FATSTOCK (GUARANTEE PAYMENTS) ORDER, 1960

HL Deb 11 April 1960 vol 222 cc844-51

2.58 p.m.

EARL WALDEGRAVE rose to move, That the Fatstock (Guarantee Payments) Order, 1960, be approved. The noble Earl said: My Lords, this Order provides cover for payments under the Fat-stock Guarantee Scheme for the year 1960–61. It replaces the Order which has served that purpose since 1957, and I will explain the essential changes which have been made. The prime reason for the Order is to provide statutory authority for the new way of treating payments on the quality premium grades of pigs to which I referred in my Statement of March 10 about agricultural guarantees following the Annual Review.

Formerly these payments, known as quality premiums, had to be treated as part of the overall guarantee for pigs. One effect of this was that the basic guarantee payments for all pigs were reduced in order to provide finance for the premiums. In addition, it was implicit in the system that the premiums could not have continued at all if, at any time, average market prices rose above the guaranteed price, and that therefore there was no deficiency payment payable. In fact, it was never necessary to reduce or discontinue quality premium payments on this account, but the possibility that it might have had to be done was a source of concern to producers of quality bacon pigs who, I think naturally enough, considered that a payment merited by quality should not be dependent upon what happened to the level of market prices. The new Order enables the producer of quality premium grade pigs to be assured of an enhanced return in all circumstances. At the same time the premiums are removed from the guaranteed price applicable to all pigs, so that ordinary guarantee rates will no longer need to be reduced to finance the quality premiums.

The remaining changes in the Order are all of a formal and subsidiary kind. Your Lordships will see from the Order that the feed formula adjustment for pigs is now to be applied to the guaranteed price instead of to the rates of payment. This change of procedure has certain advantages from the point of view of the calculation which has to be made, but it will make no difference to the rates of payment themselves. The definition of the guarantee year has been altered so that there will be a better fit with the accounting year, and provision has been made for the rounding of payments to suitable currency units. The old Order was made under the Agriculture Act, 1947, and continued in force under the 1957 Act; but the latter Act was phrased in rather a different way, and the opportunity has therefore been taken to re-word a number of the provisions in the Order to accord with the phrasing used in the 1957 Act.

I should like to emphasise to your Lordships the fact that the Order deals only with methods and procedure. It provides authority for the method of payment of guaranteed prices determined each year following the Annual Review. The prices themselves, of course, do not appear in the Order we are now considering. I propose, therefore to say no more on this Order, since your Lordships will have the opportunity a little later to-day to discuss the recent annual price determinations.

Your Lordships will note that this Order came into operation on March 28, the first day of the fatstock guarantee year, but it cannot continue in force for more than 40 days without the approval of the House. This is provided for in Section 9 of the Agriculture Act, 1957. My Lords, I beg to move.

Moved, That the Fatstock (Guarantee Payments) Order, 1960, be approved.—(Earl Waldegrave.)

3.3 p.m.

VISCOUNT ALEXANDER OF HILLSBOROUGH

My Lords, as the Special Orders Committee thought, it is obvious that this Order contains new principles and new policy. It is quite correct, of course, as the noble Earl says, that we shall be debating the general prices on the main Order of the Day on your Lordships' Paper, but I wonder whether we ought to pass this Order straightaway, or whether we should wait until after the debate on the Annual Review of Prices. At any rate, perhaps at the moment the noble Earl could clear my mind upon one point. I expect that he, like myself, reads every week the farming journals. I have noticed a controversy in, I think in was, the Farmers Weekly, in which the Secretary of the British Association of Pig Producers expressed concern over what the producers are getting in regard to this matter. He is very concerned, I take it, because the Association's request for separate guarantees—that is, guarantees and premiums for the two classes of pigs; for bacon and for pork—has been turned down, and that the net result of this Order will be that there will be one overall payment for pigs as a whole. The correspondent of the Farmers Weekly on the other hand, argues that in fact the two figures which are included in the White Paper, the 3d. and the 6d., do not affect the actual payment of the quality premium in respect of bacon pigs. I should very much like to know whether that is so.

