Commons Sitting of 25 July 1980

Preamble
The House met at half-past Nine o'clock
PRAYERS
[Mr. Speaker in the Chair]

STATUTORY INSTRUMENTS, &c.
Ordered,
That the draft Charities (Lord Hastings Hospital Trust) Order 1980 be referred to a Standing Committee on Statutory Instruments, &c.— [Mr. Boscawen.]

EUROPEAN COMMUNITY (NEW ZEALAND BUTTER)
9.35 am
The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Alick Buchanan-Smith): I beg to move,
That this House takes note of European Community Documents 8832/79 and 8476/80 on access for New Zealand butter to the European Community and supports the Government's intention to secure satisfactory arrangements for the importation of New Zealand butter into the European Community after 1980.
Mr. Speaker: I have selected the amendment in the name of the Leader of the Opposition.
Mr. Buchanan-Smith: I wish to remind the House very briefly of the historical setting. During the accession negotiations the Conservative Government, conscious of the extent to which New Zealand relied on its exports of butter and cheese to the United Kingdom for its export earnings, negotiated special arrangements for the access of New Zealand dairy products to out market. Under protocol 18 of the Act of Accession the United Kingdom was authorised to import 166,000 tonnes of butter in 1973. gradually reducing to 138,000 tonnes in 1977, and 69,000 tonnes of cheese in 1973, reducing over the same period to 15,000 tonnes. Those arrangements were subject to the observance of a minimum cif price and the payment of a special levy substantially below the full rate. The
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intention was to set the cif price and the special levy at levels designed to allow New Zealand to sell the specified quantities without disrupting the British market. The protocol also provided for the extension of the arrangements for butter. At their meeting in Dublin in 1975, the Heads of Government underlined the importance that they attached to protocol 18 and the maintenance of the special arrangements after 1977. As a result, the Council agreed in 1976 to grant New Zealand access for 125,000 tonnes in 1978, declining to 115,000 tonnes in 1980. Although the protocol 18 arrangements for cheese ended in 1977, the Community has now agreed to import almost 10,000 tonnes a year with a reduced levy under a bilateral GATT arrangement.
I now turn to the two documents. The House will know from the explanatory memorandum that the first is a report by the Commission to the Council on the milk products position in the Community, on the world market and in New Zealand in relation to the import of New Zealand butter into the United Kingdom. It is a good report, and I congratulate the Commission on identifying the essential points to be considered and presenting them in such a clear way to the Council. The second document contains the Commission's specific proposals in the form of a draft regulation.
Although, at the end of the day, it is the regulation that the Council adopts that will determine the quantities that New Zealand can sell in the Community, it is well worth considering the Commission's report to the Council. Part I of the report notes the desire expressed by the European Council in 1975 for even closer co-operation between the Community and New Zealand with the objective of promoting an orderly operation of world markets. That, of course, is highly relevant to today's debate, and I shall return to the point later. Part II draws attention to the continuing imbalance on the Community market, despite the various measures that have been taken to reduce supply and stimulate demand, but it reaffirms that the long-term solution to the Community's surplus problem does not lie in stopping imports of New Zealand butter. That part of the report also notes that the world market for dairy products improved between 1976 and 1978. I am glad to be able to say that

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that improvement has been maintained with world prices at improved levels, but still far below Community support prices.
The report goes on to deal with the continuing importance of dairying to the New Zealand economy, and it is significant that this is dealt with so specifically. Seventeen per cent. of New Zealand's foreign exchange is earned by dairy exports, and butter exports to the United Kingdom alone contribute about 5 per cent. The final two sections of the report contain an assessment of the difficulties that have been encountered in operating the present arrangements.
The Commission refers particularly to the problem of setting the special levy on New Zealand butter at an appropriate level. This requires further explanation. The problem arises because under the present regulation the levy has to be set by the dairy management committee on the basis of the difference between the cif price and the market price of New Zealand butter in the United Kingdom taking account of costs between the cif stage and the point of first sale. A judgment, therefore, has to be made about the price at which New Zealand butter will sell and. since there can be a considerable time lag between the time the levy is paid and the time the butter is sold, the judgment has to extend to future market prices. In those circumstances the wisdom of Solomon is required. Wise though the management committee may be, it simply cannot be expected to make judgments on this question that are generally correct. The result has been that the levy has frequently been set too high and has subsequently had to be reduced to enable New Zealand to dispose not only of normal quantities of butter but stocks that have built up as a consequence.
Inevitably this factor, more than any other, has led to instability on our market. It is fashionable—and one sees this in various reports—to "blame the system" when things go wrong, but in this case I am sure that this is where the blame lies. I wish to make it absolutely clear that the problem of instability certainly does not lie with New Zealand. I am pleased to say that in its report, and now in its proposals, the Commission has found a satisfactory solution in removing the minimum cif price and setting a fixed levy,
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thus leaving New Zealand to get the most out of the market.
Mr. Nigel Spearing: The Minister will know that twice in the last week the Minister of Agriculture himself has agreed that this is one of the most crucial points that must be covered. Is he satisfied that if the modified scheme that he has just mentioned does not do the trick there is still room, in any final regulation that was agreed yesterday, for further modification in order to achieve the just ends that he has just described?
Mr. Buchanan-Smith: Our assessment of the position is that this should do the trick. In our consultations with the New Zealand Government this was regarded as a considerable step forward. However, if it did not work we would have to consider whether further modification would be necessary. I am reasonably confident that it should work, as I have said.
I do not want to labour this point, but it is at the heart of the misunderstanding about the effect on the United Kingdom butter market of New Zealand imports. I have explained how sales of New Zealand butter have in the past caused some instability on our market. This has been due not to her annual entitlement being excessive but to the unsatisfactory measures of the mechanism for setting the levy.
I shall now deal with the proposals. Basically, they are in two parts. First, there is the proposal for a reduction in the New Zealand entitlement for 1980 compensated by a reduced rate of levy. This part of the proposals has now been overtaken by the events reported by my right hon. Friend yesterday.
Secondly, there is the more important aspect of the arrangements. For the period after the end of this year the Commission has proposed that the annual quantities of 97,500 tonnes in 1981, reducing to 90,000 tonnes in 1984 and subsequent years, may be imported into the Community as a whole, rather than specifically the United Kingdom under special arrangements. In any event, the Council would review the functioning of these arrangements, on the basis of a Commission report, before 1 August 1984.
Sir Ronald Bell: My hon. Friend said that we would be compensated by, among other things, the fact

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that butter could be imported into any part of the Community. Can my hon. Friend explain how that is any compensation for New Zealand?
Mr. Buchanan-Smith: I did not say that it was full compensation for New Zealand, but it is a considerable step forward. I put that point in order to provide a balance, which I hope that my hon. and learned Friend will accept in his balanced way. This is one gain in the current arrangements.
Mr. Douglas Jay: As I understand it, the amount that has been agreed in Brussels is a figure for 1980. The figures for 1981 to 1984 still await agreement. I am not sure whether that is what the Minister said. Is that correct?
Mr. Buchanan-Smith: The right hon. Gentleman is wholly correct. All that has been agreed so far is the arrangement for 1980.
Mr. Thomas Torney rose—
Mr. Buchanan-Smith: I am sorry, I must get on. Knowing the hon. Member, I am sure that he will be able to ask his question later and I will be delighted to answer it when I wind up the debate.
The Commission has proposed the abolition of the minimum cif price with the rate of special levy to be fixed at £430·02 per tonne representing 25 per cent. of the intervention price but without deduction of butter subsidy, which would be paid later. This would provide New Zealand with a substantial improvement in her net returns from the United Kingdom market. The proposed regulation also includes, for the first time, a definition of New Zealand butter in terms of fat content, which effectively precludes New Zealand from the Continental packed market but does allow access to the processing market.
Rather than go through the proposals item by item, I think that it would be preferable for me to explain to the House the Government's attitude to them. First, let me say that the Government attach great importance to obtaining access for reasonable quantities of New Zealand butter on satisfactory terms. There is no doubt that New Zealand is an important Western ally and in an important strategic area. She is a major trading partner of the Community and it is of vital import-
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ance, not only to the United Kingdom but to the Community, that her economy should not be damaged by the CAP. We have repeatedly put that point to the Council. The importance of dairy products, and the United Kingdom market in particular, to the New Zealand economy is not in doubt.
Secondly, the Government do not believe that New Zealand is in any way responsible for the difficult conditions on the Community and world dairy products markets. Nor do I believe that cutting New Zealand supplies out of the Community market would do anything to solve the overall surplus problem. I am sure that the House will have heard some grumblings—I have certainly heard them in the Council of Ministers—from our partners in the Community that the terms and particularly the quantities are too generous to New Zealand and that there should be a terminal date for the proposed arrangements.
I remind the House, and those who grumble, of the desire expressed by the European Council for even closer cooperation between the Community and New Zealand with the objective of promoting an orderly operation of world markets. Refusal to give reasonable terms for access of New Zealand butter would rightly be seen as an act of great selfishness on the part of the Community and we are simply not prepared to be part of any such deal.
Turning to the proposals themselves, my right hon. Friend reported to the House yesterday that agreement had been reached on the proposals relating to 1980 and explained why he had agreed to this prior to the debate today. On the proposals for the period after 1980, the Government see no justification for any substantial reduction in the New Zealand quantity. However, we have to recognise that the proposals contain some attractive features for New Zealand, in particular the permanency of access, the improved mechanism for setting the levy and the reduced level of the levy, which should have the effect of giving New Zealand a substantially higher return per tonne.
Our position on the issues is clear. We are determined to secure arrangements which, both in terms of quantities and of duration, are acceptable to the New Zealand Government. There should be no

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doubt at all about our commitment. I have no hesitation in asking the House to endorse fully the motion before it.
9.52 am
Mr. Gavin Strang: I beg to move, at the end of the Question, to add:
" so long as these arrangements include the principle of permanent access with a quota for 1984 of not less than 90,000 tonnes".
The amendment reflects our commitment to the people of New Zealand—a commitment that stems from the historic and close relationship between our two peoples. When the Labour Government renegotiated Britain's terms of entry into the EEC the continued access of New Zealand butter into the United Kingdom was an important element of the settlement. The basis for continued access of satisfactory quantities of butter from New Zealand into the United Kingdom between 1978 and 1980 was agreed by my right hon. Friend the Member for Huyton (Sir H. Wilson) at the Dublin summit in 1975. The commitment that I believe the House has towards New Zealand derives from our common origin. No one would deny that the British people hold New Zealanders in great respect and affection. The New Zealand economy was developed as an extension of the United Kingdom economy. Despite efforts at diversification with considerable success and despite new markets that New Zealand has developed, the fact is that New Zealand's economy is still heavily dependent on agricultural exports to the United Kingdom.
Sir Ronald Bell: Will the hon. Gentleman add that there are more Scotsmen in New Zealand and Australia than in Scotland?
Mr. Strang: My affection for New Zealand may to some extent reflect the fact that many Scots went out there. The other point that I wish to make, which I think the hon. and learned Gentleman will find equally telling, is that if there is any rational basis whatever for international trade, surely a country that, for climatic reasons, can produce a product so much cheaper than we can produce it in Europe ought to be enabled to supply part of our needs. We should have no doubts about New Zealand being a low-
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cost producer. After all, despite the fact that the stuff is shipped thousands of miles and despite the fact that we have been applying a levy of over £ 500 a tonne, New Zealand has still been making a profit out of sales in the United Kingdom market and still wants to continue to supply us.
Sir Anthony Meyer: Would the hon. Gentleman apply the same argument to imports of Australian coal?
Mr. Strang: No, I would not. One has to strike a balance between the national interest and one's commitment to other countries. To import coal, which is a finite resource, is folly when we can produce it with people well placed to do so. I must not be drawn further. I must press ahead with my speech. I know that a number of hon. Members wish to take part in the debate.
New Zealand must be entitled to supply part of our needs. I say "part of our needs" because the Opposition have a commitment to home production. Indeed, the Labour Government were committed to increasing our share of the United Kingdom market. We pursued policies aimed at increasing the British dairy industry's proportionate contribution to EEC milk production. We were successful in these policies. In 1974 and 1975 our self-sufficiency in butter was 11 per cent. and 9 per cent. respectively, whereas in 1978 and 1979 the figures were 40 per cent. and 43 per cent. respectively. We are now manufacturing more than half our butter in the United Kingdom. We welcome that situation. There is scope for New Zealand imports, which have been running at just over 30 per cent. in recent years. There is also scope for the increased United Kingdom production of butter.
I am, however, concerned that the success of the United Kingdom dairy industry is not going to be sustained. The high interest rates and the strong pound make it increasingly hard for our United Kingdom industry to compete successfully with our Continental partners. We can succeed. We are exporting thousands of tonnes of butter to Holland. But the way forward is to maintain our commitment to New Zealand. It is in our interests to import some butter from New Zealand but at the same time to support

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our own industry. This means that someone has to be the loser. It means the exclusion of EEC countries from the British market, as has been happening in recent years.
Mr. Richard Body: Would the domestic butter industry still have this success if it were not for the near-100 per cent. tax on imported New Zealand butter? Would the hon. Gentleman not agree that any industry here can succeed if given that level of protection?
Mr. Strang: We could go a long way down this road. I am not in favour of entering into an agreement whereby New Zealand will supply all our butter. I am in favour of a balance. I also have considerable sympathy for the dairy industry when it argues that New Zealand access has to be related to the size of the United Kingdom market. If the United Kingdom market is shrinking, the access of New Zealand butter should bear some relation to the United Kingdom position. The crucial factor is to provide for permanent access at reasonable prices in amounts that are acceptable and fair to New Zealand.
I turn now to the question of the EEC surplus and to the argument that we should exclude New Zealand imports of butter because they exacerbate the current enormously costly surplus of milk products in the Community.
As the Minister himself acknowledged, the French and Irish especially, but other member States as well, are very quick to complain about imports into the Community from New Zealand when they are discussing the milk surplus. It is no exaggeration to say that imports from New Zealand are an emotive issue with French farmers. The French Minister of Agriculture is vigorous and aggressive about this issue and has been for years in the Council of Ministers.
Let us put the matter in perspective. We are discussing the access of 90,000 tonnes of New Zealand butter in 1984. Production of butter in the Community in 1979 was 1,789,000 tonnes. It will be sold on the world market in competition with subsidised EEC exports. Let us be under no illusions about the scale of the subsidy that we have been applying to these exports from the Community. A
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subsidy of about £ 1,200 a tonne compares with the levy of over £ 500 a tonne that we have applied to New Zealand butter in the past. These subsidised exports—those to the Soviet Union are much publicised—to any developed country represent a real transfer of resources from the Community. By any stretch of the imagination that is not in the interests of the people of the European Community.
Milk surpluses in the EEC cost more than £3,000 million. The milk regime alone accounts for over 30 per cent. of the total Community budget. I am speaking not of the CAP but of the milk sector only. That sector accounts for 30 per cent. of total Community expenditure, including the regional fund, the social fund and administration.
That, of course, is nonsense. It is a monstrous misuse of resources. It can be tackled only in the ways recommended by the Select Committee in its report yesterday. We can in no way solve the problem by excluding New Zealand butter from the British market. To try to solve the problem by doing that will simply damage the New Zealand economy.
I shall not go into detail on the access figures. However, we attach great importance to the figure of 90,000 tonnes in 1984 and to the principle of permanent access. Our amendment does not refer to the levy, but we recognise that there has been a gentleman's agreement, particularly for the current year, whereby the levy has been substantially reduced in return for reduced sales in the United Kingdom market.
We support the replacement of the variable levy by a fixed levy. Perhaps the Minister of State can say whether the variable levy will operate for this year or a new fixed levy will be agreed. We support the proposed fixed levy in relation to the proposals for 1981 to 1984. We regard it as a sensible improvement in arrangements.
The Minister of State spoke of the Government's determination to protect the interests of New Zealand in forthcoming negotiations. I welcome that, but I must say that the Minister's right hon. Friend has not been as successful as we have liked in achieving some of his objectives. The right hon. Gentleman has been rather

929
better at expressing his determination and giving undertakings to the House than in delivering the goods.
I refer to the statement on the proposed EEC sheepmeat regime and the right hon. Gentleman's insistence that we were totally opposed to a system of costly intervention buying. It is true that the proposed regime does not involve intervention buying in the United Kingdom, but it does involve intervention buying in France and Ireland, for which we shall have to pay along with the rest. The Minister's right hon. Friend committed himself to securing a freeze on products in structural surplus and a plan for the reduction of that surplus. Again, I have to say that the right hon. Gentleman failed to achieve those objectives.
However, we support the stand that the Government are taking on this matter. Their success in securing continued access of reasonable quantities of New Zealand butter to the United Kingdom serves the interests of New Zealand and the interests of the British people at the same time.
10.5 am
Sir Bernard Braine: However diligent individual hon. Members may be we get far too few opportunities to question trends that are damaging to the country's interests in the long run and which, if allowed to go unchallenged, become irreversible. We have such an opportunity today.
Let me make my position plain. I believe profoundly in the concept of European unity. I believe that our survival as a free nation in a bitterly divided world, overshadowed by the rivalry of the two super-Powers, depends more than ever on the democratic nations of Western Europe pooling their resources and speaking and acting as one on the world stage. In short, if the European Community did not exist, it would be necessary to create it
Doubts creep in only when one looks at the idiotic way in which the EEC sometimes organises its economic affairs and, in particular, its agriculture. We have had illustrations of that in the excellent speech by the hon. Member for Edinburgh, East (Mr. Strang).
We are being asked to approve an EEC proposal for a modest increase in New Zealand's take-home pay for the butter
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that she will be selling to us in the remaining months of 1980. In return for that she is then to reduce her exports from 115,000 tonnes to 95,000 tonnes. That is a sharp reduction. If one looks at it against what New Zealand used to send to this country not so many years ago, it is a very sharp reduction indeed.
We are also being asked to approve still further reductions so that only 90,000 tonnes would be allowed in from 1984 onwards. Even that quantity will be reduced temporarily
"to prevent disturbance of the market"
What sort of deal is that for our New Zealand friends, and what sort of deal is it for the British housewife?
New Zealand produces high-quality butter at lower cost than anywhere else in the world. This enforced reduction in a traditional trade that has served the British economy well for nearly a century means that butter turned away from Europe, and Britain in particular, will have to be sold elsewhere. The chairman of the New Zealand Dairy Board said a few days ago about the Community's proposals—
Mr. David Stoddart: Will the hon. Gentleman give way?
Sir B. Braine: I am in the middle of a sentence, and I shall give way in a moment. I think that it is better, if not a matter of courtesy, that I be allowed to finish. The chairman of that board said:
"whether we gain or lose from the deal as a whole will depend entirely on restraint by the Community in the subsidies on exports to outside markets."
New Zealand has made strenuous efforts to develop new markets for dairy produce which we are no longer permitted to take. Two-thirds by volume of her exports now go to markets in Asia, Latin America, Africa and the Middle East. But the key factor is butter. Unless the milk fat component can be sold profitably, the industry as a whole cannot survive. Sales of butter, therefore, are the key to the survival of the New Zealand dairy industry.
It has been argued that New Zealand must find new outlets—Japan, for example. There is a significant passage in the letter which Commissioner Tugendhat sent to the Council of the European Communities on 10 September last year.

