RESTRICTION ON REVOCATION OF SCHEME (No. 1)

HC Deb 23 June 1993 vol 227 cc370-96

'—(1) This section applies until a decision has been made by the Council of the European Communities to introduce a regulation on the establishment of a common organisation of the market in potatoes.

(2) The Minister shall not lay before Parliament a draft of an order under section 22 of this Act or paragraph 5 of Schedule 1 to the Agricultural Marketing Act 1958 unless—

1. (a) a poll of persons who are registered producers has been carried out for the purpose of ascertaining the level of support among them for the making of that order, and
2. (b) a majority of the votes cast in that poll has been cast in favour of the making of the order.

(3) —(a) The Minister may direct the Board to carry out such a poll as is mentioned in subsection (2) of this section and the Board shall comply with the direction within such time (if any) as may reasonably be specified in the direction.

(b) Such a poll shall be carried out as if it were a poll under section 36(1) of this Act.'—[Mr. Campbell-Savours.]

Brought up, and read the First time.

Mr. Campbell-Savours

I beg to move, That the clause be read a Second time.

Madam Deputy Speaker

With this it will be convenient to discuss also the following: new clause 3—Restriction on revocation of scheme ( No. 2):

'.—(1) This section applies until a decision has been made by the Council of the European Communities to introduce a regulation on the establishment of a common organisation of the market in potatoes.

(2) The Ministers shall not make either such an order as is specified in section 22(i) of this Act or an order to revoke the Potato Marketing Scheme in accordance with Schedule I of the Agricultural Marketing Act 1958 until—

1. (a) a poll of persons who arc registered producers has been carried out for the purpose of ascertaining the level of support among them for the making of either kind of order mentioned above, and
2. (b) a majority of the votes cast in such a poll has been cast in favour of the making of such an order.

(3) The Ministers may direct the Board to carry out such a poll as is mentioned in subsection (2) of this section and the Board will comply with such a direction within such time (if any) as may reasonably be specified in such direction.

(4) Such a poll as is mentioned in this, section shall be carried out as if it were a poll under section 36(i) of this Act.'.

New clause 4—Restriction on revocation of scheme (No. 3):

'.—(1) This section applies until a decision has been made by the Council of the European Communities to introduce a regulation on the establishment of a common organisation of the market in potatoes.

(2) Before determining that it appears to them that it is necessary or in the public interest that the Potato Marketing Scheme should be brought to an end or that the Scheme should be revoked in accordance with the provisions of Schedule I of the Agricultural Marketing Act 1958, the Ministers shall first cause a poll of registered producers under that Scheme to be carried out for the purpose of ascertaining the level of support among them for bringing the Scheme to an end or revoking it, and shall not make such a determination unless a majority of the votes cast in such a poll is in favour of so doing.

(3) A poll under this section shall be carried out as if it were a poll under section 36(1) of this Act with the substitution in that subsection for "The Board" of "The Ministers".'.

Amendment No. 49, in clause 23, page 13, line 27, at end insert

`(2A) Where subsection (2) above applies, no order shall be made under subsection (1) above unless the Ministers have consulted on a proposal to bring the Potato Marketing Scheme to an end with such persons appearing to them to he representative of the interests of producers, purchasers, retailers and consumers of potatoes as they consider appropriate.'.

Amendment No. 50, in page 13, line 33, at end insert

`(3A) Where subsection (3) above applies, then to the extent that the regulation of the Council of the European Communities permits member states to make their own arrangements within a common organisation of the market in potatoes, the Ministers shall consult on those matters with such persons appearing to them to be representative of the interests of producers, purchasers, retailers and consumers of potatoes as they consider appropriate.'.

7.45 pm

Mr. Campbell-Savours

I apologise to the hon. Member for East Lindsey (Sir P. Tapsell): he wanted to move the new clause, but I told him that he could not. As he will find out, I had a reason.

I am nonplussed: I do not know what is happening to the future of the potato marketing scheme. However, l am not alone; the industry—both producers and processors—is in the same position. The policy formation of recent weeks appears to have been based on a nod and a wink to journalists, producers and the potato marketing board. Meanwhile, the industry is in turmoil, at a time when large potato surpluses have driven producers all over Europe into bankruptcy, and the board is again under severe pressure as it fulfils its obligations under the scheme.

We have all seen a number of reports suggesting a ministerial shift of position. On 4 June, Farmers Weeklyreported: Gillian Shephard, the first woman to head Britain's Ministry of Agriculture, is considering a stay of execution of the Potato Marketing Scheme and a blitz on red tape…Mrs. Shephard said reviewing the potato scheme was one of her first priorities. What is the reality? I must confess that I suspected that these statements were being orchestrated by the Whips as part of an exercise in disinformation to head off a Tory revolt. There is no doubt that there is a potential for such a revolt over this part of the Bill; perhaps Ministers have realised that only recently. Yesterday's events in my office, while not confirming my suspicions, should worry not only me but the industry.

The hon. Member for East Lindsey has tabled two amendments, arid I can almost guarantee that the Government will accept them. Why? Because, sadly, the amendments do almost nothing. They merely ensure that no order can be made to wind up the potato marketing scheme unless Ministers have consulted those involved in the industry. The two amendments do not restrict the Government's actions in any way; they do not tie the Government's hands.

I suspect that the hon. Member for East Lindsey does not know that the amendments that he tabled were a compromise, and that the amendment that really mattered was never tabled. I know that, because I tabled it yesterday, when I received it in my office. It features on the amendment paper as a starred amendment: that means that we cannot debate it, but we should be debating it. I am not sure whether the hon. Gentleman even saw it, but it would have tied the Government's hands on the future of the potato marketing scheme. It would have done the trick. It states: The Ministers shall not lay before Parliament a draft of an order under section 22 of this Act or under paragraph 5 of Schedule I to the Agricultural Marketing Act 1958 unless they certify that they are satisfied that no grants, subsidies or measures for stabilisation of the market are available for the benefit of potato producers in other Member States of the European Community which are not equally available for the benefit of potato producers in Great Britain. What a wonderful amendment. I always believed that the Tories would table it. I waited and waited: every day I went to the Vote Office to look at the latest amendments. I was convinced that it would be tabled yesterday morning, but it never arrived. When I finally saw it, it was exactly the amendment that should have been tabled.

What I find remarkable about the new Minister of Agriculture's attitude is that, when her Department was consulted about the amendment the Government were not prepared to accept it. I say that having unearthed a very interesting speech made in the House on 27 February 1989. It reads: It is in this atmosphere of change that I would like to plead for the retention of two areas of stability so that we might…qease the process of change for farmers. The two crops involved are sugar and potatoes. The speaker went on to say: potatoes…are the second highest value crop in the country, after cereals. They…are of great importance in underpinning agricultural incomes for both large and small farms There can be no doubt that the future of the potato crop is looming large in producers' minds. As my right hon. Friend knows, that is because the future of the Potato Marketing Board is under discussion. As hon. Members will understand, that board is always criticised when it refuses quotas, but I think that its response to the consultative document issued by the Government has been thorough and serious. I also believe that the consumers in the United Kingdom enjoy a far wider variety of quality potatoes than that enjoyed by their European counterparts. That variety and quality, coupled with good marketing methods, has increased our national consumption of potatoes…In my constituency potatoes are extremely important and growers there—and, I believe, throughout the country—are unanimous in their support for option 3 in the consultative document"— I do not need to remind the House what option 3 was— which will retain area and quality control in a self-financing way. I hope that, during the consultation, my right hon. Friend will consider that unanimous response carefully."—[Official Report, 27 February 1989; Vol. 148, c. 99.100.] Who said that? Was it my hon. Friend the Member for Pembroke (Mr. Ainger)? Was it my hon. Friend the Member for Edinburgh, East (Dr. Strang), or my hon. Friend the Member for Glanford and Scunthorpe (Mr. Morley)? No, it was the new Secretary of State. We therefore know that potato producers in the United Kingdom have a supporter in the Cabinet who will fight for them and not compromise. I am sure that the right hon. Lady will want to make that clear tonight. If she was prepared to make that speech before the general election, why was she not prepared to accept today's starred amendment which was put informally to people in her Department? That is the heart of our case.

New clause 2 seeks to delay the introduction of an order winding up the potato marketing scheme until the European Commission has taken a decision. The starred amendment would have dovetailed with the new clause and greatly strengthened the Government's negotiating position at the Council. Their position would have been strengthened had the right hon. Lady been prepared to accept it.

