IMPORT DUTY ON DANISH PIG-MEAT

HL Deb 23 July 1959 vol 218 cc490-536

5.20 p.m.

LORD SILKIN rose to draw attention to the disastrous consequences which will result to the pig industry in this country if the proposed withdrawal of the duty of 10 per cent. on the import of Danish bacon and pig-meat takes place; and to move for Papers. The noble Lord said: My Lords, at long last I am able to move the Motion standing in my name. First of all, I would apologise to your Lordships for having two Motions before the House on successive days. It is no fault of mine; I have not arranged it that way, but the exigencies of public business have so ordered it that these Motions have come in the way they have. Before I begin I should like to declare a double interest in this matter. First of all, I am President of the British Association of Pig Producers; and secondly, I am a medium producer of bacons.

I put this Motion down last Thursday following the statement made in connection with the agreement between the British Government and the Danish Government relating, among other things, to the abolition of the 10 per cent. import duty on bacon. I intend to deal solely with the probable effect that; this will have on those engaged in the production and in the curing of bacon. I want to say straight away that I express no opinion on the proposed free trade agreement at this stage: we have not the full particulars of it and we are going to debate it next Tuesday. However, on the face of it, unless the conditions are something that we ought not to accept, I should be prepared to view such an agreement favourably. But for the purpose of this debate I would ask your Lordships to assume, without prejudice, that this seven-Power agreement is for the common good and should be supported; that it is essential in that agreement to include Denmark; that Denmark must be given some inducement to come in, and that the abolition of the 10 per cent. tariff on bacon imports is the most suitable inducement that we can offer to Denmark—or, at any rate, the one that will commend itself most to her.

LORD BOOTHBY

My Lords may I interrupt the noble Lord for one moment? He said that he was going to confine himself strictly to the effect on the pig-producing industry in this country. But he would not wish, I imagine, to confine the whole debate strictly to that issue, because, obviously, if our pig producers are going to suffer at all, there must be balancing conditions which would have to be referred to in the course of the debate. What I am really asking is whether the noble Lord wishes to confine the debate absolutely to pigs and bacon, or whether he would like to range a little wider.

LORD SILKIN

I think that what I want to say will be apparent, and it would be difficult to answer the noble Lord without anticipating certain parts of my speech. But I am primarily concerned with the effect of this agreement on the bacon producer.

I want to lay down a number of propositions which I hope the House, and particularly the Government, will accept. First of all, I want to lay down the proposition that you cannot abolish a duty which, in part at least, is a protective duty, without the industry protected incurring loss, and accordingly that the bacon producing and curing industry will suffer—and whether the Government are going to make up the loss or not is another question. Secondly, I would say that it is Government policy to maintain a reasonably-sized bacon industry in this country, showing a fair return to those engaged in the industry; and it is also Government policy not to wish the industry to contract or decline any further. The third proposition I want to make is that it is wrong to ask a relatively small industry and a small section of the community to sacrifice itself for the benefit of the community, as a whole—and that is perhaps part answer to the noble Lord, Lord Boothby. I propose to say a few words about each of those propositions.

First there is the effect of the abolition of the duty on the industry. Most noble Lords in this House who are engaged in this industry—and a great many are—will agree that the industry is becoming increasingly efficient. The days when bacon producing was a hit and miss business are rapidly disappearing. There is the small producer, the man who keeps two or three sows in his spare time in his back garden or on a part of his small farm; but I am not counting him. By and large, the bacon industry is becoming a specialised industry: there are the breeders, the bacon producers and the curers and those who produce pork. But more and more each of them is specialising in the particular field in which he is carrying on. A great deal of research and experiment is taking place in breeding, in types of housing, in heating, ventilation, methods of feeding, management and the rest. I would say that, by and large, we are as efficient in the bacon industry as is any other country in the world. I have taken the opportunity of visiting a considerable number of farms in Denmark in the hope that I could learn something which I could pass on to producers in this country, but I am bound to say that I found little or nothing that I could learn from them, having regard to the different conditions under which they work—and I will say a word or two about that in a moment. I believe there is as much research, experiment and scientific work going on here, and as efficient methods of management, as anywhere else in the world.

There is a large and growing capital employed in the industry. The difficulty from which the industry is suffering is the lack of a clear and definite Government policy. At one time the industry was encouraged to produce more and more; at a later stage production was shut down; and to-day we are not certain as to whether the existing production is right—whether the Government expect greater production or whether they expect less. The subsidy has varied from year to year in a downward direction, and one never knows from one year to another what assistance the pig producer is going to get. I venture to say that to-day, under present conditions, no pig farmer in the country is able to get a reasonable return on the capital employed, and still less to get a reasonable reward for the efforts that he himself puts into the industry.

I am not for one moment suggesting that all pig producers are operating at a loss; but when you take into account the capital employed in the business I would say that even the most efficient would be better employed taking his capital and putting it into gilt-edged securities than in trying to raise bacons; and he could use his time more profitably. That is shown by the fact that many pig producers have given up keeping pigs; and the trend is still continuing. I know a number of noble Lords in this House who have told me that in the past two years they have given up keeping pigs producing bacon; and that applies throughout the country. The estimate is that in the next twelve months there will be something like 1¼ to 1½ million fewer pigs produced for slaughter than there have been in the past twelve months.

When this question was raised in another place last Tuesday, those who raised it were accused of being scaremongers. I hope the noble Earl who is to reply will not accuse those who are trying to take an objective view of the industry, and who speak with some knowledge of it, of trying to raise scares. If there is any scare in the industry it already exists. People do not lightly turn away from farming activities unless they feel that they are not able to carry on. The scare is there, and it is for the Government to see what they can do to remove it. The position is sufficiently serious as matters stand, without the added factor of the abolition of the protective duty.

I should like to say a few words as to why, with the efficiency that I say the industry is exercising, it cannot compete with Denmark, in particular, and with other countries. Why are they able to under-sell us in the British market? There are a number of factors. The first is the question of labour costs. We in this country are an industrial nation, and we have to compete all the time with the industrialist for farming labour. By and large, a farm worker expects as high a standard of living as the industrial worker. Although the actual wages may be less, when you take into account the housing and the overtime, which is inevitable, the bonuses and all the rest of it, the actual value to the farm worker of what he gets is at least equal to what the industrial worker gets. I am not criticising that fact; it is a fact, and I am happy that it should be the case. But in Denmark they have not that competition with industry. Denmark is not primarily an industrial country; it is primarily an agricultural country. Therefore, the standard of remuneration of the worker is substantially less.

The next point is the higher cost of feeding in this country. I said that our method of feeding is highly scientific. In Denmark they are under no such obligation. Their feeding consists almost entirely of barley, which is home-grown, and of skimmed milk, which is produced on the spot. One of the reasons they can feed their pigs on barley and skimmed milk is that over generations they have produced the type of pig, the Landrace, which can take barley. In the case of the English pig, barley would be much too fattening and would not produce a good bacon. They can feed their pigs on barley without their suffering and getting too fat. And they produce all their own barley. We have to import a great deal of our feeding-stuffs from abroad, and we have to use expensive proteins, such as fishmeal and so on, which is far more costly than skimmed milk. Moreover, some of our feeding-stuffs carry a 10 per cent. import duty. The result of all that is that it costs us far more to feed the pig and to bring it up to bacon than it does the Danish producer. I do not want to dwell on this aspect at too great length, but I have given at least two of the important factors which enable the Danish producer to under-sell the British producer—the cost of labour and the cost of feeding.

The Danes have been very wise in their generation. They will not export the Landrace pig. The Swedes are willing to export them, and the Landrace pigs that one sees in the market, and for which one pays high prices, are the inferior type of Landrace, the Swedish pig. But, as I say, the Danish Landrace is never seen in this country alive. I want to put this point to Her Majesty's Government. If there is to be free trade between the countries, why cannot we have free trade in the export of pigs? Why cannot we insist that the Danes should export the Landrace pig if British producers want to buy it? I hope that the noble Earl will make a note of that, and see whether he cannot get some satisfaction in that direction.

If we could get the Danish Landrace over here and breed from it, I believe that a great many of our difficulties would disappear. If we are going to try to produce an equivalent pig to the Danish Landrace, it is going to take us not five or ten years, but at least a couple of generations. I admit that our breeding policy is producing better and better pigs, but even to-day the proportion of Grade 1 pigs which carry the bonus—that is, the pig of over 800 millimetres in length which is graded "1"—represents at the most about 30 per cent., taking one week with another. The "AA" pig, of course, is of a bigger proportion, but the Grade 1 of the right length is not more than about 30 per cent. on an average.

I submit that, with all these difficulties, the abolition of the duty will still further turn the scales against the British producer. There is no reason to believe that the abolition of this duty by itself will materially increase consumption of bacon in this country. There are various methods by which consumption could be encouraged. One method might be the reduction in cost; but for the reasons I have given, so far as the British producer is concerned, that is for the time being difficult. So if the consumption of bacon remains relatively stationary—there may be fluctuations—and if Denmark gets a bigger share of the sales of bacon, then obviously the British producer will get less and he will produce fewer pigs with much the same overheads. It is virtually impossible for him to reduce overheads, except labour costs, in proportion to the reduction in his production of pigs. So that the overheads will remain; the output of pigs will be smaller, and, consequently, the gross profit per pig will decline. Already the bacon producer is on the edge of solvency, and in my view this step may well tip the scale.