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Speaking on New Zealand's efforts to diversify her trade in butter, he writes:
"at this moment there is no tangible evidence of a new stable outlet for New Zealand dairy products in Japan."
So we have the ludicrous position in which, as a result of these arrangements, not only has the British housewife been forced to pay an unnecessarily high price for butter which New Zealand farmers can produce more cheaply than anyone else—and without subsidy—but our New Zealand friends are being damaged in third markets because subsidised butter from the Community is affecting them there.
Mr. Stoddart: Bearing all that in mind—and what the hon. Gentleman says is absolutely right—bearing in mind that there is no guarantee, and bearing in mind that when we discussed this matter in 1972 there was still no guarantee and that some of us warned what would happen, why did the hon. Gentleman vote for us to go into the EEC?
Sir B. Braine: I do not know whether the hon. Member for Swindon (Mr. Stoddart) was in the House at the time—
Mr. Stoddart: I was.
Sir B. Braine: In that event, he will know that I took the chair at a meeting of hon. Members of all parties and of both Houses which was addressed by Chancellor Brandt and that in the course of it I said, in advance of our going into the Community, that for me exports of New Zealand dairy products was a key question. Obviously it had to be taken on trust. We had to take a great deal on trust.
Mr. Stoddart: But the hon. Gentleman voted for us to go in.
Sir B. Braine: I have been completely consistent. For many years I was chairman of the Commonwealth producers' organisation, which represented Commonwealth primary producers. It does not lie in the mouth of the hon. Member for Swindon, because of these trends against which I have complained constantly, to make accusations of that kind now.
Mr. Stoddart: But the hon. Gentleman voted to go in.
Sir B. Braine: Having regard to the hon. Gentleman's views, I should have thought that he would welcome my taking the stand that I am taking now and have taken consistently down the years.
If the effect of all this was, nevertheless, to ensure an expanding market for our Community partners' butter exports to Britain, there might be some sense in it. On the contrary, this idiocy has had the effect of diminishing butter consumption here. Between 1975 and 1979 the price of butter in Britain more than doubled, thanks to the Community's agricultural policy. Consumption fell by 25 per cent.—from more than 500,000 tonnes in 1975 to less than 400,000 tonnes in 1979. Consumers have turned instead to margarine, the ingredients of which, ironically, are imported from countries outside the Community. The result is that the market for butter in this country is at saturation point. Speaking about the prospects, Commissioner Gundelach told the European Parliament in March:
"The truth is that our butter exports have reached their physical limits; we can only export more by practically giving it away and paying the transport costs."
If the surplus were given away to the poor of the Community there might be some merit in it. But, no. It has to be sold below the cost of production to the Russians so that they in turn can buy more guns. I am tempted to quote Shakespeare, because he usually had an expression for it:
"Lord, what fools these mortals be!"
It disturbs me, too, that so little attention is paid to the devastating effect that these arrangements have had on New Zealand's economy. When I was in New Zealand last year it was manifest to me that there had been a sharp decline in the living standards of the New Zealand people. Whitsun saw the anniversary of the battle of Crete, where 39 years ago a gallant little army of Greeks, Britons, Australians and New Zealanders delayed the German attack upon Russia. The Nazis never got to Moscow because their tanks were bogged down just as the winter closed in upon them. We should never forget the significance of the battle of Crete—
Mr. Stoddart: We did not. The hon. Gentleman did.
Sir B. Braine: No. This is a serious matter. It is not one to be treated with levity.
I was present at the wreath-laying ceremony at Suda Bay when an all-party delegation paid its respects to the fallen. We saw a company of survivors of the New Zealand infantry regiment which had fought in that area marching down the road. It was a vivid reminder to us all of how, twice in a lifetime, young New Zealanders had come from the other side of the world—many of them not to return—to stand by our side in European conflicts. It was a vivid reminder, too, of the way, when this island was beleagured, New Zealand sent us food and continued for some years after the war to ration her own people to meet her commitment to us.
To those who argued—and I was not one of them—that, once we joined the Community, New Zealand's traditional trade with Britain had to be phased out after a period of adjustment, the answer is that special and permanent arrangements were made for West Germany to trade with East Germany, and there is vastly more in common between Britain and New Zealand than there is between the two Germanys.
If there is a will, there is a way. The reason why I intervene in this debate is that I believe that we should insist that there should be no further erosion of the natural and beneficial trade between Britain and New Zealand. I hope that we shall have that assurance from the Minister.
Trade is two-way. New Zealand still imports more from Britain than any other country save her next door neighbour, Australia. New Zealand's dairy trade is also especially important for us in the creation of invisible earnings. Our investment in shipping and in container facilities for the butter and meat trades alone is estimated currently at £ 314 million. Our export earnings from trade with New Zealand totalled £ 600 million in the last year for which I have figures. The balance of trade has been significantly in our favour ever since we joined the Community.
Mr. Roger Moate: I am sorry to intervene in my hon. Friend's powerful speech, but if what he. says is right, are not even these proposals totally
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inadequate? With imports of New Zealand cheese reduced from 100,000 tonnes to 10,000 tonnes, and with imports of New Zealand butter being cut almost by half over these years, surely we should seek some way of changing fundamentally the Community's agricultural policy to allow the balance to be restored?
Sir B. Braine: Of course. I agree entirely with my hon. Friend. However, I am constrained by the limits of the debate and therefore unable to range more widely.
It is true that we now have a grudging agreement from the Community to permit access by New Zealand to our market after 1984. That is a gain, but that access will be at much restricted figures, and that is a loss. If New Zealand cannot export at a reasonable profit she will be obliged to import fewer goods from Britain and, as trade declines in both directions, our invisible earnings will fall dramatically.
It does not make political or economic sense to travel down that road. It is unnecessary. For the reasons that I have given, it is morally wrong. This House should insist that our representatives in the Community block any further steps to erode what is a valued, traditionally, healthy and natural relationship between two like-minded peoples.
10.20 am
Mr. Douglas Jay: The hon. Member for Essex, South-East (Sir B. Braine) described the EEC's economic policies as ludicrous and idiotic. It would have been valuable had he discovered that before 1972, as a few of us from both sides of the House had the intelligence to do. I welcome the fact that the hon. Member, like so many members of the Tory Party, is now, happily, in transition.
The decision by the Minister of Agriculture, Fisheries and Food to agree to the Brussels proposals in advance of today's debate was a clear breach of the pledge given by all Governments that when the Scrutiny Committee recommends that a major EEC legislative proposal be debated in the House, assent to the proposal will not be given before the debate. This episode has shown how right some of us were to argue that such an assurance should be embodied in a proper parliamentary resolution.

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It is no excuse for the Minister to say that the meeting in Brussels occurred on Wednesday and that he thought that no better agreement could be reached. The Government should not have arranged the debate to occur after the meeting in Brussels and then argued that because the meeting came first they had to reach an agreement. This is no minor matter. We are discussing not negotiation alone but legislation. If we allow the procedure to slip further, parliamentary control over EEC legislation will be weakened even further.
We are confronted with a fait accompli. A further cut has been made in New Zealand supplies of butter. So far, no guarantee of permanent access has been achieved. In effect, a further cut has been made in imports of New Zealand butter, which are already far too low. There is also a further rise in price, which is already extortionately high.
The unrestricted and untaxed import into the United Kingdom of food from New Zealand has been, and still could be, highly beneficial for both countries. The United Kingdom consumer used to gain at low cost large supplies of the most efficiently produced and high-quality food in the world. New Zealand made the best possible use of its own natural resources and earned a large and dependable foreign exchange income. It is almost the best example this century of the real benefits of international trade, intelligently managed by both sides and benefiting both sides.
In 1966 I had the happy experience at the Board of Trade of renewing a trade agreement with New Zealand for continued, unrestricted free access of New Zealand food exports to Britain. It is sad to look back on that now. All that has been thrown aside by the vicious restrictions and protectionism imposed by the Common Market.
Under the Treaty of Accession which was negotiated by the Conservative Party, cheese from New Zealand was excluded from the British market. In 1973 the United Kingdom imported 68,000 tonnes of cheese from New Zealand. By 1977 that had been reduced to nothing. This year a meagre 9,500 tonnes have been imported, and that involved using the vast machinery of the GATT Tokyo round.
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In 1973, before the EEC fastened its stranglehold on the British economy, the United Kingdom imported 165,000 tonnes of butter. That amount has been steadily reduced by deliberate restrictions to a proposed 115,000 tonnes this year. As a result, according to the EEC's figures, the price of butter in the EEC is now about four times higher than the world price. The latest figure from the EEC's agriculture report shows that last year EEC prices were 399 per cent. world prices. Before the present changes butter which could have been sold to the ordinary British consumer at 27p per packet if freely imported cost him 40p and that was after all the subsidy and other arrangements.
Thanks to excessive prices, consumption of butter in Britain has fallen heavily since we joined the EEC. Consumption of butter in Britain fell from 8.7 kg per head in 1970 to 6.6 kg per head in 1979—a fall of about 25 per cent.
Mr. Hugh Dykes: Can the right hon. Gentleman say why?
Mr. Jay: The reason is that the price has risen threefold. The hon. Gentleman knows enough economics to know that if a price is multiplied by three times there will be some fall in consumption.
In plain English, the drop of about 25 per cent. in consumption means a major fall in real British living standards, engineered by restrictions on imports. There is to be a further drop this year from 115,000 tonnes to 95,000 tonnes.
Further falls must lead to a further rise in price and a further fall in consumption. The 95,000 tonnes proposed is not much more than half the 165,000 tonnes which we imported under free market conditions in the early 1970s. That is not a fundamental reform of the common agricultural policy. It is not a reform at all, but a minor tightening of the screw and a further injury to Britain.
Damaging as all the restrictions are to New Zealand, they are no less damaging to the British people. It is strange that Government Members, who always deplore the suggestion of import controls and protectionism never seem to raise a voice against this most vicious of all forms of protectionism. Cheese from New Zealand is almost totally excluded from the British market. We should hear more about the doctrine of free market forces being applied to food imports.

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I trust that in further negotiations the Government will insist at last on a permanent right of access for New Zealand's supplies of butter and cheese. We are not discussing sheepmeat today. May we have an assurance that the proposed 95,000 tonnes of butter from New Zealand will be an absolute minimum? In the interests of both this country and New Zealand, the figure should be much higher, and on a rising rather than a falling scale.
In a sane world, we should, of course, be fighting for an increase and, indeed, for no restrictions at all. Each artificial restriction on our food supplies, and each artificial increase in prices, eats further into our standard of living. In addition, as a result of the inevitable effect on pay claims, this policy of dearer and dearer food worsens industrial relations and raises the labour cost of our exports. The Prime Minister never mentions that when she lectures us about productivity and excessive pay claims.
For as long as we stay in the EEC—I hope it will not be much longer—I trust that the Government will resist resolutely any further damaging cuts or restrictions of this kind.
10.30 am
Mr. Tim Eggar: Unlike some hon. Members on both sides of the House, I speak as a committed European and a long-time supporter of our membership of the EEC. I also speak as someone who, over a period of about five years, has paid about eight visits to New Zealand and who at least claims to know something about the problems that New Zealand faces. I make no apology for trying to describe some of those difficulties this morning.
It is important to put New Zealand's problems into perspective. Its people inhabit a country that is equal in land mass to the United Kingdom, but there are a mere 31 million people. New Zealand has an economy that has been developed since the end of the nineteenth century on mutual trading between the United Kingdom and itself. It is a trading pattern that has benefited both countries consistently over a lengthy period. New Zealand is also a country that has suffered a greater reverse in its terms of trade since the 1974 OPEC price rise
938
than any other OECD country. The right hon. Member for Battersea, North (Mr. Jay) mentioned access to the EEC. It is true that our joining the EEC further worsened New Zealand's terms of trade, but the increase in the oil price—and all oil must be imported into New Zealand—had a much greater impact on its terms of trade.
Mr. Jay: As the oil increase was inevitable anyway, was not that all the more reason for not imposing on New Zealand a further disadvantage that was not inevitable?
Mr. Eggar: As I pointed out before the right hon. Gentleman's intervention, New Zealand's terms of trade were adversely affected by our joining the EEC, but I was arguing that, quantitatively, the OPEC price rise was far more important. As my hon. Friend the Member for Essex, South-East (Sir B. Braine) mentioned earlier, New Zealand's real standard of living has been falling significantly and consistently since 1973. In addition—we should not forget this, or ignore it—New Zealand has been losing 30,000 people a year, the majority of them skilled people, who have had to emigrate because of the lack of job opporunities there.
New Zealand has one natural advantage, and one natural advantage only, at the present time—its grass grows quicker than anywhere else in the world. That fact, and that fact alone, enables New Zealand to be able to retail butter in this country at 27p per ½ lb as opposed to the minimum EEC retail price of 47p per ½ 1b. Therefore, New Zealand can shift butter half way round the world and still undersell EEC-produced butter by 20p per ½ lb. That is the extent of New Zealand's natural advantage. We should also not forget that New Zealand's exports of butter to this country are responsible for 5 per cent. of all its overseas earnings—a significant portion.
New Zealand is a country that has additional problems. For historical reasons, it has a high wage structure compared with the wage structure in the rest of the Pacific area. It is making valiant attempts to diversify its manufacturing base and to extend into the processing of forestry products and so on, but

939
the fact is that it has a very limited internal market. Its transport problems and highway structures mean that it is unlikely ever to be able to compete satisfactorily in the production of manufactured goods.
Another point that we should not ignore is that since the early 1970s New Zealand has made dramatic attempts to diversify the marketing of its agriculture services. It probably has the most sophisticated marketing capability of any agricultural country in the world. There is hardly a country that the representatives of the New Zealand agricultural boards have not visited. Despite that, New Zealand has not been able significantly to increase its exports to other countries, first, because of the tariff barriers put up by virtually all countries against the import of agricultural produce and, secondly, because it has found consistently that it has to compete with surpluses from the EEC, which have been dumped and sold at almost any price. Therefore, as well as finding that its access to the United Kingdom market is restricted New Zealand is finding that the EEC system is minimising its capability of exporting to third countries. We should not forget that.
We must not—and I do not think that New Zealanders do—despair about the future economy of that country. It has a significant natural gas find, which by late 1984 will probably mean that it is not nearly so dependent on imported energy. There is significant available hydro power, which it is using. New Zealand is also expanding its forestry products. Nevertheless, the House must recognise that decisions taken here and in Brussels with regard to the continued right of access to the United Kingdom market for both sheepmeat and dairy products have a far greater effect on the New Zealand economy than any decisions that we take have on our own economy. If we significantly further reduce the access of dairy products and sheepmeat into the United Kingdom by actions in this House or in Brussels we have the power to destroy the New Zealand economy. We should never forget that.
Mr. Ron Leighton rose—
Mr. Eggar: I have almost completed my remarks. I shall not give way.
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It says a great deal for hon. Members on both sides of the House, and on both sides of the argument whether we should be members of the European Community, that we have fought consistently for continued access to the United Kingdom for New Zealand produce. We are now getting to a bedrock, and I do not believe that we can in all conscience go any further in reducing access for New Zealand.
Mr. Spearing: Before the hon. Gentleman resumes his seat—
Mr. Eggar: I have finished.
10.41 am
Mr. Laurie Pavitt: I agree with much of the contribution of the hon. Member for Enfield, North (Mr. Eggar). I disagree with him, as I disagreed with the hon. Member for Essex, South-East (Sir B. Braine), on the European commitment. However, although I am an anti-Marketeer I am a committed European. Those of us who want to see a more united Europe could pursue that aim within the wider European institutions if it were not for the disastrous commitment to tariff barriers and other economic nonsense by membership of the European Economic Community. I remind the House that the Council of Europe, which we formed in 1947, consists of 21 member States.
I intervene rarely in these debates. I am a member of the co-operative movement—I have no financial interest to declare in that respect—and I am a champion of the housewife. The price of entry to the European Community, which has proved to be outrageously expensive for Britain, has been met largely by the British housewife. She has had to meet the bills for the mistakes that the politicians have made. One of the housewife's prime concerns is food, and the price rises have been inordinate.
A theme that has run throughout the debate has been the need to understand the position of our New Zealand colleagues. Blake wrote about our dark Satanic mills and a green and pleasant land. We may still retain our Satanic mills, but New Zealand remains a green and pleasant land. It enjoys low-cost food production from which Britain has benefited year after year but in the past 10 years that benefit has been thrown aside in spite of the great commitment that New Zealand has always had to Britain.

941
One of the facts of life is that the awkward customer gets more attention than the good customer. That applies to our constituents. Those who are prepared to be patient do not get quite so much attention as those who ring up up at midnight to ascertain what we are doing about their housing problems.
Mr. Eggar: They do.
Mr. Pavift: New Zealand suffers from this fact because it has been especially understanding and helpful. It has tried to understand our point of view. That has not done it very much good for the past 10 years. The Minister made a reasonable speech. He mentioned on two or three occasions the reasonable approach that will be adopted, and a reasonable right of entry for butter and dairy produce. In 1972 we were talking about copper-bottomed backed guarantees. As my right hon. Friend the Member for Battersea, North (Mr. Jay) said, we have reached the position where a decision is taken on Wednesday, we have a ministerial statement on Thursday, it is debated on Friday, and still no assurances are forthcoming. It is the wish of the whole House not to clobber New Zealand. We want it to remain economically viable.
We think of New Zealand as a prosperous agricultural country. We sometimes make the mistake of assuming that New Zealand farmers are particularly prosperous. The average income per farm in New Zealand is still only £ 5,700. That should be born in mind when we hear about the farmers of Europe.
Like the hon. Member for Essex, South-East, I approach these matters from a Commonwealth point of view. It was the famous French statesman Couve de Murville who said that Britain had to make up its mind whether it would have the Commonwealth or the Common Market. He said that we would have great difficulty in retaining both. Thanks to New Zealand, Australia and other Commonwealth countries, we have been able to retain what I consider to be the greatest experiment in community living that the world has produced, namely, the Commonwealth. That has been done despite the economic disadvantages to the Commonwealth of our joining the EEC. It has been achieved because of the sup-
942
port that we have received from the Commonwealth.
Can we retain the Commonwealth for the next decade despite the impositions that are now emerging? I support the amendment, but it is not enough to make provision for a quota of 90,000 tonnes after 1984. There should be much greater provision. In our debates and negotiations in Brussels and in the House there must be constant demands to increase the quota. That should be the basis of our negotiations.
When discussing dairy farming we should not confine ourselves to butter and milk. We must take into account cheese and other products. New Zealand cheese is being severely restricted by the Common Market. Cheese, of course, is another imported food commodity. The sheer nonsense of the common agricultural policy of the Community has emerged during the debate. It is a ridiculous arrangement, which distorts the flow of food production and export and import throughout the world. The sooner that we are able to get rid of the policy the more likely we are to be able to solve the problem of New Zealand and to recognise positively its need to export its excellent products.
Commissioner Tugendhat has exposed the nonsense of New Zealand seeking to diversify its trading by turning to Japan. It is a nonsensical proposition from all moral and economic points of view. I am not happy about giving the West Midlands car industry to Japan. I shall be even less happy if we give away New Zealand dairy produce at the same time as we dispose of the other assets that the nation has at its command.
The Commission's proposals will undoubtedly be received with a considerable degree of disappointment in New Zealand. It is unthinkable that Britain should permit the Common Market to cut back any further the trading links with New Zealand. The present proposals must be regarded as the maximum cutback rather than the minimum. There is no alternative outlet for New Zealand butterfat that now comes to the Common Market. The sales of other dairy products are underpinned by New Zealand's butterfat sales to the Common Market. If there are further cutbacks, the New Zealand industry will find it difficult to survive.

