§ THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (EARL ST. ALDWYN) rose to move, That the Draft Egg Marketing Scheme, 1956, reported from the Special Orders Committee on November 28 be approved. The noble Earl said: My Lords, this Scheme for the marketing of eggs in the United Kingdom has been promoted by the three farmers' unions and was submitted by them in October, 1955, under the Agricultural Marketing Acts. Since then it has been going through the procedures laid down by those Acts. During the very exhaustive public discussions which have been held recently, a great deal was said about the desirability of direct sales from farmers to consumers and from farmers to retailers. I accept the desirability of these two forms of sale, and the Scheme now allows for them. But the fact remains that by far the greater part of the 10,000 million eggs produced in this country every year have to be marketed: in other words, they have to be collected and taken, sometimes long distances, to where they are w anted. The majority of the eggs are not eaten in the locality in which they are produced.
§ If these eggs are to be marketed efficiently, it is necessary, first of all, to ensure at the start that they are fresh; secondly, that they are graded so that the buyers know what sort of egg they are buying, without having to look at every individual one. Thirdly, the eggs have to be packed, and, finally, transported. A major difficulty to be overcome is due to the inescapable fact that hens do not lay the same number of eggs every week.1317
EARL ST. ALDWYN
We have not yet succeeded in controlling them to that extent. Supplies fluctuate widely; unfortunately, demands fluctuate as well, and equally unfortunately, not at the same time or in the same direction as the production. Somehow, these fluctuations have to be reconciled, and we believe that a central authority would have a useful part to play in this. However, that is not to say that everybody should be organised into one inflexible system, and I hope your Lordships will agree that this Scheme gives all the flexibility that is needed.
The Scheme's main feature is that it provides for the setting up of a Board with full trading powers. The Board will be able to require by far the great majority of eggs produced for the wholesale market to be sold by producers only to the Board. In practice, the Board will employ packing stations as its agents to collect the eggs and to grade, test, and stamp them. The Board will have no power to control wholesale or retail distribution, and normal competitive market forces will continue to rule. The demand for eggs is highly sensitive, and housewives have shown clearly that they just will not pay prices which they think are too high. So the Board will have to pay careful attention to their trading activities.
During the talks which we had with the farmers' unions in 1954, the Government agreed with them on the form which the guarantee arrangements would take if a Marketing Board with full trading powers were to be established under the Acts. These guarantee arrangements will not be part of the scheme, but if the scheme goes through we propose that they should be the subject of a financial agreement: between the Government and the Board. The guarantee under the Agriculture Act would be to the Board as representing the procedure. Similar arrangements to these are already operating for milk and wool. The general form of the guarantee would be a flat rate subsidy on all eggs of first quality passing through packing stations. This would be determined at the Annual Review. The prices to be paid to producers would be for the Board to decide subject to the financial agreement between the Government and the Board. There would also be, however, a profit and loss sharing 1318 arrangement which would give the Board an incentive to efficiency.
We have been anxious to ensure that this scheme should be both workable and widely acceptable. Like the commissioner who conducted the public inquiry into the scheme, we thought that in the form in which it was submitted it was rather too restrictive, particularly as regards sales to consumers arid to retail shops. We have therefore made a number of important changes which I think have gone a long way towards meeting the great weight of the Objections which were put forward at the inquiry.
We have modified the scheme so as to raise the qualification for exemption from 25 birds to 50 birds. This will exclude most of the backyard and domestic poultry keepers who are more concerned with supplying their own or their neighbours' households.
All producers who want to sell direct to consumers will be entitled to a producer's "A" licence, which will enable them to do so. They will not have to grade, test, or stamp their eggs. A producer who wants to sell direct to retail shops will be able to get a producer's "B" licence, provided that he honours the conditions which may be attached. No condition is to be attached requiring the eggs to be graded and tested, but the producer can be required to mark them so as to identify them as his eggs.
I know that there have been some who object to this scheme in principle. They feel that it is wrong for producers to be given statutory powers of this kind they fear that the Board will use its powers to hold other sections of the community to ransom. But that is a criticism rot of this Scheme in particular, but of the Agricultural Marketing Acts in general. By those Acts Parliament has giver, producers the right to promote this particular form of co-operative enterprise, which is designed to enable producers to help themselves to improve their efficiency in production and marketing. I see no reason why they should not be allowed to exercise that right.