The Minister gave certain assurances in another place, and I should like to comment on those. One assurance was that the guaranteed minimum price will not be reduced at the next Price Review. As I have said, even with the existing subsidy no bacon producer could carry on if he got no more than the minimum price. The only way in which the bacon producer can hang on at all is that the minimum price is the bottom but that, by and large, going right through the year, the average price he gets is greater than the minimum. If the noble Earl would like to make a calculation and see what the minimum price means in terms of the amount the producer would get, I am sure he would be satisfied that he could not live on what bacon will produce at the minimum price. So it is anticipated—it has been the case up to now—that in the good times of the year the price which the producer will receive will be more than the minimum, and sometimes substantially more. There are other times when he gets only the minimum, and he catches up by averaging throughout the year. If in fact he is compelled to live on the minimum—and in my view that is one of the dangers with which he is faced: that prices will be depreciated through competition with the Danes, who, as I have explained, can beat us—it will mean that the British producer is finished. So I submit that merely offering the bacon producer the minimum price is not sufficient in the circumstances; it will not help to save the industry.

Furthermore, the promise is for one year only. I imagine that the year in question will begin somewhere about February or March of next year, or later. At any rate, in that year there will be no material reduction in the tariff, because this first 5 per cent. reduction comes into operation on July 1, 1960, and the second 5 per cent. on July 1, 1961. The full effects of this change will not be felt in the coming year, and the assurance that we have been given is for one year only. Again, the subsidy is calculated on all pigs, and I am advised that only one-third of the total pigs will get the benefit of the guarantee; it will not be applicable to all bacons. There is no doubt, as I have explained, that the industry will suffer.

My Lords, I have referred entirely to the bacon producer, but there is the equally serious position of the curer. At present he is working to not more than half capacity. I have not the exact figures; some say 40 per cent.; some put it a little higher. But it is certainly not more than 50 per cent., and there is no likelihood of that percentage increasing. If anything is likely it is that the number of pigs available for curing will be even less. A number of producers will go over to pork, and a number will go out of business altogether. I remember that only a few years ago it was difficult to get all the bacon that we produced cured. I remember that one week I sent (I think it was) 30 bacons. I had notified 29 to the curers, and they sent one back. They would not accept the thirtieth bacon for curing. To-day, of course, if you notify 10 and send 20 they are only too delighted; they will accept any number that you care to send. The noble Earl shakes his head, but I am doing it constantly. I know what I am talking about; I am speaking from experience. It does not matter what you notify. You can send three times the number and they will take them with gratitude.

My first point, then, was that we do want to maintain a profitable industry. The next point is that we want a fair-sized national pig industry. At least I hope it is so. I hope that the Government are not prepared to sacrifice the industry in order to induce Denmark to participate; that they do not, in fact, regard the pig industry as expendable. So I come to my third proposition, that it is wrong to ask or expect a small section of our population to sacrifice itself in the common good. I know that that is no doubt the noble thing to do, and that is what the Government are asking the industry to do. But in fact there is really no precedent for the wiping out of any industry in the interests of the community without compensation or without any action on the part of the Government. There is little dispute as to the facts. I hope I have established that the producers will be to some extent sacrificed. There is really no doubt about this: it was admitted in another place. MR. Butler, in another place, said [OFFICIAL REPORT, Commons, Vol. 609 (No. 145), col. 32]: …it would be wrong to say that no damage will be done, but the subsidy and guaranteed prices will continue for British producers and the curers, will have the benefit of the Government guarantee on pigs. Well, that is admitting that damage will be done, but saying that the guarantee will put it right. I have endeavoured to establish that the guarantee will not put it right. I hope that I have satisfied the House that the guarantee in itself is not good enough.

I have tried to place before the House, fairly, I hope, objectively, and without exaggeration, the position of the bacon industry and their fears, I believe justifiable fears, for the future. It is not for me to put forward any specific hard and fast solution, but I would ask the Government to ponder deeply and consider the position seriously, and to take all steps, including discussions with the bacon industry, to ensure that they have the facts correctly. If this industry is not to die, we must have an assurance that the last word has not been said and that in the light of this debate the Government are prepared to have second thoughts. I beg to move for Papers.

5.50 p.m.

LORD AMHERST OF HACKNEY

My Lords, we have listened as usual to a most interesting speech from the noble Lord, Lord Silkin, who has reviewed the present position of the bacon industry and has shown us in the most interesting way the difficulties that the bacon industry finds in competing with the Danes. But I do think that we ought for a moment to look at the terms of the Motion on the Order Paper. The Motion is: To draw attention to the disastrous consequences which will result to the pig industry in this country if the proposed withdrawal of the duty of 10 per cent. on the import of Danish bacon and pig-meat takes place. It seems to me, having listened carefully to the noble Lord's speech—and I am sure he will correct me if I am wrong—that the main complaint that the noble Lord makes is that if the producer had to rely on the guaranteed price then he would go out of business, which surely is an argument for a review of the guaranteed price of pigs rather than for saying that, as the result of this removal of the duty, disaster will necessarily come to the pig industry.

LORD SILKIN

My Lords, the noble Lord has invited me to correct him if he is wrong or if he has misinterpreted me, and I hasten to do so. I would not have raised this debate at all, and the pig industry would not have wished me to do so, but for the 10 per cent. reduction. We are content to struggle on in the hope of better times if the competition is not accentuated, as we feel it will be, by the abolition of the duty. Therefore it is the direct result of the abolition of the duty that I was hoping to put before the House.

LORD AMHERST OF HACKNEY

My Lords, I am grateful to the noble Lord, but I think that he would agree with me that the pig industry, like many other of our agricultural producers, relies basically on the guaranteed price for its stability and in order to be enabled to compete with world prices. In fact, I think that what he has said is that the removal of the 10 per cent. duty will cause the producer to rely on that price and not, as at present, part of the year getting more and part of the year getting the price. After all, as the noble Lord mentioned in his speech, any loss that is caused to the producer from a fall in the price of bacon will be made up. We have had various other assurances, such as that the cost to the Revenue of the loss of any duty on imported pigs will not be taken into account. So surely we have got to the position that, in spite of any removal of this duty, even if the Danes send in a lot of bacon and reduce the price, then still the price which the producer will get will be the guaranteed price. It is by no means certain that the Danes will necessarily send in vast quantities of bacon and there by reduce the price that they will get. It cannot really be in their interests to break the market; and even if they do try to do so, surely the British curer and producer, with the guarantees behind them, are in a fairly strong position to compete with that threat, because any less price that they get for their product will be made up by the taxpayer.

I should have thought that the curer, although it has been said that at the moment he is in a difficult position, is in fact in a very much stronger position than almost any other person who has to compete with foreign imports, in that the price of his source of raw material is guaranteed by the Government. If he is forced to pay less for it, the Government make up the difference to the producer, which seems to me to put him in a fairly strong position. After all, the Danes have not been promised that we would not use our subsidies to maintain our present position in the market. In fact, it is quite clear in the Agreement that we are entitled to do so. So that in attempting to capture a larger share of the present market by trying to flood it, it seems to me that they are getting little benefit themselves because they merely bring down the price, and the only person who would suffer is the British taxpayer, not, I venture to say, the bacon producer.

We have agreed, I think, that if there is any increase in the market then they would be entitled to get a share, or rather we should not use our subsidies to prevent them. But that is a different question. In that case the British bacon industry would be producing more pigs than they are at the moment. Although the bacon industry are producing at well below capacity, they have this year, I think I am right in saying, produced considerably more bacon pigs for slaughter in both April and May than went for bacon in April and May last year; and I think I am right in saying that last year was a fairly high year. So that although they may not be working to capacity, they are at the moment still working at a fairly high level.

But I think that what we all want to do—and I believe that since this Agreement has been announced the Government have taken every possible opportunity of doing—is to reassure the bacon producer, because everybody in this House wants a stable, efficient bacon pig industry. That is why I fear that Motions like this on the Order Paper, which are seen and quoted in certain papers outside, have an extremely damaging effect. The speech of the noble Lord was most moderate, but the Motion on the Order Paper is not, and I think that there may be many producers of bacon pigs who, on reading this Motion, might be extremely anxious as to whether the future of their industry was in danger. Therefore I think that we should take every opportunity of reassuring them. I feel that the Government have gone a long way to do this, both by the assurances that have been quoted and by saying that the price next year will be not less than the present price. Also there are two more Price Reviews before the full 10 per cent. duty comes off. And the pig industry has after all a very efficient organisation in the National Farmers' Union—and we are very glad that the noble Lord, Lord Netherthorpe is going to speak to us this afternoon—which can put the case before the Government. Therefore I feel that the bacon producers have very little to fear from this agreement.

6.0 p.m.

LORD NETHERTHORPE

My Lords, I am very sensible of the privilege of being able to address your Lordships' House by intervening in this debate. I must, however, declare my interest, having constant concern for the well-being of the agricultural community as a whole. I know many of your Lordships share that concern with me, and I am always interested and encouraged to see the enlightened and authoritative debates that take place in your Lordships' House on matters agricultural.

I am interested and concerned for the agricultural community because its prosperity is so vitally and directly related to the economic buoyancy of the country as a whole. That, I think, is a fundamental factor that none of us must forget. I therefore thought that it would be helpful if I sought to clarify some of the issues which the noble Lord, Lord Silkin, has posed and to which the noble Lord, Lord Amherst, has added. It is, in my view, just as unwise to exaggerate the consequences of the two-stage withdrawal of the bacon tariff as it would have been to claim that the implementation of the decision to remove the 10 per cent. duty on bacon would be inconsequential. Indeed, those who contend that it spells ruin for pig producers can sow such seeds of despondency in the pig industry as to undermine producers' confidence to an extent that our total production further declines and our share of our own market contracts in consequence.

