms. Very often, efficiency and productivity are to be found on the smaller farms. I am not so irresponsible as to suggest that we do want smaller units to the extent of being so small that they do not supply a living, but there is certainly a case for retaining medium-sized farms on social as well as economic grounds. It is essential that we do not get carried away with amalgamations willy-nilly.
  I would finally ask when we shall see a fundamental change in the CAP. We were promised that we were going to alter it fundamentally. Does my right

  1417
  hon. Friend see a chink of light? Can we expect not just minor revisions, as we are getting from his efforts, but a complete revision of the CAP?
  There is much in the suggestion made by the hon. Member for Cardigan (Mr. Howells) about a Select Committee on agriculture. We could certainly air a lot of these points in such a Committee. The House owes a debt of gratitude to my predecessor who chaired that Committee and produced some good reports. We could go through the exercise again: the time is ripe.
  7.31 p.m.
  Mr. W. Benyon: I declare my interests as a farmer and pig producer. I was delighted to hear my right hon. Friend the Member for Yeovil (Mr. Peyton) start his speech by restating the aims—not necessarily the practice—of the CAP. They are worthy aims and it is quite right to restate them.
  They are to raise the standard of living of the agricultural population to the level of its brothers and sisters in industry, to produce different varieties of food in the areas of Europe where they are best produced, and to ensure, so far as possible, self-sufficiency in what is increasingly becoming an unfriendly world with regard to trading.
  A number of critics speak disparagingly of surpluses, mountains, lakes and the rest. Yet in the same breath they want us to produce food stocks to combat world shortages and enter into commodity agreements to lessen price fluctuations. It is about time that people realised that Europe is a very good place to grow food. It could become and should become one of the world's great larders.
  The consumer and producer are not at war with each other. They are basically fighting on the same side. Continuity of supplies are far preferable to the consumer than peaks and troughs. Those who say "Let us revert to a version of the old United Kingdom deficiency payments system" are really saying that they want a depressed agriculture and a Europe dependent on the vagaries of world supplies. If they do not mean that, then they are asking for a burden of taxation that will be wasteful and totally unacceptable to the vast majority.
  1418
  I admit that the prophets of doom have been proved wrong in the past and that the projected shortages in the world have not materialised. But that is not because the estimates of the world population, and therefore the world's needs, have been underestimated. It is simply that the world, or a large part of it, cannot afford to purchase the food that it needs.
  I agree with the Minister on only one point that if prices are too high, consumption drops. But the solution surely lies not in destroying the CAP but in a series of measures designed to increase consumption both at home and overseas. Here in the United Kingdom we are within sight of the end of the transitional arrangements. All the producers are asking for now is full and fair competition. That is what we have not got, particularly in the pig industry. I cannot reconcile what the Minister said about the wonderful state of British agriculture with the pile of letters that has landed on my desk in the last two or three days. I cannot reconcile that with the brief that has been put out by the NFU.
  Farmers are reasonable people. They gave the Minister the benefit of the doubt. They wanted to see the colour of his money. But now they are totally disillusioned. They sense that he is not really their friend. Farm after farm is preparing for a siege. Labour is being cut down; investment is being curtailed. The statistics quoted by the Minister are totally false, because in certain parts of the agricultural industry, such as potatoes, people who had large profits last year are now applying for grants. Production has slumped and imports are increasing. The future looks very grim, indeed. It is a tragedy—there is no other word for it—and it will take months and months to recoup the position.
  In the mistaken view that they are protecting the consumer, the Government are hell-bent on increasing imports and unemployment. Let me give one constituency example—not from the farm but from the factory. I have in my constituency one of the largest producers of pig-meat products in the country—Scot Meat Products Ltd. The Minister knows all about this because he kindly received a delegation two days ago from both the management and the unions in the company.

  1419
  The company employs 1,800 people and the business produces about 24,000 tons of cooked and cured meat products annually, almost exclusively from pigs produced in the United Kingdom. This enterprise is increasingly suffering from imports of processed ham from Holland and Belgium. These imports have been assisted by restitutions under the mcas, which have now reached the point where they represent more than 50 per cent. of the price asked of the United Kingdom importer and more than one-third of the income of the Dutch exporter. That is an enormous figure. No enterprise can for long face a situation where its customers are able to buy a commodity from a competitor at a price somewhere between 30 per cent. and 40 per cent. below the cost of production in the United Kingdom factory.
  Yet this is not some lame duck but a modern, highly efficient industry with a high level of capital investment. I emphasise as strongly as I can that if this situation is allowed to continue for much longer, without any remedial measures being taken, there will be no processing industry in the United Kingdom at all. That is the upshot of it. We cannot wait until July, or the autumn, or the end of the year. If action is not taken quickly there will be no processing industry in the United Kingdom.
  Imports are already soaring and if firms like this cease production, the extra bill will be tremendous. Then prices will start to rise and the consumer will not benefit.
  Mr. Jopling: I am sorry to interrupt my hon. Friend but may I draw his attention, and that of the House, to an answer which my hon. Friend the Member for Kidderminster (Mr. Bulmer) got a few days ago in which he was told:
  "Between February 1974 and February 1977, the latest date for which information is available, the number of employees in employment in the bacon curing, meat and fish products industry in Great Britain decreased by about 11,500. This figure is provisional."?
  That is a staggering figure and bears out exactly what my hon. Friend is saying. I think it is right to draw his attention to it.
  Mr. Benyon: I am grateful to my hon. Friend for supplying that information, because I missed that reply.
  1420
  In the meantime—this is the important point I wish to make—these jobs will be lost, and this is not an industry which can be recreated quickly. We shall be wide open to competition from abroad.
  This example highlights the seriousness of the situation. This is not a case of fair competition; this is not how the CAP was meant to operate. [HON. MEMBERS: "Ah."] It is as a result of the economic difficulties which this country has got into that we find ourselves in this position. It is because the green pound valuation is at the level it is at the moment that this distortion is created.
  I urge the Minister to be robust with regard to this matter. As my right hon. Friend the Member for Yeovil has said, he has strong cards to play. We are one of the major users of food in the Common Market and in the world. The interests of producers, consumers and the nation as a whole require a prosperous and efficient agriculture and a prosperous and efficient agricultural industry.
  7.40 p.m.
  Mr. Robin Corbett: With respect to the hon. Members for Buckingham (Mr. Benyon) and Westmorland (Mr. Jopling) and their right hon. Friend the Member for Yeovil (Mr. Peyton), one of the tragedies of these debates is that it is so very easy to try to score cheap points. It is all very well for Opposition Members now to try to berate my right hon. Friend about the iniquities of the common agricultural policy. However, we have to remember that it was a Conservative Government who signed on the dotted line to put this millstone round the necks not just of those in the agriculture industry but of all consumers.
  I say that in quite a hard way, but it is a statement of fact. It is no good, having signed that contract and accepted it behind the backs of the British people, saying four or five years later "We never expected it to work out in this way".
  How the right hon. Member for Yeovil can tell my right hon. Friend that Britain has some strong cards to play, I do not know. If that is right today, was not it right when his Government were conducting these negotiations? The strength and efficiency of British agriculture were exactly the same.

  1421
  I confess to being staggered to learn that the National Farmers' Union and the Opposition are saying to my right hon. Friend, in a situation where he has been taken to court and charged with driving at 70 mph, "Forget all about that. Get in your car and go at 80 mph." We cannot brush off these facts. The Opposition signed this piece of paper, and it is no good their pretending, in a bid for some cheap and instant popularity, that there is any easy answer.
  The Opposition misled the pig producers. With some of my hon. Friends, I met 400 pig producers recently, so we do not need any lessons about how angry they are. The villain of this pantomime, which is what it is, is not my right hon. Friend. Nor is it the Government. It is the eight other Community members, who do not share our view about the basis on which the pigmeat mcas are calculated.
  It has been very interesting in this debate to hear right hon. and hon. Members on both sides of the House talking about the attention that we should be paying to our farmland. I have felt for a long time that we should separate land from farming. That may sound a little odd. But one of the enormous problems for many owner-occupiers is servicing the money that they have had to borrow to invest in their land. That is a big strain on them.
  The House will know that the Labour Party has been discussing, although it is not yet our policy, setting up some kind of land commission so that, instead of imposing capital taxation, the State should become the landlord and not the farmer—[Interruption.] I expected Opposition Members to laugh when I said that. The idea is that the State should become the landlord, thus enabling the farmer to concentrate on farming. That will be described immediately as a State land grab. However, I was interested to see that Bernard Thorpe and Partners, who, so far as I know, are not subscribers to the Labour Party, placed advertisements in a number of papers last Friday urging readers:
  "Are you aware of the benefits of the sale and leaseback of agricultural land?"
  That could be an advertisement for the kind of Labour Party policy on land in which I am interested. It reads:
  1422
  "An opportunity to expand your farming acreage",
  and that is quite right.
  "Better use of existing capital at present invested in the freehold",
  and that is quite right.
  "Possible alternative to long-term finance which can be costly",
  and that is quite right.
  "Availability of further capital for improvements (subject to landlord's approval)",
  and that is absolutely right.
  The tragedy is that it is presented in the context of agricultural investment. It is nothing of the sort, of course. It has nothing to do with farming. It has to do with investment in land, and this has been one of the major distortions with which agriculture has had to cope in the last few years.
  Mr. Nelson: Is the hon. Gentleman prepared to accept in all objectivity that there is a fundamental difference between a farmer raising capital by a possible leaseback or by borrowing secured against the value of his land and a compulsory system, whether it be taxation such as capital transfer tax or the one proposed by the Labour Party committee to which he referred where, instead of paying tax, a farmer should be allowed to subvent part of his land to the State holding company and rent it back? That is an added cost of rent payable by the farmer on unencumbered land. That is fundamentally different from a farmer raising money secured against his own property.
  Mr. Corbett: Since the hon. Member for Chichester (Mr. Nelson) shows such an interest, I had better see whether I can get him a copy of the relevant document. There is no compulsion involved at all. It is an alternative scheme. It may be that some of us would like to see some compulsion The TUC Economic Review shows that 35·9 per cent. of all privately owned land in this country, stolen from our forefathers, incidentally, is owned by just 0·15 per cent. of the population.
  The other aspect of the problem is that, if the situation is so bad right across the agricultural industry—and I know that the pig sector is in trouble—and if on the day after the election of a Labour Government there is a massive withering away of confidence, which is what we are told, one barometer of this surely is the

  1423
  price of agricultural land with vacant possession.
  Recently a survey has been carried out by ADAS and the Agricultural Mortgage Corporation showing that over the past three years the price per acre of agricultural land with vacant possession has returned to its 1973 level. Some of us may say that that is good. Others may say that it is bad. That is not an argument which I am making. I am saying that this must be one barometer of profitability overall. The land price is back to where it was. What is more, since January 1976, when the average price was£507 per acre, it has moved to reach the figure in January 1977 of£721 an acre. That says something about the industry's view of itself. It is not my view and it is not that of the Opposition.
  We must remember that three-quarters of the purchases of land included in this survey have been made by farmers themselves. That is saying something else.
  It seems that, after the rash statements in this House about the impact of capital taxation on the industry, that message has not been believed. In practice, it has been found not to be true. The industry's initial fears about the impact of capital taxation have not been justified. Especially after the further reliefs introduced in last year's Finance Act, it is clear that farmers themselves now believe that they should be able to meet their capital taxation liabilities without significant disruption to their farming businesses.
  My final point concerns the increasing importance of the industry being aware of what consumers are thinking and saying and what they are doing with their money. There are some worrying signs. I have a document issued by the Bromley Area Health Authority and paid for by a body known as the Flora Group for Health Education, which some hon. Members will recognise as Van Den Berghs, the margarine manufacturers. It is concerned with this argument about cholesterol levels. It says to the good citizens of Bromley:
  "Use low-fat yoghurt instead of cream or soured cream. Discard the cream on top of the milk. Eat cottage cheese, curd cheese and medium-fat cheese such as Edam"—
  of which, of course, we make a great deal in this country—
  1424
  "in place of the full-fat cheeses such as Cheddar, Cheshire, Stilton and cream cheese"—
  which are the ones which we import.
  If you, Mr. Deputy Speaker, were trying to affect your cholesterol level, you would have to eat at least 40 eggs a day regularly to have any marginal effect—
  Mr. Deputy Speaker: I am not worried about the number of eggs. I thought possibly that the hon. Gentleman would produce a cheese board.
  Mr. Corbett: You would have to drink regularly about four gallons of milk a day. However, there is no time now to go into that argument.
  These are factors for which everyone in the industry must have regard. The Ministers and everyone else involved must take note of them, because fundamental changes are taking place in the pattern of consumer spending. I am sure that this is recognised. Everyone understands the pressure from the industry for a higher end price, particularly in view of inflation and fast-rising costs. But there could be a perilous consequence to all this in the High Street if it means that the people of this country are to spend a diminishing proportion of their money on what this great industry produces.
  7.50 p.m.
  Mr. John Wells: I wish to deal with the horticultural aspects of agriculture and I declare an interest as a horticulturalist.
  One third of the nation's food is of a horticultural nature, and about one third of that is imported. If agricultural costs are up some 20 per cent., horticultural costs are up much more. The bulk of today's debate is concentrated around the Common Market and the iniquitous antics of the Minister in Brussels. The fact must remain however that the horticultural section of the industry is in particular peril because of its rising costs. It is the labour-intensive sector of the agriculture industry.
  In the recent Budget the Government put up fuel oil prices. Horticulture is more transport intensive than the rest of agriculture. Greenhouse heating oil has gone up in price and the complicated machinery used in horticulture is getting even more costly. The horticulturalist uses more chemicals than the

  1425
  mixed farmer and therefore all of his costs have gone up.
  There are one or two simple things that the Government can do to assist him. There has been a very welcome grant for reservoirs at higher levels, but for only one year. Many horticulturalists who are contemplating putting in reservoirs cannot complete them within the one year. An extension of the time limit would be very welcome.
  The NFU brief that has been sent to us all makes great play about fluctuations of taxation and the problems of the general farming community. But the problems of the horticulturalist are even greater. In one year he might make very large profits but then might make nothing for two or three years. This current year will be an extremely bad year for top fruit. Who knows what next year will bring? The wet followed by the continued drought and then the wet winter last year caused great problems for the soft fruit grower.
  Many horticulturalists have the taxation problems of the ordinary farmer, but multiplied many times. It is essential that the Ministry should press this point upon the Treasury. Several hon. Members have implied that the Minister of Agriculture is a weak voice in the Cabinet. Let us hope that he will acquire greater strength when dealing with taxation.
  I wish to turn now to the question of the Covent Garden Market Authority. The Bill has gone through and a great deal of taxpayers' money is being spent.
  I see that the hon. Member for Hemel Hempstead (Mr. Corbett) is now engaged in conversation with the Parliamentary Secretary. He made his own speech a few moments ago. I wish he would now leave the Parliamentary Secretary alone so that due attention may be given to the points I am making. I am anxious to avoid tedious repetition, but I am making a number of specific requests to the Parliamentary Secretary and it would be agreeable if I could have his attention.
  The tenants at Covent Garden Market are very worried about the Minister's intentions. They want to know what he plans to do. They are negotiating with the Authority, but if they are to be forced to make a greater contribution, the
  1426
  sooner they know about that, the better. When we were debating the Bill some weeks ago hon. Members from other parts of the country claimed that Birmingham and other more remote markets had been neglected in terms of national taxation. We all know that the municipal markets get ratepayers' money and that they are supported from the public purse. I believe, however, that the Ministry must rethink its policy towards markets in general.
  I return to the question of the complicated machinery now used in horticulture and in particular to the question of increased safety regulations which are drawn up by worthy people sitting in an office with no experience of servicing complicated equipment in a muddy field. I can assure the Minister that a great many of these safety regulations are completely impracticable.
  I am the last person to want to make machinery more dangerous. We are all acutely aware of dangers on the farm, especially to children, but the regulations covering complicated horticultural machinery are sometimes stupid. I hope that the Ministry will look at the representations by the horticultural section of the NFU, particularly on the questions of tractor cabs and roll bars for work in orchards.
  The EEC grading standards on flowers are not part of the compulsory legal system. I hope they never become so. I hope that the Ministry will, however, promulgate them. These standards have had no publicity at the moment, and if they can become universally known that would be a great help to the industry. Flowers are the only perishable commodity subject to VAT. I hope that the Department can look sympathetically at some of the problems of the flower industry.
  7.58 p.m.
  Mr. John Lee: Some months ago members of the Warwickshire branch of the National Farmers Union came to see me. I thought it gratifying that they should consider it worth while to see an urban Member of Parliament. Among the problems that they mentioned was the problem of taxation. They made the case for tax-averaging over a period of time. They suggested a period of five years, and I find that acceptable.

  1427
  One needs to consider only the vagaries of the weather over the last few years to realise how vulnerable farmers, particularly those on the margin, are. Though my right hon. Friend the Minister can claim among his numerous achievements in his brief but impressive time in office that he was the Minister to give financial reparation to offset the effects of the drought, I do not think that that in itself is the answer, and there is a case for action to be taken on the question of taxation.
  This is about the only issue on which I can agree with the NFU, but it is one more thing on which I can agree with the right hon. Member for Yeovil (Mr. Peyton). His speech was extraordinary. He has a capacity for wit. He can be vinegary without malice. Many of us who have been at the receiving end of his jibes have quite enjoyed them. But today his humour was unconscious and unintentional. It amounted to an extraordinary attack upon the CAP, but that system was implemented by a Government of which he was a member. If we took his advice on that point—and I hope we shall—we should end up by busting the system altogether.
  He claims that the aims were right. Even if that assumption were correct, the Community since its inception has been able to cut the number of high-cost peasant farmers by only half, and that is not an impressive record. Nor is it a matter that we should be called upon to finance.
  One of the strangest aspects of the negotiating saga, even allowing for the unbridled enthusiasm for the mystique of a united Europe among those taking part in the negotiations, is that no serious attempt was made to sell our deficiency payments system and financial structure based on the 1947 Act to the Europeans. The good reason for this was that there was not the slightest chance of their accepting it, because their agricultural economic circumstances are entirely different. We are an enormous net importer and have a modern farming system. Most EEC countries do not come in either of those categories.
  If I criticise my right hon. Friend, it is against the background of his being quite the most promising Minister of Agriculture that we have had since Tom
  1428
  Williams. He is certainly the only Minister of Agriculture in recent years who has made a serious attempt to come to terms with the difficulties arising from this absurd system.
  I think that my right hon. Friend is being too optimistic in thinking that the system can be radically altered. I do not see how that can be done. We heard about the beef premium, the survival of the Milk Marketing Boards and milk prices, but the system is still fundamentally dependent on a financial set-up that is geared to the preservation of high-cost farms.
  Even my right hon. Friend has been unable, except in minor respects, to stave off the transitional stages that will gratuitously increase our food prices by 2 per cent. or 3 per cent. on top of anything that may result from devaluation of the green pound. That devaluation should not take place at all. The fact that it is only limited must be welcomed, but it is still a move towards fueling inflation, and, whether one accepts the basis of the social contract or not, that is surely something that we should all wish to avoid if possible. Yet we are landed with a system that unnecessarily and gratuitously increases one aspect of our cost of living.
  I wish to concentrate on the legal aspects arising out of the Minister being arraigned by the Commission for what he has done for the pig sector. I find my right hon. Friend's reasoning difficult to follow. He has deliberately broken the rules, and all credit to him for doing so. He has recognised that if the green pound is devalued further, it will not help the pig producers because it will merely increase their feeding costs and it will increase the cost of bacon to the consumer. My right hon. Friend has therefore paid a 5·5 pence per kilogram temporary subsidy. The Commission, in all its bureaucratic pomposity, has declared that action to be illegal and has taken the matter to the Community.
  My right hon. Friend's brother is bringing an action in the opposite direction as a counter-claim. If the two actions are consolidated, we shall have a determination some time in July. If we do not have the consolidation, there will be no determination before November, with the result that we shall be left in the air for several months.