The Acts themselves recognise the possibility that sectional interests may conflict, and that is why there are a number of checks and balances to safeguard the interests likely to be affected—such as the consumers of eggs, trade 1319 interests, the producers themselves, and the public interest generally.
My Lords, as I see it, this Scheme represents a landmark in the field of agricultural co-operation. I believe the fact that it has been put forward by the producers shows that they are very much alive to the vital need to help themselves to improve their efficiency. The Government have considered the Scheme in all its aspects with great care, and we are sure that, as modified, it should lead to greater efficiency in the production and marketing of eggs. We are also sure that the Scheme maintains a fair balance between all the interests concerned. Egg producers themselves have yet to have their final say on the Scheme at the initial poll, which will be held if your Lordships approve the Scheme. Only when that poll has been held shall we know whether the Scheme in its present form is generally acceptable to the producers. I myself am quite sure that, if and when it comes into operation, the Board will be able to achieve much for this very important section of our home agriculture and for the consumers and others who depend upon it for their supplies. I beg to move.
§ Moved, That the Draft Egg Marketing Scheme, 1956, reported from the Special Orders Committee on the 28th of November, be approved.—(Earl St. Aldwyn.)
§ 3.13 p.m.
§ THE EARL OF LISTOWEL
My Lords, we are all grateful to the noble Earl for his very clear exposition of an extremely long and complicated Scheme, which is far more difficult to understand than the average Bill. I shall certainly try to follow his example of brevity. I think that this particular marketing scheme for eggs deserves specially careful attention from your Lordships—perhaps even more careful attention than other marketing schemes we have considered—on account of the exceptionally large number of objections. Most of the 702 objections (the number is given in the Report) were lodged by the Society of Objectors to Compulsory Egg Marketing—commonly known by the curiously appropriate abbreviation "S.O.C.E.M." These objections were all dealt with, at great length and very patiently, at the public inquiry, 1320 and the answers are given in Mr. Baker's quite admirable, wise and valuable Report. I am sure that the noble Earl and everyone else all appreciate this admirable and excellent Report.
It seems to me that there are two classes of objectors to the Scheme. One of them—I am not sure whether both—was certainly mentioned by the noble Earl. There were the laissez faire economists and the Liberal Party, who are still opposed, root and branch, in principle to interference with the free play of supply and demand. No doubt we shall soon hear from the noble Lord, Lord Grantchester, on these somewhat doctrinal objections to the present Scheme. There were also a second class of objectors—namely, the large middlemen, the co-operative societies and the multiple grocers who, not unnaturally, would prefer to be able to bargain with the producers.
Both these classes of objectors, in spite of their different approach to the Scheme, were opposed, in the main, to two features of it. They disliked the marketing monopoly of the producers' Board, which they thought would keep up the price of eggs against the consumers. The noble Lord referred to this as "holding the consumer up to ransom." They equally disliked the compulsion on egg producers to sell their eggs to packing stations once the Scheme has been adopted. They regard this as an infringement of the freedom of the producer to sell his eggs where he likes. I like this Scheme very much—I am not going to disguise my view about it.
The peculiar merits of the Scheme that Her Majesty's Government are now putting forward, with the assent of the promoters, is that it has taken all these objections fully into account. It has been modified in the light of the objections, and makes important alterations in the original Scheme so as to carry out and carry further the recommendations of Mr. Baker's Report. The present Scheme is a compromise between free enterprise and Government control. It gives the producers, as well as the consumers, as much freedom of choice, and submits them to as little compulsion—and we all dislike compulsion—as is compatible with any plan for the organised marketing of eggs.
1321 For instance, the exemption which the noble Earl referred to, of poultry keepers with less than fifty birds, will mean, if I am right, that more than half of the total number of poultry keepers in this country (I think they amount to between 700,000 and 1 million) will be able to sell their eggs to their neighbours, if they so desire. As the noble Earl also pointed out, there is this additional freedom for the producer: that poultry keepers will be allowed to sell by licence to retailers in their neighbourhood. It is true, as the objectors have said, that if this Scheme is approved by two-thirds of the producers the rest will have to come in whether they like it or not; it becomes compulsory. But surely, in a democracy, it is not altogether unreasonable that a minority should conform to the decision of the majority. It should not be forgotten, in this context that a minority of egg producers could completely wreck this Scheme by selling to consumers when eggs are scarce and expensive and to the packing stations when they are plentiful and cheap.