The new clause would allow an earlier wind-up only if a poll of producers cast their votes by a majority in favour of the termination of the scheme. Why do we want to delay the wind-up? The answer is that the Labour party is not convinced that the Europeans will take a real decision, establishing either a light or heavyweight regime. There is no evidence to suggest that they will. A promised agreement on the back of the annual price fix has collapsed in tatters. We thought that Ministers would come home the other week with a potato agreement. The Council of Ministers itself appears to be riddled with differences of opinion about what is needed.

The history of the proposed Council regulation COM(92)185 has been done to death by a thousand objections. It started in November 1982, when it first went to the Commission, and it is due to return to the Council of Ministers some time in September. It has been rejected by the potato marketing board, the European Parliament, the Committee of Professional Agricultural Organisations, COGECA and the Economic and Social Council.

The only person who appears passionately to support this nonsense is the former Minister of Agriculture, Fisheries and Food—unless the Minister of State wishes to say that he has some residual sympathy for it. Perhaps he will argue for it, or perhaps the right hon. Lady will argue for it if she replies to the debate.

While the Commission promotes the debate, the political realities in. nation states are proving major obstacles. Commission officials may try to enforce a level playing field, but the reality is that farmers and politicians are resisting. Why? The argument is not uniquely about level playing fields; it is about the survival of producers in generally depressed economic conditions.

There is a general recognition that subsidies to potato producers throughout the Community have become entrenched. In Committee, my hon. Friends and I spoke at great length about EC subsidy regimes. Indeed, it is fair to say that our debate in Committee had some influence on more recent debates in another place where many speakers dwelt on whether it was possible to create a level playing field when the House of Lords European Communities Select Committee debated the issue some weeks ago.

In Committee, we were able to identify subsidies in Denmark to promote sales, research, quality control and disease protection, which would have amounted to the equivalent of £6 million in the United Kingdom, taking into account the comparative size of the two industries.

We also identified four schemes in Italy funded by an organisation called ALMA. One scheme paid £74 a tonne to growers, a further £50 to producers of alcohol, subsidies of £9 a tonne to producer organisations, £6 a tonne to co-ops, subsidies for new potato production and the private storage of potatoes. We are told that, in January last year, the Italians paid £26 million in aid to their producers.

France has its own intervention schemes, paying millions to main crop growers—last year, the sum involved was £13 million, although I have been told that I have grossly underestimated it. The French Government are right now paying their early potato growers almost £1,300 a hectare to destroy 1,000 hectares of potatoes in Brittany. French growers receive low-interest priority loans which would survive any new EC regime, which is not supposed to be based on such subsidies. Of course, the French will still receive their cheap loans, because they have already negotiated them. The French even subsidise regular growers to remain in business.

Spain spends millions on loans for storage at preferential interest rates. It even introduced its own import deposit scheme with delayed payments. The Portuguese provide concessional loans for storage, a £32 a tonne export subsidy, special subsidies for co-operatives and intervention buying. They have set a minimum import price of £75 a tonne. What a wonderful Common Market it is where one can set a minimum import price of £75 a tonne and get away with it. Even so, we still think that such schemes will somehow be abolished when the marvellous level playing field is established. It will not happen.

Holland, the much-cited paragon of potato producing virtue, offers starch subsidies, rent subsidies, loan guarantee funds, concessional export guarantees and a carefully tailored small business welfare payments system. Ireland is this year subsidising its production, as even Luxembourg does too.

The subsidies that we have identified are but the tip of an iceberg. Whatever assurances are given by EC Governments, the subsidies will remain in one form or another. Political realities are such that politicians and local institutions in rural parts of the Community will not allow a volatile European potato industry to collapse in ruins. Only in Britain have politicians been prepared even to consider the prospect of such a disaster.

I have a question for the new Secretary of State. I shall read out an answer given to a friend of hers only this morning in the European Parliament. A copy has just been faxed to my office. The copy reads: As Commissioner Christophersen said in his reply to Written Question No. 3435/92 by the Honourable Member"— Mr. Peter Crampton— the inventory of state aid which I understand is the document that lists all the subsidies which have been paid in Europe over the years— was designed to provide information on state aid to the whole agricultural sector. This being the case, where a Member State has granted aid in the potato sector, data relating to such aid is included by the Member State in its contribution to the inventory for the year or years in question. As was also indicated in the reply, Member States do not provide such data with a view to its publication. Oh yes, the information is not for publication. However, a copy of the updated information provided for the inventory by each Member State is supplied by the Commission, on a confidential basis, to the other Member States and to the Chairman of the European Parliament's Committee on Agriculture. So, although we have been told that Ministers do not have the information, they do have it. We should do well to recall what was said in Committee on the subject, yet here is the Commissioner responsible telling us that Ministers have that confidential information, which I know Members on both sides of the House want to see, because it is the only means of establishing whether a true level playing field exists within the EC.

8 pm

The realities cry out. The scheme cannot work until there is not only a level playing field in Europe, but an agreed system of market support. We cannot leave potato producers naked in a market in which bankruptcy follows high yields. That does not mean public money. The potato marketing scheme has cost very little taxpayers' money over the years. In the context of the wider Community, the level of subsidy paid to potato producers in the United Kingdom is the lowest by far. We run a cheap system in this country. The taxpayers' contribution is low because of the nature of that scheme.

Indeed, it is such a good scheme that I have a letter from the Irish equivalent of the National Farmers Union telling me that there are Ministers in the Irish Government who would like to have a potato marketing scheme, but they are not convinced that they would have the support of their English counterparts. Perhaps if Conservative Members are prepared to jump in to the debate—I shall leave them lots of time—they may influence Ministers. Then Ministers may get some spine and some fire into them to go out and defend our scheme, which has worked so well.

People in Ireland realise that an increasingly heavyweight regime—that is what will develop as countries bottle out on removing subsidies—can be no substitute for a managed market that costs the taxpayer almost nothing. They realise that the only way to avoid spurious national schemes being set up is to set up efficient methods of matching production with expected demand. Why do the Government not commit themselves to retaining the existing scheme, or to introducing a revised scheme, which would be my preferred option?

In Committee. we did not argue for a pure scheme such as the existing arrangement. We accepted the principle of revision, because the 'processors have a real argument—so strong an argument, indeed, that I spent the first few months of my present brief trying to devise another scheme to replace the potato marketing scheme, which would take into account the interests of both processors and producers.

I have to tell the Minister that we nearly did it—[ Interruption.] Oh yes, I am sure the Minister has been fully briefed about that. We nearly got there, but in the end there were a few minor obstacles.

The problem was that we did not have the weight of the officials behind us to bang heads together and make people sort the problems out and devise a new scheme. It was just my researcher and I, and a few colleagues, and it is difficult to operate in such a climate when one is trying to sort out the problems of an industry worth several hundred million pounds, involving 14,000 producers, many of whom—including Mr. Robertson—have some rather curious views.

No one wants a half-baked, unworkable level playing field dreamed up by the Commission. If the Government insist on going down their route, they must tell us what public moneys are available to deal with volatile market surpluses and gluts. Do they have a secret cash store to fund a glut, in these times of stringent control of public expenditure?

No doubt Ministers will argue that the United Kingdom market enjoys no more stability than those of our European partners. We have heard that argument before, and I am sure we shall hear it again tonight, unless the Secretary of State intends to change tack. However, I remind her that that argument has been convincingly rubbished by the Nottingham report.

In case some of my hon. Friends are not aware of it, I shall tell the House that that report, produced by a noble Lord and a professor at Nottingham university, and called, I believe, "Potatoes—an uncommon regime", challenged the case for closing down the operations of the potato marketing scheme. With the use of tables examining coefficients of yield variability and price variability across the Community, the report proved—conclusively, in my view—that the United Kingdom has high yield variability and low price variability. That was an important finding. The report showed that the scheme was working.

Mr. Jack

Who paid for it?

Mr. Campbell-Savours

Yes, the report was paid for by the potato marketing board. But all the research done for the Minister is carried out by agriculture officials. Why should we treat that as any more objective than the research done at Nottingham university?