  1429
  It has been suggested to my right hon. Friend that he should increase the temporary subsidy, but he has refused to do so on the ground that it would be considered provocative. To change the metaphor, I suggest that he may as well be hanged for a sheep as for a lamb. If we are to be declared to be acting illegally, it is not the amount of the subsidy, but the fact that it is in existence in defiance of the Commission that will cause the problem. I should be delighted if my right hon. Friend told the Commission and the court to jump in the lake.
  Mr. Corbett: The wine lake.
  Mr. Lee: That would be better still. The Italians got away with activity against the French that would be thought illegal, and I do not see why we should not do something similar.
  I hope that the court case goes against us. Some hon. Members believe that it may favour us. I do not share that view, because, as the Minister pointed out delicately, but clearly, it is a political court.
  I hope that it goes against us, because the sooner we have a showdown with the Commission, the better. The sooner we have a showdown, the sooner we shall be able to burst out of this system before it finally engulfs us and we find ourselves in the worst of all worlds with consumers dissatisfied because prices are too high and farmers dissatisfied because we cannot make adjustments for those who are disadvantaged by the system—and we know that some of them are. The sooner this ridiculous charade is brought to a final determination, the better.
  The Minister will need strong nerves in the next few months and not all his Cabinet colleagues share his views. I wish that the Ministry of Agriculture was more senior in the Cabinet pecking order and that the Ministry of Agriculture and the Department of Prices and Consumer Protection were amalgamated. I have nothing but a high regard for my right hon. Friend the Secretary of State for Prices and Consumer Protection, but I know which of the two Ministers I should like to see at the head of the new Ministry. The Minister of Agriculture is one of the few people we can trust to take a strong
  1430
  line with the EEC and to do his best to rescue us from the absurd situation for which he is the last person to be blamed.
  8.8. p.m.
  Mr. Alick Buchanan-Smith: I shall obey Mr. Speaker's instruction to be brief. I hope that the decision of the Luxembourg court on the special aid that the Government are giving to pig producers will not be unduly delayed. July has been mentioned as a possible date for a decision, but a lot of pigs will be produced before then and the industry will have to go through a period of great uncertainty.
  I appreciate what the Minister said about not wanting to provoke his colleagues in Europe, but I hope that everything possible will be done to bring forward the date of the hearing. If a conclusion is not reached I hope that the Minister will reconsider what he said about not being prepared to do something to help in the interim period.
  The hon. Member for Birmingham, Handsworth (Mr. Lee) said that if we adjusted the mcas, pig producers would be relatively little better off. That is true if we look at it in relation to imported grains, but we have to remember that in this country a very large number of the pigs are produced on home-grown grain and that pigs are produced on the same farms on which the grain is grown. Producers in that situation might be better off if they sold their grain rather than using it to produce pigs. Those producers are not necessarily affected by adjustment in the mcas in relation to cereal costs, yet they would benefit from an adjustment in the mcas by the higher price they would get. It is simply not true to say that if the mcas were adjusted, there would be a countervailing increase in costs in regard to many pig producers.
  I was disappointed particularly in relation to three things that the Minister said. First, when he came to the end of his speech he said that he thought British agriculture should expand. I was worried about that very conditional use of the word "should". If we look back to the White Paper of his predecessor, we see that it was very much more than "should". It should be noted from what the Minister said this afternoon that in his stewardship of the agricultural industry

  1431
  he is making everything much more conditional in regard to the future prosperity and expansion of the industry.
  Secondly, the Minister said, as on other occasions, that he must balance the price the consumer has to pay against the price the producer gets. I accept that every Minister of Agriculture has to say that, but I beg the Minister not to get the balance wrong. If he does, producers will not be able to go on producing at a loss. If producers are producing at a loss for any length of time, it is the consumer who suffers at the end of the day. Let us remember that there is an identity of interest between the producer and the consumer in this country. Let not the Minister or any other hon. Member on either side of the House try to drive a wedge in any way between the producer and the consumer, because their interests are identical.
  The third point to which I took exception was when the Minister spoke of the confidence of deeds. He mentioned particularly the farm capital grant scheme, and he indicated that there was confidence in the agricultural industry. I refer to the recent survey carried out by the National Farmers Union in my own area of Scotland, in Aberdeen and Kincardine, to which in a very short space of time there was a 50 per cent. response, with 1,300 replies. Considering that this was from only two counties in Scotland, it is extremely significant.
  With regard to beef cow and in-calf heifer numbers, we see that, compared with last June, when the survey was carried out in April there was a drop in numbers of 8·4 per cent. With regard to sows and in-pig gilts, we see a drop of over 3 per cent. in numbers for breeding. There is quite clearly a trend towards reduction there.
  But there are two much more worrying matters.
  Mr. Hamish Watt Mr. Hamish Watt (Banff) rose—
  Mr. Buchanan-Smith: The hon. Gentleman has only just come into the Chamber, and others of my colleagues want to speak. Therefore, I would rather not give way.
  These bare statistics hide two rather frightening things. With regard to beef cows and in-calf heifers, I believe that the beef industry more than any other is more representative of confidence than
  1432
  anything else because of the long period of gestation, fattening and so on. It is a much better barometer than anything else of the state of confidence in the agricultural industry. What is significant is that, while there was a decrease in beef and in-calf heifer numbers generally of 8·4 per cent., the decrease in hill areas was 20 per cent. This is very serious.
  HON. Members on both sides have talked of making more use of our land resources. I am increasingly worried that in the hill areas there is a more than proportionate decrease and decline in the numbers of breeding stock.
  With regard to the sow herd, it is significant that in the smaller herds, whereas the total reduction over the nine-month period was just over 3 per cent., in herds of under 50 sows the decline was 17 per cent. There are reasons for this and I shall not go into them now, but let the Government realise that it is the small man in particular who is suffering. It is the small man who is being forced out by the Government's present policies. I hope they will take this into account.
  With regard to dairy cows, I ask the Minister to realise the desperate uncertainty that there will be after 31st December this year. The president of the Scottish NFU and his two vice-presidents came here yesterday. One of them is a very prominent dairy-farmer from Wigtownshire, with a great knowledge of the industry. He made clear, as I know the Minister realises, how desperately anxious the dairy industry is, with food costs representing a major part of total costs. The Minister fairly said that he realised this and would make an announcement as soon as possible. I hope that the Minister genuinely fulfils that hope and makes an announcement otherwise we shall see the same decline in the dairy industry as we have seen in the beef herd and the pig herd.
  With regard to potatoes, I repeat that the Minister says that he has kept the value of the guarantee at its real value. That may be so if he regards the original starting point as fair, but it can be questioned whether that guarantee propery reflects the industry's costs. It is thoroughly cynical, in regard to something over which we have our own control, to delay the announcement of the guarantee until after planting has taken place.

  1433
  Far too often recently these debates—I want to be as objective as possible—have dissolved into an argument, or descended into acrimony, between those who are in favour of the EEC and those who are against it, between those who happen to like the CAP and support it, and those who do not. This is a common feature of these debates.
  I ask those who want to attack the CAP whether they can really put their hands on their hearts and say that deficiency payments were all that good. When we had deficiency payments, there was anxiety on both sides of the House—this is not a party political point—at the amount they were costing the taxpayer. The costs are still there with the taxpayer instead of the consumer, but they still have to be paid.
  There was worry, too, about low incomes from agricuture and about shortages of commodities. I remind those who criticise the Common Market that there were also problems of surpluses. I remember that in the early 1960s what were called standard quantities had to be introduced in order to cope with surpluses which had arisen under the deficiency payments system.
  Let us get away from this pathological opposition to the CAP or, for that matter, pathological support for the CAP. Unless we do that we are simply blind to common sense. We should avoid the entirely barren argument that we have if the debate is conducted simply on the basis of pro- or anti-EEC. We must avoid prejudice and dogma. As long as we persist in prejudice and dogma it is the producer and the consumer who suffer and whom we are sacrificing at the end of the day.
  It is true that the CAP is not working as we should like it to work. It is not common and it is not fair. What worries me most of all is that it is not being reformed in the way that we should like to see it reformed. We should not blame either producer or consumer for this. We as politicians should take the blame and get down to the job, as the Government and the other Governments in the EEC should do, of working out a new policy.
  The CAP has been criticised for creating surpluses, but surpluses themselves are not intrinsically wrong. We cannot
  1434
  predict accurately in agriculture, because of the weather and so on, what production will be. We are dealing with nature. At the same time, let us remember in regard to surpluses that in many cases it is a matter simply of good housekeeping. What housewife does not keep a certain amount of food on her shelves? It assures the availability of food for the consumer.
  I should like in conclusion to suggest two things which have to be done. First, given a surplus, we have to distinguish between what I would call a housekeeping surplus and a structural surplus. Current thinking is muddling these two. Structural surpluses must be dealt with firmly and with courage.
  Secondly, having arrived at a surpuus, we must examine the best way of dealing with it. We must realise that the best way of doing so is not necessarily by intervention buying.
  Finally, as regards reform of the policy itself, again I say that we should not be dogmatic or prejudiced on one side or the other. Let us in the EEC see whether we can marry the best features of both systems. For example, we might have intervention buying and market support for products which are storable, such as cereals and so on, but for perishable commodities we might give consumers in the EEC countries the benefit of those perishable commodities instead of exporting them to, say, Russia. Could we, perhaps, have a deficiency payments system for these?
  I believe that if we get down to it and approach the matter with common sense and reason, trying to marry the two systems, we shall be doing our duty in the House not only to the consumer but to the producer as well.
  8.20 p.m.
  Mr. Wm. Ross: First, I declare an interest as the owner of a farm, although I have not had an opportunity to farm it during the past three years.
  As what one might call an outside observer looking at the agricultural scene throughout the United Kingdom over the past two or three years, I have been struck by the way we are still greatly dependent upon the vagaries of the weather, and at no time more so than

  1435
  during the dreadful weather we have had this spring.
  Second, during my period in the House I have constantly been struck by the continuing difficulty we have in trying to reconcile our policy of the cheapest possible food with the EEC policy, which is basically a dear food policy with the return coming directly from the market place.
  Without doubt, all right hon. and hon. Members would wish to have a fairly large home production of food in order to cushion ourselves against price changes abroad, especially when we wish to go out and buy food. At the same time, we are trying to use the common agricultural policy to our national advantage. I think that the Minister has been trying, not unsuccessfully, to put the British people in the position of being able to have their cake and eat it. The trouble is that no one will complain about that so long as it lasts, but the day of reckoning will come. It cannot be avoided for ever. The Government must, therefore, remember the producers' interests in these matters.
  In that connection I draw attention to the way in which the Government responded to the problem of the meat sector in Northern Ireland, with the introduction of the meat industry employment scheme to counteract the effect of the green pound rate, especially since the green pound rate is the means used in the Common Market to get national advantage for producers—or, rather, in our case, for consumers.
  I ask the Government to take a long hard look at the milk package which the Minister brought back in the context of conditions which prevail in the milk sector in Northern Ireland, conditions totally different from those in the rest of the United Kingdom. In Great Britain 65 per cent. of all milk produced goes to the liquid market. In Northern Ireland less than 25 per cent. goes to the liquid market. Since the package depends for its efficiency on the market return from the amount of milk sold on the liquid market, this means that farmers in Northern Ireland are coming off very badly.
  Under the former policy, the relationship to which I have just referred meant
  1436
  that Northern Ireland provided a good part of what I have called the cushion in the production of milk-based products. However, as a result of the package, when the present milk arrangements, that is the milk fund ends on 31st December this year, Northern Ireland producers will be about 8p per gallon worse off than milk producers in Great Britain. In simple terms, that means the difference between profit and loss—indeed, very serious loss. I understand, according to present figures, that the price in Great Britain, is to be about 53p a gallon. In Northern Ireland it will be 45p. I know that we are efficient farmers, but I do not think we are all that much better than farmers in the rest of the United Kingdom.
  If the green pound were at par, we could, no doubt, survive. Indeed, we could compete very well in those circumstances. But in present circumstances we cannot, as the operation of mcas on imports determines the end price of milk products in this country. We therefore find ourselves with the price of milk products kept down. It is evident from past policy statements that neither the Government nor the House has any intention of getting rid of the green pound. In fact, I understand that the Minister said as much today.
  In passing, I must apologise for missing the right hon. Gentleman's speech and the speech of the right hon. Member for Yeovil (Mr. Peyton), who opened for the Opposition. Some of us were at that time cloistered with the hon. Gentleman who looks after agriculture in Northern Ireland, together with my hon. Friend the Member for Antrim, South (Mr. Molyneaux) and several representatives of the Ulster Farmers Union. We are grateful for the time which the hon. Gentleman gave us to discuss our farmers' problems in regard to milk.
  If the Government wish to continue with a policy of twisting the green pound rate to the advantage of our people, to extract the maximum advantage from the CAP, they will do well to realise that if this is to be national policy, the end result must be equitable throughout the United Kingdom and not bear heavily upon one region or one section of our national farming community. I believe that the Government have recognised that requirement in the past in Northern

  1437
  Ireland. They must take it into consideration again now and do something about it.
  I know that the Minister said that he would soon announce the price of milk in the United Kingdom for the period after the end of 1977. In my view, it should not just be done soon. It should, if possible, be done at once, because it is essential that the people concerned with milk production and milk sales in Northern Ireland have that information so that they can determine their future pricing policy.
  We hope that the Minister will take on board what we are putting to him so plainly today. If farm production in Northern Ireland is to expand, it is vital that the dairy sector, which is the basis of agriculture in a grass growing province such as ours, shall prosper and that we continue to have a good and large dairy herd, since so much of the rest of agricultural production in Northern Ireland depends upon it.
  One could say much more in this debate, especially about taxation, both capital taxation and taxation on incomes, in Northern Ireland and throughout the United Kingdom. However, those matters have already been referred to by other hon. Members and, since the problem of milk pricing in Northern Ireland is so important, I have restricted myself to that one issue in the hope that the Minister will note what I have said and take the necessary action.
  8.27 p.m.
  Miss Joan Maynard: I shall confine myself to speaking about an important group of people who have not so far been mentioned in the debate. We have heard a lot about the farmers' problems, there has been reference to land owners and to the key importance of land, but of equal importance is the worker to work the land.
  The farm worker is an essential and integral part of the industry. The 50 per cent of our food which we produce in this country could not be produced without our farm workers, with their skills and adaptability. They have adapted to the most mechanised agriculture in the world. I am sure that all hon. Members will agree that the farm worker is hard working, conscientious and loyal.
  1438
  Moreover, in my opinion, he has the right kind of humility, which is a rare quality indeed.
  Despite the good qualities of our farm workers, they are still paid a wage that is far too low. We have EEC prices without EEC wages. The basic rate today for a farm worker is£39 for a 40-hour week top line. Some hon. Members will say that some of the workers get over the basic rate. But that depends to some extent on the kind of job the worker does, the kind of area in which he works and the kind of competition there is for his labour. The dairymen and the farm managers get the highest rates but their average earnings are running at£20 a week below those in industry.
  The main cause of this is that the farm worker is still not as organised as many other workers. Some people think that if the industry is doing well the farm worker does well as a result. They think that there is an identity of interest between the farmer and the farm worker. But all the facts disprove that.
  One can look at the deep South of America where the farmers in Carolina at one time were the richest in the world. They got rich with slave labour and they fought a bitter and bloody war to retain it. Then one can look at the situation much nearer home—our own industry in the 1950s. Farming was booming, but the farm workers received wage increases of four shillings, six shillings and eight shillings. All the facts disprove the argument of an identity of interest.
  Government policy and the farm workers' loyalty to the social contract mean that the farm worker has made considerable sacrifices. The Chancellor gave certain tax concessions in 1976, but these were worth only 28p to 31p a weeek to farm workers. No farm worker's net pay has increased by more than 6·8 per cent. above the 1976 figures, but inflation during the same period has run at 16·6 per cent. That gives us an idea of the cut in living standards of these workers.
  From January 1973 to January 1977 tax and national insurance deductions have increased as a percentage of gross pay from 19 per cent. to 28 per cent. A single person earning the minimum rate suffered an 8·3 per cent. fall in real take home pay in the 12 months to January 1977. Not only are the basic rates intolerable for the farm workers, their wives and

  1439
  families, but they cannot be good for the industry. It is no wonder that we have an ageing labour force and that the farmers wanted to hang on to the tied cottage system in order to bring labour into the industry. They wanted to hold this labour through the tied cottage system and pay low rates for it. [HON. MEMBERS: Rubbish!"] It is not rubbish. The facts are there for everyone to see. During the passage of the Rent (Agriculture) Act, a Conservative Member raised the point that the catering industry often provided accommodation in order to bring people in. This is yet another low-paid industry.
  The new Rent (Agriculture) Act has not been working long enough to make an assessment of it, but I am rather perturbed about the way in which the ADAC committees are working. They have supported the farmers' applications in nearly 100 per cent. of cases, and their claims that they need the cottages to run the industry. In fact, one result of this may be that there will be a bypassing of the ADACs altogether and people will go straight to the local authority. If the ADACs always support the farmers' applications it would be quicker to go straight to the local authorities.
  The important point about the Act is that it gives our people security of tenure, and this gives them a new dignity and sense of security. I believe that it will also help them on the wages front. The farm workers will be less inhibited and freer to fight for a decent wage now that they enjoy security of tenure for themselves, their wives and their families.
  The question of safety is important in every industry and particularly so in agriculture. There is much still to be done on the safety front. We think of the mining industry as being very dangerous, but if we look at the figures for 1975—the last year for which they are available—they show that more people were killed and injured in farming than in mining. This gives some indication of the dangers of working in this mechanised industry. We need more safety inspectors and more safety inspections.
  One of the things that our people are demanding is that the tractors that they have to use daily should go through an MOT test in the same way as other vehicles. The long trailers and tractors
  1440
  which they have to drive on busy roads today should have flashing indicators to indicate to other road users what the drivers are about to do. [Laughter.] An hon. Member laughs, but I would remind him that farmers also die because of accidents.
  Mr. Peter Mills: It all has to be paid for.
  Miss Maynard: No one denies that, but if safety and people's lives are not worth paying for, not many things are. In view of all the traffic on our roads today, when someone is driving a slow-moving vehicle like a tractor with a long trailer, it should be possible to indicate properly to those behind what he is going to do. If that is not possible, there are likely to be considerably more accidents.
  The farm labour force has fallen dramatically over the years and it is now ageing and badly paid.
  Mr. Nicholas Winterton: Why?
  Miss Maynard: I have already explained why. My view is that they are badly paid because they are less well-organised than other workers.
  Mr. Winterton: No. It is a cheap food policy.
  Miss Maynard: These things will be put right first and foremost by a strong union. If we can recruit more people into the union and use that union's strength, we shall be able to win better wages and conditions.
  We hear a lot of talk about the good labour relations in the industry. They may have been good for farmers, but they have not been good for my people. We hear a lot about co-operation in the industry, but all the co-operation has been from the side of the workers and it is not they who have benefited from it.
  I hope that the Minister will consider the composition of the Agricultural Wages Board and its appointed members. The present appointed members have little understanding of the real situation that our members face or of their wages, conditions and living standards. They come from an entirely different stratum of society. I hope that the Minister will

  1441
  consider this matter at the first opportunity and appoint some people more in touch with reality, with a real sense of justice. When he does that, I hope that those people will make some more realistic decisions on the wages board than have been made in the past.
  8.38 p.m.
  Mr. Robert Boscawen: I wish that the hon. Member for Sheffield, Brightside (Miss Maynard) had come with me and some other hon. Members from both sides of the House a few days ago to visit a collective farm in the Soviet Union. We saw the high standard of living of those who had the privilege to work there and how well off they were. Then we went into the towns and saw the food queues. We then knew who actually paid in that country—the consumer. We cannot achieve the high rate of production and the high wages that we want to see in the countryside, both for the farm workers and for the food-processors and producers, if the producers do not get a reasonable end price for what they produce.
  The Minister did not answer any of the questions that the ordinary sensible producers, farm workers and processors that I meet are asking. He did not say why he took so long in making the announcement about milk. That created a lack of confidence for a start. Now that he has finally announced it, why has he not said what will happen after 31st December? How can anyone plan a dairy business and the future of his herd when he does not know what his end price will be after 31st December? I hope that the Minister of State will look at that again. These questions have not been answered.
  Why was so little said in the debate about the difficulties of producing food against the increased costs of machinery, fuel, fertiliser and feedingstuffs? Why did the Minister not explain to the House why those goods have gone up so much in price? Was not the enormous and devastating devaluation of the real pound—not the green pound—last autumn the cause of these troubles? My constituents want explanations.
  Why are people such as farm workers, producers and processors—who are the most efficient in the world—receiving so
  1442
  little advantage from their increased efficiency? They want to know the answer to that question. What has the Minister to say about the increasing consumer reluctance to pay high prices for food? That is a natural reluctance because consumers do not have the money in their pockets.
  What is the solution to the high input costs and the reluctance of the housewife to pay enough to cover those costs at the other end? We have heard nothing about consumer resistance to pigmeat nor about consumer resistance to British cheeses and other dairy products.
  Let us hear more about how the Minister is to find a solution to that problem. Let us have a down-to-earth, practical suggestion to help the farmer improve his sales and marketing. Marketing must receive more attention in this country. With consumer resistance building up because of higher prices an improvement in marketing is essential.
  I welcome what the Minister said about the hopeful signs for the future of the marketing boards within the EEC. A firm message should go from this House that the producer marketing boards must stay. They have been the foundation of our successful, efficient agricultural industry over the past 30 years. That is particularly true of the Milk Marketing Boards.
  We must have practical answers to the problems. Farmers do not all understand the highly complex problems and calculations that the Secretary of State discussed. They do not understand about mcas and the green pound. One can spend time attempting to explain to one's local NFU about the difficult calculations, but they really want to know the practical answers that effect them on the farm and in the food processing industry. Let us have some of those answers. Without them confidence will not be built up on the land. We must have some sensible answers to the questions that have been asked.
  The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. E. S. Bishop): We have been asked many questions, but what would the hon. Member for Wells (Mr. Boscawen) recommend for the pig industry? We all know the problems but we have heard little from the Opposition about what they would do if they were in power.
  8.45 p.m.
  Mr. John Watkinson: The hon. Member for Wells (Mr. Boscawen) touched on one of the major problems that confront the agricultural industry when he referred to the fact of consumer resistance. He said that his farmers were not interested in the complex economic realities of the British economy at present and the complex realities of the CAP. Nevertheless, it is vitally important that the debate is widened in economic terms so that we can look at the other side of the equation concerning the food processing industry and can confront ourselves with the problems that arise on the demand front.
  The simple fact of the matter is that as a result of the very high prices existing at present, there is, as the hon. Gentleman rightly pointed out, considerable consumer resistance. Accepting that thesis, I cannot altogether follow the argument that then says that the answer to consumer resistance is to increase prices. That seems to be what Opposition Members are asking for, and it seems to be counterproductive.
  The survey published by the Ministry of Agriculture a few weeks ago illustrates the fact that the housewife in Britain is buying consistently less of a whole range of products. That has been emphasised in an article by Mr. Simon Harris in Farmers Weekly. The article refers to the fact that there will be a slump in the United Kingdom beef consumption in the coming year It also says that there will be a fall-back in consumption over a wide range of products.
  The question that cannot be escaped is this: in these circumstances, is the solution to raise prices? The Minister himself visited Smithfield recently. The workers at Smithfield were demanding that prices should be brought down in order to lift the meat products off the market.
  It is vital that in this general debate on agriculture, while we acknowledge the problem of the producer and accept the difficulties that he confronts and the enormous increase in costs, we must look seriously at the other side of the equation—namely, the housewife, and the consumer. We must see whether we can seriously put forward policies that will involve yet a further increase in prices.
  1444
  One of the reasons why I am opposed to the CAP is that the essence of that policy, as has been pointed out very eloquently by my hon. Friend the Member for Renfrewshire, West (Mr. Buchan), is to produce higher end prices. The farmer has to look at the high prices of the market place in order to get his return. However, the central argument that I am putting forward is that at present it would he counter-productive in a whole range of sectors of the agricultural industry to increase prices. I do not think that one can escape from that reality.
  In an intervention, one of my hon. Friends referred to the pigmeat industry. I must say that the situation among pig farmers in my constituency is extremely serious. Pig farmers came to lobby the House of Commons in a delegation from my constituency. I notice that the Minister has just returned to the Chamber. I pay tribute to him for the fact that he met pig farmers from my constituency, and gave a subsidy, as we know. However, my right hon. Friend, or his colleagues, must return to Europe and say there that it is not his business to preside over the destruction of an industry. If nothing can be yielded on mcas, we shall seriously have to consider increasing the subsidy, because we cannot stand idly by and watch an industry being destroyed.
  Pig farmers in my constituency have pointed out to me the enormous organisation behind the sales of Danish produce in this country. I think that although we claim to be one of the most efficient agricultural units in the world we need a much more developed sense of marketing. I should like to see a rationalisation of the farmers' co-operatives in this country. We must wake up to the fact that in a European context we are now dealing with very big business interests and our small co-operatives are not sufficient to counterbalance the weight and influence of, say, the Danish pigmeat producers.
  Finally, I wish to repeat the point made by my hon. Friend the Member for Renfrewshire, West about the taxation of farmers. The point has already been pressed from both sides of the House. All of us who are involved in agriculture and interested in it seem to be agreed that a change would be beneficial to the farmer. We had high hopes that there might