There are, in fact, only two alternatives for the marketing of eggs. One is a return to the old pre-war free market, in which people sell at the highest price they can get and buy at the lowest. This "free-for-all" was objected to most strongly, even by those who do not like this Scheme at all. No one wanted a return to the pre-war system of putting eggs on the market. Even the most violent objectors to the compulsory marketing did not want to go back to that chaos of pre-war marketing. But that would happen, I am sure, if we had a voluntary marketing scheme, because the poultry keepers who refused to join the voluntary Scheme would very soon break the packing stations. The other alternative, the one put forward by the Government, is a compulsory marketing scheme. We had such a scheme during the war under the Ministry of Food. The present Scheme, under the proposed Egg Marketing Board, will give much more freedom to producers and consumers than they had during the war. I strongly commend this Scheme to your Lordships, and I very much hope that when the producers are asked to express their views about it, when they vote on it, as they should, they will also approve it, so that the Board can be set up and the Scheme got under way.
§ 3.25 p.m.
§ LORD GRANTCHESTER
My Lords, I will endeavour to be as brief as the previous speakers. At the risk of being called "doctrinaire" by the noble Earl who has just sat down, and I expect out-moded in the best Socialist terminology of modern Conservatism by the noble Earl who is to reply, I cannot refrain from making a protest against this Order. And I think the protest is more than justified by the admission by the commissioner who conducted the public inquiry that "the case in favour of competition was overwhelming."
Orderly marketing is an admirable conception, within limits, and subject to safeguards. Her Majesty's Government have recently taken strong measures to prevent manufacturers from combining together for the orderly marketing of their products. The Government have made manufacturers' private courts illegal; their private courts of enforcement are now illegal. I would ask on what grounds can the same Govern vent come forward with a Scheme like this, practically constituting a producers' monopoly with coercive powers which are exercisable, if desired, apparently in secret, greatly in excess of any powers given to the courts for similar offences, and with powers to the inspectors of the Board which are greatly in excess of those given to the police, as they can go on their inspections without a warrant? I ask Her Majesty's Government—I am sure it will not be any good—to take this Order back, and to study it in the light of their own expressed views when dealing with manufacturers.
Vast sums are to be collected by this new Board and, as with some other Boards, expensive posts will be created. And large sums, no doubt, will be spent on advertising. I suppose; on ways of preparing egg dishes, with the object of selling or trying to see more eggs. My Lords, let those who will spend their money like this, but none should be compelled to do so, compelled to contribute to such expenditure; and least of all the taxpayer. In this connection, the accounts of the Potato Marketing Board to the June 30, 1956, are perhaps significant. I have managed to get a copy. These reports and accounts are published by the Boards, and so attention is not drawn to them in your Lordships' House, which I think is a pity. These 1323 accounts to June 30, 1956, by the Potato Marketing Board show that producers contributed something like £687,000 and the taxpayer, via the contribution from the Ministry, £458,000. That means a total which the Board has had to play with of £1,145,000. Of this sum, about £500,000 was spent on administration.
This is not the end of the story, for there is a little note in the accounts about a contingent liability under which the taxpayer is responsible for 95 per cent. of a trading loss suffered by the Potato Marketing Board, which is estimated to work out at something like £450,000. Perhaps the Minister, when he replies, will be able to give us some idea of what this Scheme is likely to cost the taxpayer? He spoke of concluding a financial agreement. Could we have a little information on what the financial agreement will be and under what sort of liability the taxpayer is going to be?
Even with all these powers I understand that the promoters are not very partial to the Scheme. They think that it is not sufficiently watertight, but they are willing to accept in the hope that they can amend it at a later date. Finally, if Her Majesty's Government do insist on going on with this Scheme, may we observe that this is an Egg Marketing Scheme and express the hope, for the guidance of the Board's inspectors and "snoopers." that "domestic fowls," as mentioned in the Order, will be interpreted only as hens and will not include cocks and cockerels, and that "domestic ducks" will be interpreted strictly as ducks and will not include drakes.
§ 3.30 p.m.