On the other hand, those who would have sought to be little its effects would have been blinding themselves to the need to counter the ill-effects and to ensure an expanding economic pig industry in this country capable of taking an increasing share in the home market, to which its progressive efficiency has, in my view, entitled it. As essentially an industrial manufacturing country, our economy is geared to, and indeed reliant upon, a substantial export trade. We are constantly being told that we must export or decline. But clearly we should use the productive resources of our basic industries, particularly agriculture, to the best national advantage. Her Majesty's Government have pursued progressively and vigorously a policy of trade liberalisation. Indeed, I contend with other noble Lords that the trade policy of this Government is perhaps more liberal than any of its predecessors. This course of liberalisation is calculated to yield, on balance, an advantage to the country as a whole. But in the process hurts are bound to be inflicted on somebody along the road.

If the policy is continued, then I think suffering must be mitigated. That is why we have progressively sought assurances from the Government over the last few weeks during the course of negotiations. But, if I may, I should like to analyse the position with regard to the 10 per cent. direct tariff on bacon, because the noble Lord, Lord Silkin, has been addressing his remarks particularly to the impact on the pig industry of the decision on bacon. In point of fact it originated after the Ottawa Conference in 1932 where, your Lordships will remember, Imperial Preference was virtually born, and it was decided that the order of preference in the market should be first place in the home market for the home producer, second place for the Commonwealth and third place for the others—the "also rans."

We had no mechanism for giving effect to that policy until 1933, when the Agricultural Marketing Act, the second one, was passed. That Act enabled us, as a country, to impose preferential quotas, after reference to I.D.A.C. It was made possible only because the prerequisite was that the home industry should in itself effect quantitative restriction, and the pigs marketing scheme was promoted under that particular revised Marketing Act. So the preferential quota system was arranged; and Canada, for instance, got a preferential quota which lasted right up to the beginning of the last war. At that time there was no import duty on bacon at all, and therefore the preferential quota system replaced, so to speak, preferential tariffs in achieving the same objective.

There was also, of course, no guaranteed price to the producers. Then war came, and in 1940 the Government itself took over the whole responsibility for handling imports, such as they were, of bacon. That position carried on postwar, and bulk-buying continued, first under the Ministry of Food, and then, after the merger, by the Ministry of Agriculture. It was the equivalent of quantitative regulation by dint of the fact that bulk-buying was performed on State account. We had fixed prices for pigs in this country up to 1954 and then the system was changed to a system of deficiency payments where by we had standard prices—not minimum prices as the noble Lord suggested, but standard prices—and a free market: a free market, that is, except that in bacon the Government continued to be controlled by bulk-purchase contracts until the end of 1956.

The negotiations that took place at the beginning of 1956 with Denmark were concerned with how we could translate or emerge from bulk buying into a free market concept while still retaining the preferential system of the Commonwealth: and it was decided to invoke the clause in G.A.T.T., Annex A, which permits transferment of quantitative regulation system into a tariff; reputedly to be that sort of equivalent. That being so, the Government determined in their negotiations that the preferential tariff should be 10 per cent. Quite frankly, I have been intrigued at the suggestion that the 10 per cent. tariff was itself intended as a means of raising revenue in order to strengthen the price support mechanism. I do not recollect its being given such force when the announcement was actually made in 1956—although, of course, it is somewhat analogous in concept to the levy subsidy system.

What I have always felt it was designed to do was to reintroduce in post-war and post-control days the concept of preferential treatment to a member of the Commonwealth. It was never suggested that it was a means of protecting the producer of pigs in this country, because, of course, emanating from the 1947 Agriculture Act, it had always been suggested that the proper way of treating agricultural commodities in the first Schedule of the Agriculture Act was by the assurance of market and the guarantee of price. Nevertheless, we were not unwelcoming when the 10 per cent. tariff was in fact imposed. We recognised it as providing some assistance to the agricultural community and the bacon curing industry in the process.

The producers at large, I would say, however, do not regard tariff for bacon as necessarily the most desirable means of controlling imports to this market. I would go the whole way with the noble Lord, Lord Silkin, in saying that the guaranteed price system of the free market and the standard price is not alone capable of giving the stability to the agricultural community, the pig producers, that is desirable. I have always felt that an essential complement to the free market of having a payment against a standard price must be a really bold attempt to effect international stabilisation, within reasonable limits, of the primary producers' products. The only safeguard we have at the moment is in the absolute extremity—namely, when we can persuade the Board of Trade to invoke the provisions of the anti-dumping legislation. Therefore I could not really concede that the tariff of a commodity with such an in elastic demand as bacon has can be really effective unless it is penal; and of course we should have complications from another side of the community in this country if it were penal.

If I wanted justification for that contention it would be—I was going to say, the almost innumerable pig muddles we have suffered over the ages. Certainly we had one in 1957, and the tariff of 10 per cent. certainly did not save us from the pig muddle then and the chaos that existed. I recall having to leave a much-anticipated holiday very quickly to go over to Denmark to try to negotiate with the Danes a system which would at any rate inject some reason into the flow of bacon on to our market. That was despite the 10 per cent. tariff. I believe that that is our key to stability in the bacon industry as such.

We submitted evidence to the Bosanquet Committee on the pig industry and we there contended that the essential complement to the free market and the guaranteed price system was some form of quantitive regulation of flowing on to the whole market, inelastic as it is, so as to avoid the constant upsets and violent fluctuations in price of bacon, which the consumer likes no more than we do. When the scarcity comes and the price goes up, inevitably the consumer pays; whereas the operations of the Bacon Consultative Council, which we created as a forum for the discussion of the flow of imports, have yielded a very good dividend in stabilising the price of bacon to the consumers of this country. So it has not been, and it is not, for the benefit of the producers alone; rather is it infinitely beneficial to the consumers as well if we can inject that stability.

I am glad that the noble Lord, Lord Silkin, wishes with me to see a greater stability in the pig industry. We were concerned as agriculturalists about the negotiations of the "Outer Seven" free trade area, knowing as we do that the proposal to make concessions to the Danes was going to contain the preferred reduction of the 10 per cent. tariff on bacon. We were concerned about it for four major reasons: first of all, because we have never believed we could solve the agricultural problems of Denmark in the United Kingdom alone. We believe it is imperative for her to develop other markets and maintain her traditional markers in Western Europe, so that we are not placed in the position of having unloaded on to the United Kingdom market what she was barred from selling in Western Germany, say, or Italy, or what she was prevented from selling elsewhere, because that could only result in bringing the price of the commodity crumbling down, to no one's benefit.

We knew full well that the impact of the price squeeze that took place in the 1958 Review, which we then contended was too harsh, would result in a reduction in the production of pigs. We were therefore very concerned as to the timing of this operation with Denmark in so far as it caught us with a reduction of production of some 20 per cent., whereas Denmark had already increased her production by some 20 per cent. We were very concerned, and are still very concerned, therefore, to ensure that Denmark's outlets in Western Europe, the countries within the European Economic Community, are sustained. I believe that to be extremely important.

Then we did not want to see the work we had put in as producers in creating the Bacon Consultative Council—and that against a background of a request to Her Majesty's Government to do something of the sort instead of us—brought to nought if, for instance, the concession to Denmark of a 10 per cent. reduction in the tariff of bacon would mean that she was in fact going to take the more dangerous of three possible courses open to her; in other words, to use the whole of that money the more effectively, so to speak, to compete and undermine the whole price fabric of bacon in this country. I personally believe that Denmark is not so foolish as to resort to that particular course.

Another course open to her is to pass the whole of the £6½ million equivalent of the 10 per cent. tariff which she is no longer going to have to pay back to her own producers. That would be all right if it did not engender expanding production to a rate the market could not absorb, either in the United Kingdom or in the countries of Western Europe or, in deed, in the United States of America, where she has very prudently been opening up her markets.

I suppose that she will take the middle course and use some of the money available to her from this source to increase the reward to her own producers, on the one hand, and to develop her markets by improved marketing technique on the other. At least I hope she has more sense—and I believe she has—than to use it purely to exploit and have a vicious price war in the markets of the United Kingdom.

The other reason why I was concerned was that there is this great distinction which the noble Lord, Lord Silkin, draws, between the producer of pigs for bacon and the producer of pigs for other markets. The technique of pricing, the pricing mechanism, I confess at the outset is extremely complicated. That is why experts are needed to negotiate with the Government in the process of working them out. It is extremely complex, and we have sought to devise ways and means of easing the pressure and sustaining the help for the bacon-pig producers as compared with the others, by maintaining a level of quality premiums and by having a separate accounting system for pigs that are cured into bacon against the stabilising limits, which is this complicated technique. It is not in fact a minimum price system, but the method of computing the average market return against the stabilising limit. I believe that if we are going to sustain the bacon-pig industry in this country, the specialist bacon-pig industry, particularly those who are catering for the Wiltshire cure, then we may have to look even further at: this problem of particular payment for them, without insulating them against all the impact of markets—because otherwise we might be bolstering up something which in fact the consumer does not necessarily want.

Now the Minister of Agriculture has given us several assurances. The first assurances were negative—that this would not be done and that that would not be done. I should like to remind the House of them, if your Lordships will bear with me. The first was that the Government would not take into account, when fixing guaranteed prices for pigs after the Annual Price Review, either the loss of revenue to the Exchequer arising from the removal of the tariff on bacon, or the reduction in the market price caused by the tariff change. That was certainly an assurance which was welcomed by the industry; but we have contended that it did not go as far as was necessary to redress the downtrend in the breeding herds. He went on with a further assurance, saying: There is nothing in the Agreement…which provides for compensation in our market for any possible diversion of trade with Western Germany or other members of the E.E.C. That is a prudent assurance which he should give the industry—that we are not to create automatically in this country a market for what was denied, perhaps, to the Danes by the Western Germans because in fact they were associating themselves with the Outer Seven. That is very encouraging. Then he said: There is nothing in the Agreement…which limits the Government's right to take account of all the relevant factors at the annual review"— again, a very helpful assurance. Finally: The Government have no intention what soever of doing anything which will conflict with their obligations to home farmers. Those were assurances, which, on the face of it, were of a negative nature; and I believed it was absolutely vital that the industry should be reassured so that the downtrend in pig-breeding would be halted. And the Minister in another place in fact gave the assurance which Lord Silkin has already referred to in the House; that there would be no change downwards in the price at the next Price Review, and that the precise price would be determined after examination of all the relevant factors. Thank heaven that can only mean revision upwards, if revision there is at all! But the reassurance given in the Minister's remarks about production ought also to go some way to help the pig producers to realise that it would be fatal to go out of business and therefore give the market on a plate to our competitors overseas. At the same time, I feel that we must encourage the producers in the belief that they will not be let down by having a cut-back in the price because they show inclinations to expand. That sort of positive lead is, I believe, vital if the pig industry is to play its full part in the national well-being.