  1445
  be something in the Finance Bill, which is now in the House. I do not know whether it is too late to do anything. It is an area in which my right hon. Friend the Minister could give direct assistance to our hard-pressed agricultural industry. I hope that he can lean on my right hon. Friend the Chancellor to do something about it.
  8.51 p.m.
  Mr. John Farr: The Minister did his best to reassure the House with regard to some of the fears expressed by my right hon. Friend the Member for Yeovil (Mr. Peyton), but there is no doubt in the minds of many people that the right hon. Gentleman has recently very much inclined to one side of his dual responsibility. He has a very difficult job, almost unique in Europe, being responsible for agriculture, fisheries and food. Such a job is not at all what is to be found in the EEC. It seems to me that in recent months the right hon. Gentleman has come down very much on the side of his responsibility for providing food at reasonable prices to the consumer, and as a result the producer has tended to suffer.
  We are on the side of the consumers, but I urge the right hon. Gentleman to remember that the best way in which he can help the consumers in Britain is not to do what he appears to be doing now but to encourage home producers to expand their output. In the long run that will prove to be in the interests of British consumers.
  I want to speak briefly about the points raised with me by constituents who have troubles relating to agriculture. The first concerns pigs, a subject discussed at length in the House. The Minister explained very fully how he is in the process of being taken to the European Court for an alleged contravention of the regulations. I would say to him and the House "Don't be so naïve about these things." Let us consider how the others do it. Instead of giving a straightforward subsidy which can be read fairly easily as being against the rules of the club, the French give a subsidy but write into the terms of the contract, when it is passed in the domestic Parliament, a clause saying that, as and when the producer's financial situation improves, he will return the subsidy to the Government. It is then
  1446
  regarded as a loan and, I understand, does not conflict with Community laws.
  We must wake up to such ideas. Forthright and open people such as the Minister and myself, and probably most hon. Members, feel that they conflict with our natural way of doing things. We like to call a spade a spade and say what we think. The man who speaks openly is often taken for a mug. If I were a Minister I should consider acceding to any ruling laid down by the European Court, and I should begin again with a greater subsidy and include a provision to allow the subsidy to be returned by the producer when the financial situation improves. That would obviate the difficulty.
  Something must be done for pig producers. Breeding herds and output are going down. The House heard an interesting speech from my hon. Friend the Member for Buckingham (Mr. Benyon), who dealt with the processing of pig products. My hon. Friend the Member for Westmorland (Mr. Jopling) emphasised the effect of the loss of 11,000 jobs in meat processing plants. The writing is on the wall, and it is up to the Minister to take some action.
  The hon. Member for Brecon and Radnor (Mr. Roderick) referred to the common agricultural policy, and it is clear that he and a number of his hon. Friends blame that policy for our present troubles. The hon. Gentleman suggested that we should go back to the old guaranteed price system and import cheap foods. I disagree with that point of view. I opposed our application to join the Common Market and indeed I still do, although I accepted the result of the referendum. However, as an agriculturist, I thought that the one feature that would benefit the United Kingdom in the Common Market was the strength of the CAP. I felt that, if it were properly administered, it could assist British agriculture, and hence European agriculture.
  I believe that the CAP system is a good one, but that it requires considerable amendment. [Interruption.] I wish to say to those Labour Members who make sedentary comments that the days of cheap foods are gone for ever. Time has moved on since the days of the Commonwealth sugar agreement, on which my hon. Friend the Member for Holland with Boston (Mr. Body) is such

  1447
  an expert. In the five or six years since we abandoned the old guaranteed price system the amount of cheap food has declined.
  However, food production has grown at a slower rate than has the world's population. By the time we reach the year 2000, the world as a whole will be short of food. Whether we like it or not, the days of cheap surpluses of food available in vast quantities are dead and gone. I do not like the situation, but we must accept it as a fact. We must accept that the common agricultural policy is not working well, and it is up to the Government to make it work more efficiently. It is essential that we achieve greater self-sufficiency.
  A few years ago the Government produced a wonderful document entitled Food from Our Own Resources". The drought pushed them off target but the variance between the different commodity projections for 1977 and the results that we have arrived at are alarmingly great. The achievements in 1977 are nowhere near the steady 2½per cent. expansion annually that was projected in "Food from Our Own Resources". That is a worrying feature. I note that the Minister is nodding his head in agreement. Surely the whole House will agree that we must concentrate on increasing our self-sufficiency in all commodities in the interests of the producer and in the interests of the consumer.
  9.1 p.m.
  Mr. Richard Body: We are talking about the plight of the livestock industry, and much of that plight can be attributed to our pursuit of self-sufficiency in cereals.
  I often drive through the constituency of my hon. Friend the Member for Harborough (Mr. Farr), and I note that the green fields are disappearing. In their place are acres and acres of winter wheat. My hon. Friend must be familiar with the old farming saying "Up corn, down horn". It is an old saying and very true.
  It is right to say that not for very many years has horn in the form of milk and meat producers been feeling so down. However, there is no complaint from those who are growing corn. I can vouch for that, because in my constituency we grow most profitably many acres of excellent corn and gain high
  1448
  yields. This is the dilemma in which we find ourselves.
  I am not sure whether the Minister of Agriculture, Fisheries and Food appreciates the seriousness of the position. I refer him to the 1977 annual review, table 26, page 42, which contains perhaps the most startling of all the facts in the review and perhaps the one most relevant to the debate, namely, that feedingstuffs have increased in price by£459 million in one year. I wonder whether the right hon. Gentleman appreciates the gravity of that. That represents an increase of 35 per cent. in one year.
  There are about 180,000 farmers using compound feedingstuffs. The increase means that the average farmer is now having to pay£2,500 more this year than last year. As many of them are small farmers, that£2,500 last year was their net income. It follows from that that very many of them have had no net income this year. It has already been said that about 75 per cent. of the cost of pig production is in feedingstuffs. The proportion is considerably less for dairy farmers.
  Naturally the proportion varies with the quantity and quality of the grass, but feedingstuffs are still a major item. The fact is that we have produced in our countryside a very efficient form of livestock production, but it has been based upon a premise that we had access to cheap cereals. For year after year we had tons of cereals coming to our farms. That enabled us to go over to feeding our livestock in a way that Continental farmers have never sought to do.
  We have pursued the policy of self-sufficiency in wheat, growing more and more wheat but at a high cost. We know exactly what that cost is when we look at the import levy. We notice straight away that there is a difference between the world price for wheat and the price at home. I ascertained from the Intervention Board today that the present levy on wheat coming into the country is no less than£34·15 a tonne. That is very much more than the price of wheat a few years ago. It is a direct tax not only upon the housewife but upon every livestock farmer. Those who want self-sufficiency and more and more wheat production at a high cost much ask themselves whether they are justified in imposing

  1449
  a tax upon food coming into this country of no less than£34 a tonne. That represents some 39 per cent. of the total price of the wheat coming in.
  Feedingstuffs have gone up in price as as result. No one can dispute now that feedingstuffs in this country would be cut in price by£20 to£25 a tonne were it not for these import duties. That is a fact. If there were such a cut in the price of our feedingstuffs, there would be a veritable bonanza for our pig producers and dairy farmers because of the present retail price of food. There is no escaping these facts.
  If the right hon. Gentleman accepts that these import duties have put a savage burden on our livestock producers, I hope that he will make use of his time in the Council of Ministers to fight for a reduction. It is no use squealing or bleating about mcas or more subsidies. The root of the matter is in the artificial increase in the price of feedingstuffs. These import duties are no more and no less a tax on food and cannot be justified at their present level. They should be brought down, and the livestock industry, when it realises the facts, will look to the right hon. Gentleman to see that they are.
  9.6 p.m.
  Mr. William Hamilton: I am grateful to the hon. Member for Holland with Boston (Mr. Body) for allowing me two or three minutes to give some facts about the common agricultural policy and the anxiety among some European politicians. I want to put on record some views arrived at by the Socialist Group in the European Parliament, reached after many hours and days of debate on the CAP. The Socialist Group is the biggest in the European Parliament. It is the only group which has representatives from all nine countries. On it is a considerable number of agricultural experts and farmers from virtually every member State. I shall not develop the arguments on the CAP because they have been developed enough.
  One of the main criticisms of the CAP has been over-production of various commodities, such as wine, beef and butter. The conclusions of the Socialist Group are:
  "In cases of overproduction, restrictions should be placed on the marketing guarantees
  1450
  or on the obligation to intervene. Intervention measures should be confined to small, temporary surpluses, and the margin between guide and intervention prices should be increased. Products should only be bought in according to clearly established quantitative criteria; in disposing of any surpluses, priority should be given to food aid for poor countries and to improverished groups in the Community, not to countries outside the Community which are not poor.
  While recognising certain advantages of the CAP, notably the reasonable guarantee of adequate supplies of food at a time when all the signs point to increasing world shortages and widespread malnutrition in many parts of the globe, as international Socialists we believe the EEC agricultural policies must be more outward looking, more efficient, fairer to the consumer and defensible in both international political and economic terms.
  In the Socialist view, the CAP as at present operating is inefficient, wasteful, inward looking, unduly costly, of too little benefit to the consumer and often, too, to the smaller producers.
  The Socialist Group considers that the implementation of the proposals contained this document will contribute more effectively to the realisation of the aims of the common agricultural policy, and would involve less expense than some of the existing measures."
  That sums up the crux of the criticism of those who are pro-European but very anti-CAP.
  In conclusion, I must say that over the last hour or so I have been suffering from anger at the recently announced ambassadorial appointment to Washington. Mr. Peter Jay recently wrote a strong article against the farmer in The Times. I do not know whether that has led to his appointment in Washington, but I hope that he will serve the country better there than he served the farmers in his article in The Times.
  9.10 p.m.
  Mr. Michael Jopling: I do not intend to follow the hon. Member for Fife, Central (Mr. Hamilton) on his last point. But I am glad that time was found for the hon. Gentleman to speak, because, unfortunately, the whole debate on the Labour Back Benches has been totally dominated by the speeches—most of which we have heard before—from those who spend a great part of their time decrying both the concept of the European Community and the CAP in particular.
  I hope very much that the Government will take to heart what has been said from this side of the House during the debate. I now feel very pleased that the

  1451
  Opposition decided to spend their time today debating agricultural matters. What has emerged from the debate is that, certainly in the view of this side of the House, we have seen a radical shift in the Government's agricultural policies over the past few months. It would not be unfair to say that the date on which this shift occurred was exactly the date when Lord Peart of blessed memory was dispatched to another place.
  That event brought to us, for the first time since the war, a Minister who represents an urban seat and has no constituency knowledge of agriculture of which I am aware and, as far as I know, no other outside personal interest in agriculture. However, I think the Minister will agree that he was welcomed by farmers and by both sides of the House with courtesy and good will. Farmers in particular showed that they were prepared to work with him on the assumption that the good will they showed to him was shared. But that is not quite how it has worked out.
  As my hon. Friend the Member for Buckingham (Mr. Benyon) suggested in his speech, the honeymoon is now over. Farmers have seen that the Government are prepared to put other issues before the need for an expanding and prosperous food-producing industry in this country. The Government are prepared to put before that a continuation of the old anti-EEC campaign, of which we have heard so much in this House over the years. Second, they have been prepared to put before a prosperous and expanding agriculture a short-term and short-sighted policy of setting themselves up as the consumer's champion without regard to the fact that, as a result of these new policies, the housewife will in the long run be forced to pay through the nose because of the short-sighted nature of those policies.
  What saddens me most is the way in which the Government have conducted themselves in Brussels. I was at the Commission just before Easter and I was immensely struck by the widespread disillusion and anger at the way in which the British Government have been conducting their negotiations over there. This was summed up by the chance remark, which perhaps the Minister has already conic to regret, when he told us during his opening speech—I think I wrote it down properly—that good will does not matter a button in negotiations. To me that
  1452
  seems a very funny way of conducting negotiations.
  I fear very much that as a consequence of this new mood in Brussels, as a result of the attitudes of the Government, our chances of negotiating other vital issues will be seriously damaged. We believe that the Government should be prepared to use the green pound as a weapon to get agriculture in this country on an expansionist path.
  The Minister gave an illustration of the 10 per cent. devaluation. There is no need for a 10 per cent. devaluation if we could now and again have a devaluation of a much more modest nature and get in return some of the things that we badly want. That is the way we believe the Minister should be implementing his strategy to help farmers in this country.
  But farmers are at least entitled to fair competition now that we have joined the Community. If they are to do what the Minister asks in terms of expansion, they should be able to compete on a fair basis knowing that there is not this immense green pound disparity for ever stacked against them.
  The other matter of which farmers are only too painfully aware—and this was drawn attention to by my hon. Friend the Member for Wells (Mr. Boscawen)—is that, basically, what farmers suffer from today is this Government's inability to control inflation. This is the basic central reason why we have got ourselves into our present difficulties.
  In this debate we have heard speeches from various parts of the House—and I have in mind especially those of the hon. Member for Cardigan (Mr. Howells), the hon. Member for Brecon and Radnor (Mr. Roderick) and the hon. Member for Birmingham, Handsworth (Mr. Lee)—suggesting that it would be a good idea to return to the old system of deficiency payments and guaranteed prices which we knew from the end of the war until the early 1970s.
  I beg hon. Members who are attracted by a return to the old deficiency payments scheme to think again before they take up that argument. I was very pleased that so many of my hon. Friends, including the hon. Member for Buckingham the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) and the hon. Member for Harborough (Mr. Farr),

  1453
  made the point that the old system of deficiency payments was running out of steam very badly when we got towards the end of the 1960s.
  Throughout the 1960s agricultural expansion and vigour were slowing down sharply. I can remember the period when the right hon. Member for Anglesey (Mr. Hughes) was Minister. It was then that it became apparent that the deficiency payments system was running out of steam. It was also that famous time when we had to creep out of the back door at a meeting in the constituency of my hon. Friend the Member for Devon, West (Mr. Mills).
  We have to remember that throughout the 1960s the deficiency payments scheme was having to be supplemented and buttressed by other devices, including standard quantities, minimum import prices, quotas and intervention—all the other devices to support the agricultural market which we now know so much better as full members of the system. If we were to return to the old system of deficiency payments, the cost of supporting agricultural prices would be astronomical and totally prohibitive financially. I cannot believe that it is politically practical today.
  If we are to support an agricultural market, we have to use all the techniques available to us. These techniques cut across party philosophy. Most of them were used by the Labour Government in the late 1960s—basically, the system of import levies, the use of quotas in certain areas, the deficiency payments system in a modified form, and intervention as well to back up a glut in the market.
  Mr. Geraint Howells: Let us assume for a moment that the hon. Gentleman becomes Minister of Agriculture. When he takes office, will he do away with the deficiency payment for lamb?
  Mr. Jopling: I think that the hon. Gentleman means for beef.
  Mr. Howells: No. I mean for lamb.
  Mr. Jopling: The short answer is "No". Let me take the hon. Gentleman back to the summer of 1974, when my right hon. Friend the Member for Cambridgeshire (Mr. Pym) recommended to the Minister's predecessor that he take up a deficiency payment system for beef.
  1454
  This was long before the Government took up the present variable premium system. It was our idea that this should be done. That shows that we are perfectly prepared to consider any deficiency payments system. But we are not prepared to consider a support system based totally on a system that did not work and that is outdated.
  That is the way in which the CAP works now. All those techniques are used within the CAP. That is the right way to support an agricultural industry. But Labour Members make the huge mistake of attacking the system when they should be criticising the way it is being implemented in certain respects.
  It is perfectly legitimate to attack the Community and criticise the Commission when they do not take sufficient action to stop surpluses, when they do not dispose of surpluses as we would wish, when they introduce rather foolish proposals such as the margarine levy, and when they do not seem to give sufficient support to the cult of efficiency. We can attack them when they do not seem to appreciate the value of marketing boards, which we in the Conservative Party favour so strongly. It is, however, a mistake for Labour Members to attack the principle of the CAP.
  Let me sum up the position of British agriculture. We have heard throughout the debate of declining confidence, and we must consider what evidence there is for that. Incomes reached their peak in real terms in 1973–74 when my right hon. Friend the Member for Grantham (Mr. Godber) was in charge. We have seen since then a drop in farm incomes of 20 per cent. in real terms. That hardly provides a base from which to view the future with confidence.
  I was astonished to hear the Minister call in aid the fact that there were now more applications for capital grants. Has he forgotten, however, that a short time ago higher rates of grant and a simplified form of application were introduced, and does he not realise that that naturally boosted the number of applications? The Minister was on a totally bogus point. The industry now finds itself short of cash and with a declining investment programme.
  Against this background what are the prospects for the year ahead? As a

  1455
  result of the price review package the industry will get a prices increase of around 10 per cent. when costs have gone up 20 per cent. It is hardly surprising that people are speaking of cutting back. I cannot understand why the Minister did not refer to this point
  In smooth and soothing terms the Minister said at his Press conference the other day that the package represented a good outcome for the farming industry and that it should help production to expand. I cannot think of a less realistic attitude. When he uses such sentiments the Minister reminds me of the dentist saying reassuring words as he gives the patient the gas and starts to take all his teeth out. This approach merely adds cold water to the cold comfort approach from which the industry is already suffering.
  I was surprised that the Minister told us that all is well in the agricultural industry because prices for cattle and sheep are buoyant. Has he not heard of inflation? Does he not realise that as a consequence of Government policies, all prices are up in every sector? Has he not been told about what is going on in the beef sector? Plenty of hon. Members have told him today that, solely as a result of the Government's failure to deal with inflation, we have a vast discrepancy over the Irish green pound and a flood of beef coming into this country and causing heavy losses for our beef farmers.
  I am particularly concerned about what is happening to the young stock in the industry. The number of heifers in calf for beef is down by 19 per cent. in the past year and the Meat and Livestock Commission has forecast that beef production this year will be 12 per cent. down on last year.
  I was disappointed that when the right hon. Member for Anglesey asked the Minister whether he would make an announcement today about milk prices after 1st January next year, the Minister was not able to give any sort of answer. We cannot expect the milk sector to have confidence when it does not know where it will be the early part of next year. Even if autumn price is held, that will not give the levels of profitability to which the Minister has been referring.
  1456
  He said in a Written Answer on 6th May:
  "As a result of the guarantee determination, I estimate that dairy production should be more profitable this year in real terms than it has been for several years and I hope that dairy farmers will now feel able to look forward with confidence and expand their production in line with the objectives set out in 'Food From Our Own Resources'."
  At this time, the Milk Marketing Board put out a statement referring to the price up to the end of the year and saying:
  "It is reasonable to assume that the price will be maintained at this increased level during January to March. This additional return which could be had from the period January to March will be needed if the average producer margin is to be held at the levels of the last 2 years in real terms."
  That means that until farmers know that they are going to get the same price after 1st January as before that date, there is no question of their being financially better off. I cannot understand why the Minister should have made such a statement.
  We see little prospect of expansion for the dairy industry. On the contrary, we see, as with beef, a cut-back in the young breeding animals joining the dairy herd. Dairy heifers in calf with first calves are down by 14 per cent. on last year. This shows the cut-back right across the cattle sector. When the young breeding cattle are so badly affected, we are bound to see worse figures later in the year.
  The Minister's greatest failure lies in the pig sector. He has presided over a tragic decline in the pig herd, with losses ranging from£2 to£8 per pig. There has been a reduction in the breeding herd of 10 per cent. in six months and a sharp decline in the number of young animals. The number of gilts in pig is down by 19 per cent. while the number of barren sows for fattening has increased by 43 per cent. Sows are not being put back into the herd but are being killed because they are unprofitable.
  Mr. Buchan: Will the hon. Gentleman answer the question that his right hon. Friend the Member for Yeovil (Mr. Peyton) did not answer? What would he do? Would he introduce another subsidy, accept a revaluation of the green pound, or what?
  Mr. Jopling: The Minister is constantly telling us what he has done so far. He has referred to the action he took in

  1457
  October last year, to the 50p subsidy and to the latest green pound devaluation. He keeps telling us that he will be taken to court, as though this is some sort of a joke, but the truth, as my hon. Friend the hon. Member for Bury St. Edmunds (Mr. Griffiths) said, is that the Minister's efforts have not worked, and his policy on pigs is a total shambles. He knows that the best step would be to recalculate the mcas, and we all know that he missed the boat last October.
  The Minister has now suddenly started saying in the past few months that he was not able to renegotiate the mcas in return for the green pound devaluation last autumn. He has not been saying this very long and he has produced this rabbit out of the hat quite recently. It is probably no coincidence that it was after Commissioner Lardinois had left the scene. We have been accusing him of this for many months, and only very lately has he said that the Danes wrote a letter saying that they would not accept it.
  The Minister has put himself forward as the great negotiator, the "tough guy", but if he was put off the negotiations merely by a letter from somebody in the Danish Embassy in London, I fear very much for the course of our negotiations, and I cannot help feeling that we are right in putting down this motion tonight.
  Mr. Buchan: What is the answer?
  Mr. Jopling: I have explained it. I am perfectly certain that we should never have got into this situation.
  To sum up, there are few people who will say today that agriculture is in good heart. One of those happens to be the Minister, who still goes round talking about the White Paper and the targets set out in that. He has told us today that we must get back to expansion. The White Paper "Food from Our Own Resources" provided some sort of longterm policy.
  My right hon. Friend the Member for Stafford and Stone (Mr. Fraser), in what I thought was a notable speech, asked for a long-term policy. He should be forgiven for forgetting that we have a long-term policy in the White Paper. But the fact is that we are miles out on our targets and that we must have an expansion
  1458
  of about 11 per cent. a year over the next three years if we are to get back to those targets.
  I quite understand that the drought has set the Government back, but what I did not understand—I do not know where the Minister gets his figures—was when he told us that before the drought agriculture was expanding. I do not know who writes the Minister's speeches—I assume that he must write them himself—because the return for June 1976 shows what happened to livestock numbers over the previous two years. In the two years up to the start of the drought last June cattle numbers were down by 8 per cent., sheep by 1 per cent. and pigs by 7½ per cent. Who can have told him to say that the industry was expanding at that time I cannot imagine.
  The Minister does not yet seem to have learned that food production cannot be turned on and off like a bath tap. The Government have been far too concerned with posturing over short-term food prices rather than concentrating on ensuring that we have the food over a longer period. The Government do not yet seem to have realised that it is highly speculative to rely on world markets as the bais of our food supplies. I should have thought there were enough painful reminders and evidence to show what a dangerous policy that is.
  We have only to look back to the years after the last war when we were short of beef, or to a few years ago when there was a shortage of fish meal on the world market. We recall the position two years ago over the shortage of sugar, and the position today over the price of tea and coffee, and perhaps soya meal in the next year. We have only to recall these things to see how dangerous the Minister's policy is today.
  Surely with our balance of payments problem, with the strategic advantages in supporting home food production and with the volatility of world food supplies an expanding home food industry is the housewife's best bet in the long run. What a tragedy it is that, for the first time since the war, we have a Government who have turned their backs on that philosophy.
  In the past the Labour Party had always understood that policy and accepted it. I believe that the way this