When the Secretary of State winds up tonight, she will say, "Treat me as an honest broker. You know my sympathies. Campbell-Savours rattled out that speech at the Dispatch Box three years ago, so you know where I stand." She may have strong views on those matters which she may want to signal to other members of the Cabinet at some future stage, if there is to be a policy reversal.

But one thing worries me about the right hon. Lady: I do not know whether she is unassailable. I do not know how long she will last. She may be the Chancellor of the Exchequer in a few months' time; Chancellors do not seem to last long these days. Is it not possible that the present Minister of State, Department of Employment, or the Parliamentary Under-Secretary of State for Corporate Affairs, or possibly the Chief Secretary to the Treasury or the Secretary of State for Social Security, or some other prominent member of the No Turning Back group will take on responsibility for agriculture? Perhaps the present Minister of State will be moved to another Department and we shall get one of those mad right wingers at the Ministry.

Mr. Julian Brazier (Canterbury)

Order.

Mr. Campbell-Savours

The trouble is that, if the Bill reaches the statute book in its present form—

Mr. Brazier

Order.

Mr. Deputy Speaker (Mr. Michael Morris)

Order. there is only one occupant of the Chair.

Mr. Campbell-Savours

I am glad that you admonished him, Mr. Deputy Speaker.

Mr. Deputy Speaker

Order. I admonished hon. Members.

Mr. Campbell-Savours

We want an assurance that is sought by the potato marketing board and the United Kingdom potato producers. I am conscious that the Secretary of State has constituents, and that there are 300 producers in her constituency. This is a difficult matter for her to handle. I understand that.

However, we want an assurance that if the Government are given the enabling powers in the Bill they will not use them before the next general election—[ Interruption.] Let me explain why. A rebellion is being bought off with two compromise amendments on consultation. Judging by correspondence and conversations that I had with hon. Members when the former Secretary of State was in office, I have no doubt that there was to be a rebellion on the potato marketing board.

Conservative Members were prepared to vote with my hon. Friends, and if a rebellion had been on the cards, we would have put on a three-line Whip to defeat the Government. Conservative Members believed that, as the former Secretary of State intended to motor on with the changes and trigger the enabling Jegislation by introducing regulations, the only way to stop him was to support the Labour rebellion. However, that Conservative rebellion has been bought off.

If it was bought off on the basis of consultation, we want an assurance tonight that, if the Secretary of State is given those powers, the legislation will not trigger the regulations. If the right hon. Lady is no longer in her post tomorrow or the day after—I say this with gentle and deferential respect—her role will be filled by someone else. In those circumstances, hon. Members might well say that we should have blocked the possibility of triggering the regulations when we had the opportunity. If we receive the necessary assurances from the Secretary of State tonight, or even an indication from her, I am sure that my hon. Friends will not force the new clause to a Division.

Sir Peter Tapsell (East Lindsey)

I shall relate my remarks specifically to amendments Nos. 49 and 50, in my name, which were somewhat contemptuously described by the hon. Member for Workington (Mr. Campbell-Savours). It is always a pleasure to follow the hon. Member in a debate, as he manages to invest every subject with a marvellous frisson of cloak and dagger excitement which might otherwise be lacking. I should perhaps start by assuring him that I did not receive any approach from Saudi Arabia over the tabling of my amendments.

I have to declare an interest in that a considerable number of my constituents grow potatoes and work in the potato industry, and almost all my constituents eat fresh potatoes.

I greatly welcome my right hon. Friend the Secretary of State to her new post. Although we traditionally discuss such amendments in the House in an informal and light-hearted way, my right hon. Friend, who has a long farming background, knows of the importance of the subject under discussion and the deep feelings on it held by potato growers throughout the country. They are fiercely wedded to the potato marketing schemes, the quota and the intervention fund. Unlike anywhere else in Europe, Britain's staple diet has traditionally been potatoes, which have always aroused strong feelings in this country, and even stronger ones in John Bull's other island.

I have known only one other female Minister of Agriculture—delectable Madame Edith Cresson. When feelings among French farmers were running rather high, Madame Cresson had to be rescued in a smart white helicopter from a group of angry farmers. I am certain that my right hon. Friend, who will be a listening Minister in a listening Government, will not find herself in a similar position in relation to the farmers of England, who practically vote Tory to a man—least, they have until now and will, I hope, at the end of the debate gain renewed faith in and enthusiasm for Toryism. I hope that my right hon. Friend will not be tempted to follow the example of Madame Cresson, notwithstanding the fact that she went on to be, not just Chancellor of the Exchequer, but Prime Minister of France.

There has been some form of potato marketing board in this country since the 1930s, and there have been many changes at various stages over the years in the way that it has been organised. The name "potato marketing board" is misleading to the layman who does not study such matters because the potato marketing board does not sell any potatoes. It would be more appropriate if it were called the potato growers association. If it were, it might attract less criticism from what I might describe as free marketers—ething that I have never been.

8.15 pm

I want to reassure those of my hon. Friends with a passion for completely unlicensed markets that there is a totally free market in potatoes beyond the farm gate, which is not always appreciated. I say that for the particular benefit of my hon. Friend the Member for Wealden (Sir G. Johnson Smith), whose potato farmers constitute a distinguished group in Sussex. The wide support for the present arrangements among potato growers derives from the fact that the arrangements provide a certain stability of price without involving the taxpayer in the cost of intervention buying. Due to our island climate, yields in Britain are more variable than those on the continent, and it is extremely important for our potato growers to be certain about price.

The phrase "the heart of Europe" is often bandied about. Like many such platitudes, it is meaningless as Europe has no heart and never will have. If one were to ask where the allegorical heart might be, one could say that it was the common agricultural policy. One of the ironies of our affairs in the House is that, at a time when many of my right hon. and hon. Friends are keen on closer European union, they are often critical of the common agricultural policy. However, when one goes to continental Europe one finds that the cement that holds the European concept together is the CAP, which is liked by the French and the Germans.

Every country in the world, including the United States and Japan, supports agriculture—tain has done so since the beginning of the 1939 war. It is right that we should do so for an enormous range of reasons. Agriculture is not like industry; it needs support. However, the problem of the CAP has been its excesses. I fully accept that urban taxpayers cannot be expected to sign huge cheques every year to support commodities which nobody wants to buy. But the great merit of the potato marketing scheme is that, unlike the CAP, its mechanism keeps supply and demand in balance to a considerable extent.

Far from abolishing the potato marketing scheme, we should hold it up to the Community as an example of the sort of device that it should consider using for a variety of other commodities. It avoids the excesses of the CAP financial arrangements, with large imposts falling on the taxpayer. The MacSharry plan was devised to overcome the excesses of the CAP, which cannot be blamed on the potato marketing scheme.

When something works, why fix it? The view of every potato grower in my constituency is that the potato marketing scheme works. They will be very upset if it is abolished.

In the European context, potatoes have been the only major arable crop not to be covered by a CAP regime. Although potatoes have often enjoyed governmental support and grants on the continent, as the hon. Member for Workington said, we are now told that there is to be a CAP regime for potatoes. I do not necessarily agree with the hon. Member for Workington that that is another conspiracy, or that it will never come about.

In preparation for this debate, I read the Commission's report of December 1992 and I even read the Rapporteur's report on the subject to the European Parliament. The Council is considering the scheme and I imagine that it will eventually come to fruition. As the House will know, 11 am not an enormous enthusiast for European arrangements, but if we are to have a regime for potatoes, I hope that it will be sensible and not too light weight.

The declared aim of the Commission's regulation in Brussels in December 1992 was: To ensure stability of the market in potatoes and a fair income to the producers. That is perfectly acceptable and that is the aim of the potato marketing scheme. However, as so often with the Brussels Commission, its good intentions may produce quite opposite practical results. As the hon. Member for Workington and many others have suggested, the Commission may propose such a light weight Community regime in potatoes that, far from ensuring stability of the market…and a fair income to the producers", it may produce the exact opposite.

However, there is nothing in the British arrangements at present which appears to be contrary to the Commission's proposals, the Rapporteur's report and the European Parliament's response. As subsidiarity is stressed increasingly in European affairs, if the EC produces a potato regime, it would be a very good test of whether subsidiarity has any real meaning if we were allowed to retain the potato marketing scheme that we already have.

Under the British scheme, stability arises from the constancy of acreage planted and the certainty of future acreage which is encouraged by the quota system. In practice, the potato marketing board's buying-in programme is less important than the quota system. However, it also helps to maintain confidence and at no cost to the taxpayer.