There is one final word that I should like to say to your Lordships, and that is with regard to the bacon industry as such. Quite frankly, I do not despair, as some people do, of our ability to compete with the Danish product. There have been very definite technological changes going on in the curing industry in this country. For instance, we have here the benefit of 52 million consumers on our doorstep. I believe that it is necessary for the pig-curing industry, for the pig-processing industry, to be always conscious of that, and to be able to move, with flexibility, between the fresh pork market and the bacon-curing market as the markets dictate and demand. One of the interesting things has been the development of the manufacturing processing business in this country. What we are told is that the impact of the television knee-tray has caused a change in consumer habit and demand, because the husband does not want to turn his back on the television in order to sit up to the table for dinner, and the wife does not want to go into the kitchen to prepare it. So they have it pre-prepared; and pre-packaging has helped to develop the manufacturing business so far as pig meat is concerned. It might be said by some people that we have for too long worshipped at the altar of what we call the Wiltshire cure, and that a greater versatility within the industry is called for. I believe that the enlightened curers are already moving steadily in that direction; and if they develop the technique of curing in the pre-pack, then the competitive advantage which may have been held by the Danes will be by no means as great—that is, if those technological advances proceed at the pace which would be apparent from my own knowledge and experience of the trade. I believe, therefore, that if we can first attain, and then maintain, the stability which the pig industry needs so much, it will yet have a tremendous contribution to make to our national well-being.

6.27 p.m.

THE DUKE OF ATHOLL

My Lords, it is my very pleasant privilege to be the first to congratulate the noble Lord, Lord Netherthorpe, on his quite remark able maiden speech. I am sure I am speaking for all noble Lords who have had the privilege of hearing him when I say how much we enjoyed it, and how much we hope that in the future he will speak to us frequently, not only on agricultural matters, but on other, wider, issues.

We also owe a debt of gratitude to the noble Lord, Lord Silkin, for the very moderate speech which he made; and I must say that I found it most interesting. While I had slight qualms about the phraseology he used on the Order Paper, I thought his speech did a lot to rectify this. I was particularly interested in his suggestion that the Government might be encouraged to make it a condition of this Agreement that we should be able to import some Danish Landrace pigs. I fully support him on that point, and I am sure it would go a long way towards helping our bacon industry. I think it is a pity that he has worded his Motion in quite such a narrow way. I feel it is rather like eating the skin of an orange and throwing away the inside; for, as I think we all realise, the Danish Agreement as such does not benefit this country to the extent that it might do. It is part of a scheme to form an Outer Seven free trade area, and for this reason we have had to concede (as I think it might be described) some points to Denmark in order to get our way with the other countries.

This Agreement is going to cost the Exchequer some £6½ million in loss of tariff alone, not to mention the increased cost of the subsidy; and for it we are, on the face of it, as I think everyone agrees, receiving very little. But for the Outer Seven to be a success, it was essential to get Denmark in, since her ties with the other Scandinavian countries are so close that we should not have been able to get them to join unless we had come to some form of agreement with Denmark. Ninety per cent. of Denmark's exports to the United Kingdom are agricultural, and if she was going to throw open her borders to our industrial and manufactured goods, I think she had a right to expect us to make some concession with regard to her agricultural products. Futher, I feel that the removal of the tariff on bacon was a concession that we could well afford to make, because, on the whole, bacon is not a big Common- wealth produce, and it would not upset to any marked degree our system of Imperial Preferences with the Commonwealth. In a general Agreement of this kind, it is obviously impossible for everyone to benefit, and no doubt among the sufferers will be industries; such as the paper-making industry.

The words of the Motion are that …disastrous consequences…will result to the pig industry in this country if the proposed withdrawal of the duty of ten per cent. on the import of Danish bacon and pig meat takes place; I feel that I cannot agree at all with the words of the Motion. I should declare some small interest, in that I am a farmer, though I am not a pig farmer as such. There seem to be three reasons why pig farmers are worried about first the reduction and then the eventual elimination of the 10 per cent. tariff. They feel that the price of bacon in this country will drop, and therefore the price they get will eventually drop. They feel that the guaranteed prices of other products may be slashed in order to pay for the increased cost of the subsidy on bacon. They feel that the Danes may try to dump bacon in this country, if the West Germans should cut down on their imports owing to the formation of the Outer Seven free trade area.

The first, I think, is a false fear. The Government have given guarantees that the guaranteed price will not be reduced next year and will not be affected by any increased cost in subsidies. While I think it is probable that the price of bacon will fall, there is a great difference between Danish and English bacon, and I feel that the housewife will go on paying more for English bacon and thereby getting the better quality. Incidentally, this tariff, when introduced in 1956, as the noble Lord, Lord Nether-thorpe, said, was described then by pig farmers as a token affording little protection, and I think he would support that view now. The second fear of prices being slashed is, I think, a slight one. Obviously, the Government will be worried by the increased cost of subsidies, and although they have promised not to take that into account with regard to the bacon guaranteed minimum price, they have not promised, so far as I know, not to take it into account with regard to other farming prices when the next Price Review comes up. I feel that if we had an assurance that the extra cost of the subsidy—which will presumably amount to about £6 million, as home bacon production and Denmark's production are much the same—will not be taken out of some of the other agricultural guarantees, it would make us all happier.

Thirdly, on the fear of dumping owing to the loss of the West German market, it seems to me that the Danes should be more concerned about that than us. I was interested to read the other day that Mr. Krag, the Danish Foreign Minister, in introducing this identical tariff agreement in the Danish Parliament, said he had received the assurance of the West German Government that Denmark's trade would not suffer if she joined the Outer Seven. So I feel that it is unlikely that Denmark will suddenly be robbed of her West German market for bacon. Also, Her Majesty's Government made it clear in the course of these negotiations that they were bound by the 1947 and 1948 Agriculture Acts.

There are two other points worth noticing. The number of pigs produced has been falling for two years, and of this falling number only one-third now goes for bacon. The rest go to the less exacting, but equally profitable, pork and processing markets, which have grown enormously in the last three or four years, as the noble Lord, Lord Netherthorpe, said. I feel that if the amount of bacon going through the curing stations falls—I should like to make it clear that I do not know how it affects the curing stations at all; I know nothing about them—it would be due more to this trend continuing than to the effect of tariff removal. The demand for bacon is also very in elastic, and even the smallest increase in production tends to depress the price unduly. I think that the Danes fully realise this, and that they would much rather keep the price at its present level and make a profit from what they sell, than try to flood our market with cheap Danish bacon and make a loss. Like our own bacon farmers, they are working at the moment on a very slender profit margin. I do not think it is in their interests to try to cut the price of bacon to such an extent that their profit margins are virtually nil.

To sum up, I think that the Government have done all they can to reduce the blow of this necessary step, providing one accepts the formation of the Outer Seven free trade area. I think that their undertakings about the guaranteed price, and about not taking into account the loss in tariffs and the increase in subsidy in the price of bacon, are very satisfactory; and if they could say also that they would not take into account the increased subsidy on bacon when fixing other guaranteed prices, I think that it would make us all more happy. I feel, therefore, that the Government are to be congratulated on these negotiations and on not losing sight of the wood for the trees.

6.37 p.m.

THE EARL OF KINNOULL

My Lords, I should like to be the second to congratulate the noble Lord, Lord Netherthorpe, on his immensely powerful and informative maiden speech, and to take this opportunity to say how glad the agricultural industry is to have such a powerful spokesman in your Lordships' House. I trust that he will make many more speeches in the furtherance of agriculture. I read the other day that when the then Lord Herbert was asked what his reaction was to addressing your Lordships' House, he replied "It was like addressing sheeted tombstones by moonlight." I only hope that the same will not be said by the noble Lord, Lord Netherthorpe.

I should like briefly to draw your Lordships' attention to two points. The first is the present guaranteed price system. If the Minister really intends to instil confidence into this at present tottering industry, the bacon industry, he should not only state that the present support prices will remain; he should also guarantee a margin of return to the producers. As the importation of Danish bacon will no doubt increase, more and more home producers may well have to rely on these support prices. I should like to suggest the following possible alternatives. First, I would suggest that the Minister should either raise the present guaranteed price to secure a just return to producers; or secondly—which I feel the more likely alternative—he should do away with the various classes of grading and replace them with just grades A and B. Grade A should be set at a standard of carcase quality at which a reasonable return above the cost of production would be guaranteed to the producer. Grade B would be any carcase below the standard but within the limit eligible for guaranteed price at the moment. I feel that this would reassure producers of a safe market and also encourage the standard of efficiency so much required.

