HL Deb 27 June 1957 vol 204 cc427-34

2.38 p.m.

THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (EARL ST. ALDWYN) moved, That the Eggs (Guaranteed Prices) Order, 1957, reported from the Special Orders Committee on Tuesday the 4th of June, be approved. The noble Earl said: My Lords, this Order makes arrangements for providing guaranteed prices and an assured market for eggs through the British Egg Marketing Board. The Order will replace an existing Order, also made under Section 4 of the Agriculture Act, 1947, giving authority for the Government's, present interim arrangements which have operated since rationing and price control of eggs ended.

The Board has now been set up, and will start exercising its marketing functions from 30th June. In future, as with milk and wool, the guarantee will be to the Board and not to individual producers. The level and conditions of the guarantee are, of course, determined each year at the Annual Review. The detailed financial arrangements under which the Board will administer the guarantees will be set out in an Agreement between the Ministers concerned and the Board, and copies of the Agreement will later be made available in the Printed Paper Office. The present Order merely lays down the following procedure for determining each year how much is due from the Exchequer to the Board to implement the guarantees.

At each Annual Review, Ministers will determine, for hen and duck eggs, the standards of eggs to be eligible for guarantee and:—

  1. (a) a guaranteed price per dozen;
  2. (b) an estimate of the average selling price per dozen for the coming year; and
  3. (c) a rate of subsidy (which will be the difference between the guaranteed price and the estimated average selling price).
The Board will then be paid this rate on each dozen eggs which it buys.

The Order also provides for arrangements which give the Board an incentive to get the best out of the market. Differences between the average selling price estimated at the beginning of the year and the actual average selling price ascertained at the end of the year will be shared between the Board and the Exchequer. The Board will bear or keep the first twopence a dozen on any difference there is, but if the actual average selling price is more than twopence below the estimate, the Exchequer will make up 90 per cent. of the excess deficiency and, if the actual price is more than twopence above the estimate, the Exchequer will get back half of the excess.

As the Government will have been operating the guarantee for the first three months of the current financial year, the results of our operations during this period will have to be taken into account in determining what is due to the Board or to the Exchequer at the end of the year under this risk-sharing arrangement. The Order contains transitional provisions to cover this point and also provides for financial adjustments to be made when the Board takes over from the Government. After this the Board will be answerable to the producers for the way in which they market eggs. They will buy all the hen eggs which pass through packing stations and will themselves determine the prices at which they buy eggs from producers. The Government will no longer be fixing these prices.

The Board have said that they do not at present propose to make any substantial change in the physical channels through which eggs are marketed, but subject to the limitations imposed by the financial agreement between the Board and the Government, they will nevertheless be free to use their powers under the Egg Marketing Scheme to market eggs as they think best. The Board are certainly taking over a tricky job at a difficult time, but I am sure that, supported by the producers who voted it in by such an overwhelming majority, it will tackle the problems in front of it with energy and resolution. I am sure your Lordships will join with me in wishing it every success. I beg to move.

Moved, That the Eggs (Guaranteed Prices) Order, 1957, reported from the Special Orders Committee on Tuesday, June 4, be approved.—(Earl St. Aldwyn.)

2.42 p.m.


My Lords, we thank the noble Earl for his explanation of this Order which to the ordinary citizen, as I am sure he will agree, must appear somewhat complicated. When I look at the three separate calculations that have to be made in the course of dealing with the matter, it makes me think that most G.C.E. candidates would be almost forced to turn to some algebraic terms or symbols in their endeavours to find a proper answer. Certainly I find great difficulty in making an estimate of the result of these adjustments. I think that it is a pity the farming community have to labour under this kind of complicated mathematical problem.

However, the first thing one ought to say about the Egg Order, which is the first to be introduced since the new Egg Marketing Board began operating, is that we must heartily wish the Board success in their operations in what is obviously a difficult period for them. The fears of many people of whether commodities of this kind will be brought into the new agreements that may come out of the European Common Market discussions must remain until a final settlement of that question is reached. For reasons good to themselves, the Ministry have felt bound to utter words of general discouragement. Eggs are apparently under a black cloud, because producers are producing too many and the Ministry want production reduced. Therefore, the spirit in which these new mathematical processes through which settlements will be made will be worked out is fundamental.

If your Lordships will look at paragraph 5 of the Order—very interesting to me—you will see that it reads: At the end of each year the average selling price of hen eggs and duck eggs respectively for that year shall be ascertained by the Ministers in accordance with arrangements agreed with the Board or in default of agreement in accordance with such principles as the Ministers shall decide. I think that one is fairly entitled to ask the Government whether that means that the general discouragement of egg production is to be helped forward by the fact that the Minister will have absolute control of the price of eggs; because there is no appeal to arbitration, or anything of that kind, if there is disagreement between the Egg Marketing Board and the Minister on this matter. I should like a word from the noble Earl on that point, because all those engaged in farming who are affected by the tendency to discourage further production of eggs, and also of pigs and milk, will be looking to see what happens under this Order as some sort of guide to the spirit in which these commodities will be administered under Government schemes in the future. I was going to ask some rather complicated mathematical questions about the working of the adjustments, but I think that the generalisation made by the noble Earl on the calculations is sufficient for the present. We shall have to watch with interest exactly how the first set of adjustments work out.


My Lords, before the noble Earl replies, may I ask whether he can form any estimate of the cost to the taxpayer in the first year of this arrangement?