  1459
  Government are pursuing their agricultural policy would make Tom Williams, to whom one hon. Member referred, turn in his grave.
  It is tragic that the Government have moved away from that policy for reasons of short-term vote catching and long-term antagonism to the European concept. We intend to show tonight that we do not turn our backs on this concept, and I invite all those who oppose the Government's policies to join us in the Lobby.
  9.35 p.m.
  The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Gavin Strang): We have had a useful and predominantly constructive debate. I am not surprised that the hon. Member for Westmorland (Mr. Jopling) made such a hysterical speech in winding up for the Opposition, making many wild assertions which he cannot substantiate. The remarkable feature of the debate—this has been clear to those of us who have sat through most of it—is that although it was supposed to be a censure debate, there has not been much sign of censure. The two dominant themes of the debate have been the state of agriculture and the overall working and future development of the common agricultural policy, and I shall address myself to both those general issues.
  In considering the state of the industry today, I shall quickly deal with the various commodities. Milk, of course, is the dominant commodity. It is the commodity which accounts for a large proportion of agricultural gross national product, and it is also the commodity production of which, the Government believe, ought to be expanded in the national interest.
  Perhaps I should point out at once that that was the central objective of the analysis which went into the White Paper, "Food from Our Own Resources". It was not a plan setting out specific targets. It was a document based on a headed assessment of where our national interest lay with regard to the future level of agricultural expansion and production. The sums clearly showed that it was in our interest above all to expand milk production and to reduce our dependence on imported dairy products.
  The Opposition have patently failed to make their charge stick that we are not
  1460
  providing the industry with the assurance and confidence which it needs for the future. I take, for example, the position following the end of this year, an important matter which has been discussed by a number of hon. Members, including my hon. Friend the Member for Renfrew-shire, West (Mr. Buchan). Naturally, producers are concerned that when we reach the end of transition we shall be moving into a quite different situation when the traditional arrangements will no longer apply as they did.
  The new arrangements will have to operate from 1st January. and they are being urgently considered with all the interests involved. I assure the hon. Member for Londonderry (Mr. Ross) in this connection that we are very much aware of the particular circumstances and pattern of consumption of milk and milk products in Northern Ireland.
  The likely return to producers in the period January to March 1978 will obviously depend on the details of the arrangements, but the Milk Marketing Boards will obtain funds from the sale of manufacturing milk which will be related closely to the level of intervention prices which are already known and from sales of milk for liquid consumption. If the retail price of milk were to stay at 12½p a pint—decisions on this have not yet been taken—the returns to the boards would average about 52p per gallon. This is an arithmetical calculation and the actual return will depend on decisions to be taken. However, it provides an indication for the producers that there is a prospect of rising returns as one looks ahead.
  Mr. Peter Mills: I do not understand the Minister's thinking at all. Does he realise that dairy farmers have to plan a year ahead, and therefore they must know now. Also it takes nine months to produce a calf. If one wants a calf to produce milk later on, one must take action now. The Minister must realise that dairy farmers have to plan things now. It is no good consultations going on if farmers are not aware of what they will be getting. The decision must be made now.
  Mr. Strang: The hon. Gentleman makes a valid point, but I must point out that no Government have announced guaranteed milk prices for more than a

  1461
  year ahead. We are talking about the last three months of the year. The industry wants to see this Government fight for the retention of a basic system of controlled retail prices and controlled prices for producers through the Milk Marketing Board. If anyone can protect these boards—and we are more than confident that we can—it is my right hon. Friend. Let us have no more of this nonsense and talking the industry down. The prospects for the industry are good. At the turn of the year I think that we shall see that the Opposition's statements were very far from the mark indeed.
  On the question of cereals, is anyone seriously suggesting that the support arrangements that we are providing throughout the marketing year for cereals are not adequate? Is any one suggesting that the increases in support prices of 23 per cent. and 24 per cent. are not an adequate and proper basis of support for cereals?
  On the question of beef, the guaranteed prices of over£30, rising to£32, are realistic if one looks at the cost of beef production. If hon. Members claim that farmers paid very high prices for stores in the autumn and must be compensated for this, they are carrying it a bit far. The hon. Member for South Angus (Mr. Welsh) argues that because of the fantastically high prices the farmers got for ware and seed potatoes, these prices were reflected in the fantastically high prices farmers had to pay for seed potatoes. He then said that they should get fantastically high prices to compensate them for what they paid for the seed potatoes out of which they originally made vast profits. Who can believe that it is realistic to argue that when store beef prices are high—and I am not criticising that, producers have had a tough time in recent years and it is time that they got a better share from the profits of beef production—or when seed potato prices are high, farmers should automatically have their guaranteed prices jacked up to a relatively artificially high level the following year.
  Mr. Jerry Wiggin Mr. Jerry Wiggin (Weston-super-Mare) rose—
  Mr. Strang: No I will not give way, I want to get through my speech quickly.
  1462
  On the question of pigmeat, I do not wish to go over the details again. Of course the Government recognise the seriousness of the situation. We have pointed out clearly that we got the most that the Commission had within its power to give us in the autumn. We secured a phasing of the devaluation of the green pound of further benefit to producers. We cannot secure a change in the basic method of calculating MCAs without achieving the support of the Council of Ministers. I do not think that a single hon. Member in this Chamber really believes that anyone could have tried harder than my right hon. Friend—and I am glad to see that hon. Members on the Liberal Benches are nodding their heads in assent. We have taken the almost unprecedented step of introducing a subsidy which the Community has deemed illegal in its eyes.
  Conservative Members have not talked much about sheep tonight, because the Government provided substantial increases in the guarantee prices for lamb and wool. That was adequately acknowledged by the respective National Farmers Unions. The hon. Member for Cardigan (Mr. Howells) made a number of important points in this respect. Like him, I am in favour of deficiency payments arrangements for lamb. If we have a common régime for sheep meat, as we probably will in due course, we must try to maintain that deficiency payments system.
  Also like the hon. Member for Cardigan, I want to see the French market opened not just to his Welsh producers but to English and above all to Scottish producers so that they can look ahead and plan on the basis of regular supplies to the French market. We must also get a sheepmeat régime which protects our consumers from enormous price increases—which in turn would reduce the demand at home for lamb—and we must have one which adequately incorporates sensible support arrangements for our producers. Thus, I can assure hon. Members that the Government are on the same wavelength as producers over the achievement of a sheepmeat régime.
  I have dealt with potatoes already. The main point is that once again we are affected by the end of transition and these arrangements are still being considered by the Community. The

  1463
  initial proposals were sent back to the Commission for reconsideration by the Council of Ministers, but we are absolutely determined that the arrangements which are agreed will strike a sensible balance between the interests of producers and consumers.
  Mr. Wiggin: Earlier, when he refused to give way, the Minister was justifying the case for dealing with farmers' costs. On the last occasion that he spoke he admitted that the costs had risen by 20 per cent. but that the return to the farmer had risen by only 10 per cent. What should we tell our constituents about that?
  Mr. Strang: I am sorry, but one cannot generalise in these matters.
  Mr. Wiggin: The hon. Member said it.
  Mr. Strang: My point was that there are costs and costs—[Laughter.] Of course there are: let me explain it. If fertiliser costs rise as a consequence of the increase in oil prices and the general energy situation, people realise that that price rise is rather more permanent than a price rise which seed potato growers had because of the fantastic and enormous prices for potatoes brought about last year by the climate. I am therefore saying that cost increases which are a consequence of a drought such as we have not experienced for many decades—hon. Members will see from the White Paper that the drought accounted for the vast bulk of cost increases last year—must be seen in perspective.
  My hon. Friend the Member for Renfrewshire, West, among others, referred to taxation, explaining—the Government accept this—that many farmers were keenly disappointed by the absence from the Budget of any reference to the averaging of profits for taxation. The Government are fully aware of the tax difficulties which farmers can face because of their widely fluctuating incomes, and the problem has been discussed among Ministers. It has to be recognised, however, that there are difficulties about introducing special tax rules for one group of taxpayers. Moreover, averaging does not invariably operate to the taxpayers' advantage and would be complicated and expensive to administer. However, the matter remains under active consideration.
  1464
  My hon. Friend the Member for Brecon and Radnor (Mr. Roderick) raised important points about tenant farmers. Some of them were detailed, and I shall reply to him in writing. However, I would make the general point that he rightly wants to see the important benefits to tenant farmers which arise from this Government's legislation effected as soon as possible. Because of our concern for tenant farmers, in the preparation of the necessary orders and administrative arrangements we have been anxious to push ahead with the succession arrangements which affect many people in my hon. Friend's constituency. I assure him that we are seized of the need to get these measures operative at the earliest opportunity to give tenant farmers the protection to which they are entitled.
  Mr. Nelson: Will the Government recognise that farmers throughout the country will be disappointed with the statement made by the Parliamentary Secretary about tax averaging? Will the Government bear in mind that inflation has a particular impact on a tax r régime for farmers which does not take account of the vagaries or cycle of production? Will the Minister give us some hope that this situation will be reviewed as soon as possible?
  Mr. Strang: I do not recall agriculture Ministers in the previous Tory Government saying that this issue was under active consideration. It ill becomes the Opposition to criticise my right hon. Friend, who has been in office for only a few months, for failing to take action that would be of great importance to the agriculture industry.
  I return to the issues raised by my hon. Friend the Member for Sheffield, Bright-side (Miss Maynard). When the Opposition referred to agricultural producers I had the impression that they equated the words "agricultural producers" with farmers. When we talk of agricultural producers we are also talking about farm workers. We must not forget that we could not achieve our present level of efficiency and expansion without skilled agricultural workers.
  My hon. Friend the Member for Bright-side refered to the operation of the tied cottage legislation. I am glad that she acknowledged that this legislation provides farm workers and their families with

  1465
  security equivalent to Rent Act security for ordinary rented accommodation. We have removed, once and for all, the fear of eviction from farm workers and their families.
  Not long ago we were told by the hon. Member for Macclesfield (Mr. Winterton), who was active in the Standing Committee, that if we were to remove the fear of eviction from farm workers and their families, the whole livestock industry would collapse and the dairy industry would go into immediate decline. It is remarkable that four or five months since the Act became operative, not one Opposition Member has made a reference to the operation of that legislation. The reason for that is understandable. We always recognised that the Act, as we drafted it, adequately met the real needs of the industry. That is why we provided the system of Agricultural Dwelling House Advisory Committees.
  Reports have appeared in the Press which may have confused some farm workers. These committees are purely advisory. They advise whether a local authority should provide an offer of alternative accommodation to a farm worker and his family. They do not require a farm worker to move out of his house and to accept that offer of accommodation.
  My hon. Friend the Member for Brightside was right to say that in the majority of cases which have gone to ADHACs it was decided that there was agricultural need. By the end of March, 145 out of 150 cases were found to be those of agricultural need. Farmers are being fairly cautious about the cases that they put forward. Over 80 per cent. of the cases applied to livestock farming.
  On the basis of discussions that I have had with members of my hon. Friend's union, who are involved in this and who have attended many of the committees, it appears that farmers have confidence in the operation of the ADHAC system. If we can retain the confidence of farm workers in these arrangements, they must be operating in the way in which we intended.
  My hon. Friend made a number of additional points. We shall naturally note her observations about the Agri-
  1466
  ccultura Wages Board. I want to make one final point about farm workers. It must be accepted that farm workers are underpaid compared with equivalent men with equal skills in manufacturing industry. However, the fact of the matter is that when we gradually return to free collective bargaining, the security that we have provided for farm workers with this legislation will help them to secure the wages that they deserve.
  In the last five minutes at my disposal, let me make some reference to the CAP. I regret that I do not have more time to answer some of the very interesting arguments that have been advanced, particularly by Labour Members, in relation to the future reform of the CAP
  My hon. Friend the Member for Birmingham, Handsworth (Mr. Lee) criticised my right hon. Friend the Minister for being too optimistic about the reform of the CAP. There are two examples of changes that I see as useful straws in the wind. I take, for example, the directive on less favoured areas. That is a directive that incorporates the headage payment system that we have traditionally paid to hill farmers in those areas. The importance of that is not merely that we have secured a modification of the CAP to meet special needs of hill and marginal farmers, who cannot expect to cope with the same prices as other producers, and no other help, but also we have the principle, to which my right hon. Friend was referring, of nationally financed direct headage payments to these producers, 75 per cent. financed from the national Exchequer.
  In the variable beef premium we have a policy that we have secured as a result of free negotiation, by which we combine the benefits of support buying, but limit the cost to the Exchequer, with the deficiency payment, to avoid full-scale intervention and to give the consumer the benefit of lower prices.
  Finally, I want to comment on the last price settlement in relation to the reform of the CAP. Perhaps that, in a sense, was the most important achievement of British Ministers in the Council of Agricultural Ministers. With respect to the future of the CAP, this is probably the aspect for which the British presidency will best be remembered, because my right hon. Friend injected the interests of

  1467
  the consumer into the Council of Agricultural Ministers in a way that has never been done previously.
  Through the butter subsidy, we have achieved a real step forward in the direction of getting an understanding that when there are surpluses—and of course, even if we get the levels of production roughly right, there will always be occasional surpluses—these should be used to the benefit of Community consumers and not sold willy-nilly at ridiculous prices to third countries.
  Above all—and this is not adequately recognised—the central thrust of the British position throughout the whole negotiations was to hold down common prices. When I read in today's edition of The Times the statement by Mr. Tugendha't, I find that the attitude of the British delegation was precisely the same as his. We were not indulging in horse trading, saying" You give us an increased price and you can have an
  increased price. "We were the one member State backing the commission in holding down prices.
  Of course, we should have liked to see some common prices lower, in particular the common milk price—but it is very much lower than it would have been had it not been for the constant demand of the British delegation. This settlement is much lower than it has ever been in the past. These increases in prices, when translated into the other green currencies, represent falls in real terms for their milk producers. Let us not lose sight of the achievements that have been made.
  The Opposition have completely failed to make a case. There is no basis for their criticism of my right hon. Friend.
  Question put, That Subhead A1(1) (Salaries, &c., of Ministers) be reduced by£6,500:—
  The House divided: Ayes 271. Noes 273.

  Division No. 133]

  AYES

  [10. p.m.

  Adley, Robert

  Cordle, John H.

  Grant, Anthony (Harrow C)

  Aitken, Jonathan

  Cormack, Patrick

  Gray, Hamish

  Alison, Michael

  Costain, A P.

  Griffiths, Eldon

  Amery, Rt Hon Julian

  Craig, Rt Hon W. (Belfast E)

  Grimond, Rt Hon J,

  Arnold, Tom

  Crawford, Douglas

  Grist, Ian

  Atkins, Rt Hon H. (Spellhorne)

  Crouch, David

  Hall, Sir John

  Awdry, Daniel

  Crowder, F. P.

  Hall-Davis A.G.F.

  Bain, Mrs Margaret

  Davies, Rt Hon J. (Kmitsford)

  Hamllton, Michael (Salisbury)

  Baker, Kenneth

  Dean, Paul (N Somerset)

  Hampson, Dr Keith

  Banks, Robert

  Dodsworth, Geoffrey

  Hannam, John

  Beith, A. J.

  Douglas-Hamilton, Lord James

  Harrison, Col Sir Harwood (Eye)

  Bell, Ronald

  Drayson, Burnaby

  Hastings, Stephen

  Bennett, Sir Frederic (Torbay)

  du Cann, Rt Hon Edward

  Havers, Sir Michael

  Benyon, W.

  Durant, Tony

  Hawkins, Paul

  Berry, Hon Anthony

  Dykes, Hugh

  Hayhoe, Barney

  Biffen, Jonn

  Eden, Rt Hon Sir John

  Henderson, Douglas

  Biggs-Davison, Jonn

  Edwards, Nicholas (Pembroke)

  Hicks, Robert

  Blaker, Peter

  Elliott, Sir William

  Higgins, Terence L.

  Body, Richard

  Emery, Peter

  Hodgson, Robin

  Boscawen, Hon Robert

  Evans, Gwynfor (Carmarthen)

  Holland, Philip

  Bottomley, Peter

  Ewing, Mrs Winifred (Moray)

  Hooson, Emlyn

  Bowden, A. (Brighton, Kemptown)

  Eyre, Reginald

  Hordern, Peter

  Boyson, Dr Rhodes (Brent)

  Fairbairn, Nicholas

  Howe, Rt Hon Sir Geoffrey

  Braine, Sir Bernard

  Fan, John

  Howell, David (Guildford)

  Brittan, Leon

  Fell, Anthony

  Howells, Geraint (Cardigan)

  Brocklebank-Fowler, C.

  Finsberg, Geoffrey

  Hunt, David (Wirral)

  Brooke, Peter

  Fisher, Sir Nigel

  Hunt, John (Bromley)

  Brotherton, Michael

  Fookes, Miss Janet

  Hurd, Douglas

  Brown, Sir Edward (Bath)

  Forman, Nigel

  Hutchison, Michael Clark

  Bryan, Sir Paul

  Fowler, Norman (Sutton C'f'd)

  Irving, Charles (Cheltenham)

  Buchanan-Smith, Alick

  Fox, Marcus

  James, David

  Buck, Antony

  Fraser, Rt Hon H. (Stafford & St)

  Jenkin, Rt Hon P. (Wanst'd & W'df'd)

  Budgen, Nick

  Freud, Clement

  Jessel, Toby

  Bulmer, Esmond

  Fry, Peter

  Johnson Smith, G. (E Grinstead)

  Burden, F. A.

  Galbraith, Hon T.G.D.

  Jones, Arthur (Daventry)

  Butler, Adam (Bosworth)

  Gardiner, George (Relgate)

  Jopling, Michael

  Carlisle, Mark

  Gardner, Edward (S Fylde)

  Joseph, Rt Hon Sir Keith

  Chalker, Mrs Lynda

  Gilmour, Rt Hon Sir Ian (Chesham)

  Kaberry, Sir Donald

  Channon, Paul

  Gilmour, Sir John (East Fife)

  Kershaw, Anthony

  Churchill, W. S.

  Glyn, Dr Alan

  Kilfedder, James

  Clark, Alan (Plymouth, Sutton)

  Goodhart, Philip

  King, Evelyn (South Dorset)

  Clark, William (Croydon S)

  Goodhew, Victor

  King, Tom (Bridgwater)

  Clarke, Kenneth (Rushcliffe)

  Goodlad, Alastair

  Knight, Mrs Jill

  Clegg, Walter

  Gorst, John

  Knox, David

  Cockcroft, John

  Gow, Ian (Eastbourne)

  Lamont, Norman

  Cooke, Robert (Bristol W)

  Gower, Sir Raymond (Barry)

  Latham, Michael (Melton)

  Cop, John

  Lawrence, Ivan

  Nott, John

  Spence, John

  Lawson, Nigel

  Onslow, Cranley

  Spicer, Michael (S Worcester)

  Le Marchant, Spencer

  Oppenheim, Mrs Sally

  Sproat, lain

  Lester, Jim (Beeston)

  Page, John (Harrow West)

  Stainton, Keith

  Lewis, Kenneth (Rutland)

  Page, Rt Hon R. Graham (Crosby)

  Stanbrook, Ivor

  Lloyd, Ian

  Page, Richard (Workington)

  Stanley, John

  Loveridge, John

  Pardoe, John

  Steel, Rt Hon David

  Luce, Richard

  Parkinson, Cecil

  Steen, Anthony (Wavertree)

  McAdden, Sir Stephen

  Penhaligon, David

  Stewart, Rt Hon Donald

  MacCormick, Iain

  Percival, Ian

  Stewart, Ian (Hitchin)

  McCrindle, Robert

  Peyton, Rt Hon John

  Stokes, John

  Macfarlane, Neil

  Pink, R. Bonner

  Stradling Thomas, J.

  MacGregor, John

  Price, David (Eastleigh)

  Tapsell, Peter

  MacKay, Andrew James

  Prior, Rt Hon James

  Taylor, R. (Croydon NW)

  Macmillan, Rt Hon M. (Farnham)

  Pym, Rt Hon Francis

  Tebbit, Norman

  McNair-Wilson, p. (New Forest)

  Rathbone, Tim

  Temple-Morris, Peter

  Madel, David

  Rawlinson, Rt Hon Sir Peter

  Thatcher, Rt Hon Margaret

  Marshall, Michael (Arundel)

  Rees, Peter (Dover & Deal)

  Thomas, Dafydd (Merioneth)

  Marten, Neil

  Rees-Davies, W. R.

  Thomas, Rt Hon P. (Hendon S)

  Mates, Michael

  Reid, George

  Thompson, George

  Maude, Angus

  Renton, Rt Hon Sir D. (Hunts)

  Thorpe, Rt Hon Jeremy (N Devon)

  Maudling, Rt Hon Reginald

  Renton, Tim (Mid-Sussex)

  Townsend, Cyril D.

  Mawby, Ray

  Rhodes James, R.

  Trotter, Neville

  Maxwell-Hyslop, Robin

  Ridley, Hon Nicholas

  van Straubenzee, W. R.

  Mayhew, Patrick

  Ridsdale, Julian

  Vaughan, Dr Gerard

  Meyer, Sir Anthony

  Rifkind, Malcolm

  Viggers, Peter

  Miller, Hal (Bromsgrove)

  Roberts, Wyn (Conway)

  Wakeham, John

  Mills, Peter

  Rodgers, Sir John (Sevenoaks)

  Walker, Rt Hon P. (Worcester)

  Miscampbell, Norman

  Ross, Stephen (Isle of Wight)

  Walters, Dennis

  Mitchell, David (Basingstoke)

  Rossi, Hugh (Hornsey)

  Watt, Hamish

  Moate, Roger

  Rost, Peter (SE Derbyshire)

  Weatherill, Bernard

  Monro, Hector

  Royle, Sir Anthony

  Wells, John

  Montgomery, Fergus

  Sainsbury, Tim

  Welsh, Andrew

  Moore, John (Croydon C)

  St. John-Stevas, Norman

  Whitelaw, Rt Hon William

  More, Jasper (Ludlow)

  Scott, Nicholas

  Wiggin, Jerry

  Morgan, Geraint

  Shaw, Giles (Pudsey)

  Wigley, Dafydd

  Morgan-Giles, Rear-Admiral

  Shelton, William (Streatham)

  Wilson, Gordon (Dundee E)

  Morris, Michael (Northampton S)

  Shepherd, Colin

  Winterton, Nicholas

  Morrison, Charles (Devizes)

  Shersby, Michael

  Wood, Rt Hon Richard

  Morrison, Hon peter (Chester)

  Silvester, Fred

  Young, Sir G. (Ealing, Acton)

  Mudd, David

  Sims, Roger

  Younger, Hon George

  Neave, Airey

  Sinclair, Sir George

  Nelson, Anthony

  Skeet, T.H.H.

  TELLERS FOR THE AYES:

  Neubert, Michael

  Smith, Dudley (Warwick)

  Mr. Carol Mather and

  Newton, Tony

  Smith, Timothy John (Ashfield)

  Mr. Michael Roberts.

  NOES

  Abse, Leo

  Cartwright, John

  Fitch, Alan (Wigan)

  Allaun, Frank

  Castle, Rt Hon Barbara

  Flannery, Martin

  Archer, Peter

  Clemitson, Ivor

  Fletcher, Ted (Darlington)

  Armstrong, Ernest

  Cocks, Rt Hon Michael (Bristol S)

  Foot, Rt Hon Michael

  Ashley, Jack

  Cohen, Stanley

  Ford, Ben

  Ashton, Joe

  Coleman, Donald

  Forrester, John

  Atkins, Ronald (Preston N)

  Colquhoun, Ms Maureen

  Fowler, Gerald (The Wrekin)

  Atkinson, Norman

  Conlan, Bernard

  Fraser, John (Lambeth, N'w'd)

  Bagler, Gordon A. T.