We can contrast that with the situation in Brittany today, to which the hon. Member for Workington referred. Very considerable sums of French taxpayers' money—not CAP money—are being spent to help the Brittany potato growers, precisely because they do not have a scheme like ours.

Turning from the European context, I want now to consider the British critics of the scheme. It is fair to say that three main criticisms are most usually advanced within the United Kingdom against the case for the retention of the potato marketing scheme.

The first criticism is that the Tory party is supposed to believe in free markets and the potato marketing scheme restricts that. Secondly, it is said that the housewife is forced to pay a higher price for her potatoes than would otherwise be the case if there was no such scheme. Thirdly, it is said that the processing companies are concentrating their capital investment in continental Europe to the disadvantage of British employment and our balance of payments because of the scheme.

I hope to demolish those three propositions. First, with regard to free markets, I have already said that there is a totally free market in potatoes outside the farm gate. In that regard, I want to refer to the Nottingham report. Nottingham university is in the first constituency that I was elected to represent in 1959. I have a very high regard for Nottingham university, and I was a member of the university council for many years.

The Nottingham report is a distinguished document, which I have read with the greatest care. I believe that it demolishes most of the criticisms against the potato marketing scheme. The report states: The current system of market intervention is one that works with the market rather than against it. The abolition of the potato marketing scheme, far from producing a free market in the technical and economic sense of the phrase, might have precisely the opposite effect.

The processors are potentially a monopolistic group of mainly international companies. They take 33 per cent. of the total market in potatoes in this country and 25 per cent. of the home-grown crop. The market in frozen chips is dominated by one processing firm—three firms take 90 per cent. between them and one takes 60 per cent. The market in crisps is dominated by three firms.

If the Government decided to abolish the potato marketing scheme, my farmers assure me that they would be handing over a large and diversified agricultural industry to a small group of international companies which would be able to determine the acreage of potatoes planted and their price. Many farmers have put it to me that there is a much stronger case for referring the processing companies to the Monopolies and Mergers Commission than there is for abolishing the potato marketing scheme.

We do not have as strong a co-operative movement among potato growers in this country as there is on continental Europe. That is another reason for not allowing the oligopolistic tendencies of the processors unfettered expression.

I want now to consider the argument about forcing up the prices to housewives. Fresh potatoes still form three quarters of the market and are, in economic jargon, a price inelastic commodity. The consumption of fresh potatoes in Britain does not change much with price changes at the farm gate, although fresh potato consumption has been steadily rising in the United Kingdom for years unlike the trend in any other European country.

As I said at the beginning of my speech, we are a potato eating people. The potato is our staple diet. We are the only European country of which that is true. The competitors of the potato are pasta and rice, both of which are imported products. In any event, it is the retail chain, not the producer, that mainly determines the price to the housewife.

In the earlier part of this year, farmers in my constituency received about 3p a lb for their potatoes loose. The housewife pays about 20p a lb for loose potatoes in the shops and about 30p to 40p a lb for packaged potatoes depending on their quality and variety. That shows what a small part the price paid to farmers plays in relation to the price that the housewife pays.

I am assured that farmers receive only about 30 per cent. of the retail price of pre-packaged potatoes, only 10 per cent. of the retail price of frozen chips and only 3 per cent. of the retail price of potato crisps. It is therefore absurd for processors to argue that the British potato grower is in danger of pricing the processor out of the retail market. As I have said, potato consumption does not change much with a change of price at the farm gate, but what do change are the profit margins of the big international processors. That is no doubt the reason why the chairman of the processors wrote to me and a great many other hon. Members a letter that I received this morning in which he strongly urged me to vote for legislation which would abolish the potato marketing scheme.

8.30 pm

Another criticism is that processing is being forced overseas by the potato marketing scheme. That criticism was completely shot down by the Nottingham report. If anybody cares to read the section on processing, he or she will see that one sentence reads: British potato processors are not adversely affected by the potato marketing scheme. At great length the report explains the justification for that remark. I will not delay the House by giving all the detail, but I do not see how anybody could read that section of the Nottingham report without being convinced by it.

The continental producer, of course, usually has a much smaller production unit. He uses less expensive capital equipment and, in general, produces potatoes of a lower quality and at a lower price than our potato producers. My farmers feel that the producers want to be able to get their higher quality British potato at a depressed price and to acquire total dominance of the British potato market, although they buy only a quarter of the home-grown crop.

We were told much by the previous Minister of Agriculture, Fisheries and Food about how well the processing investment was going overseas. When one studies the matter overseas, one is immediately informed that the market has approached satiation point in Holland—some companies there are going bankrupt or have already gone bankrupt.

The reason for the adverse trade balance in processed potatoes is that the international processors, having sunk so much capital into continental Europe, are bringing processed potatoes into Britain. Having made that big investment overseas, it is extremely unlikely in the present circumstances that, if we abolish the potato marketing scheme, they will suddenly start to invest more capital in new equipment in this country when there is already overcapacity in Europe.

The import-export argument is often used. Potatoes are a bulk commodity and are too expensive to move in most cases, so the scope for large-scale exports of British fresh potatoes is unlikely to be great. The balance of payments argument, which is the third argument against the potato marketing scheme, does not stand up to analysis.

The employment point is also often advanced against the scheme. Again the arguments point in exactly the opposite way. There are about 16,000 registered potato farmers, but there are 14,500 active growers at the moment, employing about 60,000 workers. In rural areas, that is extremely important, particularly in Lincolnshire. Despite the large capital investment of big growers in equipment, by modern agricultural standards potato growing is still a relatively labour-intensive industry.

A farmer on a typical 1,300-acre farm in my constituency, with 150 acres of potatoes under the quota, told me last week that he now employs eight full-time workers and that five of those eight would be made redundant if he switched out of potatoes because of the uncertainty which could flow from a destabilised free-for-all regime. That is undoubtedly the case. It is virtually certain that the abolition of the potato marketing scheme would force many small potato growers in particular out of business. The Nottingham report, which was published as recently as April, estimated that 7,000 potato growers—40 per cent. of all potato growers—might go out of business without the potato marketing scheme, at a loss of half a million tonnes of potato production, which would presumably then have to be imported.

With her recent ministerial experience at the Department of Employment, my right hon. Friend the Secretary of State will understand the serious social and employment implications of those statistics, particularly in areas such as my constituency where we have about 14 per cent. unemployment on the coast and where potato growing provides much valuable employment. I suspect that the same is true in many other parts of the country. Whatever Ministers might say to the contrary, every potato grower in my constituency would he most alarmed if the scheme was abolished. They are all convinced that that would lead to much greater price fluctuations and much uncertainty. At a time when CAP regimes are being introduced for sheep, beef and set-aside, it makes no sense at all for the traditional British potato to be the only arable crop enjoying no form of agricultural protection.

I very much hope that my right hon. Friend will feel able to accept the two amendments that I have tabled. [Interruption.] Despite what the hon. Member for Workington says, amendment No. 49 would ensure that she would not use her powers under the legislation to close the schemes without the fullest consultation with everybody connected with the industry. Amendment No. 50 would build into the legislation the fact that, if the Community produced such a light weight potato marketing scheme that it would be virtually useless in stabilising the market, she would again have to consult all interests before using the European initiative as an excuse to abolish the potato marketing scheme. I hope that, as a listening Minister, she will seriously consider accepting my two amendments.

Mr. Tyler

I am delighted to follow the hon. Member for East Lindsey (Sir P. Tapsell) and I echo many of his points, but I hope to do so very briefly rather than repeat them. The hon. Gentleman led neatly to my first question. Given the evidence that he has put before us and the evidence that we have had from many other sources, exactly who is in favour of abolishing the marketing scheme? The answer is the Potato Processors Association—that is all; it is just one potato. When I met a group of Cornish and other south-western potato farmers in Central Lobby just a few hours ago, they said, "There must be some reason for the extraordinary influence of that comparatively small number of people." The only way in which they could interpret it—I do not cast any aspersions—is chequebook diplomacy, which has been rather notorious in recent days. I suggested that it might be a case of crisp bank notes rather than cheques.