943
Are we elected to this place to eliminate the economy of one of our greatest allies in two world wars? I think not. The House must be prepared to take a firm line. Common Market interests are scarcely affected by New Zealand's exports. There is not much argument about that. I resent the attitude that is taken by some, who seem to feel a need to find a scapegoat for the inefficient production of French farmers and others.
If we are not careful the Common Market will use the Commonwealth as a scapegoat in all the arguments about not ony butter and sheepmeat but every other commodity. All hon. Members appreciate that there is a burden of adjustment. The House will know that I am not an agricultural man. There is only one farm in my constituency, and although it does produce milk, as it belongs to Guinness it produces a brown liquid in far greater quantities.
The House should not accept this haphazard way of proceeding—a ministerial meeting in Brussels on Wednesday, a Commons statement from the Minister on Thursday afternoon when hon. Members are deeply involved in a whole series of other important issues, and a debate in a thin House on a Friday morning on a series of EEC instruments. That is no way for the country to treat issues as important as the future livelihood of New Zealand and the future availability to the British housewife of cheap food.
One of the great mistakes about the Common Market was that we were bamboozled by economists—
Mr. Spearing: We were not. The hon. Member for Essex, South-East (Sir B. Braine) was.
Mr. Pavitt: I have had no great faith in economists since they found that the 1930 slump was caused by sunspots. The basic flaw in the economic argument was that it claimed that it made no difference if we had high prices and high wages, than if we had low prices and low wages. It failed to foresee, however, that high prices would speedily hit the housewife but that the high wages would never materialise.
I hope that we shall have from the Minister today a solid, copper-bottomed commitment, not a promise just to do his best and to be reasonable, and to
944
plead that Britain is after all only one out of nine. Let: him speak up for the British housefiwe today and for New Zealand, and follow his words with positive deeds.
10.52 am
Sir Ronald Bell: I have always taken the view that New Zealand was shabbily treated throughout the whole Common Market business—[Hon. Members: "Hear, hear."] It is wrong to particularise the blame for that. The original negotiations completely neglected the the future of New Zealand. We were given phrases instead of realities. The renegotiations conducted by the leaders of the Labour Government were an empty farce. They were a cosmetic operation before a disingenuously conducted referendum, and the Labour leaders had the referendum in mind.
The trouble, as the hon. Member for Brent, South (Mr. Pavitt) explained, is that New Zealanders have been too decent about this issue all the way through. At the time I tried to stir them to put up a fight. They said "No, if Britain feels that this is the best thing for it, we must feel that that must be best for New Zealand". That was the attitude that New Zealand most generously adopted. We are not debating Australia, but one could say the same about that country. It woke up much too late to what was being done.
The safeguards that we secured for New Zealand were grossly inadequate. Those for Australia were almost nonexistent. That was unnecessary, because Britain was—and still is—the biggest food importer in the world. We were a treasure house for the Six. They constituted a great food surplus body. They were trying to weave the troubles of their surpluses into their Common Market theories. Suddenly, the biggest food market in the world came along and offered to join. We greatly underestimated the strength of our position, and we are now suffering for that.
The whole concept of the Rome Treaty is wrong from our point of view. It was supposed to be a free market—a common market. Its articles are designed to prevent the distortion of competition, but the whole purpose of the organisation is to distort agricultural competition. Its aim is for free trade in industrial goods, but the opposite in agricultural goods. I

945
do not criticise that as an arrangement for the Six. It may have suited them. One always has to buy off France. The French are the chauvinists who have managed to represent French chauvinism as international idealism, and I admire them for that. The Six have to pay the price, but why did we have to pay it? More especially, why did New Zealand have to pay it?
Agriculture is an important interest for us, but we can manage in the face of this policy. For New Zealand, however, agriculture is vital. Make no mistake, New Zealand is in real trouble. Its economy, while not collapsing, is sliding down, and people are beginning to slide out. That is not all, because, having diagnosed the position, one must ask what New Zealand can do about it. One quickly realises that there is nothing obvious that it can do. That is the significant point about New Zealand.
New Zealand is a nation richly endowed with a certain characteristic. It is not just that the grass grows more quickly; it grows for about nine or 10 months of the year. New Zealand producers, therefore, do not have the winter feed costs that other producers elsewhere in the world have to meet. It has tremendous advantages in the production of dairy commodities. If there is any sense in the world, a nation endowed as New Zealand is—the most efficient producer in the world—will be allowed to produce and sell its dairy goods throughout the world.
So much for the New Zealand side of the problem. There is also the British side. What are we up to, raising the cost of our food in this way? The hon. Member for Brent, South said that he did not think that it made sense to give the New Zealand dairy industry away to Japan. We are worried about Japanese competition in motor cars, motor cycles, textiles and a whole range of other goods. If we give the Japanese the advantage of cheap food while we opt for dear food, where will that get us?
I was always puzzled why we signed the Treaty of Rome. We have many disadvantages—I will not go into them because I do not want to disturb the harmony between the two sides of the House. We had certain advantages as
946
well, however. One was cheap food. It gave our manufacturers an edge in many markets. The other advantage was our high tariffs—about half as high again as those applying in the Six. We chose to throw away those two advantages, and then we wondered why we were not prospering.
Therefore, imports of New Zealand food at about a third the world price are an essential element in the prosperity of the British economy.
Mr. Jay: Does the hon. and learned Gentleman agree that it is not very sensible that the British taxpayer should have to subsidise butter supplies for the Soviet troops in Afghanistan?
Sir R. Bell: That is another aspect, but I was not proposing to cover the whole range of this issue in a short speech. I must leave some good points for other hon. Members who have yet to speak.
Sir Bernard Braine: I have already made that point.
Sir R. Bell: Yes, I am sure. I was proposing to limit myself to the economic arguments.
A gradation downwards to 90,000 tonnes of butter—and they are "Froggy" tonnes, not real tons—is simply not good enough. We are cutting New Zealand butter exports to Britain over the period to about half what they ought to be. We have virtually wiped out imports of cheese. Nor are butter and cheese the only dairy products that used to come to Britain from New Zealand. Others included milk powder, and in all of them the Common Market has the most enormous mountains. I should think that the milk powder mountains must now rival the Alps.
New Zealand has been severely hit. Sympathy, understanding and well-drafted phrases are simply not good enough. Something must be done by the British Government. Otherwise, they will be put in the position of the walrus who wept as he ate the oysters. We have said that we will stand up for New Zealand, but the result has been that we have planned and itemised its decline. That is no way of helping that country.
I make no distinction between British people, whether they live in Britain, Australia or New Zealand. Our responsibility to British people in New Zealand is as

947
great as our responsibility to people who live in this country—some of whom are very odd indeed. To put it in a neutral way, I have a strong emotional attachment to the people of Australia and New Zealand, whom I recognise as British in the way that I am British. That is the way in which I expect the Government to look after them. There are people on the other side of the Channel who look after themselves and who would sacrifice us. It is almost as though their first desire is to see Britain sink. Let us do something now for New Zealand, which is in real difficulty, and even danger.
11.2 am
Mr. Thomas Torney: I should like the Minister to clarify certain points about the levy. We clearly understand—I think that our friends from New Zealand clear understand—that for 1980 the quota has been reduced to 95,000 tonnes, but our New Zealand friends and I do not understand why it has been agreed to reduce the levy from £ 520 per tonne—that is a "Froggy" tonne—to £ 320. Will the Minister clarify that point in his reply?
Further reductions—which are far too great—are planned for the New Zealand butter quotas between now and 1984, but the levy is being raised to £ 430, according to the document. If the levy has been reduced to £ 320 for the 1980 quota, why are we reducing the quota still further for 1984 and increasing the levy? The levy is scant compensation to the New Zealanders for a reduction in the quota, but it will not even be that if we decrease it, then raise it again. Will the Minister clarify that point?
I am pleasantly surprised that there is so much agreement on both sides of the House on the question of the ill-treatment of our New Zealand allies and friends. I agree wholeheartedly with the sentiments that have already been expressed. I was struck by the excellent resumé of the hon. Member for Enfield, North (Mr. Eggar), who said that he had been to New Zealand several times. He told us about the problems of the New Zealand economy and its dependence on selling its foodstuffs, including butter, to the United Kingdom, as it has been doing for many years.
However, I hope that I shall not strike a note of controversy when I say that it
948
is a pity that in the original negotiations for our entry of the Common Market the Conservative Government did not understand what they were doing to New Zealand. It must have been patently clear that New Zealand and other Commonwealth countries—even Britain—would suffer. I cannot believe that Conservative Ministers could have been so naive at that time.
Sir Bernard Braine: Will the hon. Gentleman give way?
Mr. Torney: I shall give way in a moment.
I know that the Labour Government renegotiated the terms, but I am as dissatisfied with the new terms as I was with the original terms. The real crime was accepting the common agricultural policy for Britain, when we are not self-supporting in food and when most of the other Common Market countries are.
Sir. B. Braine: The hon. Member for Bradford, South (Mr. Torney) is fair-minded, and to some extent he put the record right after I sought to intervene. The Conservative Government received assurances which they accepted in good faith, and which were accepted by the New Zealand Government of the day in good faith. Subsequently, an opportunity occurred for a renegotiation of the terms, and the Labour Government gave their advice that the terms were reasonable and should be accepted. It is pointless for the hon. Gentleman to throw out those charges now. There were several reasons for entering the Common Market. The issue had to be looked at in its entirety. Those hon. Members who really care-there are enough on both sides of the House—that New Zealand should have permanent guarantees should make their views heard, so that in the light of experience our representatives at Brussels can insist that they are achieved.
Mr. Torney: I thank the hon. Gentleman for his telling remarks about our commitment to New Zealand.
My hon. Friend the Member for Edinburgh, East (Mr. Strang) has already referred to the French farmers as being emotive. I entirely agree. On a recent visit to France with the Select Committee on Agriculture not many months ago, we had the pleasure—or perhaps the pain—of

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meeting top officials of the French Ministry of Agriculture. We also met the French Minister of Agriculture, who was extremely vocal in his demands for a reduction in imports of New Zealand butter by Britain. The majority of us did not agree with him, but the French Minister and his civil servants surely cannot have been so naive as to believe that the cutting down of New Zealand butter coming to Britain would have any appreciable effect on the massive dairy surplus in the EEC.
Sir William Elliott (Newcastle-upon-Tyne, North): If the hon. Member will search his memory he may recall that the discussion with the French Minister, which I remember well—we were also vocal—was in the context of the lamb problem.
Mr. Torney: I do not remember it in that context. I clearly heard the representatives of the French Government at that time saying that we should reduce our imports of New Zealand butter. I reiterate that they surely cannot be so naive as to believe that that would appreciably affect the massive surplus in the EEC. The French would like to see the substitution on the British housewife's table of French butter for New Zealand butter.
I hope that the Government will try to ensure that an even better deal than the one envisaged in the order is given to New Zealand and that we shall never injure our New Zealand friends and allies by allowing French surplus butter to come into Britain.
It has already been amply explained that our New Zealand friends have little chance of disposing of their surplus in other parts of the world. They have been trying hard to dispose of it, but without much success. Every time that they try to dispose of their surplus in other places they come up against the barrier of the massive subsidies that Britain has to pay to enable French and German surpluses to be sold so cheaply to third countries that even the cheap, good quality and efficiently produced New Zealand butter cannot compete with them.
It has been suggested to me by various sources in our own dairy industry that the New Zealanders are trying to sell their butter in the Common Market. We know
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that the New Zealanders do not produce the lactic butter that the French and others in Europe like to eat It has been suggested, therefore, that New Zealand butter should be sold for manufacturing purposes—for biscuits, confectionery, and so on. It has also been suggested to me that I should ask the Government to urge this on the EEC.
I can see very little hope of New Zealand being able to sell its butter to countries in Europe which already want a reduction in New Zealand exports to the United Kingdom in order to make way for their own massive surpluses. That is not a viable proposition for New Zealand; it is just another wild promise of hope when there is no hope at all.
The British dairy industry as a whole must also look to its laurels and consider what the common agricultural policy really means for it. At the moment, our dairy production in Britain is increasing, which is good, but the consumption of dairy products is going down, mainly because of the high prices.
It should be remembered that the Common Market levies on Community farmers hit British farmers far more than farmers in other European countries. British farmers would be forced into bankruptcy—or at least out of business—with a consequent fall in our milk production, if we complied with the ridiculous suggestion that we should help to reduce a surplus that is produced not by us but by other European countries.
The only way effectively to reduce the surplus in the EEC is to ensure that the countries which produce it dispose of it themselves and that any payment comes from their own national exchequers.
We cannot and must not let New Zealand down. She has been our ally, as has been said already, in two world wars. She already buys more from us than we buy from her. She has always been our friend in need. I agree with those hon. Members who regard every New Zealander as another Briton who lives in a different part of the world. We have a moral responsibility not to allow the New Zealand economy to collapse simply to bolster the French farmer.
We know that because of the political implications in France the French cannot and will not make agreements that are helpful to the United Kingdom, New

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Zealand and other Commonwealth countries. Politically the farmer in France is a far greater force than the farmer in this country.
I hope that the Government will try to get something more for New Zealand than the 90,000 tonnes that is envisaged for 1984, because that is not enough.
I hope that my words ring in the Minister's ears, and that he will now do something about the problem.
11.20 am
Sir Anthony Meyer: It is always difficult to argue for the general rather than for any particular interests, and it is always difficult to argue for long-term advantages rather than short-term ones, even in this House, where we should be able to consider the general interest above all. I find that very sad.
I am sorry that my hon. Friend the Member for Newcastle-upon-Tyne, North (Sir W. Elliott) cannot remain long enough to intervene in this debate and expose the extraordinary partiality with which the hon. Member for Bradford, South (Mr. Torney) attempted to suggest that the workings of the common agricultural policy operate solely to the disadvantage of this country. I do not have my hon. Friend's expertise, and I do not propose to engage the hon. Gentleman in that argument.
As I understand it—I should be glad to be corrected by my hon. Friend—the CAP has always been considered to be, on balance, part of the price that this country had to pay to participate in the European Community. We always recognised that it was a policy that was not made originally with our interests in mind, and that we therefore had the uphill task of trying to adapt it in order for it to be less disadvantageous to us.
My right hon. Friend the Minister of Agriculture, Fisheries and Food has had extraordinary success in his persistent, dogged battle to amend the policy the better to suit our interests, a success that contrasts staggeringly with the failure of the right hon. Member for Deptford (Mr. Silkin), who set out saying that he intended to fling out of the Common Market if he could not get his way, wrongly imagining that that would strengthen his bargaining position, and discovering that in fact it stopped him from achieving
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anything for the defence of British interests, other than striking many heroic attitudes.
As I said, it is not as easy as it should be to argue the general interest in the House. Furthermore, there is a powerful incentive to advocate impossible solutions. The hon. Member for Edinburgh, East (Mr. Strang), who opened the debate for the Opposition, advocated, with his customary skill and dialectic ingenuity, a series of impossible solutions: that we should continue to import New Zealand butter in unlimited quantities in the name of free trade, in the name of our ties—our emotional, sentimental ties—with the Commonwealth, and in the name of a lower price for our consumers; that, on those same principles, we should continue to shut out Australian coal, in the name of free trade, in the name of our Commonwealth ties, in the name of lower prices for our consumers; that, by the same token, we should shut out textile imports from the Third world, again in the name of free trade, in the name of the doctrine of trying to promote the development of the Third world, for the long-term advantage of the British economy.
Mr. Strang Mr. Strang rose—
Sir A. Meyer: I am reluctant to give way, because I want to be brief.
Mr. Strang: I shall be brief, too. The hon. Gentleman may recall that I stated explicitly that I was not in favour of our industry being wiped out by New Zealand butter imports. I am in favour of a balance being struck. I supported our old arrangements for supporting our dairy industry. We can reconcile New Zealand's interests with our own, just as we can reconcile the interests of our own mining industry with those of the rest of the world. It would be nonsense to allow collieries to be decimated for the sake of the temporary solution of importing cheap coal. I am not advocating that we dicimate agriculture, either.
Sir A. Meyer: The hon. Gentleman must not emulate my hon. Friend the Member for Essex, South-East (Sir B. Braine), who has tried to make more than two speeches in the debate.
The plain fact is that the Labour Party demands the freedom to export our goods tariff-free to Europe, which is still the largest and is now the fastest growing of

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our export markets, without having to accept in exchange any industrial goods from Europe. It is not quite the nonsense rhyme that we used to have from the Opposition. In the old days it used to be that they were all in favour of free trade with Europe in industrial goods, as long as we did not have to have any free trade in agricultural goods or take part in the CAP. The new nonsense rhyme at least has the merit of being transparent to even the veriest infant as being impossible.
The truth is that the Labour Party wants to wreck the EEC, or at any rate to make it impossible for Britain to remain within it.
Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. The hon. Gentleman is going a little wide, when we are supposed to be discussing New Zealand butter.
Sir A. Meyer: I am grateful to you, Mr. Deputy Speaker, for taking me on to my next sentence, which is a reference to New Zealand and its problems.
All hon. Members wish New Zealand well. We were all very impressed by the speech of my hon. Friend the Member for Enfield, North (Mr. Eggar), with his close personal knowledge of the matter, with his knowledge both of the problems facing New Zealand and of the vital importance for this country of remaining a member of the EEC and playing an active part in it. But we in this country face the necessity of making painful changes. The events of the past few weeks have shown just how painful those changes will be, as one after another of our basic industries ceases to be competitive in world markets.
New Zealand faces a similar problem of adaptation of its principal industry.
Sir Ronald Bell Sir Ronald Bell rose—
Sir A. Meyer: I shall not give way any more, because to do so would only spin out my speech. I question how far we are morally obliged—we are certainly not legally obliged—to give priority to the problems of New Zealand in this regard over our own.
My hon. Friend the Minister of State said that cutting New Zealand's supplies
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of butter out of the EEC altogether would do nothing to solve the problems of surplus dairy products in Europe. I agree. I am sure that my hon. Friend is right, but it is certainly not the view of dairy farmers in my constituency, who, by and large, are happy that New Zealand lamb should continue to come into this country but would be delighted if a way could be found of sharply reducing the amount of New Zealand butter coming in. I do not necessarily endorse that view, but I am bound to record it as being the view of dairy farmers in my constituency.
As a background to this debate—perhaps it is really a foreground, because in a sense the debate has been overtaken by it—there is the agreement reached yesterday by my right hon. Friend the Minister, an agreement which the right hon. Member for Battersea, North (Mr. Jay) would have us reject on the ground that it somehow infringes parliamentary procedures. I am sure that we do well to be jealous of our procedures, but we should not allow them to stand in the way of the national interest, particularly when the national interest coincides with the interests of New Zealand.
My right hon. Friend made the position plain yesterday in reply to questions:
"As I made clear in my statement, New Zealand Government officials were present in Luxembourg and we were in close consultation with them throughout. It was their wish that we should agree to this arrangement."
Mr. Jay: Does the hon. Gentleman agree that whatever the national interest it would have been more sensible to have the debate here one or two days before the debate in Brussels, and not afterwards?
Sir A. Meyer: I most certainly do not agree. I continue to quote from what my right hon. Friend said:
"I think that, on reflection, the hon. Gentleman will agree that it would have been wrong had I left the position uncertain until a later time when other countries could come back and object. I did what I did in the in-interests of… New Zealand".— [Official Report, 24 July 1980; Vol. 989, c. 787-96.]
The agreement that was reached was under fire—of course it was—from dairy interests in Continental countries which were cross that so much had been secured for New Zealand. It would have been crazy for my right hon. Friend to reject so satisfactory an offer. I congratulate

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him on the boldness and decision that he showed. All that must be a matter of balance—
Mr. Jay Mr. Jay rose—
Sir A. Meyer: I shall not give way.
Mr. Jay: Give way.
Mr. Deputy Speaker: Order. The hon. Member for Flint, West (Sir A. Meyer) is not giving way.
Sir A. Meyer: I believe that the Government have the matter right with the present agreement. The balance must be an equilibrium of forces. Because the forces deployed so far in the debate—including even my hon. Friend the Member for Enfield, North—have urged the Government to fight for even more generous access to the European market for New Zealand butter. I must, of necessity, intervene on the other side and tell my hon. Friend the Minister that he will have my support, and the support of the Conservative Party, if he decides that he must preserve at least as much elbow room in the negotiations as he has managed to secure so far.
The difficulty is to argue the general rather than the particular. Quite clearly, Mr. Deputy Speaker, you would call me to order if I were to say more than one sentence in support of the general interest, but in a debate on one aspect of agricultural policy it is not easy to make it plain that the continuing general interest of Britain—on political grounds, general economic grounds and on the ground of Britain's long-term interests—is that we should remain an active participating member of the EEC. That necessarily entails disadvantages in certain sectors. The EEC is an arrangement whereby some countries have to forfeit some of their national interests. We see the French pursuing their national interests with the same narrow-minded determination to secure short-term advantage that we see consistently displayed by Opposition Members on each and every occasion.
It is for the Government to make the general interest prevail, whether it be on butter, on the common agricultural policy or on Britain's attitude towards the European Community, of which we are, and will remain, a member.
11.33 am
Mr. Ron Leighton: In considering the matter of New Zealand butter I am driven to the conclusion that some of the most objectionable and unpalatable consequences of our membership of the EEC are the divisions that it is causing within the Commonwealth, and the damage that it is doing to Commonwealth trade. The hon. Member for Essex, South-East (Sir B. Braine), whose constituent I once was, referred to his connection with the Commonwealth Producers Organisation. As the hon. and learned Member for Beaconsfield (Sir R. Bell) said, we are not discussing Australia today, but I wonder what the hon. Member for Essex, South-East thinks about the supplies of butter, cheese, sugar, fruit—both fresh and canned—beef and wheat from Australia that have been virtually phased out
Because of the proposed sheepmeat regime we understand that the Australians propose to replace £ 500 million-worth of exports from the EEC, most of which come from Britain. We face a possible trade war between Australia and Britain as a result of our membership of the EEC. I shall not pursue that point further because we are primarily considering New Zealand and the damage to our trade with that country.
If the New Zealanders have a product of good quality and the right price, which they want to sell and we want to buy, I do not understand why any extraneous agency should intervene, interfere and tell us that we cannot conduct that trade. As has been said, it is a perfect example of mutually beneficial international trade. If the purpose of international trade is to allow countries to specialise, to encourage countries to do what they do best, to lead to an international division of labour, surely that is the best example that can be quoted.
New Zealand has by far the most efficient dairy industry in the world. We are helping to strangle it. It is blessed by the right climate and terrain, and it has abundant land. The country is ideal for grassland farming. It can send butter across the ocean to Britain at half the price that it is produced here. In return, it takes our manufactured goods; it will take fewer in future. We also gain from shipping and insurance. All that is being seriously damaged.