  Cook, Robin F. (Edin C)

  Freeson, Reginald

  Barnett, Guy (Greenwich)

  Corbett, Robin

  Garrett, John (Norwich S)

  Barnettm Rt Hon Joel (Heywood)

  Cowans, Harry

  Garrett, W. E. (Wallsend)

  Bates, Alt

  Cox, Thomas (Tooting)

  George, Bruce

  Bean, R. E.

  Craigen, Jim (Maryhill)

  Gilbert, Dr John

  Bennett, Andrew (Stockport N)

  Crawshaw, Richard

  Ginsburg, David

  Bidwell, Sydney

  Crowther, Stan (Rotherham)

  Golding, John

  Bishop, E. S.

  Cunningham, G. (Islington S)

  Gould, Bryan

  Blenkinsop, Arthur

  Davidson, Arthur

  Gourlay, Harry

  Boardman, H.

  Davies, Bryan (Enfield N)

  Graham, Ted

  Booth, Rt Hon Albert

  Davies, Denzil (Llanelli)

  Grant, George (Morpeth)

  Boothroyd, Miss Betty

  Davies, Ifor (Gower)

  Grant, John (Islington C)

  Bottomley, Rt Hon Arthur

  Davis, Clinton (Hackney C)

  Grocott, Bruce

  Bradley, Tom

  Deakins, Eric

  Hardy, Peter

  Bray, Dr Jeremy

  Dean, Joseph (Leeds West)

  Harrison, Walter (Wakefield)

  Broughton, Sir Alfred

  Dell, Rt Hon Edmund

  Hart, Rt Hon Judith

  Brown, Hugh D. (Provan)

  Dempsey, James

  Hattersley, Rt Hon Roy

  Brown, Robert C. (Newcastle W)

  Dolg, Peter

  Hatton, Frank

  Buchan, Norman

  Douglas-Mann, Bruce

  Hayman, Mrs Helene

  Buchanan, Richard

  Dunnett, Jack

  Healey, Rt Hon Denis

  Butler, Mrs Joyce (Wood Green)

  Eadie, Alex

  Heffer, Eric S.

  Callaghan, Rt Hon J. (Cardiff SE)

  Edge, Geoff

  Hooley, Frank

  Callaghan, Jim (Middleton & P)

  Ellis, John (Brigg & Scun)

  Horam, John

  Campbell, Ian

  English, Michael

  Howell, Rt Hon D. (B'ham, Sm H)

  Canavan, Dennis

  Ennals, David

  Hoyle, Doug (Nelson)

  Cant, R. B.

  Evans, Fred (Caerphilly)

  Huckfield, Les

  Carmichael, Nell

  Evans, Ioan (Aberdare)

  Highes, Rt Hon C. (Anglesey)

  Carter, Ray

  Ewing, Harry (Stirling)

  Hughes, Robert (Aberdeen N)

  Carter-Jones, Lewis

  Faulds, Andrew

  Hughes, Roy (Newport)

  1470

  1471

  Hunter, Adam

  Mendelson, John

  Sillars, James

  Irvine, Rt Hon Sir A. (Edge Hill)

  Mikardo, Ian

  Silverman, Julius

  Irving, Rt Hon S. (Dartford)

  Millan, Rt Hon Bruce

  Skinner, Dennis

  Jackson, Colin (Brighouse)

  Miller, Dr M. S. (E Kilbride)

  Small, William

  Jackson, Miss Margaret (Lincoln)

  Miller, Mrs Millie (Ilford N)

  Smith, John (N Lanarkshire)

  Janner, Greville

  Mitchell, Austin Vernon (Grimsby)

  Spearing, Nigel

  Jay, Rt Hon Douglas

  Molloy, William

  Spriggs, Leslie

  Jeger, Mrs Lena

  Moonman, Eric

  Stallard, A. W.

  Jenkins, Hugh (Putney)

  Morris, Alfred (Wythenshawe)

  Stewart, Rt Hon M. (Fulham)

  John, Brynmor

  Morris, Charles R. (Openshaw)

  Stoddart, David

  Johnson, James (Hull West)

  Morris, Rt Hon J. (Aberavon)

  Stott, Roger

  Johnson, Walter (Derby S)

  Moyle, Roland

  Strang, Gavin

  Jones, Alec (Rhondda)

  Mulley, Rt Hon Frederick

  Summerskill, Hon Dr Shirley

  Jones, Barry (East Flint)

  Murray, Rt Hon Ronald King

  Swain, Thomas

  Jones, Dan (Burnley)

  Newens, Stanley

  Taylor, Mrs Ann (Bolton W)

  Judd, Frank

  Noble, Mike

  Thomas, Jeffrey (Abertillery)

  Kaufman, Gerald

  Oakes, Gordon

  Thomas, Mike (Newcastle E)

  Keiley, Richard

  Ogden, Eric

  Thomas, Ron (Bristol NW)

  Kerr, Russell

  O'Halloran, Michael

  Thorne, Stan (Preston South)

  Kilroy-Silk, Robert

  Orbach, Maurice

  Tierney, Sydney

  Kinnock, Nell

  Orme, Rt Hon Stanley

  Tinn, James

  Lambie, David

  Ovenden, John

  Tomney, Frank

  Lamborn, Harry

  Owen, Rt Hon Dr David

  Torney, Tom

  Lamond, James

  Padley, Walter

  Tuck, Raphael

  Latham, Arthur (Paddington)

  Palmer, Arthur

  Urwin, T. W.

  Leadbitter, Ted

  Park, George

  Variey, Rt Hon Eric G.

  Lee, John

  Parker, John

  Wainwright, Edwin (Dearne V)

  Lestor, Miss Joan (Eton & Slough)

  Pavitt, Laurie

  Walden, Brian (B'ham, L'dyw'd)

  Lever, Rt Hon Harold

  Pendry, Tom

  Walker, Harold (Doncaster)

  Lewis, Ron (Carlisle)

  Perry, Ernest

  Walker, Terry (Kingswood)

  Lipton, Marcus

  Prentice, Rt Hon Reg

  Ward, Michael

  Lomas, Kenneth

  Price, William (Rugby)

  Watkins, David

  Loyden, Eddie

  Radice, Giles

  Weetch, Ken

  Luard, Evan

  Rees, Rt Hon Merlyn (Leeds S)

  Weitzman, David

  Lyon, Alexander (York)

  Richardson, Miss Jo

  Wellbeloved, James

  Lyons, Edward (Bradford W)

  Roberts, Albert (Normanton)

  White, Frank R. (Bury)

  Mabon, Rt Hon Dr J. Dickson

  Roberts, Gwilym (Cannock)

  White, James (Pollok)

  McCartney, Hugh

  Robertson, John (Paisley)

  Whitehead, Phillip

  McDonald, Dr Oonagh

  Robinson, Geoffrey

  Whitlock, William

  McElhone, Frank

  Roderick, Caerwyn

  Willey, Rt Hon Frederick

  MacFarquhar, Roderick

  Rodgers, George (Chorley)

  Williams, Rt Hon Alan (Swansea W)

  McGuire, Michael (Ince)

  Rodgers, Rt Hon William (Stockton)

  Williams, Rt Hon Shirley (Hertford)

  MacKenzie, Gregor

  Rooker, J. W.

  Williams, Sir Thomas (Warrington)

  Mackintosh, John P,

  Rose, Paul B.

  Wilson, Alexander (Hamilton)

  McMillan, Tom (Glasgow C)

  Ross, Rt Hon W. (Kilmarnock)

  Wilson, Rt Hon Sir Harold (Huyton)

  McNamara, Kevin

  Rowlands, Ted

  Wilson, William (Coventry SE)

  Madden, Max

  Ryman, John

  Wise, Mrs Audrey

  Magee, Bryan

  Sandelson, Neville

  Woodall, Alec

  Mahon, Simon

  Sedgemore, Brian

  Woof, Robert

  Mallalieu, J. P. W

  Selby, Harry

  Wrigglesworth, Ian

  Marks, Kenneth

  Shaw, Arnold (Ilford South)

  Marshall, Dr Edmund (Goole)

  Sheldon, Rt Hon Robert

  TELLERS FOR THE NOES:

  Marshall, Jim (Leicester S)

  Shore, Rt Hon Peter

  Mr. Joseph Harper and

  Maynard, Miss Joan

  Short, Mrs Renee (Wolv NE)

  Mr. James Hamilton.

  Meacher, Michael

  Silkin, Rt Hon John (Deptford)

  Mellish, Rt Hon Robert

  Silkin, Rt Hon S. C. (Dulwich)

  Question accordingly negatived.
  Original Question again proposed.
  It being after Ten o'clock, the debate stood adjourned.

  BUSINESS OF THE HOUSE
  Ordered,
  That the motion in the name of the Prime Minister for the Adjournment of the House may he proceeded with at this day's sitting, though opposed, until half-past Eleven o'clock or for one and a half hours after it has been entered upon, whichever is the later.—[Mr. Coleman.]

  EUROPEAN COMMUNITY (BEEF AND VEAL QUOTAS)
  10.18 p.m.
  The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. E. S. Bishop): I beg to move,
  That this House takes note of Commission Documents Nos. R/2021/76, R/2614/76 and R/2109/76 on financial matters under the EAGGF and tariff quotas for frozen beef and veal, and the Ministry of Agriculture, Fisheries and Food's explanatory memorandum dated 9th May on Commission Document No. R/2614/76.
  The House has just had—[Interruption.]
  Mr. Speaker: Order. Would hon. Members who feel that they have to leave the Chamber do so quickly and quietly, please?
  Mr. Bishop: The House has just had a very full discussion on agriculture, and I welcome this opportunity to continue by considering some EEC documents which the Scrutiny Committee has recommended for debate.
  I should like first to turn to the two financial items, R/2021/76 and R/2614/76 which, as the Scrutiny Committee has indicated, go very much together. I am particularly pleased that the Scrutiny Committee has suggested these two items for discussion.
  The Cheysson Report, R/2021/76, reflects the importance which we have attached to the need for budgetary and financial control in the EEC, a theme that we have pursued constantly in Brussels and elsewhere. I need only recall the initiative of my right hon. Friend the Member for Huyton (Sir H. Wilson) when, as Prime Minister, he spoke of his desire to see applied in the EEC methods of financial control com-
  1474
  parable to those developed over the years in the United Kingdom.
  The Cheysson Committee, named after Monsieur Cheysson, who was Commissioner for Budgets and Financial Control in 1973, when the work was put in hand, has already produced reports on the olive oil and oilseed and milk and milk products sectors. The committee, which reports directly to the Commission, is made up of senior officials from member States who have special knowledge and experience of auditing and financial control. Their work is not only done by the study of legal texts, of papers submitted to them by the Commission services, and of answers to questionnaires sent to member States, but also by visits for on-the-spot inspections including one made eighteen months ago to the United Kingdom in connection with this report on beef and veal.
  The report contains a number of proposals. In general terms, there is the simplification and standardisation of Community rules and the avoidance of measures which could give rise to opportunities for speculative operations such as the carousel trade. The report also recommends improvements in co-operation between member States, better understanding of each other's systems, and standardisation of procedures to some extent. In addition, there are many detailed technical and operational recommendations relating specifically to beef and veal.
  We have already expressed our appreciation in Brussels of the Committee's work. Many of the report's recommendations are already in effect in this country. There is close contact between officials of the various departments responsible for administering measures under the CAP and similar co-operation between those officials here and in other countries.
  On the other hand, we do have doubts about some of these recommendations. The proposal that in the short term the concept of abuse of law should be used to enable member States to refuse payment to traders runs counter to United Kingdom legal concepts and practice, and more thought will be needed before we can decide how best to deal with this recommendation.
  The EAGGF Financial Report, R/2614/76, on the other hand, is an

  1475
  essentially factual document covering the operation of the farm fund during 1975 and, as the title indicates, it is the fifth of its kind. As such, it is a welcome addition to the available information on the operation of the CAP. The supplementary memorandum which the Ministry has just submitted sets out the content of the report in some detail, and I would merely draw the House's attention to the fact that the report is presented in four parts. There are chapters on guarantee and guidance, which cover the financing of these sectors; there is a chapter in which inspections and irregularities are analysed, which records the development of audit methods by the Commission's services in this field, and summarises reports of irregularities made by member States under Regulation 283/72; and the remaining part of the report deals with the financing of Community food aid.
  It might be helpful to the House if I explain at this stage exactly what is meant by irregularities. These are not, of course, necessarily frauds. An irregularity occurs when there is a breach of Community rules. For instance, in the guidance section, a farmer may agree to farm in a certain way for five years and be prevented by death or ill health from doing so. This was a feature of a recent debate in this House. Community rules are not complied with and an irregularity occurs and is reported, but in that case it may not be called fraud.
  As for the scale of irregularities, in 1975 irregularities in the guarantee section totaling£1 million were reported out of total expenditure in that section of over£2,000 million. I give these figures in order that the House can get a sense of perspective of the situation. The report shows us that, from previous experience, more than half the money is likely to be recovered within five years.
  About 20 per cent. of the Communities' guarantee section expenditure in 1975, or about£400 million, was on beef and veal, About 11 per cent. of guarantee sector irregularities, or about£80,000, fell in the beef and veal sector.
  Reports such as these before us help us to evaluate the progress being made by the Community and by member States in the operation and control of Community funds, and to this extent both are welcome documents.
  1476
  Finally, I will say a few words about the other document before us, namely R/2109/76, dealing with arrangements for the allocation of a Community quota for the import of frozen beef, free of the variable levy which is otherwise applied to imports.
  This is a subject that has already been thoroughly aired in the House—when we adopted the Agriculture Levy Reliefs (Frozen Beef and Veal) Order 1977 on 8th March. Consequently, although I shall of course be pleased to deal in my winding-up speech with any points hon. Members may wish to raise tonight, I will merely remind the House of two points at this stage. The first is that the instrument to which the Council agreed in December provides an increased share of the quota for the United Kingdom compared with the original proposal submitted by the Commission. The second is that our share of 12,750 tonnes in 1977—of a Community proposal of 38,500 tonnes—provides a useful source of supplies of the kind of beef that cannot be produced in the Community, and makes an important contribution even allowing for the generally more flexible import arrangements that came into force in this sector at the beginning of April.
  Mr. J. Enoch Powell: Will the hon. Gentleman make one matter clear about the instrument? It is before us as a draft instrument. He said that it was approved by the Council last December. Are we to understand that since then it has been in force and in operation? If so, are we considering a draft instrument which has already been effective in this country for the last five months?
  Mr. Bishop: I understand that that is the position. The matter was agreed by the Council in December. The House debated this on a motion to annul the order moved on 8th March, and the motion was withdrawn. We are now debating this matter because, before that, I understand that the Scrutiny Committee recommended that it should be a matter for debate. But this has already been debated in the House. The other two documents—the FEOGA Fifth Annual Report and the Cheysson Report and recommendations—are still matters for consideration in Brussels.
  I have not gone into very much detail on the three documents before us today.

  1477
  The last item has already, in effect, been discussed and approved by the House. The other two documents are factual and informative rather than legislative.
  Mr. Neil Marten: The hon. Gentleman used the word "approved". Was it approved?
  Mr. Powell: The motion was withdrawn.
  Mr. Bishop: The instrument came before the House and, on 8th March, there was a motion for its annulment. After a debate, that motion was withdrawn. So the matter has been debated by the House.
  Mr. Marten: But not approved.
  Mr. Bishop: The two other documents are matters still for consideration in Brussels. The debate will give the House an opportunity tonight of expressing a view on these documents and that can be taken into account subsequently.
  Mr. Douglas Jay: Was my hon. Friend strictly accurate in saying that the order had been approved by the House? As I understand it, there was a motion to annul the order, and that motion was withdrawn.
  Mr. Bishop: The Scrutiny Committee recommended the item for debate but said that that should not hold up the agreement.
  10.31 p.m.
  Mr. Michael Joplin: I suppose that I should begin by congratulating the Minister—although I regret having to do so—on having saved his shirt by such a narrow margin in the Division a few moments ago. We would all personally have felt some sorrow for him if he had had to reduce his standard of living as a result of the vote. I am sorry that in the event there were not enough Members of other parties to support our motion. With their support we could have sounded a signal success against the Government.
  Of the three documents, the first, R/2021/76, deals with irregularities in the beef and veal sector. All systems of agricultural support create opportunities for abuse and dishonesty. In our own system of grants and deficiency payments the
  1478
  same situation applied. Wherever government intervenes to provide cash and support such irregularities are bound to occur.
  Publicity has been given to incidents in the Common Market. I am glad that a paper has been produced dealing particularly with this matter because we are naturally happier to know that something is being done about it. When huge payments such as those involved in mcas on agricultural produce are passing between member States it is inevitable, with green pound discrepancies, that temptations to cheat should arise. That makes it all the more important for the Community to be vigilant.
  Mr. Hamish Watt: Does the hon. Gentleman not agree that inter-Community trade is so lucrative for many people who are shipping meat across borders that there is no need for them to be dishonest? They can make a fortune legitimately.
  Mr. Jopling: Perhaps the hon. Gentleman knows more about that than I, but I agree that over the years stories of various practices have arisen. I hope that the hon. Gentleman agrees with me that the numbers involved in questionable activities are small. I should be surprised if it were more than a very tiny minority of those engaged in the trade.
  I turn to Document R/2614/76. On page 71 there is a list of new fraudulent practices which were notified during 1975. It covers a wide range. The last item refers to seeds, but the others refer to the beef and veal sector. It is alarming that all these new practices have been discovered. I suspect that this arises from the large monetary compensatory amounts that are paid as a result of the green pound discrepancies.
  Returning to what the hon. Member for Banff (Mr. Watt) said, many of us have heard such rumours and I have heard the practice called "roundabout beef". There is a considerable amount of such trade across the border between Northern Ireland and the Republic, and I hope that the Minister can tell us what steps are being taken to stop this abuse. One hears about the wholesale smuggling of cattle across the border.
  Mr. Peter Mills: I have actually seen the smuggling. When I was

  1479
  a Minister in the Northern Ireland Office, I sent out Army helicopters to take photographs of cattle being moved across the border.
  Mr. Jopling: I know that my hon. Friend used to sell cattle and I am glad to hear that he has seen the smuggling in his capacity as a Minister rather than as a dealer in cattle. No doubt the right hon. Member for Down, South (Mr. Powell) will wish to say something about this practice later.
  Can the Minister tell us how many cases of fraud have been discovered? I think he said that 11 per cent. of fraud cases were in the beef and veal sector. It may be distasteful to the Minister, but it is important that the House should know which countries were involved. I am sure that we all wish to see such irregularities stamped out.
  Document R/2109/76 deals with boneless frozen beef. It is proposed to import 38,500 tonnes of this meat from third countries this year. I know of the demand from meat manufacturers for this sort of beef, but I have never understood why they cannot find it in the domestic market. They say that they like cow beef that has been bred on the pampas and do not like beef that has fat within the lean parts, and I suspect that the imports under this document are to help that part of the manufactured meat trade. I cannot see why some manufacturers cannot make contracts to buy thin, unfattened cows on the home market. Although the price may look low, it would be a more profitable venture than fattening up cows for many of our farmers.
  I apologise for forgetting to declare my interest in the last debate, and I do so now.
  I hope that the greatest care will be taken not to depress further the beef market in this country. The Government have probably realised from our last debate that there is serious disquiet about the position of beef producers and that this would not be a good time to depress the market further by introducing greater imports of beef from any source.
  Finally, I come to Document No. R/2614/76, and, before asking any questions, I must express a certain irritation. The expanded explanatory memorandum came to the Vote Office only last night.
  1480
  It was not there yesterday morning, and I hope that the Minister of State will tell us why. I can think of no reason for our having to wait until about 24 hours before the debate before we have the expanded memorandum on the matter.
  The document itself was dated 5th November 1976, and it was deposited with Parliament on 11th November 1976. The memorandum tells us that the document is
  "a factual report which has no policy implications".
  It refers to matters as far back as 1975. In fact, there is nothing recent in it. It is 140 pages long. Having looked through the expanded memorandum which the Government have deposited in the Vote Office, I cannot see anything written there which could not have been written a good many months ago.
  This is an intolerable way to treat the House and I hope that we shall have an explanation and at least an undertaking that that sort of thing will not happen again. This is a case in which an explanatory memorandum can help the House, but unless it arrives in good time it is too late and does not help us at all.
  Document No. R/2614, which, as I say, is 140 pages long, is interesting and extremely helpful. It sets out a good many of the facts and figures about the Community. Having looked quickly through the expanded memorandum on a day when we had a major debate, I have not been able to go into the document in the depth I should have wished because the Government deposited their paper far too late in the day. I shall study it later and, if any matters occur to me on which I wish to ask questions, I shall write to the Minister of State. But I must protest at this very bad way of treating the House, and I hope that it will not occur again.
  10.42 p.m.
  Mr. Douglas Jay: I wish to ask some questions arising out of Document No. R/2109/76, which refers to the levy-free quota for beef imports into the Community in 1977. As I understand the explanatory memorandum, the Community is to admit 38,000 tonnes of beef of this type from outside the Community to be imported into the Community as a whole in 1977, and of that about 12,000 tonnes will come to the United Kingdom.