On Second Reading, Conservative Members were critical of plans to abolish the board and the scheme. The right hon. Member for Westmorland and Lonsdale (Mr.Jopling), himself a former Minister, said: The potato scheme has worked extremely well over the years…I am much disappointed that there is a danger of the potato marketing scheme disappearing."—[Official Report, 23 March 1993; Vol. 221, c. 814.] The hon. Member for Cambridgeshire, North-East (Mr.Moss) said: many people, including my potato growers and farmers, may question whether it is worth having any EC regime at all, since it will do so little."—[Official Report, 23 March 1993; Vol. 221 c. 820.] There is widespread concern right through the industry not—just among processors—and the hon. Member for East Lindsey has rightly reflected that concern this evening.

I stand slightly uncomfortably between the hon. Members for Workington (Mr. Campbell-Savours) and for East Lindsey. The new clauses tabled by the hon. Member for Workington and the amendments tabled by the hon. Member for East Lindsey are both of value. They fit together—indeed, it is critical that they should fit together. My hon. Friends and I endorsed the amendments tabled by the hon. Member for East Lindsey precisely because we hoped that they would be placed before the House—and, if necessary, put to the vote.

There is widespread concern among all producers, be they seed producers, early producers, such as the famous early producers from Cornwall, or main crop producers. Demand is growing. The reason for that, even in the comparatively short period since the completion of the Committee's consideration of the Bill, there has been a major development—the failure of the Council of Agriculture Ministers to make any progress whatever in the development of a regime.

There has been another, perhaps more encouraging, development—the arrival at the Dispatch Box of the new Minister. I draw attention to the second section of the report in Farmers Weekly to which the hon. Member for Workington somewhat peculiarly did not refer: Mrs. Shephard said reviewing the potato scheme was one of her first priorities we shall have the benefit of her advice on that tonight. She would approach the subject with an open mind she promised. She wanted to see the 'lightest possible regime' but intended examining MAFF's plans for the scheme as well as the EC's suggestions for potatoes. As an MP for the mainly arable constituency of Norfolk South West she is well aware of potato producers' objections to the plans to scrap the scheme and the Potato Marketing Board. 'I have heard strong expressions of feelings about it,' she admitted. That is significant. I hope that her arrival will prove to be the positive development that can be set against the negative developments in Brussels.

Why did the Agriculture Ministers fail to agree? They failed because all the other producer states are enjoying the greatest degree of subsidiarity that they can exploit in the interests of their own producers. We are the only country that seems not to be prepared to do its best by its own producers. Those of the other 11 member states that produce potatoes—I do not know whether Luxembourg, for example, does—are desperately trying to keep in place the most advantageous schemes that they possibly can to help in what has become an extremely competitive situation. As the hon. Member for East Lindsey rightly said, we should be doing the same. In the absence of an effective regime to help the whole industry throughout the Community we have an obligation to try to make that happen. At present, the imbalance is increasing because the Governments of other member states are doing their best to make sure that it does.

We have heard a number of references to the university of Nottingham report, the title of which has been misquoted. The proper title is "An (Un)Common Potato Regime: the EC and the PM B". I want to read two or three extracts in which the argument not only for the retention of our scheme but for its use as a model for others is put succinctly. The report says: The record of several European countries in the potato sector demonstrates that potato producers require some form of collaboration or cooperative in order to achieve stable and reasonable incomes through time. The yields and returns from the crop are inherently unstable—much more so than for other arable crops. Certain vegetable crops may have similar problems, but there the Community has adopted intervention and withdrawal as measures to aid producers' incomes in such sectors. For those crops, at least, the Commission has recognised that yield instability, perishability, and difficulties with storage require an element of supply management; albeit after the crop is grown. For potatoes the problem is greater because of the relatively larger area grown and consumed. It is the single largest vegetable item produced and eaten in the Community. Hence, stable supplies and prices are more relevant than ever. The report continues: The PMS represents a model for farm policy-makers that deserves consideration and repetition in other sectors. As the hon. Member for East Lindsey said, rather than disposing of the PMS, we should be replicating it in other parts of the market.

Finally, the report states: Oligopolistic processing and retailing sectors will tend to exploit growers unless there is some countervailing power available to the production sector. The Potato Marketing Board surely has some role to play in this. Thus, the conclusion of that excellent report was not just that the potato marketing scheme and the board represent something of which we should be loth to dispose, but that it is peculiarly important to retain them at this juncture.

8.45 pm

At the moment, potato growers are facing the worst of all worlds. One of the Cornish farmers who came to see me this afternoon showed me the figures for his potato crop for 1992–93. The total cost, excluding management time and professional fees, came to £80,000 for about 60 acres. That yield is not remarkable or incredible, but it is not bad either. The income from that crop was £43,200. Such huge losses cannot be repeated year after year without more and more growers being driven out of business. That farmer said that, if the growers have another similar year or if the scheme goes and therefore the fluidity of the prices becomes even more alarming, he will have to make half his staff redundant. It should be remembered that my area is also an area of very high unemployment:

In those circumstances, we shall find that the other member states, which have in place the best support systems that they can devise for this sector of the industry, will carve up the market and we shall be at their mercy. To coin yet another new phrase, it will be the most uneven ploughing field yet.

The Minister is still in her honeymoon period. She has three great advantages. I am sure that other hon. Members from both sides of the House who have farming communities in their constituencies will agree that the right hon. Lady's arrival in Whitehall place has been warmly welcomed for three reasons. First, she has a farming background and it is to be hoped that that will help her to understand the problems of the industry. The speech that was referred to earlier will perhaps give added encouragement to that view. Secondly, the right hon. Lady is known to be a good listener—although whether the hon. Member for East Lindsey is right in thinking that the whole Government are good at listening is perhaps a matter for dispute. Certainly, the right hon. Lady's predecessor did not go round the farming community and achieve such a reputation. Thirdly, and perhaps most important for the farming community, the right hon. Lady is not her predecessor. That is why I hope that she will not automatically adopt her predecessor's views this evening.

Amendments Nos. 49 and 50 are welcome and useful. I hope that the right hon. Lady will think so, too. I hope that the House will either accept them without a Division or, if a Division is called, will vote to add them to the Bill. The Minister must answer the very real concern about the circumstances that have arisen following the failure of the Council of Ministers to develop even a light weight regime—let alone a more effective regime. I hope that, in the hiatus that has followed that meeting, she will be able to reassure the potato producers of this country that they will not be given a potato in a poke—an intolerable state of affairs in which all the producers of all the member states receive better treatment than they do.

Mr. John Greenway (Ryedale)

I welcome my right hon. and hon. Friends to their ministerial appointments. Having entered the House with them in the 1987 intake, I am not surprised at the progress of their careers. They will bring a great deal of common sense to the agricultural industry and do a lot of good work for it. While it is a great joy to have a lady Minister of Agriculture, Fisheries and Food, I remind the House that we had a lady Minister of State not long ago—Baroness Trumpington. She took a leading role in the reform of the potato marketing scheme when we previously examined it. I well remember her visiting my constituency and confronting many of my farmers with the bad news that the potato marketing board would disappear. She listened to their arguments and said, "Perhaps we can have another think about it."

I sense that we are in the same situation now because there has been much debate about the future of the potato industry and the scheme. If one thing is clear, it is that no clear consensus has emerged. Despite the welcome fact that the Government have accepted the amendments carried in another place that there should be parliamentary control over the enabling power to revoke the potato marketing scheme, it is right that there should be some greater certainty about the need for more consultation before the scheme is revoked.

The House must be concerned about the wide discrepancy in the view of the growers and processors. As we know, growers see the scheme as providing both stability and the prospect of a reasonable return on their potatoes. If there is no scheme, there will be a potato glut and a fall in incomes, and growers would be forced out of business. Indeed, the threat of the abolition of the scheme has created the current uncertainty among growers, coupled with the failure of the Commission to make any real progress in the creation of a Community-wide potato regime.

At the other extreme, potato processors such as McCains in Scarborough on the edge of my constituency, which buys from many potato growers in north Yorkshire, say with some force that they want to buy more locally grown potatoes. We must face the fact that, in their view, the scheme prevents them from doing so and does not give the growers enough encouragement to grow the right variety and quality of potatoes for their factories.

Mr. Nick Ainger (Pembroke)

Will the hon. Gentleman give way?

Mr. Greenway

I will not take any interventions because we want to wrap up the debate quickly.

