AGRICULTURE

HC Deb 11 May 1977 vol 931 cc1350-472

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 (Bradford, South)

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.

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 (Yeovil)

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 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 (Penistone)

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 (Cirencester and Tewkesbury)

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 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 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 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 (Birmingham, Handsworth)

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(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 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 (Bury St. Edmunds)

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 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 January, because the industry would like to know that as a matter of urgency?

Mr. Nicholas Winterton (Macclesfield)

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 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 (Westmorland)

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 (South Angus)

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 (Anglesey)

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 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 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 (Kinross and West Perthshire)

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 (Harborough)

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 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 (Montgomery)

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 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 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. 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 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 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.

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 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 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 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 (Hereford)

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 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 (Hemel Hempstead)

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 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 (Leominster)

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 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 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 against his colleagues who put the price of food first.

5.42 p.m.

Mr. Thomas Torney (Bradford, South)

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 (Chichester)

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. 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 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 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 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 (Cardigan)

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 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 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 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 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 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. 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 (Stafford and Stone)

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 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. 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 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 (Renfrewshire, West)

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 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. 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 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 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 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.

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. 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 (Buckingham)

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 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 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 (Maidstone)

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 (South Angus)

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 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 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 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 (Norfolk, South-West)

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.

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 (Carmarthen)

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 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 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 (Brecon and Radnor)

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 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 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 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 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 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 (Buckingham)

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.

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.

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.

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 (Hemel Hempstead)

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.

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: 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 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— 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 (Maidstone)

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 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 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 (Birmingham, Handsworth)

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.

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 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.

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 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 (North Angus and Mearns)

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 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 (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 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.

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 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 (Londonderry)

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 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 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 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 (Sheffield, Brightside)

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. 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 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 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 (Devon, West)

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 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 (Wells)

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 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 (Gloucestershire, West)

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.

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 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 (Harborough)

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 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 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 (Holland with Boston)

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 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 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 (Fife, Central)

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 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 (Westmorland)

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 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 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), 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. 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 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. 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 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 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 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 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 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 (Weston-super-Mare) rose—

Mr. Strang

No I will not give way, I want to get through my speech quickly. 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 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.

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 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- 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 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)

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.