§ LORD WISE
My Lords, with the permission of the House I wish to say a few words about this particular Scheme. Having advocated properly planned and orderly marketing in agriculture for the last thirty years or more, I think it right for me to welcome the Scheme in principle, and to express the hope that, at long last we are to have some orderly marketing system in connection not only with egg production but also with other activities in agriculture. There are just a few points upon which I should like to ask the noble Earl, Lord St. Aldwyn, questions. It probably will not be necessary to amend this particular Scheme in 1324 respect of the matters which I am going to mention, but in future, when any later representations or later arrangements with regard to the Scheme are under consideration, perhaps what we say in your Lordships' House now will be taken into consideration.
In the first place, I see that in the stencilled report by the Minister of Agriculture, Fisheries and Food and some of his colleagues it is stated that the organisations concerned in the submission of the Scheme were substantially representative of the producers of eggs. I notice that in the formation of this Scheme the only organisations which were consulted were the farmers' unions. Now the farmers' unions are not representative of quite half of the producers of eggs in this country, and I should have thought that there must have been some poultry keepers' organisations which would have been able to speak or to give information to the Minister in regard to this Scheme. Members of the farmers' unions who produce eggs number 223,000, whereas a total of 500,000 producers of eggs come under the Scheme.
With regard to the Scheme itself, I am not quite happy as to the composition of the Board. It is to be composed entirely of producers from various regions, special membership, and members nominated by the Minister. I should have preferred that some consumer interest were represented in the membership of the Board. The Board's agents who are running the packing stations might also be considered for membership, and the distributors. I believe that these producer marketing boards are better if their membership is not concerned solely with the producing end of the business, but includes also representatives of those who either distribute or sell the product of the producers. On the question of special membership, I note that the special members are elected by large producers of eggs. It seems to me that there is no possibility, either in regard to the regional members or the special members of the Board, for a small producer to be nominated and elected to the Board. I think that is a mistake. If special membership of the Board is provided for large producers. I suggest that one place, at any rate, 1325 might be left for representation of the small producers.
Again, I note that there are fourteen regions, and that the regional members will be elected by producers within the regions. Have these regions yet been apportioned? Does the Minister know exactly the boundaries of these fourteen regions, or will that be a matter to be determined later? In regard to the licences to sell eggs, can the present sellers of eggs and the present owners of packing stations be certain that they will be licensed? Will the new Board give an undertaking that existing sellers of eggs will receive licences? Further, will the producers of eggs who are now supporting particular packing stations still have the right to send their eggs to those same packing stations? To enlarge, for a moment, upon that subject, I may say that I have at the back of my mind the fact that there are certain packing stations run by the Co-operative Wholesale Society, and no doubt those stations are used by their members for the sale of their eggs. My doubt is whether or not the co-operative packing stations will still be able not only to collect eggs but to distribute eggs to their shops or sell them as they do in existing circumstances. With respect to "A" and "B" licences in the Scheme before us, it seems to me that the procedure is highly complicated. It is difficult to understand exactly how one obtains "A" licences and "B" licences, or whether one is entitled to have such licences. Possibly in a later scheme there might be simplification in some way or another.
My two final questions are these. First, as to the disciplinary committee. I am not at all in favour of a very strict disciplinary committee in connection with any marketing board. In years gone by, I used to send my milk to the Milk Marketing Board, and I. received month by month their journals. From a study of these, it appeared to me that small penalties which were imposed on producers month by month were in many cases most unnecessary and must have been very irksome indeed. I hope that, whatever disciplinary committee is set up by the Board, the small and trifling troubles which arise between producers and the board will not result in the imposition of heavy penalties. There is one point in this Scheme which arises in connection with paragraph 85. That deals with the question of the arbitrator and 1326 the award. From that paragraph, as it is published at the moment, it seems to me that the Board assume that if they go to arbitration they will always be right and that the award will be granted in their favour. To me, it seems that there is no provision whatever to protect the producer who may win his arbitration in regard to his costs or otherwise. I think, therefore, that some new clause should be drawn up, or some new arrangement of some kind should be made and published, to show to the producer that if he goes to arbitration it is not inevitable that he will lose the award and be subject to costs. In general, I support the Scheme and wish it a happy life in future. I hope that it may benefit all producers of eggs and that by the carrying out of this scheme and by the protection which producers will receive under it, we shall be able to produce all the eggs we require.
§ 3.40 p.m.