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The figures are not in dispute. In 1973 New Zealand sent us 165,000 tonnes. This year, it will be 95,000 tonnes. That beautiful trade has been virtually cut in half. In 1977 New Zealand sent us 65,500 tonnes of cheese. That was whittled down to nothing for two years. As a result of the GATT negotiations it will be less than 10,000 tonnes this year. That creates a problem for New Zealand. The milk equivalent for the production of 55,000 tonnes of butter and 65,000 tonnes of cheese has to go somewhere. Where will it go? Will the New Zealanders have to slaughter their dairy herds?
The stark truth is that only one part of the world is willing to take those dairy supplies—the Soviet Union. I understand that the New Zealanders are holding back from that because of the international position, but, inevitably, they will be driven increasingly to dependence upon the Eastern bloc. I do not know whether that pleases the Conservative Party. New Zealand is being shut out of our markets and those of Western Europe, and there is nowhere else for it to go.
The obscene levy on New Zealand butter to increase the price—to the consumer, not to New Zealand—is currently about 60 per cent. of the landed price. What nonsense that is. We know that the butter comes in at half the price of the minimum selling price on the Continent. As the Minister pointed out, hitherto the levy was hot a fixed quantity. It was set in advance in an unpredictable market. Quite often the EEC over-estimated the levy. As a result, New Zealand's trade in butter has often been uneconomic. That is why it has often failed to fulfil even its existing quota—not because it could not physically supply, but because it was losing money on the trade. New Zealand could physically send us 170,000 tonnes, or even 200,000 tonnes, if we were willing to allow it, but instead, the proposal before us is that we should cut the trade by 20,000 tonnes.
I hope that no Minister will claim that the New Zealand Government are enthusiastic about that. We have heard that they have agreed to it. Let us say rather that they acquiesce in it. The New Zealand Government were negotiating against a time limit, they were forced
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into a corner and they were beaten and intimidated. They played the game and agreed to the terms, but let no one suggest that they agreed enthusiastically. They do not like it—they are opposed to it—but they have been forced to agree.
It is a favourite negotiating tactic of the French, is it not, to set a time limit? They are doing that on fish. I am afraid that we shall have a similar sell-out on fish.
Mr. Dykes: Will the hon. Member accept that after the Minister's words yesterday the Opposition spokesman did not refute the assertion that the New Zealanders had accepted the agreement. He simply asked questions about it; he did not say that it was unacceptable to New Zealand.
Mr. Leighton: When superior force is brought to bear on a small country, it often gives way. Does the hon. Member really think that the New Zealanders are happy or enthusiastic about this agreement, that they like to have their quotas cut by 20,000 tonnes? Does he not think that they would like to trade freely with us? Certainly that is the information that I have received from my talks with New Zealanders.
This agreement is. of course, for one year only. What happens then? I hope that eventually this country will come to its senses and we shall succeed in extricating ourselves from this lunacy. I hope that we can then get back to a sensible arrangement with our New Zealand brothers. But in the interim, although 90,000 tonnes is far too low, I hope that the Government will give an assurance that they will stick to that figure virtually throughout the foreseeable future.
Can we rely on the Government? I am not speaking so much to the Minister of State who is on the Front Bench now, but I have the gravest suspicions about his right hon. Friend the Minister of Agriculture. We have heard him repeatedly give assurances from the Dispatch Box, particularly to the hon. Member for Holland with Boston (Mr. Body) that he would not agree to increasing the prices for those goods that are in structural surplus. Those were clear unambiguous statements—absolutely firm assurances. He gave them two years running and two years running he reneged.

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Can we believe anything that he says? Has he any credibility in the House? Have the Government any credibility at all over the CAP? They are certainly not reforming it. If they were to give way further and go below this low figure of 90,000 tonnes, they would never be forgiven.
The EEC does not give a tuppenny damn about New Zealand. It does not give a row of beans. When a few of us had the chance to go to Luxembourg and Brussels a few days ago, I sat next to a senior Commission official, a splendid fellow of Dutch origin. We discussed matters in a very convivial manner. He said "The arrangements for New Zealand come to an end in 1980." I said" Oh yes, but of course you will negotiate a follow-on agreement." He said "Why? Why should we? The agreement was to end in 1980." I was rather shocked and I did not know whether he was joking or not. He went on "They send their butter across the ocean and land it at half the price. Therefore, it must be subsidised; it is being dumped. Why should we have dumped butter?" I then asked what he know about New Zealand. His answers showed that he did not have a clue. I asked him what he thought the population of New Zealand was. He said "Ten million." I asked him where he went to school and he told me that he went to the University of Amsterdam. I suggested that he had never learnt geography.
Mr. Buchanan-Smith: It might help the House if the hon. Member would give us the name and the position of that official in the Commission.
Mr. Leighton: Yes. Yesterday I met some people from the New Zealand High Commission. I had asked this gentleman to write his name and address on a piece of paper so that the facts about New Zealand could be sent to him. I have given that piece of paper to one of the trade attaches at the New Zealand High Commission. I cannot remember the man's name offhand, but if the Minister wishes I shall get it and let him have it. But I have ensured, via the New Zealand High Commission, that the education of this high official is taken further.
I then said to this official "I am afraid that you are wrong; the population is not 10 million. Have another estimate." He then guessed 15 million and then 20 million. My point is that these people
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do not worry about New Zealand at all. I have no faith in the Commission. I want to have faith in the British Government, and I have some faith in the Minister of State. But after the promises which have been betrayed by his right hon. Friend, I have my doubts.
Mr. Buchanan-Smith: I thoroughly commend the efforts that the hon. Member has made to educate this member of the Commission. It would be interesting if he could give us the position of the official so that we can know what influence he has on policy in relation to New Zealand. I should be very surprised to find that he influenced anything.
Mr. Leighton: I shall certainly respond to that. I shall get the information and give it to you as soon as possible. I shall send you his particulars and I hope that you can send him some information the next time that you are over there. I hope that you can take him by the hand and continue his education.
Mr. Deputy Speaker: I think that it is very unlikely that I shall be there.
Mr. Leighton: I apologise, Mr. Deputy Speaker.
Mr. Dykes: Will the hon. Gentleman give way? I was sitting at the same table with him and the Commission official.
Mr. Leighton: The hon. Member was sitting up the other end of the table and he never heard our conversation; nevertheless, I shall give way.
Mr. Dykes: I think it will help the House to record that the official concerned was a Dutch member of the Court of Accounts, concerned with the Community accounts and that therefore he would not necessarily be an expert on the population of New Zealand. Equally, I could ask the hon Member if he is so well informed about the population of Martinique.
Mr. Leighton: I shall treat that interesting intervention in the manner that it deserves. This agreement that we have arrived at is not even second-best; it is third-best. I hope that when it runs out the Government will stick to it for the foreseeable future and ensure that in the horrible Euro-jargon, there is no more "digressivity" over New Zealand—that is what they call it.

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The Europeans talk about a review if consumption declines. Of course consumption will decline, primarily because of price. I suppose that we shall hear from some Conservative Members that people are not eating butter because it gives them high cholesterol, or something like that, but I am sure that the vast majority of people—certainly my working-class constituents—look at the price of butter and compare it with the price of margarine. Perhaps in the reaches of other suburban areas they worry about cholesterol, but in my area they worry about price.
I hope that as consumption declines there will be no question of the United Kingdom Government giving way and saying that the New Zealand figure must be reduced. The cause of the trouble in dairy products is not New Zealand. According to document No. 8832, in 1978 EEC production was 156,000 tonnes more than the year before, and consumption in the same period was 80,000 tonnes less. That is the problem. The high price regime in the CAP has caused all the trouble. Then the butter is exported with a subsidy or restitution of 70 per cent. of the value. That crazy arrangement is the real cause of the problem entrenched by this agreement. We want a firm guarantee that after this year's agreement is out of the way New Zealand can rely on 90,000 tonnes in perpetuity.
11.50 am
Mr. Richard Body: It may be out of order, but I am glad that the hon. Member for Newham, North-East, (Mr. Leighton) referred to Australia. It needs to be recorded yet again that no less than one-third of the efficient dairy producers of Australia have gone out of business. In the words of the Prime Minister of Australia, they have been driven out of business because of our membership of the EEC. It is shameful that we have overlooked the interests of Australia.
We have struggled hard in the last few days to look after the interests of New Zealand. As the hon. Member for Newham, North-East emphasised, the agreement is for only one year. There can be no doubt that we shall be debating the issue again in 12 months' time, if not before. In 12 months' time the prob-
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lem will be worse for New Zealand, because the production of dairy products in the Community will have increased yet again.
I should like to refer to the report of the Select Committee on agriculture, published yesterday. We have spent many hours in the Select Committee considering the problems of surplus production. We recognise the undoubted fact that surplus production will increase and not diminish. The potential for increased production of dairy products in the Community is phenomenal. The dairy industry in the Community is where ours was 30 years ago. Just as ours has been able to expand considerably over the last 30 years, so can the Community's in the next decade.
The Select Committee report, in paragraph 23, says:
"No witness dissented from the view of the Centre for Agricultural Strategy that overproduction is increasing, or from Professor Benyon's grim prophecy that unless something is done about it ' the present structural surpluses will pale into insignificance during the '80s.'"
Those surpluses are now costing us more than £ 2,000 million. The amount could be doubled if we do not take forthright action. As the hon. Member for Newham, North-East indicated, there would have to be unilateral action. We shall not curb this excess production and these mountains, which get larger year by year, by the more modest proposals set out in the Select Committee report, supported, I understand, by the hon. Member for Edinburgh, East (Mr. Strang), on behalf of the Opposition. As production increases, and as we dump still more on the world market, so will Australian farmers increasingly go out of business. The same consideration applies to New Zealand. That must be self-evident. We in this House will bear a heavy responsibility if we allow this situation to continue, as I fear will happen.
The debate would not be necessary if it were not for the single fact that British people like to buy New Zealand butter. They like to eat it. What we are saying, and what the Community is saying, is that they shall not eat—that they shall not have the freedom to buy what they want to eat. The agreement just reached means, in effect, that the British people will not be allowed to eat their 20,000

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tonnes of butter, and that they are to eat less. I do not see how hon. Members can justify this situation to their constituents. My hon. Friend the Member for Harrow, East (Mr. Dykes), who is poised to catch your eye, Mr. Deputy Speaker, will no doubt have persuasive arguments to put forward to his constituents to explain why they should not be allowed this modest freedom to buy the butter that they wish to buy. I hope that he will touch on this matter in his speech. I am opposed to quotas. Any quota is an assault on the essential freedom of the consumer to buy what he wishes.
There is no doubt that the New Zealanders would like to send us much more butter. The hon. Member for New-ham, North-East was right to express disquiet on their behalf. I should like to refer again to the Select Committee report. I moved an amendment that did not quite secure the necessary majority. I am glad to see that the hon. Member for Durham (Mr. Hughes) is present. He voted against it, and the amendment did not get through. The amendment sought to make the point that New Zealand, as its high commissioner told the Committee, would be delighted to send us whatever quantities of butter and cheese we desired. His country would gladly go back to sending us as much butter and cheese as we used to be able to buy from New Zealand a few years ago. The high commissioner went on to say that the restrictions existing in this country, through our membership of the Community, have caused New Zealand farmers to cut back their production. Is it not amazing that in a world where, we are told, there is a shortage of food, we should be cutting back on production in countries that can produce it more cheaply?
Mr. Spearing: It is evil.
Mr. Body: The hon. Gentleman says "evil". That is the word to use.
Mr. Leighton: Immoral.
Mr. Body: And immoral. The high commissioner for New Zealand explained that because of the restrictions imposed on New Zealand, it would take some time—perhaps two or three years—before New Zealand farmers would be able to expand production to enable them to meet the demand that would come from this country were we allowed once more to buy
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whatever amounts of food we wished from New Zealand, given the removal of quotas and levies that have the effect of roughly doubling the price of butter that the housewife in this country wishes to buy from New Zealand. I have no doubt that my hon. Friend the Member for Harrow, East has plausible reasons for doubling the price of butter for housewives in his constituency.
This debate would be unnecessary were it not for the fact that the housewives of South Brent, East Harrow and elsewhere wish to buy this butter. We are standing in the way of willing buyers and willing sellers. We are saying to New Zealand, which is willing, in the words of the high commissioner, to sell us all the butter and cheese that we want, "We do not want your nasty cheap butter and cheese. We want the expensive kinds. We want more of the kind that the housewife would not prefer, given freedom of choice".
We are saying the same to the housewife. It is difficult to see how hon. Members can explain to their constituents that this simple freedom should be taken away from them. I would have thought that British people, listening to the debate and reflecting on how we are seeking to stand between them and the New Zealanders, would shake their heads and wonder what possible arguments we can advance for this nonsense.
We have heard already, but it merits repetition, that we are still exporting to New Zealand, in the form of manufactured goods, more than we import from New Zealand. The New Zealanders have a balance of payments deficit with us. They have warned us that this is serious for them and that if it persists they may have to take steps against our trade with them. This will inhibit our trade, and that cannot be for the welfare of the British people.
We know from the figures that have been published that every week we are paying considerably more than we need for food. The figures that came out recently indicated that the average family was now paying about £5 a week more than they need. That means £5 a week less to spend on other items. It means less to spend on holidays and all those manufactured items that go towards improving the standard of living. However, those same manufactured items also go towards maintaining full employment.

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If every family had £5 a week more to spend I wonder whether there would be the level of unemployment that we see today.
We are concerned, therefore, not just with the welfare of New Zealand. It may be that on this occasion New Zealand farmers will say "We accept this. We shall have more money in our pockets for sending less butter to the United Kingdom. "That might be to their short-term advantage, but it is not to the advantage of the British people. Even the charming advocacy of my hon. Friend the Member for Harrow, East, whose contributions to these debates I always listen to with fascination, will not persuade me that what we are doing by imposing quotas of this kind is right for the British people.
12.2 pm
Mr. David Stoddart: The hon. Member for Holland with Boston (Mr. Body) was right to say that the restriction of butter production where it can be produced most cheaply is an evil. It is an evil when there are so many starving people in the world, and it is an evil when imports on an unrestricted basis or even on a higher basis than that proposed would help to reduce our food costs and therefore improve the economy generally and assist in getting down the level of unemployment.
This debate has been interesting, in that we have heard comments from rather unusual quarters. Those people who were so vociferous at the time we entered the EEC have now understood exactly what it means for the Commonwealth, and especially for New Zealand. They now realise that the copper-bottomed guarantees that were given at the time are worthless.
The hon. Member for Essex, South-East (Sir B. Braine) is not in the Chamber at present, unfortunately, but I must refer to some comments of his. I do not need to be lectured by him about the contribution that New Zealand made to this country during the last war, or about the amazing and valuable contribution that both New Zealand and Australia made to post-war reconstruction. I hate to think what would have happened to our food supplies in the immediate postwar period but for the co-operation and
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generosity of our Commonwealth friends in Australia, New Zealand and Canada.
The new agreement that is proposed is completely unsatisfactory. The assurances that were given about the continued access of New Zealand dairy produce have been reneged upon. In my view the position put to us this morning is good neither for New Zealand nor for this country. There is no guarantee in the Opposition amendment—certainly there is not in the motion—that the 90,000 tonnes quota will continue after 1984. We do not know what the figure will be after 1984. It is true that the amendment asks for guarantees about the permanent access of New Zealand butter, but at what rate is not stated. That is not good enough, and I hope that the House will be highly suspicious of these proposals.
My constituents pack New Zealand Anchor butter. If the quota amount is reduced very much further than the 90,000 tonnes my constituency will lose a number of jobs, and that concerns me greatly. It will mean a considerable addition to Swindon's unemployment. We have lost enough jobs already. I do not want to see any more go.
The Minister has been congratulated by one or two Government supporters, but in my view he is a soft touch. He has already given way on farm prices, and he is about to sell our fishermen down the river. The Minister is an india-rubber man, whom the French can twist round their little fingers at will. If this quota is agreed it will not be long before our so-called partners are hammering at the door for further reductions in the agreed quota of New Zealand butter.
New Zealand will be kept in a state of permanent suspense. It is no good hon. Members prating on about New Zealand's having agreed to the new arrangements. She has done so because she has a pistol at her head. The New Zealanders are agreeing to these arrangements not because they think that they are good for the New Zealand economy and not because they trust Government guarantees about the future but because a pistol is being held at their heads and they are at the mercy of the European Commission.
Sir Anthony Meyer: It is in our national interest.
Mr. Stoddart: The hon. Member for Flint, West (Sir A. Meyer) is one of the Euro-maniacs about whom we talk from time to time. He has made it quite clear that the interests of New Zealand and the best interests of this country take second place to his desire for a federated State of Europe. I can assure him that the British electorate did not vote for that in the referendum and that they would not tolerate it, even though he seems to believe that they would.
The problem of surplus butter in the Community is caused not by New Zealand but by the crazy common agricultural policy to which we subscribed when we went into the Common Market and which hon. Members such as the hon. Member for Essex, South-East knew about when they voted to go in.
The Community is producing more and more butter, which cannot be sold because the price is far too high. The New Zealanders can produce a packet of butter at roughly half the price of a similar pack produced in the Community. There is a huge surplus, but it cannot be sold at a cheaper price other than to the Russians. Cutting the New Zealand quota will neither affect nor help the problem that the Community has created for itself.
Before we entered this disreputable organisation we had a perfectly good arrangement with the New Zealanders, whereby our farmers were given a reasonable living. They were protected and New Zealand interests were safeguarded at the same time as the British housewife had cheap butter and cheese.
We need to continue to supply our goods to New Zealand. It has already been said that New Zealand is a good market for our products. It is therefore essential that at a time of recession, with 1.9 million people on the dole, we continue to have access to that market and to improve our position in it. The more that the EEC restricts the access of New Zealand and Australian products to Britain and the rest of the Community and competes in their markets by dumping surplus dairy products the less New Zealand and Australia are able to take our manufactured goods from us.
It is essential for our survival that we continue to allow New Zealand products into this country in large quantities. What is more, New Zealand is expected to
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contribute to the stability of the Asian Pacific area. But the weaker New Zealand becomes, economically, the less able she is to perform that role. Community documents comment upon that fact.
There are some lessons to be drawn from the Australian situation. Not content with smashing the Australian beef trade, the EEC now wishes to make inroads into the Australian lamb trade. However, the EEC has come up against stiff opposition from Australia and has discovered that that country can be a tough customer. Australia has some pretty good bargaining counters, including 17 per cent. of the world's uranium supplies.
Mr. Gundelach recently visited the Australians, no doubt expecting to be able to browbeat them into submission. I am glad to say that that European mountebank came away with a bloody nose. That is precisely what the EEC Commissioners are—complete mountebanks. It was made quite clear to Mr. Gundelach by the Australians that if the Europeans did not watch it they would come off badly. Mr. Gundelach apparently said that he had never been treated in that way before. He had never been spoken to so forthrightly.
It is about time that these overpaid, vain, bureaucratic bully-boys were put in their place and it is a great pity that British Ministers do not do more of what the Australians did. Unfortunately, all that our Ministers seem to do is to dance to the EEC tune, like a bunch of weak-minded flunkeys.
Perhaps, in time, Australia and New Zealand will so arrange their affairs as to be able to make a complete break with this country, which has so disgracefully ratted on them. They may be able to distance themselves completely from the EEC. The loss will not be theirs but ours.
The Government are supposed to believe in free market forces, yet they have agreed to a completely rigged market in food which oppresses consumers in this country as well as our Commonwealth kith and kin. New Zealand can supply butter at roughly half the present price in the shops, but she is not allowed to do so. Instead, a 60 per cent. tax is put on that butter. That tax is handed over to the Brussels bureaucrats to squander on themselves and on other minutiae.