The last thing that the House should want is a solution imposed by Ministers. I want the growers and processors to find a common solution. We largely achieved that with regard to the future of the milk industry. Where we are now with the potato industry is where we were two or three years ago with the milk industry. There was a lot of resistance to change and the two sides of the industry failed to reach a common position. As we found that common solution with milk, I believe that we can achieve the same in the potato industry.

I want north Yorkshire and the United Kingdom as a whole to have an expanding potato industry with more United Kingdom-grown potatoes processed in United Kingdom factories with that product sold at home and overseas. The proposed Community-wide scheme is some way off and may not happen, so there is time for the matter to be debated further, although I suspect that we do not have unlimited time.

The present scheme does not protect United Kingdom growers from low-priced imported products and that has undermined the market, certainly in Yorkshire. But there is an opportunity for more discussion and consultation to find a solution. The potato industry needs an agreed solution—that is the best way forward. The industry does not need a political solution or an imposed one. Amendments Nos. 49 and 50, to which I have added my name, provide the mechanism by which we can not only have that further consultation and discussion but provide some greater assurance about the future of potato growers.

Farmers and potato growers in Ryedale and north Yorkshire, and workers in McCains modern processing plant at Cayton, Scarborough, should be on the same side of this matter, not at loggerheads. That is what happened in sugar and it should happen in potatoes. A partnership solution between growers and processors is what the potato industry in the United Kingdom badly needs.

Mr. Ainger

I tried to intervene on the hon. Member for Ryedale (Mr. Greenway) because I wanted to make the point that there is a forum where producers and processors can get together and discuss acreage and types of potatoes to be grown—the Joint Consultative Committee. When one looks at the minutes of the JCC and talks to its members, it is interesting to see that the processors have never demanded a higher acreage or different varieties to be grown. When one reads the minutes of those meetings, it is stretching the imagination to believe what the processors say because they have a forum and an opportunity to address their concerns. It leaves hon. Members with the belief that the processors are concerned not about growth or the type of potatoes grown but the price of them.

My hon. Friend the Member for Workington (Mr. Campbell-Savours) took us on a nice trip around Europe. At last, we discovered—I hope that it is good news for Ministers—what has been going on in other member states with regard to support and intervention. It is worth while comparing what is currently happening in our potato industry with that of Brittany.

In Central Lobby today, I met local producers from the constituency of the hon. Member for North Cornwall (Mr. Tyler). I was told—I shall use acreage terms—that if an early potato producer in Pembrokeshire could get an income of £1,000 per acre, he would get a reasonable living. We are looking at £800 to cover his costs. In fact, producers now get between £400 and £500, so obviously there is a massive loss.

The potato marketing scheme has been implemented. Total assets of about £2 million—25 per cent.—have been allocated to early growers. However, that will leave them with a significant loss this year, which unfortunately follows a significant loss last year. This year, about 15 per cent. less acreage has been planted and it has been estimated that there will be a further cut of about 30 per cent. as a result of the poor season this year. That is important because the early potato sector has an excellent record of import substitution. In 1987, 385,000 tonnes of new potatoes were imported. That has fallen to approximately 260,000 or 270,000 tonnes now. When we have a balance of payments problem, it seems crazy to allow production of a basic staple food such as potatoes to fall and to encourage imports in.

I return to the comparison that I was making between Pembrokeshire and Brittany. We have a looming crisis. The levy-payers—the producers—will benefit to the massive tune of £500,000. As my hon. Friend the Member for Workington told us, the French Government are intervening directly using French taxpayers' money, not producers' money. The Government have already contributed, according to my figures, more than £1.3 million to their early potato growers. That is the equivalent of about£530 to £560 to each one.

Government intervention is not the only factor in France. The French potato industry has developed powerful co-operatives which in effect set quotas and market the produce directly from the producer. They also supply the seed. They control the acreage in the same way, to a certain extent, as the JCC does.

9 pm

If the Bill is not amended we shall face the prospect in the near future of only British producers being left unprotected in the face of Government intervention and powerful co-operatives establishing quota and acreage, marketing and so on in continental Europe. It is bizarre that the first part of the Bill abolishes the milk marketing boards and encourages the establishment of a powerful co-operative to replace them, yet it sweeps away the potato marketing board and puts nothing in its place.

This is my first opportunity to welcome the Secretary of State to her new post. I urge her to listen to what the producers are saying and what people in rural communities are saying. As the hon. Member for East Lindsey (Sir P. Tapsell) said. the potato industry makes a vital contribution to rural areas in terms of employment and income. The Secretary of State represents a rural area so she knows that well. It seems ludicrous to leave the Bill unamended. We have heard that it is highly unlikely that we shall get an EC regime. We shall leave our British producers unprotected in a market in which their EC competitors are determined to export to Britain maincrop and early potatoes. I trust that the Secretary of State will have something positive to say in her reply.

Mr. Clifton-Brown

You allowed me to catch your eye, Mr. Deputy Speaker, on the basis that I spoke briefly, which I intend to do. First, I welcome my right hon. Friend and my hon. Friend to their posts. They bring a new look to the industry which I am sure will be welcomed.

I listened to the debate for many weeks in Committee. The hon. Member for Workington (Mr. Campbell-Savours) went on at some length. I thought that I had heard it all. When he announced this evening that he had come up with a better scheme than all the experts had done since the potato marketing board was set up in 1958, and that it almost worked, I nearly fell off my seat. I am sure that the PMB will rush to employ his services as a consultant. But, under the Labour party's new probity, I am sure that he will refuse any consultant's fee.

I declare my interest as a potato grower. Let me bring a little sanity to the debate. In the past 10 years the amount of processed potatoes that we import has doubled from about a quarter of a million tonnes per year to a little more than half a million tonnes a year. On a yield of 20 tonnes per acre that works out to some 30,000 acres. That is 30,000 acres of potatoes that we could be growing in Britain. It amounts to a loss to our balance of trade of £125 million. That is a large sum of money. So there is a good case for looking carefully at our potato market.

It is plain that the potato marketing board has been an outstanding success. The hon. Member for Workington quoted many figures from the Nottingham report which was commissioned by the PMB, so although it may be independent, we cannot expect it to come out glowingly against the PMB.

It is a fact that in the last three of the past 12 years price fluctuations were higher in the United Kingdom than elsewhere and that in any four years price fluctuations were lower here than elsewhere. Therefore, the comment that we have heard so often this evening that the PMB has brought stability into our potato market is simply not borne out. Indeed, in the past season large tonnages of potatoes were changing hands at well below the cost of production, at £30 a tonne or less. The hon. Member for Pembroke, North (Mr. Ainger) has told us that this year many of his early growers are losing money. Last week I heard that an ex-farm price in Pembroke was £41 a tonne whereas at this time of year one would expect the price of potatoes to be £100 a tonne.

The kernel of my remarks is that we are now in a changing market. It will become increasingly easy with technology and better chilling.methods to import not only fresh potatoes but every sort of processed potato, so we must consider our potato market.

I recognise from letters and representations from my constituents that they welcome the PM B/PMS overview of our policy. I have made representations to my right hon. Friend and, indeed, her predecessor to the effect that we should go slowly on abolishing the PMS. It would be folly to abolish the PMS the moment that the Bill is enacted and, as the hon. Member for Workington has rightly pointed out at length, to suffer the subsidies that would follow. It would be folly to lose the stability that the board brings until we have a regime, however lightweight, across Europe, to which we can oblige our Community partners to adhere under Maastricht.

I welcome the thrust of the Bill, but I urge my right hon. and hon. Friends to think carefully and not to throw the baby out with the bath water. I urge them to go slowly. In that respect I welcome amendment No. 49, which calls for consultations with the industry, but I do not welcome amendment No. 50 because a poll of the industry would produce a difficult result. [Laughter.] Hon. Members who laugh must know that 60 per cent. of the market is produced by just 2,000 of the 16,000 growers. Why, then, should a poll on a per member basis produce the ultimate answer about what should happen to the market?

One needs to consult widely to see the best way forward for potato growers and, above all, for consumers and processors, so that we start to repatriate some of the half a million tonnes produced abroad which should be produced here. I look forward with eagerness to what my right hon. Friend has to say.

Mr. Welsh

I think that the massive impor of frozen chips has more to do with a lack of processing capacity than with the workings of the potato marketing board. Nevertheless, I share the wish of the hon. Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) to see increased home production. He again proves that absolutely nobody supports the abolition of the PMB. I have not even heard the Government defend such a policy. Perhaps they will do so before the evening is through.