  1481
  These are derisory figures for beet imports compared with either United Kingdom consumption or, much more relevantly, the quantities of beef which this country imported from producing countries such as Australia, Brazil and Argentina before we entered the Market. I put this question to my hon. Friend the Minister of State. Taking a year such as 1970, or perhaps 1971, before we entered the Market, what were the imports of beef into the United Kingdom from, say, Australia, Argentina and Brazil? I imagine that they were much nearer 100,000 tons than 12,000 tons.
  It is, of course, the exclusion of beef from these efficient low-cost producing countries—which now have considerable quantities of surplus beef available at much lower prices than those within the EEC—that has kept the price of beef in the United Kingdom at a level that the consumer would have considered prohibitive until quite recently.
  I was surprised to hear the speech by the hon. Member for Westmorland (Mr. Jopling). We are told that the Conservatives are opposed to import controls. In the case of beef we have a system of import controls, amounting to very nearly total exclusion, imposed by the Community. It is surprising that this should be accepted and welcomed by the Opposition. Perhaps the hon. Member for Westmorland should consult his Leader and his Shadow Cabinet on whether he has the right party line.
  I remind the Minister that the recent Summit declaration, which we all cheered, pronounced firmly against protectionism of all kinds. If we exclude prime food stuffs from the most efficient producer countries, surely this is protectionism to an indefensible degree.
  If I am wrong in my figures I should like to hear it from the Minister. I urge him to tell us the figures for actual imports in the year preceding our entry into the EEC as compared with the 12,000 tonnes we are committed to import from outside the EEC.
  10.47 p.m.
  Mr. J. Enoch Powell: I rise principally to put on the record an emphatic protest against the form of the motion before the House tonight. I believe that it is a breach of the spirit, if not precisely of the terms, of the agreement
  1482
  between all sides of the House on the handling of EEC documents which are recommended for the attention of the House by the Scrutiny Committee. The general principle is that in the case of such documents, before a final decision is taken, unless the Scrutiny Committee specifically recommends otherwise, the House should have the opportunity to see that its opinion on the matter is expressed, either by a debate or, alternatively, by coming to a conclusion on it.
  If two or more such documents dealing with substantially separate matters are to be combined in one motion and disposed of in one and a half hours under the Standing Order, that fundamental agreement on the handling of EEC legislation is, in effect, nullified. Even if the agreement is only that these documents should be debated, it is absurd to suggest that, with ministerial explanations in opening, it is possible for two or three separate subjects to be debated in any natural sense of the term in the space of one and a half hours.
  This linking of documents in a single motion frustrates even the minimal sense of the understanding on which these proceedings are based. It also brings another matter of frustration. It has been the custom, sanctified by Mr. Speaker from time to time, that where the House wishes to come to a conclusion on such a document, the Chair will call an amendment to the motion to take note. But it will be perfectly obvious that if such a procedure is desired in respect of one of a number of documents before the House combined in a single motion, it is making a nonsense of our procedure to attempt to debate an amendment to the "take note" motion—which would take the full one and a half hours—in respect of one of several matters comprised in the motion.
  The matter is worse than I originally suggested. It not merely frustrates debate; it frustrates decision—even if the House is anxious to come to a decision, if necessary, by way of vote. This is a precedent of extreme danger, not only in the context of EEC legislation but in wider matters even than that. For if there is no Standing Order of the House which prevents this kind of motion—I take it that there is not, Mr. Deputy Speaker, as otherwise it would not be standing on the Order Paper—there is

  1483
  no reason why the Government should not link together in a single motion the approval of two or more draft Orders in Council.
  I will not dwell at length on this matter, Mr. Deputy Speaker, but I am sure that you are aware that the part of the Kingdom in which I represent a constituency is legislated for at present to some extent by Order in Council, and consequently the ability to debate the draft Orders in Council is a precious vestige of our representational rights. If this precedent is to be followed in future, no doubt we shall have motions which invite the House to approve "the following orders" which are set out in the terms of the motion.
  Mr. Jay: Does the right hon. Gentleman think perhaps that if we are to start down this road, before long we shall have a motion to approve the Second Readings of three or four Bills in one motion?
  Mr. Powell: The right hon. Gentleman is wise to observe, if I may say so, that once we allow a procedure to override what is the clear understanding and intention of the House in dealing with its business, no man can set limits to the extent to which that precedent will be followed. The well-known appetite of Governments for time, combined with the well-known propensity of the Whips' Office to minimise time, acting as the upper and the nether millstones, can very soon grind to powder the opportunities of the House for doing its duty. Therefore, I hope that I shall not be alone in placing radical dissatisfaction with this motion upon the record of tonight's debate.
  There are only two or three other minimal matters—relatively to that—to which I should like to allude. First, we have a complete nonsense in dealing with R/2109 in the way in which we are doing tonight. The Minister says that this draft instrument was implemented by an order, that we debated that order implementing this draft instrument upon a Prayer to annul it and that now it arrives as one of three topics for joint debate in this one-and-a-half-hour debate, presumably because the word "beef" happens to be mentioned in this draft instrument as well as in one or two of the other draft instruments linked with it.
  1484
  I should have thought that the natural procedure, and one which would have satisfied the requirements of the Scrutiny Committee, was that when the Prayer against the implementing order was taken it should have been taken, as is often the case, in connection with the draft instrument R/2109. That would have satisfactorily disposed of that matter in one debate.
  Then, coming to R/2021, I was challenged by the hon. Member for Westmorland (Mr. Jopling) to refer to the well-known and lucrative but not always legal traffic across the frontier between the United Kingdom and the Irish Republic. Of course there is always smuggling across the frontier between nations which have different fiscal regimes; that is in human nature and will last as long as human nature is unchanged.
  But what is special is that the Common Market and its provisions, including particularly the provisions for the mcas and the green pound, might have been specially devised to create the ideal conditions in which the propensity of human nature to smuggling was absolutely maximised. Therefore, on that order, I have to say that although smuggling was indeed endemic, it is one of the facts that illustrate the nonsensicality of the artificial regime of the CAP that we in this country have to pay out millions of pounds per quarter in order to neutralise the nonsense effect across the frontier between the Irish Republic and the United Kingdom which is created by the working of the CAP.
  I want to draw attention to paragraph 9 of the explanatory memorandum to that same instrument where it says:
  "A recommendation that will require particularly careful examination is that for harmonisation of penalties, as the administrative penalties used in some Member States are in the United Kingdom employed only to a very limited extent"
  We indeed welcome the confirmation that administrative penalties are employed in this country to "a very limited extent". It will be the determination of most of us that they should always be used in this country to "a very limited extent."
  We would, I am therefore sure, be glad to hear from the Minister a little more of what lies behind that rather ominous sentence and to have assurances that there will be a new and full opportunity for consideration if there is any question of a harmonisation of penalties, which alters

  1485
  the form of penalties which are thought appropriate in the United Kingdom.
  10.56 p.m.
  Mr. Nigel Spearing: The aspect of the documents before us tonight which I shall draw to the attention of the House relates to storage and the consequent investigation into irregularities. These are contained in Document R/2021/76 which we are told is
  "for the purpose of examining the possibilities of fraud and irregularities in the management of Community funds."
  This document deals only with the beef and veal sector. I wish to deal with the matter as a whole because it is also dealt with in the 1975 report. It is not easy to find out how much money is spent on storage. I am talking not of intervention buying or selling out of intervention at a subsidy but of keeping the goods in store.
  Volume IV of the 1977 Budget, pages 144 to 168, sets out the appropriations made in 1976 for this purpose. I wish to put on record how much was spent in millions of units of account for each of the major items. About 61 million units of account were spent on cereal storage and 469 million on milk powder storage and special sales. Unfortunately, the two are not separated so it is impossible to compute from that information what relates to storage and what to sales.
  About 151 million units of account were spent on the storage of butter; 11 million on cheese; 1·5 million on olive oil, colza and sunflower oil; 131 million on sugar; 393 million on beef; and 50 million on wine. Incidentally, an extra 134 million was spent on distilling wine.
  About 8 million units of account were spent on tobacco storage, although the total expenditure on tobacco was 228 million units of account. One million units of account were spent on fish. That totals about 1,281 million units of account.
  Perhaps in my somewhat amateur researches I have made an error in the figures. If I have, I hope that my hon. Friend will let me know in correspondence at a later date. I guarantee to ask him a Question so that he can correct me if I have made a mistake.
  The expenditure amounts to about£500 million or more, according to how one calculates the rates of exchange.
  1486
  That sum represents 15 per cent. of expenditure on agriculture.
  Mr. Jay: My hon. Friend has done a very valuable piece of research in unearthing these figures for the cost of storage. Is he absolutely certain that he has the noughts right? If he is not, perhaps the Minister could confirm it. If it is true that on top of everything else some such sum as£500 million is being spent this year on storage, in addition to intervention and sales and so on, that in itself seems to me a condemnation of the CAP without any further evidence.
  Mr. Spearing: I am very willing to be corrected on this matter if correction is necessary. However, it is only fair to myself to add that it is not always easy, as anyone knows in relation to almost anything relating to the Common Market, to dig out very important figures because they are spread and scattered in all sorts of directions.
  Mr. Jay: Deliberately.
  Mr. Spearing: That may well be. Therefore, I am putting forward these figures tentatively, and for later correction if necessary. If I am wrong, I can only claim that these matters are not set out in EEC documents with the relative clarity of papers relating to Her Majesty's Government. Perhaps we can leave the matter at that.
  However, what I can say quite clearly is that in the budget statement for 1976, which we debated on 19th July last, there appears in the EEC report this very important qualification of the accounts of the EAGGF. I quoted it in that debate and I quote it again tonight, because it is a quotation that has not had the attention that it deserves. This is a report of the Audit Board of the Community, Document R/118/76. It says,
  "only very limited examination by the Audit Board of the operations of the Guarantee Section of the EAGGF has been possible. As in previous years, the Board has not been in a position to form its own judgment of the manner in which the operations have been conducted or to give an opinion on the reliability of the financial management of this sector of expenditure."
  I have said previously and I say again: if that qualification appeared on the accounts of even the smallest firm in the City, the Board of Trade would be down on it almost immediately. That is the background to the document before us,

  1487
  which is attempting to get rid of some of these irregularities.
  I draw attention to page 31 of Document R/2021/76, where it talks about control problems. It says,
  "Because of lack of staff the intervention agencies are not always able to carry out under satisfactory conditions the many checks which should be made at time various stages of the private storage operation, namely"
  —and it goes on to mention one or two things. In other words, there is an admission in this document that the proper inspections cannot be carried out. Towards the end of the document, on page 107—it is no small document—it refers to the use of false or forged T1 and T3 documents. In other words, it is not only a question of people not, perhaps, inspecting the storage places, but it is also, apparently, a matter of the deliberate forging of documents. That, too, should be put on the record.
  In the annual report of the EAGGF for 1975—R/2614/76, which is the big annual report—there is reference to the question of inspection. Section 6.2 on page 61 deals with visits in connection with the 1971 and 1972 accounts. It says,
  "Visits undertaken between April and July 1974 in connection with the clearance of accounts for the 1971 and 1972 financial years were supplemented by a further 42 days work in 1975"
  It appears that auditing of the accounts for the 1971 and 1972 financial years was still being carried on in 1975. That is not an unknown occurrence in firms, but it seems rather strange. It goes on to say—as though it is a good thing—
  "42 days work in 1975, bringing to 165 days the number of days of work done in the six Member States by the Commission staff."
  On its own, that is meaningless. Is it 165 man-days or woman-days or is it one person for 165 days? There is a boast that everything is under control, with that massive number of days, but no real indication of the amount of work done. It is not a reassuring statement. The quality of the statement itself needs auditing, apparently.
  The Community is spending a large sum—£500 million, it appears, but still a large sum even if it is half that; and it may be£750 million—purely on the storage of surplus foods. It appears from the documents before us, and the Audit
  1488
  Board report which I quoted previously, that there is no proper system of checking the documentation and payment for goods that may or may not be there, goods that may have come in and been taken away on the round-about routes.
  In the past the House, through its powers over the Executive, required proper accounts of public moneys. It seems that we do not have that direct control over what happens in the Community. I have asked the Treasury and Ministers to examine this matter. My right hon. Friends bear responsibility in the Council of Ministers, and I hope that they will now begin to take steps to see not only that the Audit Board produces more reports but that the reports are more satisfactory, giving the House some indication that there is a minimal amount of fraud and deception involved in these very large sums which the papers before us do not and cannot show.
  11.7 p.m.
  Mr. Peter Mills: I have the privilege of being on the Select Committee on European Legislation, and I think that these are documents which should have been brought before the House. I wish that more hon. Members were present to discuss them, because they are very important.
  I should like to say a few words about the guarantee section. The more one looks at the sums of money that are spent in guaranteeing certain sections of the Community's agricultural production, the more one must come to the opinion that something should be done about production, particularly of milk, simply for the intervention prices. There seems to me to be little responsibility in marketing. The whole business of co-responsibility, with all that it means, should be very much to the fore in the Community's thinking.
  The dairy farmers in this country have acted responsibly over many years, through the Milk Marketing Board, bearing the costs of the sale and distribution of milk, of advertising and so on, but within the Community there are people who simply produce milk for intervention, with no thought for marketing and no responsibility for it. The Minister should press that point very strongly in Brussels.
  Much more should be done to have lower intervention levels for certain

  1489
  products, particularly skim milk powder, and there should be variable intervention levels in different countries. This is what is needed, and it would go a long way to reduce the butter and milk powder mountains. The disciplines involved in lowering intervention levels would get back to the farmers who produce without any thoughts about marketing but simply for intervention purposes. A much stricter policy should be brought in by lowering the intervention level for skim milk powder. This must be done in the coming months, and it would help to reduce the sums of money in the guarantee section. No responsible farmer would object to that policy.
  I am somewhat confused by Annex GIII. I may even have lost three noughts. I hope that the Minister will clarify the situation. Not only am I getting old and dim, but I cannot even read the figures. They appear to be far from clear. They refer to units of account, but they do not say whether those units are to be taken in thousands. I hope that the Minister will clarify the situation. If one looks at milk production and the total expended in guaranteed prices, one sees exactly who will obtain the money. It can be seen that Great Britain has 70,107 units of account. It may even be 70,107,000 units of account, but it does not seem to matter whether those three noughts are added. It appears to show the United Kingdom as representing 70,000 units of account, the Netherlands as 215,000 units of account, France 296,000 units of account, and Germany 275,000 units of account.
  Those figures appear to back up my argument. In other words, we in this country appear to be using out of the guarantee funds only 70,000 units of account, when other countries appear to be using three or four times as many. It illustrates the irresponsibility in those countries to marketing, discipline and co-responsibility. Perhaps the Minister when replying will say whether I have missed out the three noughts, but the trend is there and shows the picture.
  Mr. Marten: We are subsidising them.
  Mr. Mills: We shall listen with great interest to what the Minister has to say on that score.
  We then come to the guidance section. There is no doubt that there is something radically wrong in that respect. We are
  1490
  obviously not taking advantage of all we should be doing in restructuring agriculture. We see from the figures that we in the United Kingdom have obtained from the Community only 5,644,000 units of account. When Germany has obtained 42,000,000 and France 33,000,000, it seems a pity that British agriculture and the various companies which process our food here are not taking advantage of these grants. I believe in getting all we can out of the Community. If we put a lot in, we should take out as much as possible.
  Mr. Spearing Mr. Spearing rose—
  Mr. Mills: Of course, it is not for me to answer for the Government. Any questions must be directed to the Government. It is for the Government to say why they are not taking greater advantage. I should like to see much greater use made of that which is available.
  Mr. Spearing: A possible reason for the lack of applications is that British agriculture, for reasons that the hon. Gentleman will understand, does not stand in the same need of the restructuring as is constantly referred to in Germany, France and Belgium.
  Mr. Mills: The hon. Gentleman will find that most of the money is being used to build storage plants and for the modernising of processing plants, for example. I remember fighting hard to obtain better facilities in Northern Ireland so as to take advantage of the grants when I had the privilege to be a Northern Ireland Minister. We are in the Community and I believe that we want to take advantage of that which is available. I hope that there will be far more effort on the part of the Ministry to encourage our food industry and agriculture to take advantage of the grants.
  I return to the guidance section. I feel that much of the money is not being directed to the right methods of dealing with the problems within the Community. I want to see funds diverted to improve the regional structure of many of the countries concerned. Money must be diverted so that very small farmers may find other employment opportunities. The Community as a whole must turn its attention to dealing with the regional structure more than the structural problems of agriculture. Far more money

  1491
  should be diverted within the Community to deal with these problems.
  Mr. Marten: Would my hon. Friend have that done by agricultural financing or regional financing?
  Mr. Mills: My own view is that there should be less money in the agricultural fund and that more money should be diverted to the structural funding of the regions. In the long term that is the only way to deal with surpluses within the Community. Alternative work must be found for many of the small farmers. Considerable emphasis should be placed on dealing with the problem of surpluses within the Community. I want to see money diverted so that there is a proper regional programme.
  I welcome increased activity in dealing with irregularities. It is only human nature that we shall find dealers and farmers seeking to take advantage. There must be far greater activity in ensuring that many of the irregularities do not continue.
  Reference is made to the difficulties that are experienced in carrying out checks. I have never heard weaker arguments in my life. It is said that there are difficulties in carrying out physical checks owing to the way in which goods are presented—for example, meat being placed in refrigerated containers and the possible risk of deterioration of goods when the doors are opened.
  What nonsense that is! There is nothing to stop a person taking out a piece of meat. I have done it at meat plants in this country when making a check. There is nothing to stop anyone taking out a piece of meat. A piece of meat can be cut off in no time with a power saw, even though the meat is frozen solid. Of course samples can be taken and checks made. I sometimes wonder whether those who produce these documents have ever been to a meat plant and whether they have any experience in these matters. It is sad that they make such excuses. We need some practical people. These excuses merely give ammunition to the critics who are all around us, those who are anti-Common Market.
  11.20 p.m.
  Mr. Hamish Watt: There is a great deal in these documents that requires
  1492
  comment, but I shall confine myself to three aspects. The first is the tremendous amount of swindling—I use the word advisedly—that goes on in the movement of meat across the borders. The hon. Member for Newham, South (Mr. Spearing) mentioned the tremendous sums being wasted by provision for the storage of meat in the Community. That amount is minuscule compared with the money being milked off by certain sections of the meat trade as the meat crosses the borders.
  It is not good enough for the Commission to say that it cannot afford to police this trade. I quote an example of the sort of thing that happens, although this case is not to do with meat. Could the Minister explain why shiploads of barley from Peterhead to Bristol go via Hamburg? It is because restitution payments can be obtained by going that way round. Is there any sense in the Commission putting£6 or£7 a ton on such cereals? Yet the mishandling of the cereal trade is minuscule compared with the mishandling of the meat trade. I am referring to the trade not across the Irish border but between European countries.
  Secondly, I am desperately disappointed to see that the Minister has acceded to the import of meat from Argentina once again. In 1973, this country was no less than 84 per cent. self-sufficient in the production of beef and veal—a very short step from 100 per cent. self-sufficiency. Had there been any encouragement to the beef industry, we could by now have been totally self-sufficient. It is too bad that, for the sake of 12,000 tons of meat from Argentina, the Minister should put our entire livestock industry at risk.
  In 1970, we had in Cheshire the last outbreak of foot and mouth disease. The source was tracked back to meat from Argentina. It is too bad, in our wonderful island, where we could virtually have the status of a quarantine station, that the Minister should put all the animals in the country at risk by allowing the importation of even the small amount of 12,000 tons of beef from Argentina, where foot and mouth disease is endemic and often reaches epidemic proportions. It is too had that we cannot deliberately, through the health regulations, keep that meat out. It is virtually criminal to put our breeding livestock at risk in this irresponsible way.

  1493
  Thirdly, there is the question of the export of live lambs from Britain to Europe. There has been for many years a legitimate, lucrative and reasonable export trade of lamb carcases from England and Scotland to France. We find now, however, that large quantities of live lambs are being exported to Belgium and Germany, where they are slaughtered—which, incidentally, deprives our own slaughtermen of work. The moment these lambs are slaughtered in Belgium and Germany they become Belgian or German lamb and they get into the French market by the back door, where they pay no levy.
  It is little wonder that the French Government are getting particularly annoyed at what amounts to tax evasion by this means. The French Government impose a levy on lamb that comes from Britain but do not do so in respect of lamb that supposedly has its origins in Belgium or Germany. I fear for the legitimate side of the trade because unless this anomaly is cleared up quickly the French Government may close the door on all trade in lamb, both live and dead.
  I would ask the Minister and his colleagues in the Commission to pay a great deal more attention to what the men in the meat trade are saying. I have never known them to be as frustrated as they are just now. Like many other people, these men are coming firmly to the conclusion that the CAP is one unholy bundle and that it can never work efficiently. It is obvious that the cost of running the CAP is going up year by year. We heard earlier that the Commission has not yet managed to square the books for 1972–73. Many fiddles are obviously taking place that will never be detected. I doubt whether we shall ever manage to get the books squared, but we shall no doubt be expected to fork out more and more cash as the years go by in order to pay for the many anomalies that exist.
  It is not good enough for the Minister and his colleagues in the Commission to say that this matter is difficult to police. If it is impossible to police, he should tell the House so that hon. Members can come to a decision about allowing the CAP to continue. There is a strong case for this country remaining in Europe, but there is little or no case for the continuation of the monstrous CAP.
  11.27 p.m.
  Mr. Nicholas Winterton: I shall be brief. I was interested in the comments of the hon. Member for Banff (Mr. Watt) about fiddles and swindles taking place in the transportation of beasts and meat across borders. If I understand SNP policy correctly, the hon. Gentleman is trying to establish yet another border over which perhaps these fiddles and swindles would occur. I hope that he is not successful in his objectives.
  I was tempted to make a brief contribution because of the interesting speech of my hon. Friend the Member for Devon, West (Mr. Mills). It is always a pleasure to listen to my hon. Friend's contributions, not only in agricultural debates but also his observations on the numerous EEC documents that are brought before the House late at night. It is a pity that more hon. Members on both sides do not participate because the contents of many of these documents are very important indeed. They will have long-term effects upon the way that this country is run.
  The document we are discussing tonight is a particularly heavyweight document, which I have only briefly glanced through, relating to guidance verification, irregularities, food aid and so on in the guarantee scheme, which is of particular importance. There is one point I should like the Minister to comment upon when he winds up. He and I will be sharing a platform in his constituency on Saturday and, with his permission, I look forward to a visit to his most delightful constituency.
  My hon. Friend the Member for Devon, West highlighted the huge differentials in the sums of money being taken from the appropriate EEC accounts or funds by the various member countries of the EEC. From the facts that my hon. Friend presented to the House there was no doubt whatever that the meat processing industry, and the agricultural industry as a whole, in this country were taking far less than any other major country within the EEC. My hon. Friend mentioned France and Germany in particular.
  Will the Minister say whether this is because we have a very damaging system of taxation in this country, combined with the Price Code and price restraints imposed by successive Governments, but increasingly by the present Government?