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That means that prices are increased for the British housewife.
The British housewife wishes to continue to buy Anchor butter, much of which is packed in my constituency, but her opportunity to do that will be reduced by this agreement. I do not think that I can divide the House on this issue, but I am bitterly disappointed at this new sellout. I am disillusioned that we have a Government and an Establishment in this country who not only sell Britain short but treacherously betray our Commonwealth friends. We have been doing that for a long time, and it is about time that we brought it to an end, in the interests of this country, of our Commonwealth friends, and of the British consumer.
12.15 pm
Mr. Hugh Dykes: Once again we have had the usual xenophobic tirade from the hon. Member for Swindon (Mr. Stoddart). His remarks were rather like the comments of the hon. Member for Bradford, South (Mr. Torney), in that they revealed a deep hatred of foreigners as well as of the European Community. Sensible, pragmatic people in this country find that disturbing.
Mr. Stoddart: Will the hon. Gentleman give way?
Mr. Dykes: I shall not give way at the moment.
Mr. Stoddart: The hon. Gentleman has made an accusation.
Mr. Dykes: Very well, I shall give way in a moment. First, I must say that it seems a pity that on the Opposition Benches the small corpus of ferocious anti-Marketeers continue to use our debates to go back to fundamental first principles in an attempt to revive the central issues which arose when we first became members of the Community. Understandably, though I believe that it is an imposition upon the House, they oblige us, as balanced supporters of the Community, who like, none the less, to criticise many aspects of Community policy, without reaching the absurd existentialist conclusions reached by Opposition antis and by some of my hon. Friends, to listen to them. We are prevented from sensible discussion, because the whole matter was distorted in the original debate. I greatly regret that.
Mr. Stoddart: I am not xenophobic, nor do I hate foreigners. The hon. Gentleman should understand that I believe in world-wide co-operation. I do not believe that such co-operation can be assisted by our ignoring the best economic interests of this country.
Mr. Dykes: In that case, I hope that the hon. Member will be enthusiastically in favour of increasing textile imports from low-cost countries without complaint, which, of course, we never get from Labour Members.
This discussion once again shows the distortions and contradictions that continually arise in our debates. I think that that does the House a lot of harm, because the scrutiny process should be much more objective. It should be based on fact rather than on the hysterical prejudices of the Opposition.
The expression on your face, Mr. Deputy Speaker, indicates that I shall stray out of order if I continue in this vein. However, I suppose that 1 can, none the less, provide some immediate background to the debate without going out of order.
A compendium of some of the impressions that we have gained from scrutiny debates in the last few months would be that these horned foreigners with devils' tails are always cheating this country, doing us down, and are now going to new sinister depths of conspiracy and hostile action against the United Kingdom. I quote from a recent article:
"The EEC is really a plot by the Pope to get the French to put fluoride in our water, and so sap our national morale and will. The French are going to introduce a new EEC law to make us install compulsory bidets in British bathrooms. The Germans and the Dutch are secretly buying up all our farmland. The Commission want to revive the old directive on lawnmowers".
What a terrible plot!
Mr. Jay: On a point of order, Mr. Deputy Speaker. In a debate on New Zealand butter, is it really in order for the hon. Member for Harrow, East (Mr. Dykes) to read out a lot of nonsense that has nothing to do with New Zealand or butter?
Mr. Deputy Speaker: I think that the hon. Member for Harrow, East (Mr. Dykes) is fully aware that he is out of order and is bringing himself back into order very speedily.
Mr. Dykes: I am bringing myself back into order with extreme celerity, Mr. Deputy Speaker. I was quoting from that source to demonstrate precisely the nonsense referred to by the right hon. Member for Battersea, North (Mr. Jay). It does a continued disservice to the House when Opposition Members continue in that way.
I, too, have reservations about the position of New Zealand in the future. I am worried about many aspects. That should not mean that we should do a disservice to the House and the country by indulging in gross denunciatory politics and criticising everything in the Community as if none of it were any good.
As a result of the development side of the CAP, Britain's dairy industry has derived considerable funds for development and expansion. At the margin, the whole of the dairy industry in Britain has been financed out of Community money. The dairy industry repeatedly has paid tribute to that. That reveals the hypocrisy and contradiction in the arguments which refuse to acknowledge the realities of the conflicts which must be ironed out, or at least reduced, in the inevitable political and economic compromise which is the sum total of interaction between nations—be they European, members of the old Commonwealth or in the newly emergent Third world.
Mr. Deputy Speaker: Order. Will the hon. Gentleman now begin the New Zealand butter part of his speech?
Mr. Dykes: Our dairy industry is most anxious for a reduction in New Zealand supplies. That is understandable. That does not mean that the Government should allow it to happen. The first agreed transitional period has come to an end. I do not share the view, but some people—and I do not wish to be too critical of them—question whether the New Zealanders themselves have done enough to adapt to new world conditions and new markets. I pay obeisance to the fact that New Zealand is a small country which, by reason of its special characteristics in history, needs special help. Many people in the other member States understandably regard New Zealand as a remote country, unconnected with them, in the same way as we regard the French overseas territories in the Caribbean. We often grumble when special aid is given
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to them. There is a lack of understanding and failure to see the other country's view.
When Britain joined the Community, a striking agreement was reached to guarantee access and to form a quota system for New Zealand butter and other products at a level which, in spite of the initial New Zealand anxiety, was later regarded as acceptable by New Zealand representatives. All parties agreed that it was reasonable, at the end of that seven-year transitional period, to negotiate longer-term arrangements which perhaps would not be as generous because the European dairy industries were building up. Why should it be said that a New Zealand surplus is heroic and virtuous and that other surpluses are wicked? All surpluses are awkward. We must balance price, quantity and availability. It is unpalatable for Opposition Members to accept—
Mr. Leighton: Will the hon. Gentleman give way?
Mr. Dykes: I want to develop my theme. I do not want to speak for too long. Butter suplies have declined relatively and absolutely in Britain and elsewhere, not only because of the price increase. We no longer live in a world of cheap food.
Mr. Leighton: Give way.
Mr. Dykes: I shall not give way now. Even in quantitative terms the hon. Gentleman need not worry too much, because more hon. Members wish in the Chamber now to deploy the anti-EEC arguments than to draw a balanced, objective picture.
Another reason for the fall in the consumption of butter is that many people have come to the conclusion that eating excessive quantities of butter, as they used to, might be a health hazard. I put it no higher than that. There is a fear about the effects of building up too much cholesterol in the body. That is one reason why people have switched. [Hon. Members: "Rubbish."] It is no earthly good our latter-day nineteenth century nationalists opposite denying the evidence. A huge campaign has been mounted on television and elsewhere in favour of Flora and other margarines. There has been an increase in the consumption of

973
such products in place of butter. The dairy industry should bear that in mind.
I welcome the negotiation of the agreement in Brussels. I thank my hon. Friend the Minister of State for what he said today. Of course it is not a perfect agreement, nor is it supremely satisfactory, for New Zealand. After weighing up all the difficulties and the pros and cons many people more sagacious than Opposition Members will say that it is not bad at all for New Zealand in the circumstances.
I am particularly anxious that New Zealand should have a continuing arrangement in the Community beyond 1984. One of the reasons for the decline from 165,000 tonnes in recent years to the 90,000 tonnes established in the new arrangement is that there has been some switching already below the old quota. If people in Australia regard the scene with objectivity as well as with emotion, they might consider whether they can take more New Zealand butter, since they are so much closer to New Zealand. However, Australia wishes to expand its own dairy industry. There is nothing wicked or conspiratorial in that. In all the circumstances, the Commission has produced a fair and balanced deal.
Some people will wish to ensure that New Zealand develops other activities and products, even other agricultural products. Many people in New Zealand recognise that the country must spread its trade more with other territories rather than rely on an old-fashioned dependence on the United Kingdom. In the harsh world of international trade, New Zealand, like other countries, must look elsewhere for new markets with new products. I do not put it stronger than that. The whole House is imbued with a profound sympathy for New Zealand and a profound gratitude for what that country did for Britain and the allies during the war.
These things go both ways. Even old historical friends do not have an automatic right to a frozen-in-aspic position in international trade, guaranteed for all time at whatever level. The price increase has been welcomed by New Zealand. It is in many ways a sufficient counterweight to the fact that the quota has been reduced. That shows that the European Commission, the Community
974
and our representatives are far more internationalist and outward looking than hon. Members who take a narrow-minded and bigoted view of our role as a modern country in Europe. It shows in the whole of the Community effort to build up more trade and aid with the Third world. Britain is fully participating in that effort, not to the exclusion of national aid efforts. That effort is a useful international supplement to the national effort. I hope that that will result in surpluses of dairy products going to such countries in larger quantities.
Let us be balanced and restrained, but let us, with justification, criticise aspects of the Community, as we do national Governments and the House of Commons. Let us not draw absurd conclusions relating to abolition or withdrawal. Everybody in the Community agrees that the CAP requires a major and tangible adjustment. That is bound to happen, because the VAT equivalent figure is now building up. It is already 0.95 per cent. in the latest budget proposals.
I think that there will be a considerable recasting of many aspects of the agreement within the common agricultural policy which produce some of these surpluses. The dairy surpluses are the worst, but do not let us think for a moment that this country does not contribute to them. There are people in this country who believe that British agriculture is still the most efficient in the Community, although some research figures now question that and suggest that Belgium is perhaps overtaking us in terms of output per unit. However, assuming that that is still the general position, those people would like to see the United Kingdom achieve self-sufficiency in agricultural products, as the Germans have already done. We also know that the French are exporters.
That will change the whole position and will cause difficulties in the future for other outside exporters such as New Zealand. However, given good will and co-operative, constructive behaviour between the Community and countries such as New Zealand, I believe that we shall reach agreement beyond 1984. It should be remembered that when we first joined the Community many pessimists said that it would be impossible to negotiate a proper agreement with New Zealand. It

975
is a tribute to the EEC that that was possible. New Zealand is a country that is remote from the original Six, and it is understandable that there was some hesitation when the idea of a perpetual structure of protection was first enunciated by some ferocious anti-Marketeers in this country, because it was felt that that was totally unrealistic.
I welcome this agreement, although 1, too, am sorry that the House was not able to debate it before it was concluded. However, I understand the circumstances surrounding it, and I believe that it was necessary to reassure the New Zealand representatives in Brussels by coming to that agreement in order to achieve a quota figure for 1980-84. I am glad that that was done, and I again thank the Minister.
12.32 pm
Mr. Mark Hughes: I should like to start by comparing conditions in 1975 with what they look like being this year. In 1975, total United Kingdom consumption of butter by humans, and also in all sorts of manufacturing ways, was about 510,000 tonnes, of which home production represented less than 9 per cent.—about 40,000 tonnes. This year, consumption has dropped to about 310,000 tonnes. Domestic production now accounts for more than 50 per cent. of potential consumption. Therefore, between 1975 and 1980 production in this country has risen from about 40,000 tonnes to more than 160,000 tonnes.
That is the first and major change. Our own domestic producers, cushioned by the over-high price within the CAP, have expanded their production massively. They have now invested large sums in creameries and butter manufacturing capacity. It was suggested earlier that we should allow twice as much butter to come in from New Zealand. That is worrying, because it would mean that we would import 180,000 tonnes from New Zealand, produce 170,000 tonnes ourselves, and consume only 300,000 tonnes at present price levels. Alternatively, one would have to drop the price levels, but if one did that one would have to spend money to support the British farmer and the butter manufacturers at the same time. Therefore, problems arise.
Another curious aspect of the situation in 1980 is that Britain is now a net
976
exporter of butter to France. More British butter is sold to France than French butter is sold to us, which does not greatly delight the French agriculture press or interests. Through intervention and by subsidised export restitutions we shall export more than 50,000 tonnes of butter this year. If we import 90,000 tonnes or 120,000 tonnes of butter from New Zealand and, with export restitutions, export 50,000 tonnes from our own country, the taxpayer and the consumer will pay doubly on that set of transactions.
The great condemnation of the present CAP arrangement is that the United Kingdom is simultaneously the largest market for New Zealand butter and one of the major competitors with New Zealand butter in Third world markets. When the New Zealanders try to sell their butter in Third world markets they find that it is British butter, subsidised by the British taxpayer and the rest of the Community, that is their major competitor. That is a silly situation to have got into.
One of the classic problems is that butter is not the same product on the Continent as it is here. To open a Community quota for New Zealand butter for direct human consumption on a Community basis is to delude ourselves, because the Community is used to a lactose butter, in which the cream is allowed to sour before it is churned. Our domestic and New Zealand butter is fresh cream butter, in which salt is used to give it longer life. Traditional German, French and Dutch butters are eaten within a short time of production. They are not long-life butters. Those butters have a different taste.
To suggest that unless there were a massive price differential the consumer on the Continent would switch readily to New Zealand butter for human consumption is improbable, to say the least. Therefore, any Community quota for New Zealand must end up in this country, unless—this is a suggestion that certain interests in this country are putting forward—part of it is earmarked for the bulk butter market within the Community, where it would receive a subsidy for manufacturing purposes. That would relieve some of the intensity of competition between our own butter manufacturers and New Zealand imports. On present trends, we

977
shall be more than 60 per cent. self-sufficient in butter within the next couple of years. Consequently, there will be problems in fitting in the New Zealand quantity.
The Dutch have strongly urged continued access to New Zealand butter, but only to the United Kingdom. They want it done on a percentage basis of our consumption rather than on a fixed quota. The same was suggested in evidence to the Select Committee, from other domestic interests. It was suggested that to give New Zealand a tonnage in absolute terms while consumption was falling would be to give it the first slice of the market, to the detriment of the domestic producer. I reject that argument. I believe that it is in the interests of New Zealand to have an absolutely fixed, guaranteed quota quantity.
That is why my name appears in support of the amendment. I hope that the Government will accept it and that they will strive rather more effectively to ensure that the arrangements introduced after 1984 are watertight. We cannot turn off New Zealand dairy products like a tap. I urge the Government carefully to consider the quota that is being earmarked for the bulk butter market within the Community.
Between 1973 and 1977 neither the New Zealand Government nor their dairy board sent their allocated quota to the United Kingdom. Every year they undersold their quota to Britain. In 1975 the quota was 152,000 tonnes. We were sent 124,000 tonnes. In that year New Zealand's share of our market was 24 per cent. Last year its share was 31.6 per cent. Its share of the British market under a much reviled arrangement has increased. I accept that it is a smaller market.
When we urge the Government to give a quantitative guarantee to New Zealand we are doing so in the knowledge that we are giving New Zealanders an advantage that we are not prepared to give to our domestic producers.
The flow of butter from New Zealand should not be too haphazard, bearing in mind its effect on prices and trade in recent years. There have been periods when there has been a low Anchor butter price, followed by huge quantities being
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sold. That has meant that we have had to buy into intervention, which has distorted trade. In addition to the firm quota, I hope that methods can be found to even out the competition between New Zealand and butter producers in the Community.
12.42 pm
Mr. Nigel Spearing: I start on a procedural note. The hon. Member for Enfield, North (Mr. Eggar) referred to decisions taken in this place and in Brussels. It may be that technically the House will reach a procedural decision. However, the hon. Gentleman should recognise, as should everyone else in the House and throughout the United Kingdom, that the House no longer takes decisions on these matters. Decisions are made in Brussels. Although the motion and the amendment may be agreed to, the ultimate decision will not be that of the House. It will not be that of the Minister of Agriculture, Fisheries and Food. It will be that of the Council of Ministers.
The second procedural matter that I wish to mention is that the debate is taking place following the Minister's agreement this week in Brussels. I understand the reasons that have been given. It might have been much better for the Government if the debate had taken place a week ago. If that had happened, the debate would have preceded the relevant council and the Minister would have gone to Brussels with the backing of the House.
Last Friday there was a debate on the Northern Ireland Appropriation (No. 2) Order. It would not have made much difference to the appropriations if that debate had taken place a week later, but it might have made a considerable difference to these issues if this debate had taken place a week ago. My right hon. Friend the Member for Battersea, North (Mr. Jay) made valid criticisms about the good faith of the Government in giving an assurance that unless there were exceptional circumstances there would be a debate in the House prior to the decision in Brussels. The spirit of the agreement has been breached on this occasion.
I am sorry that the Minister did not refer to the amendment. I shall be sorry if only at the end of a long debate do we hear that the Minister is prepared to