The last point I should like to deal with is that of the small producers, who are the most vulnerable of all in this industry. It appears that bacon producers can be divided into three classes: first, the large producers, who have sufficient resources to ride most storms; secondly, the speculators, who appear to be moving out of the industry pretty rapidly at this moment; and lastly, the small producers. Since the pig industry lends itself to intensive farming, it is natural that the small men should form the largest proportion of producers. If the effect of the 10 per cent. tariff forces farmers to rely more on the guaranteed prices, the small farmer has the choice either of selling up, and so losing much of his hard earned capital, or of carrying on and accepting a lower standard of living. Many of these producers sell to the pork trade, so gaining a quick turnover. It is quite possible that, due to an influx of Danish bacon, others will turn to the pork trade, and consequently the pork trade will suffer. I therefore implore the Government to watch this position and to hold to the words of the Minister the other day, that no pig producer will lose one penny in consequence of the reduction of the 10 per cent tariff".

6.41 p.m.

LORD BROCKET

My Lords, in racing parlance, I feel very honoured to think that I have a place in the race to congratulate the noble Lord, Lord Netherthorpe, on his maiden speech. Having been in this House for nearly twenty-five years, I have heard quite a number of maiden speeches, and I must say that I do not think I have ever heard a more powerful or effective one than Lord Netherthorpe's. It gives me great pleasure to congratulate the noble Lord on that speech. But his fame is much wider than in this House, because about a week ago I was having a lot of trouble with my telephone and I was receiving wireless broadcasts on it by mistake. I live near Brookman's Park. The noble Lord, Lord Netherthorpe, happened to ring me on the telephone, and while I was talking to him the religious broadcaster on the wireless started saying: We like sheep have gone astray. They must have realised that the noble Lord was telephoning in the district.

To come to the Motion before us this afternoon, I hope that the noble Lord, Lord Silkin, is not right in thinking that there may be disastrous consequences. I know that he, like myself and many others, produces pigs, or, at any rate, rears pigs for sale, and we none of us want disastrous consequences. But I feel that we must try to analyse this question of the consequences. One consequence will be—and it may or may not be disastrous—that the taxpayer will have to find the £7 million or thereabouts represented by this 10 per cent., which presumably has been found in some other way up to now.

In June, 1931, I fought a by-election, and, as the noble Lord, Lord Netherthorpe, has reminded us this afternoon, the policy then was: Britain first, the Empire (as it was called in those days) second and foreign countries third. After that, in 1932, the Ottawa Agreements which largely depended on tariffs, were brought into operation. Tariffs now seem to be an unpopular form of dealing with these matters. On the other hand, there is quite a lot to be said for them even now, and the noble Lord, Lord Netherthorpe, said (and I use his words) that "the trading policy of this Government has been more liberal than that of any of its predecessors" I think that that is quite true. It rather worries me whether we may not have rushed into this removal of the 10 per cent. tariff rather too quickly. I know that if you are dealing politically or in business with astute politicians or astute business men—and I think I can classify the Danes as being astute politicians and astute business men—you have to be most careful, and I hope it is not the case that we have rushed into this too quickly. I feel that when negotiating in these matters one probably has to go rather more slowly and put up more of a fight than it appears Her Majesty's Government have put up on this occasion.

Noble Lords seem to have been declaring their interests this afternoon. As I have already said, I am a pig producer in this country; but I am also a farmer in Ireland, particularly in milk, beef and arable crops. At the present time I have no pigs in Ireland, because, quite frankly, the position there has been somewhat doubtful and rather difficult. But I should like to say a word or two about Ireland as being affected by the British market in pigs, and also by the removal of this 10 per cent. duty. It must have a deleterious effect upon Irish imports into this country of pig-meat, and that may make Ireland less prosperous and will perhaps have a resultant effect on Irish imports into this country of store cattle, on which we depend to a considerable extent. In that connection, I have a herd of roughly 350 cattle in Ireland, and I have lately become attested, as other farmers are trying to do, in order to keep the market for store cattle. I hope that the attestation scheme—or the accreditation scheme, as it is called—will go ahead and be completed as soon as possible, although it is only right to say that in this country it took nearly thirty years to get to the position which we have now achieved. In that case, also, I am being instrumental in hoping to have a new mart (your Lordships will know what that means) on my estate for attested cattle only, and those cattle will be sent straight to the ships and to Britain without any chance of infection.

In 1958 Ireland was; the second largest European exporting country to this country; and before 1958 the Republic of Ireland was the first country. In 1958 Britain exported £109 million worth of goods to Ireland, and, incidentally, imported from Ireland £109 million worth of goods—in other words, pound for pound. Western Germany, in 1958, exported to this country £123 million worth of goods, and, therefore, beat Ireland in that year, although Ireland had been the premier country for the export of British goods before that. I hope that that will not all suffer owing to this agreement, and I trust that the negotiations which are going on between the Irish and the British Governments will be successful for both countries. But I have great fears, as I have said before, of this 10 per cent. cut in the tariff.

I do not intend to say much more, but I would say that farmers, as the noble Lord, Lord Netherthorpe, will know, are not like sheep who go astray. But they are like sheep in one way, and that is that when they know of a good thing, they follow it. You can always get farmers to go in for broilers, pigs, wheat, barley or whatever you like by weighting the price a little. They will go to the market and meet their fellow farmers, as I do; and certain pig buildings I know have now been converted into broiler houses in order to make profits out of broilers. If this happens, and if confidence among farmers is broken by such an event as the removal of this 10 per cent. duty, you will find that they will go out of pigs and into broilers as quickly as possible, and you will lose your production of pigs in this country. That is why I think confidence is absolutely essential. I only hope that if the Government, and particularly the Minister of Agriculture, have not already done all they can to restore the confidence which may be shaken by the removal of this duty, they will do so.

It has always been said that pigs are either muck or money. That may be a Yorkshire expression, where the noble Lord, Lord Netherthorpe, comes from—it sounds very much like it—but it is a fact. The ups and downs of the pig industry have never really been conquered by marketing schemes, tariffs, guaranteed prices or anything else. You always seem to have this up and down in pigs, and the fact that they breed quickly and have large litters seems to make those ups and downs even steeper than they would be otherwise. Therefore it is essential, from the point of view of this country and of pig production in this country, that every confidence shall be given to the pig industry. For that reason I think it is an excellent thing that the noble Lord, Lord Silkin, has brought forward this Motion to-day; and I am glad he has used the word "disastrous", because I hope that the Government will be able to assure us that there will be no disaster.

6.50 p.m.

LORD BOOTHBY

My Lords, if this debate has served no other purpose it has given us, as my noble friend Lord Brocket said, a most remarkable maiden speech from the noble Lord, Lord Netherthorpe. Between us, the noble Lord, Lord Brocket, and I have been Members of both Houses of Parliament for quite a long time, and I think it was certainly the most remarkable maiden speech that I can remember. I hope the noble Lord will talk to us a great deal on other subjects besides agriculture. I know that he is an expert on agriculture, but I have always had a suspicion that he is an expert on a good many other things as well.

I am not going to detain your Lordships for any length of time at this late hour. As both the noble Lord, Lord Netherthorpe, and my noble friend Lord Brocket indicated, you cannot fairly see this Motion of the noble Lord, Lord Silkin, purely in the context of pigs. I shall spend a brief period in the sty, but I must get out of it for a moment or two at the beginning and the end, because it really has to be seen, if we are to take a sane and reasoned view, against the background of our whole trade policy with regard to Europe. In my submission, that has been rather a sad story ever since the war. As some of your Lordships know, I was a member of the Council of Europe for ten years, and we had a great chance of taking the lead in the development of a reciprocal trade in Western Europe, of which we were at the end of the war the undisputed leader, and I think we missed it.

At the end of the war productive capacity was at a low ebb. The coordination of investment plans and the division of labour and specialisation would have raised productivity and greatly benefited the under-developed countries in the world. We did not touch any of it. At the time of the Marshall Plan we would not even consider planned international investment on a large scale. We refused even to participate in the discussions which led to the formation of the Iron and Steel Community; and, finally, we rejected what became known as the Strasbourg Plan, which directly affected agriculture and was designed to harness the industrial resources of Western Europe to the raw material resources of associated overseas territories, and by providing assured markets for both, to expand the production and trade of the whole. Also included were what the noble Lord, Lord Netherthorpe, has referred to as international commodity schemes which, if they had been put into operation at the time, would have been of enormous benefit, not only to this country but to agriculturists all over the world. For this policy of insulation—and I can only call it that—both Labour and Conservative Governments since the war have been responsible. We have paid a heavy price. The Common Market Treaty, for example, is an inevitable consequence. It came to Her Majesty's Government as a great shock, just as the equally inevitable rejection of the E.D.C. Treaty did. Once again they had to hustle, and this time they hustled into the proposal for a Western European Free Trade Area without giving sufficient consideration to the practical difficulties involved.

Now we have this projected European Trade Association, the Seven-Power Association, which is really the main subject of the Motion, between Britain, Scandinavia, Austria, Switzerland and Portugal. I myself think this is much more hopeful and much more practical. As one of your Lordships has already pointed out, the total imports of these seven countries amount to £3,000 million a year, and our exports to them to £350 million. This is not far short of the Common Market total of imports; so the opportunities of expansion are very great and we all stand to gain on them. Somebody, of course, may have to suffer a little. I was amused by the noble Viscount, Lord Elibank, speaking from the Liberal Benches earlier to-day, who complained bitterly of the fact that the paper importers, I think it was, might have to suffer from any form of free trade. This was from the Liberal Benches! The Liberal idea of free trade is that nobody should suffer at all. That is the great Liberal idea—that if you have free trade it is fine, so long as nobody suffers at all, except the other chap. Unfortunately, that, is not a practical proposition: somebody has to suffer a little.