My Lords. I had not intended to address your Lordships on this matter but I am stung to my feet, if I may use that expression, by the epithet used by the noble Earl, Lord Listowel, to describe the opposition from this quarter of the House. The noble Earl spoke of our policy as being "doctrinal". If to be liberal is to be doctrinal we accept the epithet with pleasure, but I cannot help feeling that this measure is definitely illiberal, and I rise for one moment to underline, if I may, the points put by my noble friend Lord Grantchester.
In the first place, the very essence of the Scheme seems to contrast totally with the principle of the Monopolies Act which the present Government have put forward. It is indeed a monopoly, and I am rather surprised that noble Lords on my left should be backing this measure so wholeheartedly. If I may allude to the Potato Marketing scheme, to which my noble friend Lord Grantchester referred, it is, if I may say so, most relevant. If anybody—for instance one of your Lordships—has a small amount of land, he is perfectly at liberty to plant potatoes and to grow them and lift them; but if he tries to sell them in the open market, he is committing an offence. That is exactly similar to what is being done now by the Egg Marketing Scheme. I personally resent not being able to grow and sell potatoes if I wish, whether in large or in small quantities, and I equally 1327 resent not only the fact that the small poultry keeper is arbitrarily stopped from selling his or her eggs if he or she keeps not more than twenty-nine birds, including cocks, but also the fact that one cannot go to a farm gate and say, "Please can I have three eggs?" The farmer might reply, "Had you come yesterday I would have given you them with pleasure, because then I had only forty-nine birds including cocks, but to-day I have fifty-one including cocks"—or "not including cocks"—"so you cannot have any eggs." I think that that is inherently contrary to liberalism and liberty, and for that perfectly commonsense reason we on these Benches object to the measure which is before your Lordships.
§ 3.43 p.m.
EARL ST. ALDWYN
My Lords, I am grateful for the support I have had from noble Lords opposite. I cannot pretend that I anticipated that I should get much support from noble Lords who sit immediately on the left of the Woolsack. The noble Lords who spoke raised a number of points and I will try to deal with as many of them as I can. If I may say so, the noble Lord, Lord Rea, does not appear to have listened to what I said in my opening remarks. I pointed out that we had raised the limit from 25 to 50.
EARL ST. ALDWYN
The producer who wishes to sell retail can apply for an "A" licence, as I said in my opening remarks. He will receive this licence automatically and will be able to sell retail to anybody who comes to him, and also to deliver direct to consumers if he wishes to do so. The noble Lord, Lord Grantchester, raised the question of the disciplinary committee. I would point out that this committee will meet in public, unless there are special reasons, and there is the right of appeal from their decisions to the arbitrator. Perhaps I can also deal with the point of the noble Lord, Lord Wise, here, and add 1328 that the arbitrator will determine what the penalty should be. He also has the right to award costs.
The noble Lord, Lord Wise, asked me about existing packing stations. The Board are under an obligation to employ as agents all those who can show that they can do the job of grading and packing eggs efficiently. Packers can go to arbitration if the Board do not agree to employ them. So I can give the noble Lord that assurance. He also asked me about the regions under the scheme. If the noble Lord will turn to the second Schedule he will find the regions set out there. On the question of the membership of the Board, I would say that it is now necessary to have only ten producers to nominate a candidate for election to the Board. The noble Lord, Lord Grantchester, asked about matters of finance. I would point out to the noble Lord that the financial agreement will be coming up for debate in your Lordships' House when an order is made under the Agriculture Act authorising the payment of money for the guarantee arrangements. Perhaps we may discuss questions of finance more fully then. I think I have dealt with most of the points that have been raised, and I thank noble Lords opposite for their assistance.
§ LORD GRANTCHESTER
My Lords, may I ask whether the noble Earl is satisfied that these drastic powers are really necessary, and whether it is not possible to modify the powers given to inspectors and to these private courts, which are in excess of those given to the normal courts of this country?
EARL ST. ALDWYN
My Lords, these powers are similar to those given under all the schemes made under the Marketing Acts. Inspectors will have right of entry only in the case of large-scale producers who come under the scheme; they will not have the right to enter the property of small producers. In effect, it will only be where they are satisfied that there has been some serious infringement that inspection will be likely to take place at all. We are perfectly satisfied that these powers are reasonable.
§ On Question, Motion agreed to.