Although I, too, welcome the new faces in the ministerial team, I hope that they will bring new thinking and a fresh approach. In particular I hope that they will listen to the industry and those involved in production.

I support maximum consultation with the industry. I remind the Government of the massive and strongly felt opposition in Scotland to any abolition of the PMB. Although it is not a perfect institution, it has by and large served the interests of producers and consumers over the long term. If the Government had listened to Scottish farming views, the PMB would be in no danger of abolition. The scheme would certainly be modernised and improved, but there would not be the threat of abolition. I wonder whether the Scottish Office shares completely the views about abolition which have been expressed elsewhere. It seems that there are two voices. I hope that what I interpret as the Scottish Office voice will prevail. Perhaps it will and the Minister will surprise us all before the evening is through.

I remind the Government about the importance of the potato industry to Scotland. It is a major employer and a major source of employment in other, related industries. These decisions are of major importance to us. Scotland's ware industry and its crucial seed industry require both stability and direction if they are to plan ahead properly. I remind the Minister of the capital-intensive nature of the seed potato industry. I am told that the investment requirment is about £3,500 per hectare. Thus, any delay or doubt in decision-making simply destabilises the industry and, with uncertainty, investment simply stops. These amendments would eliminate at least some of the uncertainty and allow the industry to participate in decisions about its own future.

There is a need for proper planning horizons. There is too much short-termism in the approach to agriculture. In the case of the potato industry, producers require firmer guidance as to the Government's intentions so that the industry may plan ahead properly. Producers have to look to markets and contracts. The sooner the Government clarify their decisions, the better. I am told that the actual production of potatoes takes a year and a half of forward planning. This extends to four years or more when capital investment, banking decisions, machinery, and so on, are taken into consideration.

That brings me to the argument about a level playing field. This is not just the use of a cliche; it really is an attempt to ensure that the industry will not -face massive disadvantages. Our industry has the quality and the expertise to beat any of its competitors if it is allowed a level playing field. The United Kingdom's potato industry is not a burden on British taxpayers, yet it has to compete against its European Community counterparts whose Governments positively finance their potato sectors. I am told that £7 million in loans was given to Spanish producers last year, that Italy supplied £50 million to its producers, that France has put £13 million, if not more, into its industry, and that Portugal gives growers an export subsidy. The British Government will put our industry at a great disadvantage if they abolish the potato marketing scheme while these competitors enjoy exactly such advantages.

The French Government are acting very quickly to help their industry. Currently they give Brittany's early potato growers assistance to the tune of millions of pounds to prevent market collapse in an area that provides about 80 per cent. of French early potatoes. The British Government must understand that it is little wonder that our industry is concerned about the abolition of market stabilisation measures here while direct competitors have such advantages given to them by their Governments. Does the Minister accept the concern of potato growers about the need for a level playing field? Can she give a guarantee that the potato marketing scheme will not be abolished while other European countries implement market stabilisation measures that are not available here? Can the Government guarantee that they will not revoke the scheme before the European Commission requires that to be done? Otherwise our industry will face massive disadvantages.

The industry requires consultation, stability and a level playing field so that it may plan for the future. Potato production is massively important to Angus—indeed, to Scotland—and the Government's overall strategic decisions will affect, in turn, a mass of associated industries and services. I am thinking of transportation, the supply of machinery and the very important processing sector.

In summing up, I put to the Government a plea for clarity of action so that producers and 'processors may begin to plan ahead. Confidence—or, more important, the lack of it—is a major factor affecting this sector of the industry.

A change of Ministers should provide an opportunity for second and cooler thoughts on the subject and allow those affected to have a real say in deciding their future. I do not expect, however, that the Government will allow that freedom and that sort of decision-making power to our agriculture industry, more is the pity.

Mr. Cash

I agree absolutely with my hon. Friend the member for Lindsey, East (Sir P. Tapsell). [Interruprion.] We have corresponded on this matter. I want to get it on the record—because I have a direct constituency interest in this matter—that I endorse what he has said and many of the other remarks made during the debate.

9.15 pm

The Minister of Agriculture, Fisheries and Food (Mrs. Gillian Shephard)

This has been an extremely interesting debate. Not the least interesting feature has been the light in which we have now all been led to regard the hon. Member for Workington (Mr. Campbell-Savours). He has revealed himself as a capitalist, an entrepreneur, a faulty drafter of clauses, but an excellent drafter of potato marketing schemes. We have been treated to a vision of the hon. Gentleman in his bath and, finally, when he read the extract of what I said in 1989, he showed himself to be a wonderful female impersonator.

What is clear about the hon. Gentleman's performance is that his customary paranoia has not deserted him. He accused the Ministry of Agriculture, Fisheries and Food of rejecting his starred amendment, but he must know that that is a matter for Madam Speaker. I reject his accusation.

I noted that my hon. Friend the Member for East Lindsey (Sir P. Tapsell), in moving his amendment, attempted to compare me to the unfortunate Madame Cresson. I will pass over that comparison, the white helicopter and everything else. He spoke about processed potatoes, and I 'wonder whether he has noted the massive changes in the pattern of potato consumption in this country since 1975. In 1975, we consumed 143 lb of potatoes per head per year; in 1992, we consumed 110 lb per head per yeara considerable reduction. In the same period, the consumption of crisps has increased. In 1975, we consumed a mere 7 lb per head per year; in 1992 it increased to a staggering 17 lb per head per year. I am amazed by those figures. All I can say is that it is obvious the hon. Member for Workington has not been indulging, but I might have been. As to frozen chips, in 1975 we consumed 4.7 lb per head per year; in 1992 consumption rose to 18 lb.

Those figures should be noted because they indicate a great change in the demands on our potato processors. I would remind hon. Members, as did my hon. Friend the Member for Ryedale (Mr. Greenway), that processing also provides employment.

The hon. Member for North Cornwall (Mr. Tyler) should note that 30 per cent. of potato producers were in favour of abolition of the potato marketing scheme.

Mr. Tyler

I think that I am right in saying that that poll was taken some years ago and that a different situation has now arisen—particularly with the failure of the Council of Agricultural Ministers to arrive at a satisfactory alternative.

Mrs. Shephard

The EC position must be taken into account when we look at the issue, but I am sure that the hon. Gentleman would agree that many producers see the downside of what is, in many respects, an excellent scheme.

My hon. Friend the Member for Ryedale made a very balanced contribution and reminded us of the need to look at change in the consumption of potatoes and the demands on potato producers. The hon. Member for Pembroke (Mr. Ainger) referred to the JCC and Government intervention. The Government are intervening in the market this year to the extent of £1.5 million, which is not an inconsiderable sum.

We heard the usual sensible, balanced comment from my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown). I considered the Nottingham university report, which was commissioned by the potato marketing board. The university did not consult processors and its report contains some arithmetical errors. Nevertheless, it made interesting reading and I have studied it carefully.

The hon. Member for Angus, East (Mr. Welsh) reminded us of the need to consider the lack of processing capacity in Britain and to consider the reason for that.

Speeches have been balanced, but hon. Members have hinted heavily that we need to remember the changes that have occurred in the potato market.

I know that the Bill's provisions have caused a lot of anxiety among farmers, despite the fact that they are only enabling provisions. Representing the constituency that I do, and in the light of my words on 27 January 1989, I obviously understand the concerns of growers—

Mr. Campbell-Savours

No one would have known that the hon. Lady made that speech if I had not found it.

Mrs. Shephard

I could have referred the hon. Gentleman to it with no trouble at all. He should ask in future.

I understand that growers are concerned that the scheme that they know well and on which they have come to rely over the years might disappear.

Since taking up my post, I have considered the recent poll taken by the potato marketing board, but the view of the majority is not universally held. We must remember that retailers and processors as well as consumers—interestingly, nobody has mentioned consumers during the debate—have an input. Potatoes are an important crop in Britain. It has become a high-tech and successful industry. Producers set great store by it, but, as my hon. Friend the Member for Cirencester and Tewkesbury pointed out, a third of potatoes eaten in 1992 were in processed form and only 23 per cent. of those came from a United Kingdom provenance. We must consider the trend in the market if we are to retain a healthy potato industry.