My Lords, before the Minister replies, may we have some assurance from the point of view of the consumer? Does it mean that we are going to get our eggs more cheaply?


My Lords, may I deal with the two last points first? I am afraid that at the moment I cannot give the estimate for the ensuing year. A provisional estimate was made last November which put the figure at somewhere about £30 million. I appreciate that that may not be an entirely realistic figure to-day, but I am afraid that I cannot at present give the noble Lord anything more accurate than that.


My Lords, does the noble Earl think it right to give these blank cheques in the present financial difficulties of the country?


My Lords, it is not a question of a blank cheque. There will have to be a Supplementary Estimate which will be available for discussion by your Lordships.


My Lords, the expense is incurred first and the Supplementary Estimate is put forward afterwards. Is that not the wrong way round?


My Lords, I do not think that it would be quite the wrong way round, because I anticipate that the Supplementary Estimate will be available before the original Estimate has been entirely consumed. The noble Earl, Lord Howe, asked whether we were going to have cheaper eggs. I would point out to him that, at their present price, eggs are probably the best value of any commodity on the market to-day, and I hope that he is not suggesting that we should hope to see even cheaper eggs. They are cheaper in proportion to other forms of food than they were before the war.


My Lords, arising out of that answer, may I ask the noble Earl whether it is not a fact that, owing to supplies from elsewhere coming into this country, eggs have been at such a low retail price in the last few months that they have been sold in the shops at below their actual cost of production in this country? I am sure that noble Lords who have asked questions on this point do not want to reduce labour costs.


My Lords, it is true, as the noble Viscount says, that the retail price has been exceptionally low and near the actual cost of production, but that is not due to excessive importation. It has been due to excessive home production.


My Lords, may I ask a supplementary question, following that of the noble Earl, Lord Howe? The noble Earl, Lord St. Aldwyn, said that the producers had given their overwhelming support to this measure. Can we have it from him that the Government consulted the consumers, or is that going to be left to a General Election?


As the noble Lord is fully aware, we have not had a referendum of consumers on the matter, but I can assure him that we considered the consumers' interests just as carefully as those of the producers.


Is it not a fact that under the Marketing Acts proper inquiries have been held, at which representations could be made?


As the noble Viscount says, there has been a public inquiry, where representations were made, and although some opposition by certain sections was put up, it was not overwhelming. The noble Viscount asked me earlier about paragraph 5 of the Order. I am sure he will appreciate that the guaranteed price, which is (shall I say?) a in his algebraical problem, is fixed at the Annual Review. I can assure him that the last words of the paragraph which refer to the Minister's discretion do not conceal any intention to do anything prejudicial to the interests of the industry. They are inserted merely to cover occasions where the Minister disagrees with the Board's estimate and he cannot, in fairness to the Exchequer and the nation, agree with them. I can assure the noble Viscount that there is no intention of using this power to deprive the egg producers of what they would be justified in thinking they would get as a result of the reduction.

2.52 p.m.


My Lords, I believe in this policy. I do not believe that there is a complete divergence between the interests of the consumer and the interests of the producer. I believe that the policy the Government are pursuing is right, and that the producer should be given a fair return for what he does. In that way, we best consult the interests of the consumer. However, I am rather concerned at the answer which the noble Earl gave about the estimated cost of this scheme. He seemed to think that, just because a Supplementary Estimate is required, therefore the matter is effectively under Parliamentary control. But if a policy is adopted, and it then turns out that a Supplementary Estimate is required to carry out that policy, really the House is not free. Its hands are bound; it has adopted the policy, and it is difficult not to pass the Supplementary Estimate. I think that to produce an Estimate, which he says may be £32 million—and heaven alone knows how much it will be! it may be more or less; we have not the least idea—is the wrong way to set about the nation's housekeeping. The only answer is: "Well, you know, whatever it does cost, there will have to be a Supplementary Estimate." Well, there will. And, in practice, whatever the Supplementary Estimate comes to, it will have to be approved to give effect to this policy. As I say, I believe this to be the right policy—I have never believed in the simple dictum of "Set the people free!"; and this is the policy which my Party adopted a long time ago—but I venture to express my feeling, in the present financial condition of the country, against the Minister's getting up and saying: "We do not know in the least what this will cost, but it will be all right, because there will be a Supplementary Estimate some day."


My Lords, I can assure the noble and learned Earl that we are not in any way complacent about this matter and at the last Annual Review we considerably reduced the guaranteed price for eggs with the intention of discouraging production, and thus reducing the Exchequer liability in this matter. I would refer him to an answer which my right honourable friend gave in another place. He said [OFFICIAL REPORT, Commons, Vol. 570 (No. 112), col. 865]: I think, however, that it would he right to warn producers now that, unless there is some major change in circumstances between now and next February, a further reduction in the level of the guarantee, within the long-term assurances, must be expected.


My Lords, I think the point on Parliamentary procedure which my noble and learned friend raised is an important one. I should like to ask whether, in fact, the Supplementary Estimate referred to is one which arises under the past system of dealing with this subsidy for eggs and which probably will not arise in the case of this new Order. First of all, there is to be an Estimate, and as there is now a Marketing Board operating between the producers and the Government they will themselves make their own adjustment with the Minister of Agriculture, either by receiving what is too low under the Estimate or by themselves paying back to the Ministry what is found to have been too much.


I think the noble Viscount is quite correct in his assumption.

On Question, Motion agreed to.