I do not think—and I say this perfectly sincerely, as one who represented an agricultural constituency in another place for 34 years—that pig producers in this country are going to suffer as gravely as the noble Lord, Lord Silkin, suggested. After all, they are still protected by the guaranteed price. The deficiency payment on a seven-score pig is running to-day at just over £3, and if the pig is a good quality baconer there is an additional bonus of 3s. a score, which increases the deficiency payment to over £4. I do not think—and I am sure the Minister may give some reassurance on this score—that the Minister's statement that he would not alter this deficiency payment at the next Annual Review applies merely to the year 1960. I believe it was intended as a general guarantee, as an assurance to pig producers in this country as a whole that, by and large, without committing himself to a specific figure, the guaranteed price to the pig producers of this country would be maintained at its present level.

I should like to ask noble Lords on the Opposition side of the House this question. Why should not the British housewife have the advantage of Danish bacon, which is jolly good bacon, at a slightly cheaper price? I do not think it is going to undermine our own pig producers, and I think we should remember that for about a century Danish pig production has been geared to the British market. The noble Lord himself said that the Danish landrace pig was the best bacon pig in the world. We know it is. That, I think, is one thing we might try to get out of this Agreement. If only we could get our hands on that Danish landrace pig we should do pretty well. If we could persuade the Danes to let us have some of them in exchange for this abolition of the 10 per cent. tariff, that would be worth doing, because they are pretty careful not to let it go to anybody else.

Nevertheless, I still think that if the pig producers of this country are given the guarantees which have been promised by Her Majesty's Government, we ought to allow the British housewife to have Danish bacon at a reasonable price, and I am slightly astonished at the reluctance of the leaders of the Labour Party to accept that fact. When I heard the noble Lord, Lord Silkin, speaking, I wondered what the late Lord Snowden, who was the most adamant free-trader I have ever known, would have thought of what he was saying. I cannot think he would have approved in any shape or form. He was for free trade right out almost to the end. Whoever suffered, went down. He was no partial free-trader, like the noble Viscount. Lord Elibank. He was no free-trader who believed that nobody should be hurt. He was for free trade with the maximum amount of hurting to everybody concerned all round.

Under the 1947 and 1957 Acts the farmers are protected, as I know the noble Lord, Lord Netherthorpe, will agree, by guaranteed prices; and they are encouraged also by production grants which, in my opinion, should be increased for the small man. I think that is a very encouraging development. But let us be clear on one point. The bacon tariff was introduced in 1956 to give the Exchequer the necessary revenue to offset the subsidy payment to the pig producers. That is why they put on this 10 per cent. tariff. In fixing the guaranteed prices for pigs, Her Majesty's Government have now said that neither the loss of revenue nor the fall in market prices due to the removal of the tariff will in future be taken into account. Therefore, in my submission, we are back where we began, and I suggest that £7 million-odd is a small price for the British taxpayer—not for the producer, but for the taxpayer—to pay for admission to this Free Trade Association.

That being said, I quite agree with what several of your Lordships have pointed out, that it is an illusion to suppose that the economic problems confronting this country can be solved by a mere reduction or abolition of tariffs. It is good so far as it stimulates competitive enterprise, but by itself the mere abolition of tariffs is a negative policy. They are only one part of the arsenal of economic weapons, and common policies in wider fields are their necessary counterpart. A little earlier we were talking about the question of the arrangements with regard to fish in connection with this Seven Power Agreement. If, for example, we could get agreement about the conservation of fish in the North Sea, that in itself would be a tremendous step forward as part of this general Agreement. I therefore hope that these arrangements will be extended beyond the range of tariff reductions only and beyond the range of the seven countries alone.

Quite frankly, I should like to see the Commonwealth countries brought into this general association at a later stage. We have been careful to safeguard their interests in the arrangements that have already been made, but let me give your Lordships one example of the point which was raised by the noble Lord, Lord Netherthorpe—I refer to commodity agreements, which I think are so vitally necessary in the world to-day and so much more important, in the long run, than mere reductions in tariffs. Take butter, for example. The world demand for exports of butter is almost equally met by Australia and New Zealand, on the one side, and by Denmark and Holland on the other, while we are the main importers. There have been tremendous fluctuations in the price of butter in recent years, as there have been in the price of bacon. Can you see any argument, therefore, against the regulation by international agreement of supplies of butter to the London market, designed to stabilise prices for the benefit not only of the producers of butter but also of the housewives of this country? I think that is the way we ought to be thinking, and it is because I think this Seven Power Agreement points in that direction that I am so much in favour of it. The adhesion of Switzerland, with her great international reserves, is a tremendous asset and will give us great additional strength, because we must remember that Switzerland has not hitherto adhered to these European organisations, neither to the Common Market nor to the Council of Europe.

I hope we shall move on from this to a relaxation of currency restrictions, perhaps to a more flexible exchange system, to a clearing union designed to help countries in temporary balance-of-payments difficulties, and to planned international investment in underdeveloped countries. Then, and only then, shall we be able to negotiate with the Common Market from a position of strength and heal the present disastrous economic division of Europe into the Six and the Seven. I firmly believe that this Seven Power Agreement will have no less an advantage than that in the long run: that it will enable us to negotiate with the Common Market in Europe an agreement which by ourselves we could never have hoped to do.

I believe that three broad choices confront this country: first of all, a return to the laissez faire multilateral system of the nineteenth century, despite the prevailing economic disequilibrium and shortage of liquid reserves in the free world; secondly, a relapse into complete national economic autarchy; thirdly, the creation of new patterns of reciprocal international trade, including not only the reduction of tariffs but international commodity agreements of the kind suggested by the noble Lord, Lord Netherthorpe, by means of effective economic co-operation at every level between the various groups of countries. It is because we are at long last embarking on this third and most promising course that I hope that nothing will be done in either House to impede it. I am sure the dangers confronting the pig producers are not so great as the noble Lord, Lord Silkin, suggested, and I am equally sure that the long-term advantages of the proposed arrangements are incalculable.

7.5 p.m.

LORD WISE

My Lords, we are now coming to the end of the second chapter in this discussion, and time is going on, so I do not propose to detain your Lordships for very long. First of all, I want to add my very sincere congratulations to my noble friend, Lord Netherthorpe, for his masterly speech. I endorse everything which the noble Lord, Lord Boothby, said about it a moment ago. We welcome him to this House. We welcome him for his agricultural knowledge, for his character and for his work over many years in the interests of the farming community. I am certain that whatever he tells us in the future will be for the good of the industry, and we on this side of the House, and I think on all sides of the House, will be very pleased whenever he rises to address us.

I do not want to follow the last speaker, the noble Lord, Lord Boothby, in what he said, but I was rather intrigued by his reference to the British housewife having what she required. I want to take him up on a little episode which happened to me over the week-end. It was my privilege to be in Cheshire at the All-England school sports, where 2,000 of the pride of our youth were engaged in their athletics and in their competitions. In a small country town in which I was staying, after dinner one evening I walked round to look at the shops. I found one building which I discovered was the divisional headquarters of the Conservative Association, with the usual placards of "Living is Better under the Conservatives"; on the other side of the street I looked in a provision shop, and I was astounded to see what the British housewives were expected to eat. In that window were the following tinned goods: Spam, the product of the Republic of Ireland; chopped pork in natural juices, the product of Poland; Danish chopped ham; Ma Ling's ready cooked pork from China (no mention of Formosa, so it must have been from Red China); and sundry tins of meats from America. But if the British housewife was not satisfied with that table array, there were plentiful supplies of Kit-E-Kat.

LORD BOOTHBY

NO herrings?

LORD WISE

No herrings and no snoek.

I want to congratulate my noble Leader on an extraordinarily masterly speech. He spoke from experience and he spoke with conviction. I must judge this settlement entirely from an agricultural standpoint—that, with me, is only natural. I am concerned, as we have all been this afternoon, with the prosperity of our agricultural industry, with restoring the confidence which it is losing and with establishing a better stability. With regard to the Agreement, it has been suggested by one or two speakers to-day that the timing has been inopportune. I am wondering why there has been such a hurry. I should have thought that it was right and proper that a change which is going to create great difficulties within our primary industry should have been the subject of some discussion in both Houses before the Government decided to enter into this Agreement. Apparently, the thing is an accomplished fact, and all we can do now is to examine the statement and assess its implications; and its probable results on our pig-breeding industry.

First of all, I want to refer in the presence of the President of the National Farmers' Union to some reactions created by this settlement in his own Union Only yesterday I received a copy of my local paper, which is not unknown to Lord Amherst of Hackney opposite. There I saw that various well-known farmers in the district, pig producers and others, were showing a good deal of hesitancy as to the result of this Anglo-Danish pig agreement. May I read a few extracts from the Press cutting? The chairman, who is a large farmer in the district, said that he was not impressed by the fair play assurances from the Minister of Agriculture to National Farmers' Union headquarters in London, and he went on to say: Although we must accept the Government's assurance we should accept it for what it's worth and with concern. That is a pretty drastic sort of statement to make. According to the cutting, another speaker said that undoubtedly this was a very, very serious situation, and that if the home pig industry did suffer people would no doubt look to other sections of farming for their livelihood. Well, we shall do that, because we in the farming industry generally show adaptability, and we are rather inclined if we lose on the roundabouts to try to get back on the swings. The same speaker said that the Danes want us to get out so that they can get in. It is up to us to fight this job. That is what we are trying to do to-day on this side of the House. So I could go on, but I do not want to weary the House.

One well-known farmer said that he thought this was a dangerous agreement which had been made; that undoubtedly the Danes would step up their pig production. I have no doubt whatever that with the benefits that they will receive from our markets they will step up production to the detriment of our own products. The Minister and the Government speakers are inclined to refer to the guarantee. I only wish that the guarantee and deficiency payments were in every case paid to the producer. At the present time I believe that that is not a fact. Whether or not the producer receives the full credit for the guarantee is uncertain, and from my own point of view I think that, as in the livestock markets, the producer in the dead weight sales should be in direct contact with the Government for his payment.