Mr. George Kynoch (Kincardine and Deeside)

Does my right hon. Friend accept that we must not consider only the healthy trend in the market but ensure good production planning? Many of my constituents, to whom I referred in a recent letter to her, recognise that the acreage control is necessary for good management planning in potato production. Will she go further and say that she will press this point with our colleagues in Europe, rather than accept a rather loose European regime being imposed on us?

Mrs. Shepherd

I have received a representation from my hon. Friend and I shall bear his remarks in mind when we are working in Europe on this matter.

The Bill provides for two possibilities, depending on the existence or otherwise of an EC regime for potatoes. Let me deal first with the situation should there be a regime. As hon. Members will know, the proposal that the Commission made last November is very lightweight. It does not provide any market support measures and if it is adopted in its present form it will mean the end of national arrangements here and elsewhere. We made it clear that, in the context of that proposal, we would not press for retention of quota and support buying arrangements because no other member states wished to adopt quotas. It clearly would not be in the interests of our growers, even if we were allowed to do so, to adopt quotas while others could grow as many potatoes as they liked.

Mr. Ainger

Does the right hon. Lady accept that in France the powerful co-operatives that supply seed and eventually market the produced potatoes operate, in effect, a quota system? Although the French Government do not set quotas, those powerful co-operatives are effectively operating a quota system.

Mrs. Shephard

I am not sure whether that is the case, although I would probably bow to the experience of the hon. Gentleman. If we limit our acreage, we could put our growers at a disadvantage without knowing the outcome of the EC scheme.

Mr. Malcolm Bruce (Gordon)

Is the Minister aware of the concern expressed by potato farmers in my constituency that the large seed developers and the seed merchants are taking more control over exactly what farmers can do, including for species of potato that have been established for 20 or 30 years? Is that not a restriction on the market that should be investigated? Farmers are telling me that the Plant Varieties and Seeds Act 1964 says that monopolistic practices by seed merchants and developers cannot be investigated because of a ruling of the House. Is that. sensible, and should not it be changed?

Mrs. Shephard

I accept, of course, that all growers wish to grow for a particular market. If there are matters which the hon. Gentleman wishes to draw to my attention I shall be happy to look at them. However, most growers are anxious to work with the market that they have.

Mr. Welsh

Can the Minister guarantee that she will not abolish the potato marketing scheme or give up the advantages of the potato marketing board before any European scheme is adopted?

Mrs. Shephard

I am coming to what I am prepared to do. The Bill prepares us to respond to any Community regime and to retain the constructive and desirable activities of the board, such as research and development and market promotion, if that is what growers want.

The Bill allows for establishement of a successor body for that purpose. Without the Bill, we would have no alternative but to revoke the scheme and wind up the board without the possibility of a successor and the protection of its important functions.

I should mention briefly what is happening in Brussels. The proposal was considered by the May Council together with presidency proposals incorporating marketing standards. There was no agreement on that and the Special Committee for Agriculture has been asked to do further work. The proposal was not discussed at the June Council and it remains to be seen when it will be brought forward again.

Mr. Campbell-Savours

Will the Minister clarify something? If there is no European regime, is the Minister sure that she will then not revoke the scheme, or does she think she may have to revoke it even if there is an agreement?

Mrs. Shephard

Funnily enough, I was about to deal with that. In addition to all the other things we have described him as, the hon. Gentleman is perhaps a little impatient, but also has some foresight. I was about to say what might happen in the continued absence of an EC regime.

The Government have not made any decision to revoke the scheme. My hon. Friend and I want to acquaint ourselves first-hand with all the arguments, and we have set in motion meetings with the industry bodies concerned. We shall then be in a position to discuss the matter in an informed way with the Secretaries of State for Scotland and for Wales, who are also involved in making any decision.

I have made it clear that I want to spend a considerable amount of time and effort listening to growers, processors, retailers, packers and consumers before reaching any conclusions about the future of the scheme.

I am also aware that statutory decisions need to be taken shortly with regard to the 1994 crop year. The potato marketing board has to announce its quota arrangements by the end of August so that growers can plan their 1994 plantings. I am prepared to allow the present arrangements to apply to the 1994 season in order to give myself time.

The Government have retained the full spirit of the amendments made in another place. We have tidied up the amendments which their Lordships accepted would be necessary, but the thrust of the amendments is unaffected. They have as their most important effect the requirement to bring any decision to revoke the scheme, apart from one made in the context of an EC regime, back to Parliament for approval. That is sufficient safeguard for growers' interests in that it will ensure that a case for or against revocation would be heard in full and that informed debate would be guaranteed, should the Government consider that revocation is appropriate.

That brings me to new clauses 2, 3 and 4. The effect of the clauses would be that, in the absence of an EC potato regime, Ministers could not begin to take action to revoke the scheme even if it were patently obvious that it were necessary to do so, unless a poll of producers had shown a majority to be in favour of revocation. The informed debate in Parliament to which I have referred could not begin unless a certain group, of potato producers gave Parliament the go-ahead.

I am more than willing to listen to the views of growers and other interested parties, and to take them into account. However, I do not think it is on to subordinate proper parliamentary consideration of any issue to the views of a particular interest group. I do not think that Parliament's hands should be tied in that way; moreover, such action would remove the essential safeguard contained in the 1958 Act to prevent the potato marketing board from damaging the interests of consumers. I hope that, in the light of the assurances that I have given, the House will reject the new clauses.

9.30 pm

Amendment No. 49 appears to me to reflect the procedure that I would propose to adopt before making any decision on the future of the scheme. I am sorry that it was rubbished by the hon. Member for Workington and by my hon. Friend the Member for East Lindsey (Sir P. Tapsell) into the bargain. I am happy to accept it. Amendment No. 50 is a little more problematic, because the wording is odd. It suggests that we should consult on the possibility of national measures after certifying that it was necessary to bring the potato marketing scheme to an end because its continued existence was inconsistent with an EC regulation. I do not think I could accept that the Government should be committed in those circumstances. I think the spirit of the amendment is that I should consult, and take account of the industry's views. As I am already committed to such action, I hope that the House will not accept the amendment.

I want a flourishing potato industry. I want our processors—who also provide a good many jobs—to be easily able to obtain the supplies that they want to process, so that we can discourage costly imports rather than using our own excellent potatoes. I want our producers, processors, retailers, packers and consumers to be delighted with this country's arrangements for the potato market, and I am prepared to take time to engage in discussions with interested bodies to ensure that that is what we achieve.

Dr. Strang

I think the House will agree that we have had an excellent debate, which has reflected the industry's views. The Minister's reply did more than justice to the discussions in which we have engaged.

The Minister referred to the position that would accompany an EC regime. Given our experience, that is the last thing that we want. The danger is that even a regime that started off relatively lightweight would end up like all the others, involving a huge cost to the taxpayer. That is an unsatisfactory way in which to support the market. I very much hope that there will be no question of the Government's allowing the EC to operate a fully fledged common potato regime: such a regime would probably create more of the problems experienced by other sectors of agriculture in this country, such as beef, milk and cereals, and bring about huge, costly surpluses.

The important part of the Minister's speech, however, related to the position without an EC regime. As she and other hon. Members have pointed out, the Council of Ministers has not made the progress towards a common regime that was expected. No one can be sure of the outcome, but it seems reasonable to assume that it will be some time before such a regime is agreed.

The Minister's response was very helpful. She said that, as things stood, the Government did not intend to wind up the potato marketing board: she said that no decision had been made and that she wanted to spend a long time consulting the industry about the future. She stated that the potato marketing board and the joint committee could go ahead and fix the target acreage and that the quotas could be in place for next year. They are positive advances and fully reflect the consensus in our debate, which did justice to the industry.

When the Minister examines the matter further, I believe that she will recognise the strength of the case for the potato marketing board. My hon. Friend the Member for Workington (Mr. Campbell-Savours) made a valuable contribution to the debate in destroying the argument initially put forward by Ministers that there were no other support arrangements within the EEC and that there was something peculiar about Britain's special domestic arrangements ror supporting our potato market. That is not the case. Many other Community countries have elaborate arrangements for supporting their potato industries.

We have had a most valuable debate. Anyone who is in any doubt about the change in the Government's position should have a casual look at some of the statements made by the Minister's predecessor, on Second Reading and especially in Committee. It is clear that the Government were intent then on unilaterally winding up the potato marketing board, but the Minister has now made it clear that the Government are not going ahead. For that reason, we shall not press the new clause.

Question put and negatived.