979
accept the amendment. I hope that he will accept it, but I do not see even a nod to indicate his intention.
The amendment does not go as far as many of my hon. Friends would wish. I think that some of my hon. Friends have read more into it than the words carry. It does not request the Government to ensure a permanent 90,000 tonnes quota; it merely asks them to write in that figure for 1984. The permanent access that is referred to in the amendment is not qualified by that or any other figure. We shall be back at some time conducting a similar debate and we may then have to accept much less than 90,000 tonnes for the period after 1984—perhaps for the reasons outlined by my hon. Friend the Member for Durham (Mr. Hughes), but also for reasons arising in the Community.
Perhaps the House is to some extent being misled about the future in the same way as, I charitably suspect, the hon. Member for Essex, South-East (Sir B. Braine) may have been misled about our terms of entry. Certainly that is the only construction I can put upon his speech. My evidence for this assertion comes from publications entitled "Fact Sheets on Britain and Europe" which were issued in a complete series by the Government in 1971. Fact sheet No. 5 states:
"There are cases where Commonwealth countries are still greatly dependent on the UK market, and the future of New Zealand dairy exports and of sugar from the developing Commonwealth are special problems"—
I stress the next few words—
"that are being dealt with in the negotiations between Britain and the EEC."
We know that they were not dealt with—at least not satisfactorily. If they had been we would not now be having the debate. The words "are being dealt with" sought to imply that they were being dealt with satisfactorily. However, the White Paper showed clearly that there would be no guarantee after the first five years.
Fact sheet No. 10 states:
"Commonwealth countries are also finding new markets. Today Japan is Australia's largest export market, followed by the USA. The USA has long been Canada's most important customer. Even New Zealand, for whose dairy products we seek special arrangements, has diversified her export trade considerably. Furthermore, a strengthening of
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Britain's economy will make her a better trading partner."
That passage contains many assumptions—one of which was that joining the EEC would strengthen our economy. Even if it had, would we have been "a better trading partner" when the arrangement was that New Zealand would send us less?
Many people were misled by this sort of propaganda, which was paid for by the taxpayer and issued under the imprimatur of Her Majesty's Government. I am reminded of the definition of "propaganda" given by Dr. Goebbels. He said that propaganda was not telling lies; it was telling the truth, but only that aspect of it that fitted the picture that one wished to project. I believe that much of the "information" that we have had and are still getting has not reached Dr. Goebbels' standard, because the quotations that I have given gave people the impression that everything was all right, that New Zealand was diversifying and that everything would be well.
I give the Minister a warning that I hope he will pass to the Lord Privy Seal, who, I hope, will pass it on to the news department of the Foreign Office. We hear that the Government are to start a major information programme about the EEC. I warn the Minister that if attempts are made to produce the sort of material that I have just quoted it will be shadowed and the matter will be raised repeatedly in the House. I hope that the news department of the Foreign Office will not follow the path mapped so ably by Dr. Goebbels and that if information is issued about the Common Market it will be objective and fair and will not make implications that are not borne out by the facts.
I now turn to the year 1984, which has a particular ring about it. After my comments on Eurospeak, it is appropriate that I should speak about 1984. That is the year in which this agreement runs out. As my hon. Friend the Member for Swindon (Mr. Stoddart) said, there is no guarantee of any figure after that date. My hon. Friend the Member for Durham explained why even a cautious Government may not be able to go beyond that.
Butter production in Britain has increased to nearly 60 per cent. of our consumption, at a time when demand

981
has shrunk. That is because of the obscene surpluses and financial structure of the common agricultural policy. We buy butter from New Zealand at 27p a packet, while it costs the EEC 47p a packet to produce—and there is a 7p subsidy on EEC butter to be taken into account. The EEC is spending almost £3,000 million disposing of dairy surpluses.
The report of the United Kingdom intervention board includes some extremely interesting figures, which are relevant to this debate. I referred to the subsidies paid on butter produced in the EEC. In 1979 the United Kingdom intervention board spent £ 50 million providing those subsidies. At the end of 1979 30,000 tonnes of United Kingdom butter was in intervention.
In 1979 the United Kingdom intervention board spent a total of £ 213 million assisting or suppressing the production of milk in this country. It is illogical that while part of that money was spent to ensure production of milk, more money is being spent on buying farmers out of milk production. It was stated in press reports that the Earl of Iveagh in Elvedon, Norfolk received a grant of £1 million to take his land out of milk production.
Mr. Pavitt: Is it not an even greater nonsense that deliveries of milk to our doorsteps may have to stop, as UHT is forced upon us by our Common Market partners?
Mr. Spearing: I am glad that my hon. Friend raised that point.
New Zealand is being squeezed out of a market that is not a market. The interests of almost everyone are being prejudiced by the common agricultural policy, even those of the dairy men.
Even the dairy men, who may benefit to some extent from increased butter sales, are uncertain, not only about milk deliveries but about the future of our dairy structure. Dairy farmers, despite their increased returns, are no less certain. Almost everyone loses, including the taxpayers who support the dairy surplus. The total structure of the CAP benefits no one except a few farmers on mainland Europe and the distributors. Everyone loses, and New Zealand is liable to lose most.
Mr. Dykes: Will the hon. Gentleman agree that he has just shown amazing contradiction and self-delusion? He is fair-minded and I am sure that he will agree that a little earlier he nodded vigorously when an anti-marketeer on the Conservative Benches was saying how wicked it was for us to be deprived of the opportunity of buying cheaper New Zealand butter. Then, a few moments ago, he again nodded vigorously when his hon. Friend the Member for Brent, South (Mr. Pavitt) said that cheaper UHT milk coming into this country would be an imposition on us and would deprive us of milk on the doorstep. Why not increase consumer choice by having both sources available?
Mr. Spearing: The hon. Gentleman should realise that a managed market can sometimes provide advantages for everybody. The previous market in butter from New Zealand, among other places, and in liquid milk in this country, provided just that advantage. In other words, an intervention in market forces can sometimes—indeed, frequently, in my opinion—provide benefits for all.
The trouble is that the managed market of the common agricultural policy does not do that; it does the opposite and harms virtually everybody—most of all, New Zealand. This House, having voted away its powers—by the votes, among others, of the hon. Members for Harrow, East (Mr. Dykes) and Essex, South-East—can do little about it.
12.56 pm
Mr. Buchanan-Smith: I must confess that sometimes, in debates such as this, I feel as though I have been here before. I am sure that other hon. Members must have exactly the same feeling. In that sense, I particularly welcome two speeches in the debate. First, my hon. Friend the Member for Harrow, East (Mr. Dykes) managed to bring the debate, in its latter stages, back into perspective in terms of the United Kingdom and Europe, and also Europe's place in the world. It was salutary to the House that he should have spelt it out in the way that he did at that stage in the debate.
Secondly, I pay tribute to the speech of the hon. Member for Durham (Mr. Hughes). He brought us back to reality

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in terms of what is involved in the dairy industries concerned.
I do not for a moment want to underestimate the strength of feeling within the House with regard to support for New Zealand and our efforts to ensure that New Zealand is fairly and rightly treated. I hope that I made it absolutely plain in my opening speech that I share, and the Government share, those sentiments, feelings and intentions. At the same time, one cannot help feeling, occasionally, some slight difficulty in distinguishing between genuine attempts to achieve the best deal for New Zealand and attacks on the EEC.
I reiterate that I wholly accept the strength of feeling within the House, and I know that our colleagues in Europe who read these debates will equally be left in no doubt as to that feeling. At the same time, I hope that the people of New Zealand and their Government will be encouraged to know that not only the British Government but hon. Members in all parts of the House are ready to speak out for their interests.
I accept the criticisms made by, among others, the right hon. Member for Batter-sea, North (Mr. Jay) and the hon. Member for Newham, South (Mr. Spearing) about the procedures involved—the fact that my right hon. Friend the Minister of Agriculture had to announce to the House that decisions for 1980 had been taken before the debate on the document could take place. Unfortunately, circumstance are not always ideal, but in ideal circumstances the Government do their best to fulfil the undertaking that was given. The business of the House has not been exactly light over recent weeks. The Government have taken the first opportunity to debate these matters. I apologise to the right hon. Gentleman if he thinks that the undertaking was not properly honoured, but in the circumstances, and given the result of the negotiation as regards 1980, I believe that my right hon. Friend was absolutely right to accept the agreement reached in Luxembourg on Tuesday.
Two matters must be borne in mind about our decision to accept what was proposed in Luxembourg, where I was present. First, when Mr. Gundelach, the Agriculture Commissioner, proposed the arrangements to the Council of Ministers,
984
he said that they had already been agreed with the new Zealand Government. Secondly, as my right hon. Friend pointed out yesterday, there were representatives of the New Zealand Government present in Luxembourg, with whom we were in consultation throughout the Council meeting. They indicated that it was in everyone's best interests, including their own, that what was being discussed in Luxembourg should be accepted.
It is important to get those points on the record.
Mr. Jay: It should also be on the record—because, together with some of my hon. Friends I, too, have met representations of the New Zealand Government in the past 48 hours—that the New Zealand Government did not welcome the arrangements, but accepted them simply because, in all the circumstances, it seemed unlikely that they would receive any assistance to get any better arrangements.
Mr. Buchanan-Smith: I accept what the hon. Gentleman says. In all deals we should like to get better arrangements. That applies to almost every kind of deal that one makes. The important thing is that, given the circumstances, the New Zealand Government believed that it was right on that occasion that the agreement should be accepted by the United Kingdom Government along with the others. That is what happened, and that is why we did it.
I should like now to deal with some points of detail about the 1980 arrangement. The hon. Member for Edinburgh, East (Mr. Strang) asked me whether it was for a fixed levy or whether the same arrangements applied as had applied through the earlier part of this year. The new arrangements that I mentioned in my opening speech apply only from the beginning of next year. For the rest of this year the current arrangements for fixing the levy still apply. The fixing will probably be done next week, at the dairy management committee. We do not know precisely what the figure will be but in the committee, we shall certainly argue to ensure that it is at a level that makes sure that what we agreed in Luxembourg this week is achieved.
The hon. Member for Bradford, South (Mr. Torney) mentioned a figure of £ 320 per tonne as the size of the levy during

985
1980. That was the figure originally proposed by the Commission. However, the deal that is now being done should result in a levy that is considerably lower. Taken as net, particularly net of the butter subsidy, it will be about £100.
The major point that I should like to make before leaving the question of the 1980 arrangements is that we believe, and I think that the New Zealand Government also accept, that what has been agreed—having the reduction of 20,000 tonnes plus the adjustment in price—is much more satisfactory to New Zealand than simply allowing the existing arrangements to run on to the end of the year.
We must accept the fact of the current position, which is that because of the unsatisfactory current arrangements—a point made by the hon. Member for Newham, South, in an intervention—New Zealand has not sold the quantity of butter that it was entitled to sell in the course of this year. Given those arrangements, it is extremely unlikely that New Zealand would ever have been able to reach that figure by the end of the year. It was an unsatisfactory arrangement. It is better to accept that than to stand on one's dignity and maintain an unrealistic figure. It is better to have a realistic figure for the amount of butter, which can be sold at a higher price, with the result that not only will New Zealand take home more hard cash than it would otherwise have been able to do, but it will have the ability to sell the balance of unsold butter in other markets. For those reasons I believe that the agreement, although perhaps not ideal—rarely are agreements ideal—is a good agreement. It was right for my hon. Friend the Minister to accept it in the way that he did.
Mr. Leighton: Will the Minister confirm that the New Zealanders failed to fulfil their quota not because they were physically unable to do so but because of the workings of the levy?
Mr. Buchanan-Smith: If the hon. Gentleman had listened to me he would have realised that that was precisely what I said. It was not the fault of the New Zealand Government. I said that in my earlier speech. Whatever the reasons for getting into a certain position, it should not be ignored. It is better to take action,
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and we did that. In the circumstances it is a good arrangement for New Zealand, covering the period from now to the end of the year. At the management committee meeting next week we shall argue to ensure that the arrangement is implemented in the intended way.
I turn to an important matter, namely, the arrangements after the end of this year. A number of points were raised about that. I shall deal specifically with two points—first, the position of the United Kingdom dairy industry and, secondly, the attitude of the EEC towards New Zealand, which underlies the whole issue. Those two points were touched on in almost every speech.
Any industry, whether agriculture or manufacturing, is always anxious to reduce the amount of competition and imports. But the level of New Zealand imports over recent years, and the level that is now proposed by the Commission, do not in any desperately serious way affect the United Kingdom dairy industry. As I said earlier, in 1973 we imported about 166,000 tonnes of butter from New Zealand. That has been reduced to 95,000 tonnes for the current year. That is a massive reduction for the dairy industry. The effects of that can to some extent be exaggerated. It is important that we put the matter in perspective. The quantity involved is very small—we are talking of under 100,000 tonnes—in relation to the quantity of butter produced throughout the EEC. In proportionate terms it is much less than our previous imports.
I listened to the remarks of the hon. Member for Durham, whose views I share. In future we should try to agree New Zealand imports at a certain figure and not at a proportionate figure of the United Kingdom market. Because of the sacrifice that has already been made we owe it to New Zealand to set a definite figure. For those reasons it is important that the United Kingdom dairy industry, while it must put up with the extra competition from New Zealand, should put the figures into perspective. I do not believe that things are nearly as bad as has been claimed.
I turn now to the question of the EEC itself. We must also put this into perspective. New Zealand butter comprises about 7 per cent. of total EEC butter

987
production. At the same time a fall in New Zealand supplies of the order of 10 per cent. is equivalent to a reduction of only about one-quarter of 1 per cent. in EEC butter production. Therefore, we are talking about a relatively small area of production for the EEC as a whole.
That puts the onus very firmly on the EEC. If it is serious about disposing of its surplus butter production there is far greater scope for doing so in relation to its own production than by straining at the gnat—if I may put it like that—of New Zealand imports into Britain.
Mr. Jay: Is that not an argument for claiming that the reduction to 90,000 tonnes need never have been made?
Mr. Buchanan-Smith: I have come back to the practical point. The reason why it had to be made was the unsatisfactory arrangement. That quantity could not be reached this year, and I am glad that that has been corrected.
Some hon. Members tried to make out that the EEC was implacably opposed to New Zealand. Certainly there are some countries that are more critical of the entry of New Zealand butter than others, but it is worth remembering that the balance of payments on both visible and invisible trade between the EEC and New Zealand is very much in favour of the EEC. I assure hon. Members that my right hon. Friend and I have made this point on every possible occasion, both within the Council and individually with Ministers. We have been at pains to point out that if the economy of New Zealand is damaged by the EEC's refusing to take a reasonable share, that in turn will damage the economy of the EEC and its constituent parts.
For an example let us take the case of West Germany. It had a favourable balance last year of about $NZ92 million, which is the equivalent of about £ 45 million. Many other countries are in the same position. It is true that some, such as France, find the opposite, but overall, many countries—not only Britain—benefit from this trade.
We also remind our EEC colleagues that New Zealand itself is suffering a deficit on its overall trade balance. In recent years the terms of trade have been going
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against it. If the EEC willingly hurts the New Zealand economy that will not just affect the direct trading position between New Zealand and the EEC; it will make New Zealand's overall world trading position more difficult. That will weaken the New Zealand economy still further and hurt its ability to buy from the EEC. I make no apologies for emphasising this point.
The reasons for supporting trade between New Zealand and the EEC are not merely historical, emotional or nostalgic. It is in the interests of the EEC as a whole, and particularly countries such as West Germany, to maintain and continue that trade for the benefit of all our economies across the board. I accept what many hon. Members from both sides of the House have said.
I should now like to turn to the position after 1980. I do not think that it is clear to all hon. Members that the post-1980 period has still to be negotiated. No decisions have yet been taken in relation to the period after the end of this year. That is what the second document that we are discussing is all about. I have taken into account everything that has been said in this debate. Figures have been recommended by the Commission. It is the firm intention of the Government to negotiate a deal at the best possible figure that can be obtained. I go into these negotiations endeavouring to get a figure that is better than those that have been suggested by the Commission.
One of the benefits of the recommendations made by the Commission is that the arrangements for the access of New Zealand butter should continue after the end of the currency of the particular period of agreement proposed. We strongly support that recommendation. To do it for a short time and then to cut off would be totally unacceptable to the Government. On the ground of continuing access of New Zealand butter to the Community and to the United Kingdom and on the ground of the levels, I assure the House that it is the intention of the United Kingdom Government that we should get the best possible deal. The deal for which we shall be aiming is above the figures that have so far been mentioned by the Commission. I have no hesitation in accepting the Opposition amendment proposed by the hon. Member for Edinburgh,

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East. It fulfils the spirit of what the Government are seeking to achieve.
Amendment agreed to.
Main Question, as amended, put and agreed to.
Resolved,
That this House takes note of European Community documents 8832/79 and 8476/80 on access for New Zealand butter to the European Community and supports the Government's intention to secure satisfactory arrangements for the imporation of New Zealand butter into the European Community after 1980, so long as these arrangements include the principle of permanent access with a quota for 1984 of not less than 90,000 tonnes.