It is argued, for example, that the net benefit of the Annual Review of Prices will be in addition to the premiums formerly paid for the bacon pigs, which will now be absorbed in the general price, and that they will therefore get the one on top of the other. Perhaps the noble Earl, if he cannot tell us at the moment, will have his staff look up the Farmers Weekly in question (it was within the last week or so) and will then tell us what is going to be the real result of these adjustments which are clearly foreshadowed in this Statutory Order. For myself, it left me in a complete whirlwind, going round and round, trying to discover what the real facts were. I suggest that it might be best if your Lordships were to agree (or to divide, if necessary) on this Order after the debate on the revision of prices.

EARL WALDEGRAVE

My Lords, I am in your Lordships' hands. As a junior Minister I would suggest that the actual prices determined by the Review are not properly discussed on this procedural Order, but that this procedural Order is the machinery whereby the determinations in the Review are carried out. As I said, this Order is required chiefly to bring about the new arrangement for paying the quality premiums and to take them out of the Price Review determinations. I suggest that we should debate the question of whether we do or do not like what is proposed, or whether we agree with what has been written in some farming journal about these proposals, when we come to the debate on these proposals in a moment or two. However, I am in your Lordships' hands.

LORD SILKIN

My Lords, the question of whether we agree or not depends entirely on whether we understand the proposal, and whether we approve of what we understand. I must confess that I am not very clear as to what the position of these premiums is to be. Are they being given in addition, or is the amount of the premium to be deducted from the amount that has formerly been given to the pig producers? In other words, is the pig producer going to be any better off, or put in any different position, assuming he is a normal pig producer getting a normal number of AA's, and so on? Or is this merely a matter of machinery?

EARL WALDEGRAVE

My Lords, this is merely a matter of machinery; but the bacon producer, the quality producer, the man who earns premiums, will be better off. The situation is that the only quality premiums that are payable under our guarantee scheme are, as your Lordships know, in respect of bacon pigs, and not of pork pigs. In the past, the financing of those quality premiums has been from the general guarantee for all pigs. Therefore, as I tried to explain, the pork producer or the heavy hog producer was in fact suffering a deduction to provide the premium for the quality bacon man. That situation comes to an end under this arrangement—and that, I think, my Lords, is the beginning and the end and the middle of the matter. That is the main difference, as I attempted to say in moving this Order, which merely provides the machinery to bring that about.

VISCOUNT ALEXANDER OF HILLSBOROUGH

I must say that I am still not satisfied. The argument of the Secretary of the British Association of Pig Producers is that their request for having two separate assessments for the two classes of pigs, bacon and pork, has not been met, and that the adjustment in the revision of prices taken in the White Paper gives them only 3d. in respect of the new procedure; whereas the argument on the other side is that they are going to get much more than that. I do not think we are going to pass this Order unless the Minister can tell us what exactly is the fact.

EARL WALDEGRAVE

My Lords, it is very difficult for me to say exactly what the facts are as to an article in a newspaper which I have not got with me and which I am not at all sure that I have read; but I can without any question or hesitation state the facts. They are that the removal of the quality premiums from the general guarantee gives an additional value to the bacon pig producer. That is the first point.

VISCOUNT ALEXANDER OF HILLSBOROUGH

How much?

EARL WALDEGRAVE

I think it is 3d. Speaking without my papers, I think it is 3d. It has been published over and over again, and I can turn it up in my papers and can give it later in the debate. The other advantage to the bacon pig producer is that the equalising values have been narrowed from 3s. to 2s. 3d. Those two things together give a substantial advantage to the producer of quality pigs. The machin3ry of this Order is to enable these things to be carried out, and I think that we ought to pass the Order, Or divide, if necessary. I must put the Order here and now at this stage in the proceedings.

LORD STONHAM

My Lords, I would remind the noble Earl that this Order was considered with other Orders by the Special Orders Committee on Wednesday last. Usually when Orders are considered the Committee reports that there are no special circumstances requiring comment from them. That happened with three of the Orders which we considered on Wednesday afternoon last, but not with this one. The Special Orders Committee—and we are not now talking about a letter in a newspaper, but about the Special Orders Committee of this House—reported that there were, in fact, special circumstances which in the opinion of the Special Orders Committee ought to be given reasonable consideration. As I understood it, the suggestion from my noble Leader was that it might be a convenient matter that this should not be considered in a separate debate, but could be considered in the main debate which is to follow. An answer to the points raised could then be given by the noble Earl, and the Motion with regard to this Order could be put after we had had an opportunity of considering it. I think the Report from the Special Orders Committee is most relevant and cannot be ridden off like a letter to a newspaper.