  1495
  Because of the situation of high taxation and low profit margins, are companies, farmers and producers in this country not in a position to take advantage of the grants that my hon. Friend the Member for Devon, West rightly drew to the attention of the House?
  If that is the case, all that I can say is that the Government have the Finance Bill in Committee at the moment and I hope that they will have second thoughts about some of their proposals or add new clauses to enable food producers, manufacturers and farmers to take advantage of the very generous grants which exist within the EEC. It is ridiculous that we should be making the massive contributions that we are making, and how right my hon. Friend the Member for Banbury (Mr. Marten), the right hon. Member for Battersea, North (Mr. Jay) and the hon. Member for Newham, South (Mr. Spearing) are to draw attention to them again and again.
  I am not anti-Market, although I see a great deal wrong with it, and certainly the CAP is not a common agricultural policy at all. When dairy producers in Italy can draw 80p a gallon for milk and our own farmers are to get only 48½p in a week or so until the end of the year, there is nothing common about it.
  Our farmers are suffering. Are the Government aware of the situation? Have they analysed why we are not drawing the necessary funds from the EEC, along with the other major agricultural countries? I hope that the Minister will give some attention to this and provide some explanations.
  11.32 p.m.
  Mr. Bishop: In the brief time available to me, I shall try to deal with some of the matters raised in the debate.
  The hon. Members for Macclesfield (Mr. Winterton) and Devon, West (Mr. Mills) asked about the contribution to the Community and what we get from it. My information is that, in 1975, the United Kingdom's net benefit from guarantee section expenditure by the EAGGF was about£70 million. But, in 1976, the United Kingdom made a net contribution of about£200,000 to CAP expenditure. In 1975, we gained greatly from large receipts from mcas on United Kingdom imports paid in the United
  1496
  Kingdom. In 1976, arrangements for paying mcas were changed and, since then, most of these payments have been made in other member States. This reduced United Kingdom receipts from the EEC budget without diminishing the benefits which the United Kingdom derived from mcas and should not increase consumer prices. This change, plus increases in the share of the Communities' budget resulting from the Treaty of Accession, largely accounts for the difference between 1975 and 1976.
  The hon. Member for Macclesfield is right that we make a very substantial contribution to Community funds. Speaking from memory, our contribution to the overall budget is about 19·2 per cent. which, out of nine member States, is not an insignificant contribution. Surely this justifies the stand which my right hon. Friend and my hon. Friend the Under-Secretary, who wound up the previous debate so well to get that two-vote majority, are taking in Brussels to ensure that we get not the kind of charity to which the Opposition so often refer in the green pound but some return for our contribution.
  The hon. Member for Banff (Mr. Watt) made allegations about fraudulent shipments from Peterhead to Bristol via Hamburg. If he will write to me about it, I shall be pleased to look into it.
  The hon. Member for Devon, West asked about Table GIII on page 95 of the fifth EAGGF Report. The figures in the table are in millions of units of account and the United Kingdom figure is 70·107 million units of account.
  The beef carousel trade applies not only to Europe but to Northern Ireland. It is almost inevitable that any system of trading arrangements will provide some scope for profits to be made out of irregular or artificial but not necessarily illegal trading activities. There have been one or two examples in the beef sector, and the so-called carousel trade between the United Kingdom and the Continent has attracted special attention.
  I assure the House that a special watch is being kept for new irregularities, and when they are detected the attention of the verifiers and the auditors is directed towards establishing whether there are distortions of trade. Good co-operation has been developed among the customs

  1497
  authorities and it is a feature of the EEC system that regulations can generally be rapidly changed to close loopholes. The United Kingdom is taking every opportunity to ensure that Community legislation is drafted so as to reduce the scope for irregular trading to a minimum.
  Hon. Members have referred to the United Kingdom's share of the beef and veal sector. In 1975 the United Kingdom received just under a fifth, or 18 per cent., of the total EEC expenditure on the beef and veal sector. I regret to say that later figures are not yet available.
  There have been references to the Cheysson Committee and the intervention system. Some criticisms of that committee apply to the whole range of support measures currently in operation. On page 98 of its report the Cheysson Committee recommends:
  "As far as possible no regulations should be adopted which make for excessive administrative work or complicated inspection procedures…This recommendation effectively applies to all forms of support in the sector of beef and veal."
  I merely pass on that information, and hon. Members will note it.
  The hon. Member for Westmorland (Mr. Jopling) and the hon. Member for Devon, West spoke about the number of frauds in each country. The Commission does not report irregularities divided by country. It will be appreciated that many instances arise in trade between countries and it would be invidious to attribute them to the country that discovered them and reported them. [HON. MEMBERS: "Why?"] It is a matter not of apportioning blame but of finding out what has gone wrong and putting it right as soon as possible.
  I was asked about the number of instances of irregularities. In 1975 it was reported that there were six instances with beef and 18 involving mcas, of which 14 related to the beef and veal sector. We must keep this matter in perspective. In 1975 the irregularities reported in the guarantee sector totalled£1 million out of a total expenditure of£2,000 million. That is a small percentage, but it is serious and certainly gives no justification for us to let up on the necessary safeguards.
  The hon. Member for Devon, West referred to discipline. The Cheysson Committee is looking into this matter.
  1498
  The committee was disturbed by the variation in the rules of administration and even the types of support schemes among member States. For instance, in the United Kingdom we pay a premium on the slaughter of fat cattle, whereas in Italy a premium is paid on the retention of calves. In our view, some variation in methods of support must be tolerated, and the committee has overlooked that there is less than complete uniformity in the ways in which the intervention system is operated. We accept that if variations are allowed it is most important to have effective co-operation and an exchange of information between the enforcement agencies, and I can assure the House that we have played a full part in this matter.
  I come to points raised about the beef and veal sector. This matter was referred by the Scrutiny Committee to the House. The Committee suggested in its report, which was ordered to be printed last October, that in its opinion the instrument raised
  "questions of political importance and recommended that it be further considered by the House during any future debate concerning beef and veal",
  but it did not consider that further consideration need delay its adoption by the Council.
  This was the subject of an order introduced under the negative resolution procedure. There was a debate on an annulment motion, which was withdrawn, on 8th March.
  I have been asked about the date of the explanatory memorandum. It is usual practice for self-explanatory reports of this kind to be deposited with a short formal covering note. However, in view of the size of the report I thought it would be helpful to hon. Members if they had an explanatory memorandum of the kind used in Bills, summarising the contents of the report. The matter has been before the House and so the House was well aware of the situation.
  The hon. Member for Westmorland raised one or two questions about the debate on 8th March and about the kind of beef used. He asked why manufacturers needed to use imported beef. They require lean, tough beef for many of their processes. That type of beef is produced in the dry grasslands of the Southern hemisphere. In the EEC, where

  1499
  cattle are fed predominantly on richer grazing, this type of beef is not produced. Frozen beef from intervention stores is not always suitable for manufacturing purposes and could not replace this import requirement.
  My right hon. Friend the Member for Battersea, North (Mr. Jay) asked what third country imports there were in the year before entry into the EEC. I can tell him that the Community, including the United Kingdom, is nearer to self-sufficiency now than it was in the 1960s. We must continue to offer home producers adequate protection in order to ensure a stable supply to consumers. That is in line with the policy spelled out in our White Paper "Food from Our Own Resources".
  Mr. Jay: Will my hon. Friend answer the question? What were those imports before entry?
  Mr. Bishop: That is a matter upon which I must write to my right hon. Friend.
  The other question about the import of beef referred to the quota. I reiterate the point that I made in the debate on 8th March that the overall size of the quota is hardly significant in relation to the total production, either here or in the Community as a whole. I hope that hon. Members will be reassured on this point. The figure of 38,500 tonnes compares with annual production in the EEC of 6 million to 6·5 million tonnes. Our own production is about 1 million tonnes. Our quota share is 1·3 per cent. of that. Because of the Community's GATT obligations, imports under the quota have been allowed to continue uninterrupted over the past three years, even though there have been some general restrictions on the import of beef in the period.
  The hon. Member for Banff asked about imports. I am sure that he will appreciate that there is good reason for some liberalisation of trade with third countries. This need not in any way create unfair competition for home-produced food.
  I think that I have covered the main points raised in the debate.
  Mr. Nicholas Winterton: I asked the Minister to explain why there was a huge difference in the sums granted from Euro-
  1500
  pean sources to meat manufacturing and agricultural interests in this country compared with the sums granted to Germany and France, for example. It seems that we are not in a position to take advantage of the funds that are available. Why is this?
  Mr. Bishop: I should like notice of that question.
  The right hon. Member for Down, South (Mr. Powell) mentioned administrative penalties and I was pleased that in his comments on policy implications he accepted that there is a recommendation, that will require careful examination, for the harmonisation of penalties, since administrative penalties in some member States apply to only a limited extent in the United Kingdom.
  There is a reference in the report to the possibility of introducing administrative sanctions in regulations governing the CAP. We envisage this as the provision of controls by the Commission of the sort that already exist in the sphere of competition and it may include such things as the withdrawal or refusal of licences and the withholding of benefits.
  There have already been discussions between the Ministers of Justice of the member States with a view to establishing procedural rules to be applied to administrative sanctions, particularly with a view to securing, as far as possible, that the rules reflect existing rules for the protection of the individual in EEC States.
  Mr. Spearing: I understand that my hon. Friend cannot confirm now the figures that I gave, but will he undertake to write to me confirming my figures or, if they are not correct, giving me the right figures?
  Mr. Bishop: I should prefer to be accurate rather than hopeful so I shall write to my hon. Friend about the allegations that he has made.
  The debate has been useful. One of the three documents before us has been debated and approved by the House. The other two are still being considered by the Commission. It has been helpful to have as the basis of our discussion not only the fifth annual report of FEOGA but the recommendations of the Cheysson Committee that are detailed so well in the reports. I can assure the House that the views of hon. Members will be borne in

  1501
  mind in the further consideration in Brussels.
  Question put and agreed to.
  Resolved,
  That this House takes note of Commission documents Nos. R/2021/76, R/2614/76 and R/2109/76 on financial matters under the EAGGF and tariff quotas for frozen beef and veal, and the Ministry of Agriculture, Fisheries and Food's explanatory memorandum dated 9th May on Commission Document No. R/2614/76.

  EUROPEAN COMMUNITY (ANIMAL HEALTH)
  [Commission documents Nos. R/1668/76 and R/2578/76.]
  Motion made, and Question proposed,That this House do now adjourn.—[Mr. Tinn.]
  11.49 p.m.
  The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Gavin Strang): The health of our farm livestock is of great importance, and I am sure that the Scrutiny Committee was fully aware of that when it recommended this debate. Animal health is a difficult subject, and I am sure that the House will want to know that we are integrating our health requirements with those of the Community in a way that fully meets the needs of our livestock industries.
  Looking back a few years to the negotiations that preceded our membership of the EEC, hon. Members will recall that animal health was one of the subjects which could not be resolved from the start. As a result, derogations were agreed which enabled Great Britain and Denmark to continue their national rules—to 31st December 1976 for imports of meat and to 31st December 1977 for imports of cattle and pigs. Northern Ireland and the Republic of Ireland could continue national rules on imports of both meat and live cattle and pigs to the end of 1977. The Treaty of Accession also provided that by 1st July 1976 the Commission would submit to the Council a report on the animal health situation in the Community as a whole.
  Those who have studied the Commission's report, published on 7th July under
  1502
  reference R/1668/76, will agree that it includes a valuable summary of the varying disease patterns across the Community. It shows in particular that while the United Kingdom and Ireland have made most progress in the eradication of foot-and-mouth disease and swine fever, other countries have moved faster on brucellosis and tuberculosis.
  Mr. Hamish Watt: Do I understand the Minister to say that we have not yet eliminated tuberculosis? I understood that we had eliminated it many years ago.
  Mr. Strang: I regret to have to inform the hon. Gentleman that we have a small problem in this respect, in the South-West of England in particular, though his general observation as it relates to Scotland is fair.
  We were, however, less satisfied with some of the detail in the original proposals for implementing these measures put forward by the Commission. In particular, we wanted to see a firm and progressive policy for foot-and-mouth disease control built into Community law. We also wanted to ensure that the proposed Community action against swine fever was soundly based and that we should not have to introduce methods for eradicating bovine tuberculosis and brucellosis which were different from those we already use, other than for sound scientific reasons. We have made good progress on each of these fronts, as I believe hon. Members will agree if they have studied the paper that we placed in the Library on 21st March. I should add in parenthesis that that is the basic document for this debate, since it provides a very useful and full summary of the current position.
  I shall deal first with foot-and-mouth disease, a disease of which we have bitter memories and from which Great Britain has been free since 1968. We now have a Community directive, No. 77/98, which gives us the working basis that we considered essential. For intra-Community trade in fresh meat on the bone and offals, we have an agreement that will enable us, whenever there is an outbreak of disease, to require the same safeguards as we have imposed hitherto: the holding from which the animals came and the slaughterhouse concerned must be at least 10 kilometres from any disease outbreak

  1503
  within the previous 28 days, the herd of origin must have been free of the disease during the previous three months, and a clinical examination for foot-and-mouth disease must have been carried out both before and after slaughter.
  Similarly, for imports of live cattle and pigs, the new directive contains valuable safeguards for countries such as Britain which are free of foot-and-mouth disease and do not allow vaccination against it. When importing from member States which have not yet reached this highest category of disease freedom, we shall be able to require quarantine and isolation of the animals both in the exporting country and after they arrive here. We shall also be able to specify that cattle and pigs shall pass a serological test, which determines that they have not been vaccinated, and that cattle shall pass a probang test for the presence of live virus. These are valuable defences against the introduction of foot-and-mouth disease, and we have every confidence in them.
  Full cognisance was also taken by the Council of Ministers of Northern Ireland's stringent import régime, and recognition was given to the major rôle which exports of meat and livestock play in the Province's economy. Consequently, Northern Ireland has been given an extension for a further five years of the existing derogation to apply national rules against foot-and-mouth disease to imports of meat and livestock. In addition, the Commission has undertaken to examine the extent to which Northern Ireland's present export markets might be jeopardised if Community measures were applied from 1982 onwards when the newly extended derogation expires.
  As I have already said, we want to see the proposed scheme for eradicating swine fever in the Community develop on sound lines. It would not have been possible to achieve this against the deadline of 31st December 1976. We therefore obtained agreement to the continuance of our national rules on imported fresh pigmeat for a further year, in line with the arrangements for imports of live pigs. During this time we can help to draw up an effective plan to deal with the remaining pockets of disease in other parts of the Community. Moreover, it was agreed that the eradication plan should contain adequate safeguards for those areas—such as the United Kingdom
  1504
  —where swine fever has already been eradicated.
  Turning to bovine tuberculosis and brucellosis, the ultimate aim is that all cattle breedings herds in the Community should reach the status of "officially brucellosis-free" and "official tuberculosis-free' 'as defined in Comunity law. Without that status, animals cannot be exported for breding or store purposes to other Member Staes unless specific derogations have been granted by the importing country. We in Great Britain still have some way to go before a substantial proportion of our herds can be certified as "officially brucellosis-free", but we are making encouraging progress and a small nucleus of herds has already achieved this status. Our first aim must be to ensure that during the remainder of our eradication programme we do not havce to change the methods we are already adopting to deal with the disease unless theer is clear scientific or economic reason for doing so.
  These are matters we are currently discussing in depth at Brussels. Similarly, we want to see the comparative tuberculin test accepted for purposes of recognising a herd as officially tuberculosis-free". This is the test we have used for many years and we consider it to be fully effective. It will be some time yet before the detailed technical issues on brucellosis and tuberculosis have been resolved. I believe that it will be time well spent.
  Finally, there is the question of imports of cattle and pigs and of meat from third countries. The Commission paper R/2578/76 which was before the Scrutiny Committee is relevant to these considerations. I think we can claim to have more experience of importing meat from third countries than have other members of the Community, and we know how important it is to lay down conditions that will minimise any animal and public health risk from such sources. We intend to play a full part in overseas missions—such as the Community mission to South America—and to see that the Community conditions which will gradually be introduced will provide as good a protection as the national conditions that they will replace.
  Throughout the discussions in Brussels on the Commission's proposals we maintained close and continuous contact with the farmers' union and the veterinary

  1505
  organisations, and we shall continue to consult them as further developments take place.
  In this brief summary I have tried to concentrate on the main points that were agreed at the November and December meetings of the Council of Ministers. The Government believe that the outcome was good for Britain and good for the Community. The House may be assured that we intend to build on this solid foundation.
  11.58 p.m.
  Mr. Michael Jopling: We are grateful to the Minister for explaining the contents of these documents. We should also thank the Scrutiny Committee, which has brought them to our attention. The Committee does a great deal of work, and customarily we thank it for its work, which has been done in a very heartfelt way.
  I declare an interest as one who breeds cattle and is interested in farming. We welcome the efforts to safeguard animal health, both in this country and throughout the EEC.
  The thing that occurs to us is that we have huge advantages in this country by virtue of the fact that we are an island. The fact that rabies and foot-and-mouth disease are not endemic in this country is mainly due to our island status, and it is absurd to agree to any regulations that would sweep away that advantage if we are to merge our animal health regulations, as the Parliamentary Secretary has said we will.
  It is crucial to keep our advantages. Certainly I am attracted to the summary which is printed in document R/1668 on the third page, which says:
  "The solutions proposed by the Commission may be summarised as follows: assure the free trade of animals and meat within the Community without compromising the animal health status already achieved by some countries"
  I also like the final paragraph:
  "The measures thus proposed will at a later stage be completed by initiatives aiming at eradication of certain contagious animal diseases, financially supported by the Community."
  Basically, the Community is on the proper lines. I like the fact that the Community is making a point of trying to combat rabies, about which the Minister did not say too much.
  1506
  I am concerned about some parts of these proposals, particularly the proposal that regulations on intra-Community trade should be decided by majority voting on the Standing Veterinary Committee. That would or could be a dangerous move forward. Perhaps the Minister can say how far that has gone and to what extent it could be blocked. He referred to this in the explanatory document.
  Those who negotiate on our behalf in Brussels must jealously guard our advantages. It is crucial to keep out foot-and-mouth disease and rabies. But these papers have an air which suggests that our partners have not yet become fully aware of our advantages. There is still talk about transitional periods and other matters which give one that feeling. I am not discouraged by what the Minister said, and I hope that the Government will understand that we must not compromise on our animal health advantages. They must be defended. They are almost as important as the marketing boards which we discussed earlier.
  Document R/2578 deals with the possibility of imports from third countries and is published following a visit by veterinary experts from the Community to various countries which might wish to export meat to us. In some ways this document is even more crucial than R/1668. We are concerned here with the importation through meat of foot-and-mouth disease. In the last 10 years it has been spectacularly demonstrated how the control of meat imported particularly from South America can have a spectacular effect on the incidence of foot and mouth.
  Since we have banned "bone-in" meat, by which I mean meat on the bone from South America, I believe that we have had no outbreak of foot and mouth. I am somewhat alarmed to see on page 8 of this document that the experts recommend that boned meat—meat without the bone—should be allowed in from zones 1 and 2 of Argentina, but that meat on the bone could be allowed in from zone 3.
  That brings me back to what we discussed earlier—the anomalies and possible cheating. As the right hon. Member for Down, South (Mr. Powell) said, human nature being what it is, this will happen where it is possible. One area of

  1507
  Argentina is to be allowed to send beef on the hone to this country. That is a cheaper, simpler and more convenient way of exporting beef because it involves less processing, but inevitably it will put a temptation in the way of those who live in zones 1 and 2 to move beef into zone 3 and to send it here on the bone. We should examine that possibility carefully. Perhaps the Minister can tell us something about this. I view the proposal with considerable alarm, and I should like to hear more about it from him.
  12.6 a.m.
  Mr. Douglas Jay: I should like to know from my hon. Friend the Minister why this debate is on a motion for the Adjournment. All previous discussions on EEC documents have taken place on a motion to take note which is capable of amendment. There must be a special reason why we have, for the first time, a motion that the House should adjourn. What is that special reason?
  12.7 a.m.
  Mr. Nicholas Winterton: I did not intend to participate in this short debate, but I am concerned about some of the Minister's remarks and about what he left unsaid. I want to put a direct question to him. I am deeply worried. The United Kingdom is in a unique situation. It is an island. Foot-and-mouth disease is not endemic. Our standard of animal health and hygiene is as high as, if not higher than, that of other member States. The only area in which we fall behind, perhaps, is in brucellosis, and we are making steady progress in that.
  Will the proposals which the Minister has undoubtedly recommended to the House give us the same safeguards as those which we have had to date? Will the United Kingdom be as protected from foot-and-mouth disease as it has been under our own regulations?
  I find it somewhat difficult to comprehend the documents which pour into the House from the EEC. There are far more documents to read than any hon. Member could physically read, even if he worked 24 hours a day, seven days a week and 52 weeks a year. We therefore rely upon explanatory memoranda and on the integrity and honesty of Ministers and Shadow spokesmen who make careful studies of the documents.
  1508
  I am worried that we might be allowing back into this country from Argentina the cause of the last devastating outbreak of foot-and-mouth disease. I had experience of that outbreak. I never again want to see the scenes that I witnessed then. Perhaps it brought considerable sums of money to the firm for which I then worked, because it hired out excavators to dig huge holes in which to bury the burnt carcases. It was a very sad sight. Many prize herds up and down the country were destroyed because of that disease.
  I do not want the mania about harmonisation, which regrettably seems to be part of the EEC mentality, to envelop this country and to erode what has been a fine system of safeguards in Britain where foot-and-mouth disease is concerned—perhaps rabies, too. Can the Minister stand at the Dispatch Box tonight and tell the House, and through this House the people of this country, including farmers, that no safeguard that we have had in the past is being eroded and that the proposals that he is putting to the House tonight are as good as the safeguards that we have had in the past?
  12.10 a.m.
  Mr. Nigel Spearing: The first debate that we had after 10 o'clock tonight involved a procedural question which was enunciated by the right hon. Member for Down, South (Mr. Powell), and in this debate my right hon. Friend the Member for Battersea, North (Mr. Jay) has raised a similar and related matter. I press upon the Minister the fact that it is perhaps rather more serious than he might think at first sight.
  I shall not go into the merits of the matter, because I am not qualified to do so, but am I to understand that if we do not adjourn the House tonight and vote to that effect, or find that not enough Members are present if a Division is called, the House will have discussed the directive, in accordance with the guarantee given by the Government, and we shall then be bound by it? The directive, in the words of the document, is a
  "Proposal for a Council Directive amending Directives 64/432 of 26th June 1964, 712/461 of 12th December 1972 and 72/462 of 12th December 1972 on health and veterinary problems."
  It is a specific directive. It is not a regulation, as I think the hon. Member for

  1509
  Westmorland (Mr. Jopling) said—in perhaps justifiable and understandable error. It is something which is an undertaking, which in this debate we are presumably taking for the House.
  The questions that the hon. Member for Macclesfield (Mr. Winterton) has asked the Minister are very relevant. I hope that my hon. Friend will be able to say "Yes" to them, but I rather fear that he may not, because the answer that should be available is partly available in the explanatory memorandum. In the "policy implications", paragraph 8 says that the
  "requirements should be aimed towards the highest standards reached by individual member States."
  Then it goes on to say:
  "On a preliminary examination it seems doubtful whether the United Kingdom's animal health status would be fully safeguarded, but a detailed assessment cannot be made until the Commission's attitude to foot and mouth disease has been clarified and their future proposals for common action in relation to the eradication of swine fever and the acceleration of the eradication of brucellosis and tuberculosis are known."
  It may be that, not being technically involved, I did not listen sufficiently closely to what my hon. Friend said in opening the debate. It may well be that what he told the House incorporated what I have just read. Even if it did, it surely means that the House cannot know and does not know tonight whether, in the view of Ministers, the position of this country will be safeguarded, because the Minister's own explanatory memorandum says that it cannot until the Commission's attitude is known. It may be that it has been known since 13th August 1976. Perhaps that is one of the points I missed. However, why this point has arisen and I am a little suspicious is that we are entrusting the matter to the Adjournment. If the matter was procedurally regular, to get the confidence of the House in the Government's handling of these documents it would have been taken on a "take note" motion.
  The coupling of these apparent inconsistencies—I hope that my hon. Friend will clarify the matter—together with this highly questionable motion on the Adjournment, and not to "take note", at least raises some questions, on which I hope that the Minister will be able to satisfy the House.
  12.14 a.m.
  Mr. Strang: I should perhaps start by addressing myself to the question put by my right hon. Friend the Member for Battersea, North (Mr. Jay) and my hon. Friend the Member for Newham, South (Mr. Spearing). I understood that they were concerned, I think understandably, at the original suggestion, which was to take together all the EEC matters which we have discussed tonight, the regulations on isoglucose and the butter subsidy. I am rather at a loss, because I was under the impression that the new arrangements—for the debate which my hon. Friend the Minister of State opened and the debate on these items on the Adjournment, with the isoglucose and butter subsidy being debated subsequently—had been agreed with my right hon. and hon. Friends. I regret any misunderstanding on my part.
  I believe that there should be no concern that this debate is taking place on the motion for the Adjournment, because there is no controversy about the matter. The Scrutiny Committee accepted that we had protected the situation. The highest veterinary advice available to us—all the veterinary authorities, all the farming unions and the whole industry—has agreed that we have done so. This is a success story in that the proposals which came from the Commission last August have been transformed. Therefore, I think that I can completely remove the slightest suspicion that somehow we chose to have the debate on the Adjournment because it was a controversial issue and we did not want to face an amendment.
  Mr. Jay: It is true that representations were made to the Government against taking all these different issues in one debate, but representations were not made in favour of having a debate on the motion for the Adjournment. Even if these matters are not controversial, about which I do not feel fully sure, that is no reason for not having the usual "take note" motion.
  Mr. Strang: That is perfectly fair. I shall have to take these points to the appropriate Ministers and we shall have to have the matter clarified. If hon. Members desire that in no circumstances should any EEC matters be taken on the Adjournment, that is a matter for my right hon. Friend the Leader of the