EUROPEAN COMMUNITY (PROTECTION OF WORKERS)
1.18 pm
The Under-Secretary of State for Employment (Mr. Patrick Mayhew): I beg to move,
That this House takes note of European Community Document 11571/79 and Addendum 1 for a Council Directive on the protection of workers from harmful exposure to metallic lead and its ionic compounds at work and welcomes the Government's intention to support appropriate measures for the control of persons' exposure to lead at work.
This document is a proposal for a Council directive, and was the subject of the explanatory memorandum to Parliament dated 26 February 1980. The Select Committee on European legislation recommended that it should be further considered by the House. Substantive discussions on this proposal have only recently begun in the Council social affairs working group.
I shall first describe how the draft directive originates, and how it would take effect, and then outline the Government's proposed response to it.
The proposal is based on article 100 of the Treaty of Rome and arises from the Community programme on safety and health at work. Its purpose is to improve the protection of workers against occupational risks arising from harmful exposure to lead. It is proposed to establish common standards which would then form the basis of member States' own regulation and control of such exposure. It is the first of the special directives to be proposed under the directive on the protection of workers from exposure to harmful chemical, physical and biological agents at work, which was agreed by the Council of Ministers on 9 June and debated in the House on 26 March this year.
It would take effect in this way. The provisions of the draft directive will apply wherever, with the exception of sea and air transport, there is a risk of a worker absorbing lead. This is contained in article 2. Reference or threshold levels to determine whether such risk exists are given in annex 1. The term "lead" is used to refer specifically to metallic lead and any of its ionic compounds. Covalent lead compounds such as tetra alkyl lead compounds which

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are used as petrol additives are excluded from its scope.
The directive would establish limits for the exposure of workers to airborne lead, and further limits for the amount of lead in the blood. The lead in air and lead in blood limits would be mere guidelines at first, but from 1985 they would become more stringent and mandatory.
The Commission could, in the case of certain industrial activities listed in annex 3, extend until 1989 the time by which the more stringent limit values have to be met. Those activities are lead mining, smelting, refining and producing, and the manufacture of batteries.
The proposal also sets out certain criteria for air monitoring and health surveillance, including biological monitoring. Lead is especially dangerous to the developing foetus. What are called "workers of child-bearing capacity", which is scarcely a euphemism, are treated as a special case in the directive. More stringent limits are proposed for use in their biological monitoring, and workers who are confirmed as being pregnant are not to be exposed to the risk of absorbing lead at work at all.
Finally, the draft directive requires the provision of information to workers, and of respiratory protection, protective clothing, washing facilities and clothing accommodation.
I turn to the Government's proposed response.
General provisions for achieving the health and safety of persons at work already exist in the Health and Safety at Work etc. Act 1974. In addition, relevant statutory provisions specific to protection against the effects of lead exist in the Factories Act 1961 and regulations made under it. The specific provisions are out of date and fragmented. Accordingly, they cover only a limited range of lead industries, they cover obsolete processes and are difficult to enforce, and they do not make full provision for modern monitoring techniques.
New regulations and an approved code of practice for the control of lead at work in draft form and designed to replace this out-of-date legislation have been the subject of extensive public consultation between industry, the trade unions, the Health and Safety Executive and Gov-
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ernment Departments during the past three to four years and are currently with my right hon. Friend. This proposed domestic legislation would, if adopted, provide an adequate legislative framework for implementing the proposed directive. The general safeguards required by the two sets of proposals correspond because they are based on the same occupational hygiene principles. The limit values proposed for use initially under the directive are similar to those in the proposed United Kingdom legislation, but the proposed mandatory standards for 1985 are much more stringent than the United Kingdom proposals.
We accordingly support the objective and principle of this directive, but have reservations on the levels of the limits proposed and their points of application. We will develop these during the negotiations on the directive with the objective of gaining agreement on the changes that we think necessary.
The Government have consulted closely a number of bodies on the draft directive, principally the CBI, the TUC, the Lead Development Association, other trade associations and the HSC.
One major area of concern is the Commission's proposal to introduce mandatory limit values from 1985 which are more stringent than those which have been accepted during our own consultative process. The Commission is proposing that the amount of lead in the blood of any individual worker should not be allowed to exceed 60 micrograms of lead per 100 millilitres of blood and that the concentration of airborne lead in the breathing zone of workers should not be allowed to exceed 100 micrograms of lead per cubic metre of air, calculated as a time-weighted average over a 40-hour week. For our part, we subscribe to the establishment of mandatory limits, but take the view that such limits should be based on clearly established evidence about the threshold of clinical effects, and we believe that difficulties arise in that connection.
It is common ground that lead is a ubiquitous element and that we all absorb lead to a greater or lesser extent from our natural surroundings. In the normal course, lead is excreted almost as fast as it is absorbed. But if the absorption rate occurs much faster than it can be

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excreted, a build-up will occur in the body and a range of metabolic functions can be affected.
The interpretation of these effects in relation to health is by no means clear. For example, even at very low levels, well within the range found among people not occupationally exposed to lead, there are effects on certain enzymes, but no recognised effects detrimental to health.
The medical advice available to us is that it is rare for any clinical effects to be observed in adults below a blood lead level of 80 micrograms per 100 millilitres. Under the provisions of the directive the significance of a blood lead limit is that if a person's blood lead level exceeds that limit he would have to be temporarily suspended from work with lead until his blood lead level dropped below the limit. The Government's view is that until evidence of detriment to health suggests otherwise, the level at which a person is mandatorily suspended from work should be no lower than a blood lead level of 80 micrograms per 100 millilitres.
As regards the limit set for airborne lead, it is logical that this should be such that if exposure is kept within the limit it will not give rise to blood lead levels that will reach 80 micrograms per 100 millilitres. Experience has shown, and it is generally accepted, that an air lead limit of 150 micrograms per cubic metre correlates to a blood level of about 60 micrograms per 100 millilitres, and this limit for airborne lead is what we intend to propose.
There is further concern about the lack of flexibility in the limit values proposed. For example, it is well known that in considering the effect of exposure to lead account has to be taken of variables such as solubility and particle size, which can affect the rate of lead absorption into the body. We are advised by the Health and Safety Commission that, in consequence of this, flexibility is needed in the application of limits for lead in air, and for this reason we could not accept an inflexible limit of 150 micrograms per cubic metre of air for all airborne lead.
There is, however, a further important consideration. Even if the Government were able to agree the Commission's proposed mandatory limits now, we are ad-
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vised that it is not feasible to implement them in all industries by 1985, as time would be needed to design, construct, commission, and in some cases research and develop new equipment with which to do so. In recognition of this fact, the Commission has proposed a system whereby it could grant extensions of time for certain industries on application by a member State.
There are, however, considerable disadvantages in such a system. It could create unfair trading conditions as between member States and unnecessary administrative burdens, but, most importantly, it is the Government's view that if there is a health risk at the more stringent limits set out at article 8, all industry should abide by those limits. If there is no clear health risk, these more stringent values should be advisory rather than mandatory.
The other major area of concern is in relation to the level of risk at which certain control measures become applicable. As I have said, the directive will apply wherever there is a risk of a worker absorbing lead, and in annex 1 reference or threshold levels for determining risk in terms of airborne lead and blood lead are given. If these reference levels are exceeded, all the provisions of the directive are at once to apply, including those which require regular monitoring of blood levels and of levels of airborne lead. Whereas immediate application may well be warranted in the case of matters such as the provision of information to workers, or the provision of washing facilities, a much more selective approach to the use of resources, and, indeed, to the imposition of onerous obligations is, in our view, merited in other matters.
The Commission's proposal here will mean that a great deal of such monitoring will have to be carried out where there is exposure to lead only at low levels, where there is no likelihood of adverse effects on health and no need for any further action arising from the monitoring results. We have had practical experience of these matters in the United Kingdom for many years, and the medical evidence available indicates this to be unnecessary for the protection of workers' health.
It is, therefore, our view that less stringent, but equally effective, reference levels should be set as the thresholds

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for regular mandatory monitoring, and that we should rely primarily on sampling of airborne lead, based on an eight-hour sampling time, to identify areas where regular monitoring, thereafter, will be required, and not use blood lead sampling for this purpose. Our proposals, which are reflected in the draft domestic regulations, would accordingly impose little or no cost on industry until exposure reaches a significant level, which is defined as a lead-in-air level of 75 micrograms per cubic metre. That is half the maximum permitted airborne lead level.
Under the Commission's proposals as they stand, not only would blood lead monitoring be required in all cases at very low levels of exposure to lead; there would need to be a second biological test for the determination of amino-laevulinic acid in urine. Our view is that only one biological test would be mandatory. This would serve as adequate screening, conserve resources, would in no way inhibit further tests being carried out in appropriate cases, and would not lessen the degree of protection afforded to workers. We propose, therefore, to seek amendment of the draft directive on all these points.
I should say a word about the special position of women. Under our existing statutory provisions for lead, and under international convention, women are prohibited from work in certain lead processes. These provisions date from the time when lead exposure levels were generally higher than they are today, and abortions and other troubles were known to be associated with them. The principal concern at the present time, however, is not with the effect of today's lower levels of lead exposure on women per se, but of any possible harmful effect on the foetus in the event of pregnancy occurring in a female worker in lead. Lead, even in relatively low doses, is now widely credited with having a harmful effect on the central nervous system of the young child, and lead is known to cross the placental barrier so that foetal blood lead levels reach maternal blood lead levels.
We therefore agreed in principle with the proposals in the draft directive, which would require a worker of child-bearing capacity to be suspended from
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work which exposes her to lead when her blood lead concentration exceeds 40 micrograms per 100 millilitres. This is the upper limit of blood lead concentrations found in people who are not occupationally exposed to lead. Our proposed regulations require that no pregnant woman should do work in which she is exposed to the risk of absorbing lead.
There is one last matter of importance with which I should deal. I have already referred to new draft regulations and a draft approved code of practice for the control of lead at work which, after very wide consultation over three and a half years have lately been submitted to my right hon. Friend by the Health and Safety Commission. These documents are basically compatible with the Commission's proposals in this draft directive, but they do, as will be supposed reflect the Government's views on the matters which I have already mentioned.
The question arises whether our domestic proposals should be held back until negotiations on the directive are completed. We believe the disadvantages of delay to be greater than the advantages and that it is better to go ahead with our own proposals and the revision of the existing domestic legislation, which is considered both by the lead industry and the trades unions to be long overdue. The new regulations and approved code of practice provide an adequate legislative framework for implementing the proposed directive, and are wholly in keeping with the spirit in which the Commission has made its proposals. To proceed would conform with the Commission's desire to promote progress, not to inhibit it, and ensure that the benefit of the extensive consultation which has been carried out over the past three and a half years is soonest enjoyed. The Government therefore feel that it is right to proceed with the secondary legislation proposed, and they will shortly bring it forward.
I therefore commend to the House the Government's policy that the objective and principle of the European draft directive should be supported, but that it would be appropriate for the amendments on the issues to which I have referred to be agreed before the directive is presented for adoption.
1.33 pm
Mr. John Grant: It would be churlish and foolish not to welcome the directive. It is the first individual directive to be proposed under the draft framework on the protection of workers from harmful exposure to chemical, physical and biological agents. It covers about 1 million workers throughout the Community and gives better protection wherever there is a risk of absorbing lead at work. Clearly, it is a major step forward.
It is a major step for Britain because, as the Government recognise, the Factories Acts provisions against the effects of lead are well out of date. The Health and Safety Commission has proposed its own new draft regulations and code of practice, and there have been lengthy consultations with industry. The HSC's agreed final proposals have been approved by the Secretary of State, although the Minister simply said that they were with the Secretary of State.
The Government believe that they should go ahead without waiting for the implementation of the directive. That being so, I am surprised and disappointed that the regulations have not already been laid before the House in their final form. I doubt whether the Benches would have been packed but if the regulations had been laid before the House hon. Members with an interest could have made comparisons between the draft directive and the HSC's proposals instead of having to rely on the earlier document.
However, the Government tell us that domestic legislation will meet the requirements of the directive, at least in its early stages. It would be particularly unfortunate if that were not the case, because the proposed EEC limit values, at any rate initially, are not particularly stringent. If I have got it right—I think that I am in line with what the Minister said—the proposed air-lead concentration is 150 micrograms of lead per cubic metre of air, and the maximum blood lead limit is 70 micrograms per millilitre of blood. The United Kingdom proposes limits of 150 and 80 respectively.
Tighter standards are proposed by the European Commission from 1 January 1985, with the lead-in-air limit then at 100 micrograms and a blood lead limit of 60 micrograms. This is where we run into a little trouble. The Government
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appear to be unwilling to accept these tighter standards. In the explanatory memorandum, they refer to the cost to industry. In considering this matter, the most important cost is the consequences to individual workers of exposure to lead. That must be the overriding factor. If higher standards are uniform within the EEC, there should not be a competitive disadvantage for United Kingdom industry, certainly in respect of Europe.
I do not want to be too dogmatic about the figures. We are in a somewhat technical world, as I am sure the hon. and learned Gentleman will agree. I know that the Health and Safety Executive would argue that there is little evidence-again the Minister said this today—of harm from exposure to lead at levels between the figures set in the directive. A large number of workers might be unnecessarily suspended if the levels were too harsh, and it has been suggested that more research is required before the EEC levels can be accepted.
Of course, this is not a new issue. A great deal of research has already taken place. I view with suspicion the attitude of some employers. Indeed, I understand that it is because of employer pressure that the European Commission has watered down some of its original proposals, which would otherwise have been even more stringent than those which the Government are now reluctant to accept. Rather than the earlier European Commission proposals for mandatory suspension of workers whose blood lead levels exceed 70 micrograms, it now seems that the mandatory suspension has been dropped in favour of far less specific action to be taken at 60 micrograms. Article 12, which deals with what should happen when someone is over the limit, seems to leave decided loopholes. I accept what the hon. and learned Gentleman said about the need for flexibility, perhaps in the case of an older worker being laid off and ending up permanently out of work if laid off in the wrong circumstances. I have heard talk of what has been called "the grandfather brigade". One must take these things into account.
Having said that, I favour the toughest possible safeguards. I am not entirely convinced by what I have heard about these matters so far. The implementation target date for this directive was to have been 1 January 1982, and that has now

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slipped by a full three years. I am told that that is primarily as a result of employer pressure.
There is also the question of the exemption list, under which some industries need not comply fully until 1989. The Minister himself has doubts in this regard, and I wonder whether that will not present further loopholes and perhaps postpone necessary action. I am glad to know that the hon. and learned Gentleman will look more carefully at that matter in the further consideration and consultations that will take place.
I do not want to detain the House by arguing technicalities, but I should like to say something about research. The Lawther report was published in March. An EEC survey was also carried out in this country, including research in Islington, in my constituency. I know that all that was environmental and that it took place on a community-wide basis rather than at the workplace. However, a great deal of information about the effects of lead was obtained.
Having perhaps expressed some reservations about the directive, and more especially about the Government's attitude, I repeat that we welcome the directive generally as a major advance in the right direction. It is one thing to welcome the directive, as I do, irrespective of any criticism of detail. It is one thing, perhaps more guardedly, to welcome the HSC regulations and the code of practice that relate directly to the directive, which we shall want to examine in more detail in due course. It is another thing to recognise that implementation will need more than lip service. It will need extra resources.
There will be an additional burden on industry. That is a price that it is socially and morally right for industry to pay. In the long run, I suppose that part of the additional cost will be met by industry's customers, and it is right for that cost to be paid. Death and disease caused by the hazards of the workplace have taken a heavy toll of the nation's work force for all too long. We should support all efforts to minimise that toll and to reduce the figures.
The cost to firms will be massively offset by the gains—for example, the increased stability of the work force and better productivity when workers are in
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better health. We all know that a tremendous amount of working time is lost through industrial injury and accidents. Every survey has consistently shown that far more days are lost in that way than are ever lost through strikes.
There are other important costs to consider. Implementation of the domestic and EEC legislation is bound to mean more work for the Health and Safety Executive, especially for the Factory Inspectorate and the Employment Medical Advisory Service. The directive sets still higher standards and will require still more enforcement than even the domestic legislation if that is unamended.
The executive has to have the tools to do the job. However, there have been two series of cuts in its staff under the Government, resulting in a startling reduction of more than 10 per cent. In addition, and with grave implications for industrial health and safety, the Secretary of State has asked for a reduction of another 8 per cent. The right hon. Gentleman has produced an outraged reaction from the Health and Safety Commission—and its reaction is quite justified. It is right to bring this matter out into the daylight. Ministers have not told us anything about it.
The commission has told the Secretary of State that if he persists in these cuts it will be unable to fulfil its statutory obligations under the Health and Safety at Work etc. Act 1974. It has explained what an 8 per cent. cut across the board would entail. Visits to factories that are not regarded as especially dangerous plants would probably have to be so infrequent as hardly to merit being carried out.
The staff bulletin sent to the staff of the commission puts them in the picture on these matters in a way that has not been available to the House. The bulletin contains the letter of the chairman of the commission, Mr. Bill Simpson, to the Secretary of State for Employment. It says:
"A further cut of 8 per cent. in staff numbers, in addition to the cuts required by the previous reductions in the budget, would bring the total staff of the Executive back to little more than the level of 1975—that is broadly to the level of resources in use on health and safety matters prior to the passing of the 1974 Act."

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The letter continues:
"The Executive is now responsible for the health and safety of about 18 million people at work as compared with 12 million before the 1974 Act."
The letter stresses:
"the basic implementation of a further 8 per cent cut in staff would therefore be that a far wider range of responsibilities would have to be carried out with broadly the same staff as before the passing of the 1974 Act. Clearly this would mean that some or all of the work being carried out prior to the 1974 Act would have to be substantially reduced in scale or comprehensiveness in order that resources could be available for dealing with the new responsibilities.
This was certainly not what was envisaged when the 1974 Act was passed. Both the original Bill, introduced by the Conservative Administration, and the Bill which was finally passed by the Labour Administration referred in the explanatory memorandum to the additional resources which would be needed to implement the Act."
The chairman observes:
"It will be immediately clear to you that the implications can only be regarded as serious."
His final paragraph states:
"We are about, in any case, to embark upon a review of our programme of work with particular reference to new or updated regulations and codes of practice."
Here, perhaps, we come particularly to the points that we are discussing this afternoon. The chairman says:
"The resources available for 1982-83 will force the postponement for some time of a number of major projects. A further cut of 8 per cent in staff employed on this work would certainly mean that projects and developments which the Commission regards as of real importance in carrying out our responsibilities would have to be abandoned altogether for the foreseeable future."
There is an annex for the benefit of staff, entitled:
"Effect of further 8 per cent. cut in staff."
It has been produced by the director of the Health and Safety Executive, Mr. John Lock. It refers in particular to the effects on the Factory Inspectorate and the Employment Medical Advisory Service—the two areas most affected by the directive and by the regulations and code of practice to which the Minister has referred.
Here we come to an even more remarkable situation, which I think is unprecedented in relations between the Government and any body such as the Health and Safety Commission. I understand that the commission has told the Govern-
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ment that it cannot accept the responsibility for making these further 8 per cent. cuts, and that if Ministers persist they must decide how to wield the axe and which parts should be chopped. In other words, it is saying that the Government must do their own dirty work.
I regard that as a crisis in relations between the commission and the Government, a crisis entirely of the Government's making. It is certainly not the sort of situation that we in the Labour Government's Department of Employment ever experienced in dealing with any such bodies. The country's industrial health and safety programme has been plunged into a scandalous state by the Government's sheer blinkered irresponsibility.
Not only lead is poisonous to workers. So is the Government's policy. I therefore ask the Minister what he and his colleagues will do about these disastrous cuts. How will they go about fulfilling the requirements of the directive, the health and safety regulations and the code of practice which it is proposed to introduce? Will they slash the agricultural inspectorate in spite of the grave death and accident rate in that industry? Will the axe fall upon the Nuclear Installations Inspectorate, in spite of the Government's apparent determination to press ahead with the development of a nuclear energy programme? Will it fall on the Mines and Quarries Inspectorate, which is already suffering from a shortage of inspectors? Will the target be the Alkali and Clean Air Inspectorate, with all the implications that that would have not only for workers in the relevant industries, but for the environment beyond and for the local communities? Or, to come back to lead, will they sabotage the work of the Factory Inspectorate and the Employment Medical Advisory Service which are both directly and heavily concerned in the implementation of those measures?
The Health and Safety Commission's attitude, which seems to be tantamount to rebellion against the Government's wrecking tactics, is that of the commission members as a whole—not just representatives of the trade unions but those of the employers and other interests. It is no good the Government's coming to the House with their hand on their heart saying that they are about to make another

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major improvement in industrial health and safety and seeking to gain credit for it and for an enlightened approach, when they know that they are not only unwilling to make the necessary resources available but are undermining the legislation which they have a clear responsibility to see enforced. If they persist in further cuts they should come to the House openly with their proposals to alter or repeal the legislation. We can then fight it out publicly, not on a hole and corner basis, and the country will know where the Government stand on these matters and how little they care for industrial health and safety.
We see today an exercise in gross hypocrisy. I do not blame the Minister for that; I am not attacking him personally. I am sure that he is shackled and, perhaps, impotent in these matters. It is high time, however, that the Secretary of State made a frank and open statement to the House about the grave situation facing the commission and about other matters related to public expenditure for which he is responsible. He should be fighting for them in the Cabinet, not meekly accepting these further damaging cuts.
We are certainly not opposed to the directive, but we believe that it is for the Government to demonstrate that they are not simply wasting the time of the House and of all those concerned with protecting workers from exposure to lead poisoning by going through the motions here while ensuring that effective implementation is little more than a pipe dream.
1.50 pm
Mr. Mayhew: Being neither shackled nor impotent, I should like to respond briefly to the points raised by the hon. Member for Islington, Central (Mr. Grant). I shall confine my remarks to his comments on the directive. This is a major advance in the right direction. The hon. Gentleman is wrong in supposing that my right hon. Friend the Secretary of State has approved the domestic regulations. They are with him, but they have not yet been approved. They closely conform to the shape and principle of the European directive.
Mr. John Grant: I am not sure how up to date the Under-Secretary's information is, but I have been assured that the
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Secretary of State has given his approval to the domestic regulations.
Mr. Mayhew: I have made inquiries, but it does not matter whether the regulations are approved this week or next week. I am sure that they will be approved.
I share the hon. Gentleman's doubts about the wisdom of article 12. If the levels are exceeded, suspension should take place immediately. We wanted to avoid unnecessary cost falling upon employers. It does not matter whether all member States would be in the same boat if unrealistically stringent levels were fixed by the European directive. The Government's task is to ensure that unnecessary cost does not fall upon employers.
Half of the hon. Gentleman's speech was spent in launching a diatribe against the Government's refusal to exempt the Health and Safety Commission from the obligation to make cuts in expenditure which, with the exception of the Armed Forces and the police, have been imposed across the board by the Government. The Government were elected in order to restore the country's national housekeeping to a proper basis. If we were to fail in that, all the aspirations of the Government and the people would fail. That extends to the ability to provide employment for people, and to provide a proper monitoring service for the health and safety of people at work.
The hon. Gentleman was wrong when he said that a third tranche of cuts of 8 per cent. had been imposed on the Health and Safety Commission. My right hon. Friend has asked the chairman of the Health and Safety Commission to advise him about the likely affects of a further cut of 8 per cent. in staff expenditure, if that were found to be necessary. The Government will make up their minds in the light of the advice that they receive. They have an overriding duty to assure the stability of this country by getting its national housekeeping into a proper state.
I welcome the accord that exists in this crowded and excited House as to the principles of this European directive.
Question put and agreed to.
Resolved,
That this House takes note of European Community Document 11571/79 and Addendum 1 for a Council Directive on the protection of workers from harmful exposure to metallic lead and its ionic compounds at work and welcomes the Government's intention to support appropriate measures for the control of persons' exposure to lead at work.