VISCOUNT ALEXANDER OF HILLSBOROUGH

My Lords, I really ought to put another Amendment. I should move that the discussion on this Order he postponed until the end of the debate on the White Paper next on the Order Paper.

THE LORD CHANCELLOR (VISCOUNT KILMUIR)

My Lords, I am afraid that I have no notice of this Amendment. Would the noble Viscount repeat it?

VISCOUNT ALEXANDER OF HILLSBOROUGH

I have explained what I want to be done, but apparently it is going to be turned down by the Government. The Division on this Order ought not to take place until a full explanation has been given. Here is an Order which his been submitted with a specific note from the Special Orders Committee of the House. We have not yet had a complete answer, although the noble Earl has no doubt done his best. He will make a further explanation during the next debate. We are quite willing to adjourn this debate now, but if you are going to insist on a Division now, we will have to vote against the Order.

EARL WALDEGRAVE

My Lords, I am sorry if I have not been clear. I think the noble Viscount who leads the Opposition is referring to a letter in the Farmers Weekly in which the writer was unhappy that we had not two separate guarantees for two different kinds of pigs. Well, we have not two separate guarantees for two different kinds of pigs: the Price Review did not do that. The Order, however, does not rule this out. If Ministers at any time on some subsequent review determine to have two separate guarantees, this Order is drawn widely enough to have that put in. Therefore, I fail to see how anybody can vote against the Order who wants it for that purpose. What the Order also does is to provide for this alteration in the payment of quality premiums which has been determined in this year's guarantee Review, and without this Order we should not be able to carry that out.

I should like to be accurate on the figures, because, although they do not come under this Order, the noble Viscount has raised them. All producers are going to benefit by 3d. on account of the increase in the guaranteed price. Secondly, there will be a 6d. benefit or increase, because the premiums have been paid separately, instead of out of the pig guarantees. One lot of pigs will not have to finance the other lot of pigs. The bacon pig producers will also get premiums in addition which, taking the average throughout the year, have generally averaged, and are likely to average again, about 1s. 3d. a score.

I hope that the noble Viscount will think this is a full explanation of the points he has raised, and I am sorry if I did not make them clear in the first instance. I believe it would be more to the convenience of your Lordships if this Order, which is an enabling Order—it is machinery to enable these things to be done—were passed now.

LORD REA

My Lords, could the noble Earl explain why he needs a decision for or against at this moment rather than at, say, half-past five or six o'clock this afternoon after some fourteen noble Lords have given their general view on the agricultural position? We are not doubting the bona fides of the noble Earl, or the goodness of his argument, but the Special Orders Committee do suggest that the Order should not be passed through the House without special attention. It is a matter of interpretation, and I agree that what has happened so far in the way of question and answer is, to some extent, special attention. But this is a particularly appropriate opportunity to deal with the matter in the debate, and I wonder whether the noble Earl will not give way on this small procedural point and defer the decision until after the debate.

LORD WISE

My Lords, there is one point that I was intending to raise in the next discussion, and it would probably be more appropriate for me to raise it then, in connection with any leakage in the deficiency receipts and the definition of the producer. That is a matter which I raised once before with the noble Earl and did not receive such satisfaction as I expect I ought to have done.

EARL WALDEGRAVE

My Lords, if it is the wish of the House generally, of course we will take this Order at the end of the general debate. All I was trying to say—and I do not want to put an "if" or a "but" at the end—is that this is a widely-drawn Order. That was necessary because of a specific thing we have done in this year's Review, but it is wide enough to do all sorts of other things, as well. But, if it suits your Lordships, let us take this at the end of the debate.

VISCOUNT ALEXANDER OF HILLSBOROUGH

I am obliged to the noble Earl.

[The debate was accordingly adjourned.]