LORD BOOTHBY

May I ask the noble Lord one question, because I think it is important? Is it his considered opinion that the British housewife should be denied the opportunity of buying first-class Danish bacon at a cheaper price than she gets it to-day? I should like an answer to that question.

LORD WISE

Well, I do not want to deny the British housewife the purchase of first-class Danish bacon; but from my own point of view I would rather have the British housewife buying British bacon. Let me go on with the little episode about which I was speaking a moment ago. Over another shop in the same town, a butcher's shop, there was inscribed "Home cured bacon". That pleased me much more than my looking in at the shop where the foreign goods were on sale.

As noble Lords have already said, there is no doubt that the pig industry in this country has suffered more ups and downs in the past than has any other industry, and I think it is high time that we take whatever steps we can to stabilise it. The statement in regard to the settlement seems to fall far too much on the side of the Danes. I can find no suggestion at all in that settlement of any material benefit other than to Denmark, as indeed the statement says. I personally cannot find that: the British farmer is likely to gain at all. Therefore, I wonder why, in coming to this particular settlement—I take it that it is the first between the countries concerned—British agriculture has been singled out for the first operation. There is no evidence in the settlement that the export trade of this country to Denmark will increase. There is a suggestion that reciprocity will take place, but there is no guarantee at all that the Danes should take our manufactured goods in exchange for the additional agricultural products which will be sent in, not only of bacon but of three other products which are mentioned in the settlement.

LORD BOOTHBY

There is no guarantee on either side. We do not guarantee the Danes.

LORD WISE

It may be that there is no guarantee; but there is no suggestion that these products will not be imported into this country, and under this Agreement when it comes into operation in two years' time I can envisage a good deal of dumping into Britain.

LORD BOOTHBY

My Lords, I must interrupt my noble friend. Equally, there is no suggestion that our products will not be imported into Denmark. That is the object of the whole exercise.

LORD WISE

Well, as we are more or less giving a guarantee to the Danes, I should like to see a similar guarantee from the other side. Now there is a suggestion in the statement in regard to dumping, and I should like to hear from the Minister in his reply that steps will be taken under the appropriate Act—I think it is the 1957 Act—in regard to dumping. Because I feel that unless we can, in some form or another, protect our British farmers against uncertain or increasing importation of products in competition with our own, we shall suffer. I should have liked also to hear from the Government as to what action they have taken in this Agreement in regard to the Commonwealth. There is a reference in it to the fact that the Commonwealth have been notified as to steps taken, but there is nothing to suggest to us that the Commonwealth are in accordance with the terms which have been agreed with Denmark. I hope the views of the Government as to the effect upon British agriculture will be expressed. They will no doubt tell us that we shall not suffer in regard to our products. I hope that may be so: but personally I view the Agreement with a great deal of, not perhaps suspicion, but uncertainty, and I hope that my fears and the fears of the agricultural community will not come to pass.

7.22 p.m.

THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (EARL WALDEGRAVE)

My Lords, I am sure all of us are grateful to the noble Lord, Lord Silkin, for having raised this matter to-day and for the extremely interesting debate we have had on the high level one would expect from this House when farming is being talked about. It gives me an opportunity of saying what I wanted to say in this House: that the Government want to see a stable and efficient pig industry in this country and are confident that the removal of the tariff will not prejudice this objective. I nearly forgot—because, as an "also ran", to use Lord Brocket's racing parlance, I should like to say my own word about the great maiden speech we have heard. I was searching for adjectives. I thought of "massive", "masterly", "powerful"; but for me it was helpful, and that was the adjective I settled on.

The noble Lord, Lord Silkin, in his very closely-argued opening speech really was too pessimistic to my mind. I should declare an interest. He and I have one thing in common: we both produce a large number of pigs. We have more than one thing in common——

LORD SILKIN

We both make a loss.

EARL WALDEGRAVE

But I do not share his pessimism in this matter and I fear very much that the terms of his Motion may rock the mutual boat we are both in, and I am not happy about that. I think he said "No pig farmer is able to get a reasonable return on his capital or reasonable personal reward unless he can absolutely beat the standard price." I am sure that that is a great exaggeration. He cannot live on the minimum. Lord Netherthorpe, with greater expertise than I can hope to have, went into the guaranteed price and the minimum price and I will not do that again. The other point is that Lord Silkin is over-pessimistic in his whole concept. You cannot say in one breath, as the noble Lord said, that British farming is one of the most efficient in the world and then go on to say that we can never beat the Danes at farming.

It would be a great help to get imports of the Landrace pig but I do not think we can do that in the near future. But I am quite sure he was over-pessimistic in saying there is no hope against the Danes. We have good dairy farmers who can feed whey and skimmed milk to pigs. We are all agreed that the establishment of the Outer Seven Trade Area holds out great opportunities for the country, and we know that we cannot work in isolation here or leave agriculture out. We sincerely hope that this Free Trade Area of the Seven may be the bridge to even wider associations. Noble Lords will have ample opportunity to state their views on this subject in next week's debate when the noble Earl, Lord Swinton moves his Motion. I think that some of the points of the noble Lords, Lord Brocket and Lord Boothby, will no doubt be raised again by them and others in that debate.

One point I want to stress to-day is that to achieve this Outer Seven Free Trade Area we had to have bilateral discussions with the Danes. They are not an industrial nation; they are primarily an agricultural exporting country. Sixty per cent. of their exports are agricultural and 35 to 40 per cent. come to this country, and there had to be bilateral talks with the Danes. We could not reasonably expect them—and this is the point Lord Wise does not appear to appreciate—to lower tariffs to our industrial goods without coming to an agreement on their agricultural exports. But—and this is the point—we took the utmost care to ensure that the tariff concessions that we were prepared to give were not going to conflict in any way with the obligations we have as a Government with the United Kingdom farmer and, of course, with the Commonwealth. It was because we were able to find a way of doing that that we were able to make an agreement with the Danes. The noble Lord seems to think that the negotiations in Stockholm and with the Danes were to be for the benefit of the other countries. This is a misconception. There are mutual benefits. All of us stand to gain.

What is anyone likely to lose if this bacon tariff is removed? It is certainly going to cost the taxpayer the actual amount of the tariff—about £6¼ million. There may be some additional burden arising from any increase in the Government assistance to our own pig producers. But of this we are confident—as the noble Lord, Lord Boothby, brought out—that the price which the general body of taxpayers has to pay in this matter is going to be far more than offset by the general and increased prosperity that this wider area of free trade association will bring to the whole country. Our pig producers are secure under the long-term guarantees of the 1947 and 1957 Acts, "by which", as we have told the Danes, "we are bound". I think it is important to remember these words. There was no equivocal language used. The words were "by which we are bound" and the Danes agreed and accepted that. It was plain English.

I need not remind your Lordships of the other assurances by the Government given since this agreement, because Lord Netherthorpe gave them in extenso. But I should like to remind your Lordships of what the noble Earl, Lord St. Aldwyn, said in this House a fortnight ago, because we have to bear it in mind in the context of the whole matter [OFFICIAL REPORT, Vol. 217, col. 955]: …the Government will not take into account, in fixing the guaranteed price for pigs, either the loss of revenue to the Exchequer arising from the removal of the tariff on bacon or any reduction in the market price caused by the tariff change,". That assurance was given in this House. And, my Lords, we really must not confuse the tariff concession to the Danes, which does not come into operation until July, 1960, with the present or prospective level of pig production, which is taken care of by our guaranteed price system. Let us keep this matter in proportion. What are we talking about?—a 10 per cent. reduction of tariff over two years and a Motion that says that disaster will flow from it. I have to say I am sorry that the noble Lord thought it was proper to use such strong language.

Let me take those two points separately. We are not removing a prohibitive tariff wall over which it has not been possible for importers to climb until now. The noble Lord, Lord Netherthorpe, referred to that point and used the word "penal" tariff. We have not a penal tariff now. The price of bacon in the wholesale market fluctuates. The problem would be simpler if it did not; but we have to face facts. The price fluctuates, and fluctuates by far more, I would tell noble Lords who do not already know it, than 10 per cent. on the wholesale price. We are concerned about this; we do not desire these fluctuations. That is why we have this complicated structure which the noble Lord, Lord Netherthorpe, was telling us about, of the stabilising limits, about which, at this late hour, I am sure noble Lords do not want me to go into detail. But they are a genuine and good attempt and endeavour to meet these undue fluctuations which no one wants to see. Can it be seriously said that in a market which is, unfortunately, used to these very wide fluctuations the removal of a 10 per cent. tariff, which has been in being for only a small number of years, is going to lead to disaster? Notwithstanding all the moderate and mild speeches we have heard this afternoon, what may go out of this House is the terms of the Motion on the Order Paper, which is that this 10 per cent. reduction is going to lead to disaster.

That brings me to the second point in the terms of the noble Lord's Motion. It does not express anxiety or doubt about possible ill-effects. Those would have been words I should have welcomed wholeheartedly, because they are reasonable words we can discuss; but it says that disaster will follow. My noble friend Lord Amherst of Hackney, who has had to leave his place, made this point and I was glad that he did; and no doubt the noble Lord will come back to it in his reply. But it is this kind of phraseology that, taken out of its context and used by unscrupulous persons (and there are such persons) or ultra-nervous persons (and there are such) can really do harm and create alarm and despondency. The only real danger I see in all this arrangement and the publicity that has been given to it is that confidence could be undermined. That would lead to a reduction in the breeding herd; and that, in turn, would lead to a reduction in the flow of pigs for the farms, which might be serious.