STATUTORY INSTRUMENTS, &c.
Mr. Deputy Speaker (Mr. Bernard Weatherill): With the leave of the House, I shall put together the five Questions on the motions relating to statutory instruments.
Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments, &c.)

Legal Advice and Assistance
That the Legal Advice and Assistance (Prospective Cost) Regulations 1980, a copy of which was laid before this House on 3 July, be approved.
Legal Advice and Assistance (Scotland)
That the Legal Advice and Assistance (Scotland) (Prospective Cost) Regulations 1980, a copy of which was laid before this House on 8 July, be approved.
European Communities (Railway Tariffs)
That the draft European Communities (Definition of Treaties) (International Railway Tariffs Agreements) Order 1980, which was laid before this House on 19 June, be approved.
Motor Vehicles
That the draft Motor Vehicles (International Circulation) (Amendment) Order 1980, which was laid before this House on 26 June, be approved.

Sea Transport (Passengers and Luggage)
That the draft Carriage of Passengers and their Luggage by Sea (Interim Provisions) Order 1980, which was laid before this House on 14 July, be approved.— [Lord James Douglas-Hamilton.']
Question agreed to.

ADULT TRAINING FACILITIES (KIRKLEES)
Motion made, and Question proposed, That this House do now adjourn.— [Lord James Douglas-Hamilton.]
1.45 pm
Mr. Richard Wainwright: The moderately paid and generally hard working people of the South Pennine valleys and the travel-to-work areas of Huddersfield and Dews-bury are suffering at the moment quite exceptionally sudden large-scale increases in unemployment—a penalty which they have certainly not brought upon themselves. Massive redundancies in wool textiles and severe setbacks in mechanical engineering and elsewhere have contributed to an increase of no less than 55 per cent. in unemployment in the Huddersfield and Colne Valley area during the past 12 months. In the Dews-bury area of Kirklees, the 12-month increase in unemployment has been 69 per cent. This is a steeper rise than in any part of the country other than certain steel areas, and it has created a current Kirklees unemployment rate—quite apart from many unregistered women workers who have lost their jobs—8.2 per cent.
The essence of the consequent industrial and economic problems, which I must convey to the Government today, is that, like a thief in the night, industrial slump has suddenly turned a whole area of traditionally low unemployment and usually widespread opportunities for skilled jobs into a seeming desert in terms of finding secure jobs. In Government terms, this means that an area which did not need to claim exceptional facilities, and which always worked hard to provide for itself, has now, quite suddenly, a substantial claim to be given speedy official help in order further to help itself.
The aspect that I want to take up in this debate is that of adult training facilities. The House could, on a suitable occasion, debate for hours the Government measures which are urgently necessary to preserve the diligent attitude to work and the extraordinarily high skills of this traditional manufacturing area, but I have selected the urgent need for further adult training facilities.

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I emphasise at the start that, in this respect as well, the area believes even at this moment in starting by helping itself. For instance, the Colne Valley Woollen Training Group—a co-operative, staffed by private enterprise, established some years ago—is very active. Its secretary reports to me that
"the industry needs some assurance that a suitable central training centre will be set up and be available to give the specialist training necessary when the need arises in hopefully the not too distant future."
Then there is the Kirklees Training Association, which is another co-operative of private enterprises. More than 75 businesses co-ordinate the selection of apprentices and various other aspects of technical training through the association, which is at present preparing its own training centre for apprentices.
Nor has Kirklees been benefiting from exceptionally generous facilities from the Government in the rest of Yorkshire, because for every 67 skillcentre places per 100,000 work force in Yorkshire, there are in Wales 134 places—more than twice as many—and 141 places in the far North of England.
This very sudden turnround—which is an appalling shock to an area which has not known severe unemployment since the 1930s—requires a completely new attitude. It means that all of us—Government, Opposition parties, trade unions, employers and the rest—must discard a great many notions of which we were perfectly convinced in good faith until a few months ago.
I hope that the Minister will not trot out the results of the Manpower Services Commission's survey of Yorkshire training, which was usefully completed in January of this year, because, alas, that is already seriously out of date in terms of the current need.
Industrial training will have to be looked at in a new light, and arguments against skillcentres which were understandable to some extent during the long years of fairly full employment should not be repeated in the entirely different position that we now face.
Furthermore, Kirklees is, unfortunately, no longer able to count absolutely on the many splendid apprentice schools of a very high standard in Kirklees industry being able to continue at completely full stretch for the present time, because their
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companies are very hard pressed indeed through the loss of export markets consequent on the gross over-valuation of sterling and for other reasons.
The reliance of Kirklees upon Wakefield, Leeds and Bradford skillcentres cannot be the answer for a large and rapidly increasing number of people who face the alternatives of total unemployment or constructive attempts to add to their skill, and thus to their chance of getting a good job when recovery comes. The same is true, I am told, of the neighbouring metropolitan borough of Calderdale, which is also without a skillcentre.
This basic change of approach must also be rapid, more rapid than is usual in any Government circles, because unemployment is still growing fast. Redundancies alone in Kirklees are growing at the rate of over 500 a month, apart from the outpouring of school leavers with, for the first time in Kirklees, dismal prospects.
I urge a rapid approach because we must recognise that the time scale for a new skillcentre, despite every effort, is bound to be about two years to completion, by which time I reckon the demand will be almost overwhelming, if the proper attitude to training is adopted. I advocate the use of converted buildings, in which Kirklees is rich, rather than a highly expensive, purpose-built centre, training people in surroundings that are unrealistic in relation to the jobs that they will be taking, if they are fortunate. Even so, a converted building will take many months to bring into operation.
It is also necessary that the content of courses be reviewed, so that there will not be quite the same heavy emphasis on vehicle engineering, miscellaneous engineering, welding and so on, valuable though they are.
There must also be regard to the fact that local authority training provision is, unfortunately, being cut—for example, textile training in Dewsbury. There will be a natural disposition on the part of many enterprising unemployed people in Kirklees to want training for high-quality, up-market production, where the hope of industrial recovery is probably greatest.
Here I must pose the Minister two questions, in the light of an answer that

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he gave me on the subject on 9 July At the end of the answer he said that
"the primary responsibility for overcoming skill shortages lies with industry and employers."— [Official Report, 9 July 1980; Vol. 988, c. 163.]
Does that mean that primary responsibility for training the unemployed lies with industry and employers? Secondly, is it simply with employers and private industry that responsibility lies for seeing that when the recovery comes we do not have a repetition for the umpteenth time of a skill bottleneck?
West Germany, Switzerland and Austria have beaten us hands down on each occasion because of the great superiority of their training arrangements. While poor old Britain has been complaining that the boom has taken it unawares and that skilled labour is not available, these competitors have forged ahead and taken enormous advantage of us, because their much wiser and more farsighted training schemes have meant that skilled labour was immediately available—and to great effect.
In that connection, training the unemployed, I must point out what the West Yorkshire county council wrote only a few days ago on the subject of access to training facilities. The council's document says:
"Both Calderdale and Kirklees are Pennine areas, with consequently long lines of communication and lengthy commuting journeys to Wakefield, Bradford and Leeds, where the skill-centres are. Many potential trainees from Calderdale and Kirklees may well be deterred from making use of the facilities at these three existing centres. On grounds of equity, and taking into account commuting time and cost, it is desirable that the present Training Service Division's restrictions on catchment areas for a skillcentre should be set aside and its location and allocation of places be determined on the social cost involved to potential trainees."
To that I add the enormous potential cost to industry if it is subjected yet again to an appalling lack of skilled labour when the need arises.
I also draw attention to the personal view of the secretary of the Kirklees chamber of commerce:
"One the economy recovers, so too will the structural weakness that we have in our labour market, and certain skilled vacancies, particularly in engineering, will prove very difficult to fill."
Naturally, the council of the metropolitan borough of Kirklees takes the whole
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matter very seriously. After meeting all the local Members of Parliament at Westminster, leaders of all three parties on the council called a special conference on 4 July to discuss the employment position and the rapid turnabout from which Kirklees is suffering. Members of Parliament of all three parties, trade unions, the chamber of commerce, West Yorkshire county councillors and Kirklees councillors took part. One of the points in the official record of that meeting was
"the establishment of a skillcentre locally would be of considerable benefit, it was felt."
I hope that the Minister will make it clear this afternoon that training for industry is regarded as a first-class national investment for the future—well worth the unavoidable risks of not always matching exactly the skills that will be required. Calculated ventures in faith are more acceptable to West Riding people than enforced idleness and the gradual loss of skill that that involves. Kirklees is the seventh most populous borough in the metropolitan counties of England. It is also one of the most far flung—and my constituency of Colne Valley is the most scattered of all. I have constituents near the top of the Pennines in the wool textile towns of Slaithwaite and Marsden for whom a journey to the nearest training centre at Wakefield is an expensive nightmare of high and increasing fares and unreliable service.
Kirklees people have maintained some of Britain's staple industries during good times and bad. They are entitled now to have the opportunity to gain new or upgraded skills within their borough and within reasonable travelling distance. They have shown the will to work, to acquire skills and to adapt to changing needs. I hope that the Minister, this afternoon, will give them real grounds for hope.
2.8 pm
The Under-Secretary of State for Employment (Mr. Jim Lester): I listened with interest and concern to the remarks of the hon. Member for Colne Valley (Mr. Wainwright) about the difficulties facing his constituency. It is not by any means the first that we have heard about those matters. The House knows that for several years the hon. Gentleman has been assiduous in pressing the claims of his constituents for improved training

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facilities. More recently, he met my right hon. Friend the Secretary of State to discuss that matter. In addition, I have received a report from the Secretary of State following his visit to Huddersfield earlier this month, when he met local employers and representatives of the West Yorkshire county council and the Kirklees metropolitan district. We take these matters seriously.
We share the hon. Gentleman's concern about the substantial rise in unemployment in Kirklees—about 58 per cent. during the past year. The increase has been markedly higher than for the remainder of West Yorkshire, or for the Yorkshire and Humberside region as a whole. For the first time in recent years the Kirklees unemployment rate has moved above the national average. The increase has mainly reflected the redundancies in textile and other manufacturing sectors but it has not been confined to those sectors. An especially worrying feature is the increased proportion of youngsters—especially ethnic minorities—among the unemployed. I am the first to acknowledge the value and the contribution that those work forces made in previous times.
The main solution to the problem of unemployment in West Yorkshire, as elsewhere in the country, is as recently stated in the Manpower Services Commission manpower review:
"a faster rate of employment growth, which depends on the control of inflation and the restoration of an efficient and effective economy."
It is to the objective of a sustained improvement in job prospects, through the control of inflation and the creation of a more competitive economy, that the Government's policies are directed.
I turn to the vital question of skilled training. The main responsibility for meeting future skill needs rests with industry, assisted by the industrial training boards and other national training organisations. An important objective of the Manpower Services Commission's training-for-skills programme is to encourage industry to make realistic assessments of future manpower and training needs, and to prepare soundly based plans to meet them. This year the Government are providing, through the Manpower Services Commission, £ 51.8 million to support
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industry's training plans, a substantial proportion of which will be used to support about 23,500 training places for young people.
In addition, the Commission has announced that in view of the high level of youth unemployment and indications that present levels of apprentice recruitment may be falling substantially below last year's levels, already in terms of sharp action, extra grants have been made available through industrial training boards to support 1,500 extra apprenticeship places this year. The commission is currently consulting ITBs about the allocation of these places and hopes to make grants available by the end of next month. Priority will be given to regions of high unemployment and industries in which cutbacks in apprenticeships have been particularly severe. I shall ask the commission to consider, in its allocation of grants, the points that the hon. Member made about the needs of his constituency and the contribution that might be made by this scheme.
Mr. Richard Wainwright: I am grateful to the Minister, but will he come to the specific point that I raised about responsibility for training those at present unemployed, who will seek work as soon as it is available?
Mr. Lester: Yes, I shall come to that point shortly.
In his choice of a topic for today's debate, the hon. Member has deliberately concentrated on the contribution that so-called "speculative" training under the training opportunity scheme can make to economic growth. He is concerned that TOPS should make its fullest contribution to the attraction of industry and the encouragement of local enterprise, which are essential if Kirklees is to diversify its present narrow industrial base.
There is a general reservation to be entered here. This is not carping. The reservation is based on some evidence that speculative training, while it may contribute to economic regeneration, cannot of itself create jobs. It is not fair to the redundant worker or to the taxpayer to provide additional training facilities unless there is a reasonable expectation that a job will be available after training. There was a report in 1978 by Richard Berthoud, of the Policy Studies Institute, which stated that the ideal time for men

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to train was during a recession. One would always consider that. But that report also pointed out that only 5 per cent. of the men who did not immediately find jobs using their new skills subsequently did so. The remedy suggested by the report was extensive refresher training, but that is highly expensive. Training for stock is justifiable only where there is a real chance of using the new skills that are given. This has been borne out by a lot of work that we have done in Merseyside and the North-East.
I must say immediately that I do not think that in all the representations Ministers have received a case has been made for a new skillcentre at Kirklees. Even a small centre would require a minimum class size of between eight and 14, depending on the trades, and a minimum number of classes to form a viable group. To build, staff and equip a new centre would be very costly, and could not be justified unless there was a high probability that sufficient demand would be forthcoming from local industry to absorb the centre's output for a long time.
I am advised by the MSC—and this advice refers not to last January but to the present time—that its employment and training services covering Kirklees are unaware of any specific skill shortages in the area. For the foreseeable future it does not see sufficient demand coming from local employers to justify a new skillcentre, taking account of the training facilities already available locally or within reasonable travelling distance. The current TOPS programme includes skillcentres at Bradford, Wakefield and Leeds, and together these centres provide 750 places in a range of trades, including construction engineering and electrical and electronic trades. All three centres are accessible from Huddersfield, Dews-bury and Batley, with travelling time by public transport of one hour or less. The hon. Member raised the question of costs. I have always considered that grants are made to cover the cost of transport, even though it might be difficult.
Mr. Richard Wainwright: Yes, but the Minister mentioned only the main towns. I must point out that my constituents do not live in any of them. They live further afield, many of them virtually on the tops of the Pennines.
Mr. Lester: I am familiar with the area and I recognise the hon. Member's point, but there is the feeling that skill-centre provision in the Yorkshire and Humberside region has been constantly reviewed in recent years to ensure that it meets the labour market needs as adequately as possible. We have increased the share of Yorkshire and Humberside skillcentre places from 7.9 per cent. in the review that we have just completed. As a result, new classes are to start later in the year at Bradford on general construction and electronics and at the Wakefield skillcentre on general construction and bricklaying.
Help with the skill needs of existing and new enterprises can also be provided though our direct training services, on which we have put a great deal of accent and for which economic charges are made. Sponsored training is available in skillcentres across the full range of skills normally taught there. Our mobile instructor services are being expanded and will be available to offer to Kirklees employers, on their own premises, a full range of MSC instructional skills available within its Yorkshire and Humberside region. Skills taught include specific manual skills at semi-skilled and skilled level and training in the safety aspects of particular operations.
Turning from manual occupations, TOPS-supported courses in clerical, commercial, catering and business machine maintenance skills are running at both Huddersfield technical college and the Dewsbury and Batley technical and art college. TOPS supports a wide range of courses at educational and employers' establishments in other towns within daily travelling distance, Wakefield, Halifax, Bradford, Morley, Shipley, Barnsley, and Leeds. These courses include clerical, secretarial and business skills, heavy goods driving, catering and food preparation, computer skills and preparatory courses in communications and basic arithmetic skills. In addition, this year we are providing 100 per cent. funding for West Yorkshire LEA's language link that provides English language training for unemployed adults and young people as part of the wider opportunities course at the Bradford and Leeds skillcentres. These are pilot courses. They integrate language training, literacy,

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numeracy, life and social skills instruction with practical work sampling.
Overall, this year, TOPS plans to provide places for just under 3,300 people to start training in West Yorkshire. The adequacy of provision in relation to employers' needs is kept under constant review through the Manpower Services Commission's contacts with district manpower committees, industrial training boards, including the wool, jute and flax training board. Within available resources, the Manpower Services Commission is always ready to consider proposals for new courses to meet specific skill needs that cannot readily be met through employers' own training.
The TOPS scheme provides training for adults aged 19 and over. In addition, the youth opportunities programme, which provides work experience and training opportunities for unemployed young people of 16 to 18, will provide 7,400 places in West Yorkshire in 1980-81, compared to about 4,000 places last year. This is a measure of the seriousness of the situation and the response. In Kirk-lees, about 1,550 young people are provisionally expected to join the programme. Of these, 320 will follow short training courses or work in production courses. Most of these courses are college-based, but a number of places are provided by the West Yorkshire motor trades group through its introduction to the motor trades course.
A possible new development currently under discussion between Huddersfield technical college and the careers service is a work introduction course, including training in English as a second language. It is hoped that the course will benefit young people, particularly those from ethnic minorities with language difficulties. That course will begin in September.
The youth opportunities programme is essentially geared to local needs. The special programme area boards take into
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account any local labour market developments in preparing their annual plans. They are considering nationally how increased attention can be focused on increasing the schemes' relevance to labour market needs and the requirements of new technology.
In some areas there are indications of reduced levels of apprenticeship intake, resulting in fewer opportunities for young people to enter training. Again, in terms of instant response, the MSC is examining ways of using any spare training capacity that might emerge to provide suitable training opportunities under the youth opportunities programme. They would not surplant craft level training in skillcentres, nor offer a TOP-based alternative to first-year apprenticeships, but they would aim at offering pre-apprenticeship or basic training at a higher level than has been available under the youth opportunities programme.
There is also the important general principle that I have already mentioned but which cannot be too often emphasised, that training provision must be geared to a reasonable expectation of labour market demand sufficient to provide job opportunities for those who are trained.
Subject to those reservations, I repeat the undertaking given to the hon. Gentleman earlier this week by my right hon. Friend the Secretary of State that we shall ask the Manpower Services Commission to take account of the rapid increase in unemployment in Kirklees over the past year when determining training provision under both the training opportunities scheme and the youth opportunities scheme. I shall also ask the Manpower Services Commission to consider the important additional matters raised by the hon. Gentleman during the debate.
Question put and agreed to.
Adjourned accordingly at twenty minutes past Two o'clock.