  1511
  House. I may be wrong, but I have a suspicion that there have been occasions when such a debate has been taken on the Adjournment. I think I recall my hon. Friend the Member for Newham, South raising the matter at a meeting of the Parliamentary Labour Party after it had happened.
  Mr. Spearing: I think that I raised it on the Floor of the House, which is the right place. I understood that what had happened then would not be repeated, because it was recognised to be a questionable procedure, at least for regulations, draft regulations and draft directives. My hon. Friend has satisfied the House at least in explaining the Adjournment question, but the explanatory memorandum that he placed before us said that the Commission's attitude on foot-and-mouth disease had yet to be clarified. If it has been clarified, should we not have had another memorandum? My hon. Friend has not made clear to what extent his explanatory memorandum shows that there is doubt. If there is not, what has happened since, and why was not a new explanatory memorandum issued to tell us that it had been changed?
  Mr. Strang: My hon. Friend may not be aware of the Written Answer we gave to my hon. Friend the Member for Sheffield, Brightside (Miss Maynard) on 21st March, which pointed out that we had produced and placed in the Library for the benefit of hon. Members a statement explaining what had been decided. If my hon. Friend studies it, he will find that all the points he has raised are adequately met.
  Whatever the position with regard to taking these items on the Adjournment, perhaps in some respects it is a good thing that it has happened on a basically non-controversial item such as this. I am sure that my right hon. Friend the Leader of the House will note the points that my right hon. Friend and my hon. Friend have made, and no doubt a satisfactory understanding can be reached for the future to avoid any feeling that these matters are not being handled in the way that hon. Members would like.
  Mr. Nicholas Winterton: Why was not the Written Answer which was given to the hon. Member for Sheffield, Brightside (Miss Maynard) on 21st March more
  1512
  widely publicised to hon. Members? Why was it merely put in the Library?
  Mr. Strang: If hon. Members are interested in a subject such as animal health and the Government answer by a Written Question, that answer is printed in Hansard. Therefore, we are hardly culpable on the ground that we are not drawing such matters to the attention of hon. Members. The directive, agreed in November and December, was published in the normal way in January.
  Perhaps I may now seek to answer some of the other points raised in this debate. We must see these measures in the context of the changing situation at disease throughout the Community and, indeed, throughout the world. It is striking that a tremendous improvement in the eradication of animal diseases and of foot-and-mouth disease in particular has taken place in other Community countries. If we examine recent data on reported outbreaks of foot-and-mouth disease in some of the member States and compare them with the data for 10 years ago, we see that the situation has been transformed. In France, for example, no outbreaks of foot-and-mouth disease were reported in 1976, compared with 59 outbreaks a decade earlier. In Holland, reported foot-and-mouth outbreaks were down from 2,194 to nil in the same 10-year period. The trend has been similar in other countries of the Community, and, of course, Denmark has been free of the disease for several years and the Irish Republic has been free for a very long time. We must bear in mind that the national rules for importation which we have been operating hitherto were drawn up to cope with a much greater prevalence of the disease incidence on mainland Europe than that which we now face.
  The situation as regards swine fever shows the same general trend of reduction in numbers of outbreaks. Denmark and the Republic of Ireland have both been free of this disease for many years, considerably longer than we have in Great Britain. Although on a much reduced level of incidence, the disease continues to occur in other continental member States. I can cite the recent problems connected with it in the Netherlands. Therefore, we must support moves by the Commission to draw up agreed plans for the eradication of this disease, but

  1513
  at the same time we must ensure our own protection against it.
  The hon. Member for Westmorland (Mr. Jopling) mentioned the Standing Veterinary Committee. Its terms of reference are very limited, and it is clear that any important measure, such as swine fever eradication or safeguards against imports, must come before the Council.
  Hon. Members rightly mentioned the situation in regard to the Argentine. I have discussed this matter with my officials, because it sticks out like a sore thumb. Veterinary experts went to the Argentine and studied the situation there very carefully. I can probably write to those concerned on the technical matters because they are somewhat involved, but it is true to say that there are buffer zones between zones 1 and 2 and the situation still has to be worked out. We shall play a full part in that process. We have no intention in any of the areas of increasing the risk of foot-and-mouth disease.
  I assure the hon. Member for Macclesfield (Mr. Winterton) that Ministers have been fully aware of the importance of this issue, which has been raised time and again in Council discussions. I must admit that we got everything we asked for in the Council. We are dealing here not with a national matter but with a Community aspect.
  It would patently be nonsense if for the sacred cow of removing tariff barriers we were in any way to undermine or threaten the status of any member State, the United Kingdom included. Of course, the United Kingdom and Ireland are in a special position. We are islands, and that is of benefit to us. That becomes a corresponding benefit to the Community as a whole. There can be no question but that these circumstances and considerations have been put forcibly to our colleagues in the Council and have been accepted.
  All the best advice available in the country is unanimous that these arrangements adequately protect our national interest.
  Mr. Frank R. White: I beg to ask leave to withdraw the motion.
  Motion, by leave, withdrawn.

  UNFAIR DISMISSAL ALLEGATION
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Frank R. White.]
  12.26 a.m.
  Mr. David Mitchell: I am glad to see the Minister of State on the Front Bench even at this somewhat late hour. First, there is a technical matter that I am sure he will understand. The terms under which I asked for this Adjournment debate refer to "wrongful dismissal". Technically the correct words are "unfair dismissal". However, the Minister and I will both be talking about the same thing.
  The law provides a procedure for dealing with cases in which people feel that they have been wrongly dismissed. This is not a party matter. It was introduced in the Conservative Industrial Relations Act 1971 and was re-enacted in the Labour Government's subsequent legislation.
  It is important that we should have a system whereby a man may have the means of appeal if he feels that he has been wrongfully dismisesd. If we do not provide such a procedure, we virtually create a situation in which a man's workmates who are uneasy or are convinced that he has been wrongfully dismissed have almost no alternative but to go on strike to secure him justice. Surely everyone will agree that a situation in which there is no redress other than the solidarity of workmates coming out on strike is wholly unsatisfactory and that the House was right to introduce the concept of a right of appeal against unfair dismissal.
  The intention of Parliament was quite clear. It was that if someone was unfairly dismissed there should be a procedure for reinstatement or compensation. What Parliament never intended was that if someone had been properly and fairly dismissed he should also get compensation. The problem which I raise tonight is that the legislation is not working out in the way expected by Ministers, Opposition spokesmen and Members in all parts of the House who follow matters of industrial relations with care and interest.
  This matter has been raised with me by the Smaller Businesses Association,

  1515
  now known as the Association of Independent Businesses. I have been approached by its president, Patrick de Laszlo, who has been involved in a case of such a nature. I have also been approached by its chairman, Colin Davris, and its secretary, Miss Ingram. Their attention has been brought to the sequence of events that I shall spell out to the Minister.
  In addition the Small Business Bureau, which has been advising the Conservative Parliamentary Party's Small Business Committee, has arranged a series of meetings throughout the country so that we can consult on the problems facing small businesses. I have to tell the Minister that the whole question of the Employment Protection Act and this aspect of it is one of the subjects most often raised with us. However, I do not want to stray into the generality of that. I shall turn now to the sequence of events which broadly occurs, although the phraseology may be different from one case to another.
  A man is dismissed. He signs on at the employment exchange and seeks unemployment benefit. If he lost his job because of misconduct, he is barred from unemployment benefit for six weeks under the very old-established rule that if one is responsible oneself for being unemployed one is not able to claim. Therefore, the first question which arises at this early stage is "Were you fairly dismissed? If you were, you have six weeks to wait".
  It is rather a leading question, and the answer very often, quite inevitably, is "No. It was unfair". I put it to the Minister of State that if the electors of Doncaster should decide to dispense with his services at the next General Election and he were asked such a question, he would reply "It was very unfair".
  The point having been established that the man feels that it is all rather unfair, a stack of leaflets is made available to him, explaining to him how to make a complaint, and he is given a form to fill in. Simple inquiry will reveal rapidly to the man that it costs him nothing to fill in the form and that he does not have to be very precise in explaining the reasons for his complaint.
  He learns that if he gets as far as a tribunal it is simply a case of telling his side of the story, and someone is there
  1516
  to help him. But the employer must tell his side of the story first, which makes it that much easier for the man. Of course, the case might be settled before it gets to the tribunal—another fact which the man can easily learn. He will also be told that he may withdraw the case if he does not want to bother any further. With all this knowledge, a very large number of people decide to fill in the complaints form. They also know that their only chance of getting six weeks' benefit is if the officer specially allows the benefit, which he is unlikely to do if they have not bothered to challenge their dismissal.
  All this is not a criticism of the Department or its officers. It is right that they should point out to people what their rights are. They would he failing in their duty if they did not give such information.
  Great latitude is allowed to an individual in filling in the complaints form. Again, that is quite right, because we do not want to penalise an ordinary working man for not being a good form-filler. The employer gets a copy and tries to fathom it out. Sometimes it is clear, but in many cases it is not, and I have examples with me.
  We have a situation in which it is very easy for an employee to arrive at the point where he makes a claim. The employer then has to decide whether to go to the hearing. At this point a conciliation officer appears and offers his services. He goes over the ground. Either the employer has committed some very small technical infringement, which it is extremely easy to do, and then he is in the wrong, or it is all correct.
  Suppose that a conciliation officer finds that everything which should have been done has been done in the correct way. That is not the end of it, because we then come to the question of what it will cost the employer to go to the hearing. He has to decide whether he will take his manager to give evidence of dismissal or whether he is prepared for any number of other allegations of reasons for dismissal because of the vagueness of the form.
  The employer might want to be there, in which case he might want to take along half a dozen or more witnesses. I know of a case in which the employer had 14 witnesses, only three of whom were

  1517
  called. A lot of time, and cost in terms of time, is involved for the employer.
  I now turn to the question of costs, because in the course of one of the consultation meetings to which I have referred I consulted a solicitor who handled a recent case which occupied a day and a half in court and numerous conferences, and his account amounted to£234. That is in addition to the cost falling on the employer in having to take time off work, as well as taking other people from work as witnesses and the like. We come to the dilemma facing the employer. He has a cast-iron case. He has done everything he should have done. He is entirely within his rights. Nevertheless, it will cost him between£200 and£400 to prove it.
  I want to quote from actual cases drawn to my attention by the Smaller Businesses Association. One person says:
  "We have, over the past two years, been approached by the ACAS on several occasions where ex staff have claimed unfair dismissal. In every case the official tried to coerce this company into paying extra money which the company negotiated and eventually paid a modified sum which averaged out at£75 on the three cases. However, it was decided last year to carry a case through to the courts, and we were successful in having the claim squashed, only to be told that our costs for our staff attending court would not be met, their personal transport costs would not be met, meal expenses would not be met, and above all, although the plaintiff was given legal aid, our solicitors' costs were to be stood by us. We feel that all this is fine were we to lose the case. My conclusion to this is quite simple: it is cheaper to be blackmailed even if you're right."
  In another case an employee had sought to change his terms of employment to terms which the company found unacceptable. The employee therefore left. When he went to sign on at the employment exchange, a clerk, following what is believed to be common practice, encouraged him to complete a wrongful dismissal form claiming that he had been dismissed unfairly, with an assurance that he would not be bothered further. The conciliation officer visited the firm for a day and verified that the employee had not been wrongfully dismissed and that all the forms had been kept correctly. He suggested that the company should pay£50 to the employee because that would be cheaper than instructing lawyers and fighting the case at an industrial tribunal.
  1518
  The association knows of several other cases which follow the same pattern. This seems to reveal a very serious situation in which, in effect, people are being blackmailed to pay money to people who have been quite properly dismissed from their employment, who have no case whatever and who are being handed cash on a plate.
  I asked the Department about this, and the Minister of State himself replied to my Question some time ago indicating that in about 3,000 cases a year "out-of-tribunal" settlements are being made in which the payments were less than£100. These are cases where the former employees have no grounds for complaint but where it is cheaper to give them the cash—in other words, to accept the blackmail—than to fight the cases before tribunals.
  This has been confirmed by independent research carried out by Ian Murray of the Daily Express, who made an investigation and wrote:
  "Thousands of firms say that they have been blackmailed by the State into paying compensation to people who have been perfectly fairly dismissed from their jobs."
  I put it to the Minister that that is not the intention of Parliament. I trust that it is not his intention. I am certain that he will assure us that it is not. It was never the intention of Parliament at the time the legislation was put on the statute book. I hope that, in the light of my raising the matter in this short debate, he will instruct his Department to look into it and see whether there is some action which should be taken.
  I make a simple suggestion about how it might be done. Since no costs fall on the employee, whereas substantial costs fall on the employer, the right and proper way would be for the ACAS representative to certify that there was a case to answer. I assure the hon. Gentleman that I make no criticism of the staff of ACAS. What they are doing is obvious and logical: it is cheaper to accept blackmail than it is to take a case to court. One does not have to be a genius to realise that. If, however, we introduced a procedure whereby, before a case went to court, the conciliation officer had to certify that there was a case to answer, that in itself would prevent this problem arising.

  1519
  If the Minister does not like that, some relatively minor cost—say,£10 or£20—could be imposed on the employee if it was found that there was no case to answer. I have no strong feelings about the figure, but I suggest that we need something sufficient to make him think twice before embarking on the rosy path which leads very easily from one point to another.
  I take this opportunity of saying in all seriousness to the Minister that I know that he shares my concern about unemployment. He will recognise, I hope, that although some parts of the employment protection legislation help to protect those in work, they are causing very real concern. The legislation is extremely complex, and it is creating costs and liabilities for small employers to the extent that they are becoming very wary of taking on new people. We must be careful about erecting barriers to the taking on of employees and the creation of new jobs.
  12.43 a.m.
  The Minister of State, Department of Employment (Mr. Harold Walker): The issues raised by the hon. Member for Basingstoke (Mr. Mitchell) have been the subject of several letters which I have received from hon. Members in recent months.
  Before dealing with the specific matters dealt with by the hon. Gentleman, perhaps I should follow his lead and say a little about the origin, nature and importance of the statutory arrangements for dealing with unfair dismissal, so that we may see in perspective the criticisms which have been made.
  As the hon. Gentleman fairly reminded us, the statutory right not to be dismissed unfairly has been supported by both major political parties since it was first recommended by the Donovan Report. It was first included in the Labour Government's abortive Industrial Relations Bill in 1970. Subsequently it appeared in the Conservative Government's Industrial Relations Act, which was swept away in 1974. But, of course, the unfair dismissal provisions were preserved. It is important, therefore, to recognise at the outset that both major parties are agreed on the importance of this statutory safeguard.
  The arrangements have, I think, three features which are particularly relevant
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  to this evening's debate. First, the legislation is rightly built on the proposition that employers must be prepared to justify a dismissal, if necessary, to an impartial and informed tribunal. In the Act the onus is placed on the employer to show why he dismissed the employee, to demonstrate that he did so for a fair reason and to show that in dismissing the employee for that reason he acted reasonably.
  Good employers have always appreciated that an employee should not be dismissed unless these conditions have been fulfilled. But since 1971 employers generally have known that they may be publicly accountable for their actions in this way. This is salutary knowledge, and it is important that these statutory rights should apply to employees in small firms in just the same way as they do to those in larger firms. All employees deserve this measure of job security. The Government attach particular importance to the provision in the Employment Protection Act, now in operation, which extended to small firms the right not to be unfairly dismissed.
  Mr. David Mitchell Mr. David Mitchell rose—
  Mr. Walker: I prefer not to give way. I do not blame him for it, but the hon. Member took rather longer that is normal.
  Secondly, employees' statutory rights are backed by effective enforcement arrangements. As hon. Members know, industrial tribunals can order reinstatement or re-engagement by the employer if that is practicable and the employee so wishes it. Alternatively, the tribunal may award compensation. The Employment Protection Act has given the tribunals the power to order reinstatement or re-engagement, as distinct from their previous power merely to recommend these remedies, and thus greater emphasis has, quite rightly, been placed on job retention than on compensation for loss of a job. Nevertheless, I am bound to say that, perhaps for understandable reasons, only a small percentage of cases result in reinstatement or re-engagement. The vast majority of cases result in compensation.
  Thirdly, a major and essential feature in the statutory arrangements is the accessibility of the industrial tribunals and the relative informality of their proceedings. Dismissed employees are

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  obviously in a vulnerable position. There would be little point in a system of tribunals which employees found difficult to reach or whose procedures they could not understand. There has been recently an increasing tendency, more marked amongst employers than employees, for parties to be legally represented at tribunal hearings. This causes me some concern.
  Lawyers, of course, may have a rôle to play at the tribunals. But, with the greatest of respect for their profession, I hope that the increasing tendency for them to appear at hearings will not—as it might—lead to a more cumbersome and legalistic procedure concerned overmuch with legal proprieties and less with the merits of the case and to a situation where both employers and employees find it difficult to understand the language used at the hearings. I have heard it suggested that the industrial tribunals offer palm-tree justice. But palm trees offer convenient and simple shade when the heat is too much.
  The value of these provisions to employees can hardly be exaggerated. The number of applications to industrial tribunals involving alleged unfair dismissal has increased steadily since the legislation was introduced—from 5,000 in 1972 to 34,000 in 1976. There could hardly be more graphic proof of the importance to workers of this legislation. It is significant that since 1971 the proportion of industrial stoppages caused by dismissal has declined.
  Against that background, let me turn to the criticisms which have been made of the present arrangements. They can, I think, conveniently be divided into two classes—criticisms of the rules under which the tribunals operate, or the way their rules are administered, and criticisms of the rôle played by the conciliation officers of the Advisory, Conciliation and Arbitration Service.
  As to the first kind of criticism, it is, as I have already emphasised, fundamental that every employee should have ready access to machinery for settling his grievance. On the other hand, it is, of course, important that employers should be protected against groundless complaints where the employee knows that he has no case and where he makes the complaint from perhaps malicious
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  motives, which waste time and money. There is a difficult balance here to be struck. But I believe that we have got it about right. I do not think that a case has been made for tipping the scales any further against a dismissed employee.
  The main deterrent against malicious complaints lies, of course, in the powers of the industrial tribunals to award costs against either party if they consider a complaint to be frivolous or vexatious. This power is sparingly used, but it is used and it acts as a deterrent. It has been suggested that the power should be widened, but I cannot accept that such a change would be justifiable. A wider power might well deter applicants who were sincerely convinced of the merits of their cases. In passing, let me emphasise that it is not only employees who can insist on arguing groundless cases before tribunals. Employers may do it too.
  Another important aspect of the present arrangements is the procedures operated by the tribunals for trying to ensure that complaints that are out of scope are not proceeded with. Great care is taken to explain to applicants whose complaints seem to be out of scope that a tribunal is likely to have no power to consider their application and that it should therefore be withdrawn.
  If, nevertheless, such a case comes forward for a hearing, the tribunals are prepared to hold preliminary hearings, without witnesses in order to save the parties and their witnesses unnecessary trouble and expense, to consider the question of scope. I hope that this will become more widely known. It has been suggested that modified and more effective vetting procedures should be introduced. I am, however, yet to be convinced that this would be practicable or desirable when it is borne in mind that it is often difficult to be sure whether an application is or is not within scope.
  I am not claiming that the present procedures are perfect. We are always ready to consider representations on ways of improving them. In recent months officials of my Department have discussed with the CBI and the Institute of Personnel Management ideas put forward by those bodies for tightening up the procedures for dealing with what they consider to be groundless complaints. So far, however, the discussions have not

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  persuaded me that the present arrangements need to be changed.
  Let me now turn to the rôle of the conciliation officers. As the hon. Gentleman recognised, all complaints of unfair dismissal go to a conciliation officer in the first place. These officers play a valuable rôle—the hon. Gentleman fairly recognised this—in setting nearly 60 per cent. of complaints. It is the task of a conciliation officer to try to settle complaints by conciliation between the individual and the employer. If the parties do not want conciliation, or do not reach a settlement, the case goes forward to a tribunal for hearing, unless the complainant withdraws it. Twenty per cent. of cases are withdrawn in this way without any settlement having been made at all.
  The conciliation officer gives his assistance only if both parties are willing to accept conciliation. He talks to employer and employee separately to try to clarify their point of view, and may also offer advice about the legislation.
  Last July the CBI raised with my Department the rôle of the conciliation officer and complained that he frequently proposes an instant solution which involved the payment of a sum by the employer to the former employee. This criticism was carefully considered by ACAS and the chairman subsequently met representatives of the CBI to discuss the matter.
  ACAS accepted that small conciliated settlements occur quite frequently, but it emphasised that it is not ACAS policy to press employers to offer small sums to settle complaints. The conciliation officer tries to help the parties to reach agreement, but he does not attempt to act as an arbitrator on the merits of the case. Nor does he seek to impose, or even to recommend, a particular settlement. ACAS appreciates that settlements are the responsibility of the parties concerned.
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  ACAS pointed out, however, that conciliation officers find that in discussion with employers on what seems to be a complaint without much substance the employer may ask the conciliation officer whether there is a way of settling the complaint without going to the tribunal. In these circumstances the conciliation officer may suggest paying compensation. But he will be careful to point out to the employer at the same time the possible dangers of setting a precedent by doing so.
  ACAS also pointed out that its conciliation officers are also finding that where solicitors represent employers they overwhelmingly advise employers to settle complaints with a small sum of compensation. "Nuisance money", I am told, is the description which applied here.
  Following the meeting with the CBI, the Chairman of ACAS took a number of steps to ensure that the rôle of the conciliation officer was fully understood within and, as far as this was possible, outside ACAS, and that effective machinery was available for dealing with complaints. In this respect, regional directors were asked to discuss these matters and a leaflet was prepared describing the rôle of the conciliation officer and emphasising that he is not an arbitrator. We are considering other ways of publicising the conciliation officer's rôle.
  I shall look carefully at what the hon. Gentleman said about the complexity and lack of clarity of the appropriate forms.
  In conclusion, I should like to emphasise two points—
  The Question having been proposed after Ten o'clock on Wednesday evening, and the Debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at four minutes to One o'clock.