I do not burke the question. I readily agree that removal of the tariff presents a challenge to the bacon curers, but it is a challenge which I am quite sure they are going to be able to accept. I am not sure that it will be quite so serious as some people would like to make out, because I agree with the noble Lords who have said that it is unlikely that the Danes will take steps to knock the bottom out of their own market. If the market collapses they are going to suffer; they have not such guarantee arrangements as we have; and I think it is much more likely, as the noble Lord, Lord Netherthorpe, said, that the Danes will continue to study the market situation in our country, and throughout the world, through the Bacon Consultative Council, in which they have always worked since its inception. Started largely at the inspiration of the National Farmers' Union, that Council has done most valuable work in exchanging information about market prospects.

We come back to this fact. What the bacon curers want is an adequate supply of pigs. As the removal of the tariff will not affect the price the British farmer gets for his pigs, there is no reason why the pigs should not continue to be forthcoming for the curers; and provided they get them there is no reason why they should not retain their share of the market. Noble Lords should bear in mind that the output of the bacon curers is still over 60 per cent. of the maximum that has ever been achieved. We have heard they are working at only 40 per cent. capacity. It is difficult to judge this capicity. It is a statistical matter—what you take into account and how you arrive at it. Admittedly, they have excess capacity, but I am not sure that the industry, on the whole, is not working at rather more than the 40 per cent. to which the noble Lord, Lord Silkin, referred. I am sure that these curers will be able to, and will, rise to this challenge.

There is one very good pointer to that. Quite recently they have agreed—90 per cent. of the curers responsible for Wiltshire-cured bacon have agreed—to conform to a new code of practice worked out by the Pig Industry Development Authority. That is a most encouraging fact and your Lordships should know it. If there is a risk to the bacon curers it is that alarmist and pessimistic talk might frighten pig producers out of producing pigs. I must not quote the National Farmers' Union in front of their President, so I should like to quote the Scottish National Farmers' Union, and the Convener of their Pig Committee said, "You must not take cold feet"—or words to that effect—"on this matter." That is the danger, he said. Farmers would then be destroying their own market. So what we have to do is keep this confidence.

I am not at this time going into the detail of the Government fat stock guarantee scheme, but it has been rather misrepresented to-day, and I should just say that we have a standard price for fat pigs, as the noble Lord, Lord Silkin, knows perfectly well. That makes good the deficiency. The noble Duke, the Duke of Atholl, asked: could we be sure that if the Government had to spend a lot of money on the guaranteed price for pigs, they would not be taking it out of the other moneys that are used in the Price Review balance sheet. It is not true to say, as the noble Duke said, that the cost is £6¼ million. It is more likely to be more than that. It might be £10 million. It will be whatever the figure is that has to be found for the guaranteed price of pigs. But the Chancellor of the Exchequer has said that he is ready to face this.

The current cost of all agricultural support at the moment is about £240 million a year. There is nothing fixed in this sum. The total has gone down this year and it may have to go up next year when we come to the Price Review; and I would assure the noble Duke any extra money that has to be found for pig price guarantee will not be at the expense of the guarantee of other livestock or crops. The guarantee just does not work in that way. The standard price of pigs now is 46s. 9d. per score deadweight. This was determined at the last Annual Review and I should like to remind the noble Lord. Lord Silkin—who said nobody could make a living out of pigs—that this last Annual Review was an agreed Review. It was arrived at after consultation with the farmers' unions and was an agreed Review. These guaranteed prices and guarantee arrangements will not in any way be affected by the removal of the tariff on Danish bacon.

LORD NETHERTHORPE

My Lords, would the noble Earl permit me to make one comment on the last statement he made? We in the agricultural community protested most vigorously about the harshness of the Review settlement for pigs in 1958. We felt the impact on the industry would result in a downtrend in production. It is not a case of being wise after the event: events have proved us to be right. To pray in aid, therefore, the fact that the 1959 review was an agreed one is somewhat unfair, because again we protested—and, indeed, asked for redress in that particular direction; but in our balanced and statesmanlike view of the industry, we did in fact agree a settlement. Therefore, I do not think it is fair to use that particular argument.

EARL WALDEGRAVE

I have often wondered what was going to happen when the noble Lord, Lord Netherthorpe, took his seat in your Lordships' House and Price Review matters came up. Now I know. The answer is that we have got to be statesmanlike about this, and I should not pray it in aid. The noble Lord can reserve his position on this, but I did not go further than to say—which was perfectly accurate—that, by and large and all in all, this was an agreed Review. It had not been mentioned as such, and I think I was entitled to say that; and the noble Lord was certainly entitled to his interjection.

My Lords, I have tried to make a fair assessment of the present position of the pig industry. I hope you will agree with me that to assert, as is set out in the Motion before your Lordships, that the withdrawal of the bacon tariff would have disastrous consequences for the industry, is really very wide of the mark. The arrangements that we are making do not conflict in any way with our obligations to the farmer, who will continue to have his guarantees. And, as my right honourable friend has already announced in another place, the farmer can now look ahead with the assurance that the standard price for pigs will not be reduced at the 1960 Annual Price Review—except, of course, for any adjustments which would follow automatically from the feedingstuffs formula. This is positive proof that the Government want to see an efficient and effective pig industry in Britain. We believe that farmers can have confidence in pigs; and we hope that they will reject any alarmist talk that they may hear in any quarter.

It was because we had fears of the impact of such talk that the Government gave this assurance about the next Price Review. It really is not good enough to belittle this assurance. For myself, I believe that there is enormous value in this assurance, and there is no doubt that it has been welcomed by pig producers generally. It means, in effect, that there can be no reduction in the guaranteed price for pigs before April 1, 1961—except, as I have said, for adjustment because of the feedingstuffs formula—and this must impart great confidence into the pig market over this period. The first effect of the tariff reduction will probably be felt in July, 1960: so the undertaking now given stretches well beyond that date.

When one considers this assurance, combined with the other most specific undertaking that the taxpayer will accept the full burden of the cost of the removal of the tariff, both as to the value of the tariff itself and any increase in deficiency payments that may result from it, then I can surely claim that at no time and in no circumstances have farmers in this country been given such assurances for a commodity, such as pigs, which can fluctuate in terms of supply with such rapidity.

My Lords, I am delighted that we have had such a good debate this evening, and so many speakers. I thank the noble Lords very much for their contributions and for their courtesy in staying to the end of the debate. I have not had time to answer or to refer to all the points that have been raised, and I hope they will not think that there is any discourtesy on my part, because no discourtesy is intended. I must say this to noble Lords on the other side of the House; that we are playing with fire if we use words like those on the paper. Confidence is a tender plant, and confidence, once wilted, is very difficult to revive. The words in the Motion are strong words—I believe unnecessarily strong words—and I very much hope that the noble Lord will see fit to withdraw this Motion in the terms in which it has been put down.

7.45 p.m.

LORD SILKIN

My Lords, there is so much that has been said this afternoon of a controversial nature that I could well make a second speech and take as long on that second speech as I did on my first. I do not propose to do so, because I am very conscious of the time. I should like to congratulate the noble Lord, Lord Netherthorpe, as every other noble Lord has done. I feel that we are running short of adjectives, but I hope he will take my congratulations without an adjective as sincerely as they are intended. I should also like to express the welcome of the House, as I am sure we can, to the speeches of the noble Duke, the Duke of Atholl, and the noble Earl, Lord Kinnoull. We do not hear very much of them, and I can assure them that we welcome the speeches of younger noble Lords. They hear quite enough of the older generation, and it is very refreshing to hear the views of the next or the next but one generation—and that is without prejudice to any views they may have expressed.

I have been asked—and the noble Earl who wound up for the Government repeatedly asked—that I should withdraw the use of the word "disastrous." I believe that that word is correct; and I believe it after careful consideration. The situation may turn out better: I sincerely hope it will. But as I see the industry I see it as an industry which is declining at this moment—and it was declining apart from this withdrawal of the tariff. I have known so many people who are going out of bacon production at the present time, and who have done so because they find that it is no longer profitable, despite the guarantee. My feeling is that this withdrawal of the duty is the last straw; and if we do take the view that we want a live and flourishing bacon industry, then it certainly is the last straw.

I am not arguing—and I want to say this to the noble Lord, Lord Boothby, in particular—that we should not do this. On the contrary, I think that the Common Market is a good thing—subject, of course, to hearing more details about it I think that in principle it is a good thing; and I started off my speech by saying that I was speaking on the assumption that it is a good thing. I said that we had to do something about the Danes, and I thought this was the only possible thing we could do to bring them in. But the whole burden of my speech was that it would be wrong to sacrifice one section of the community; and I think the noble Lord, Lord Boothby, was a bit complacent about sections of the community suffering for the benefit of the rest. We do not do things like that in this country. If it were a minor sacrifice, that would be one thing. But if we are going to deprive a section of the community of their livelihood, which I think is what is going to happen—I may be wrong—then I say that we ought not to accept that complacently, and that we should see that one section does not suffer for the benefit of the rest. I am sure that nobody who accepts my premises would tolerate sacrificing the bacon producers in order to make a good Common Market agreement.

There is one other thing. The noble Lord, Lord Boothby, has tempted me with a speech which was in fact made at the wrong time and on the wrong occasion. He will have his opportunity of making that speech again on Tuesday: but he did ask me what Lord Snowden would have thought. Honestly, I do not know.

LORD BOOTHBY

I do.

LORD SILKIN

I do not, because Lord Snowden continued to be a member of a Government which in 1932 imposed tariffs. He himself departed from free trade; and as to what Lord Snowden would have done in present conditions I think it would be impertinent for me to hazard a guess. I do not myself think that the imposition of a duty is the best way of protecting a market: I would not have recommended it. But the duty being there, I certainly think that the abolition of the duty is going to damage the industry. I do not want to detain your Lordships any longer. As I say, this is a subject we could debate at much greater length, but I think that we have had the case put and I propose to exercise great restraint in not pursuing the matter. I beg leave to withdraw my Motion.

Motion for Papers, by leave, withdrawn.