§ 3.28 p.m.
My Lords, the purpose of this Order is to safeguard the Hops Marketing Scheme which is designed to secure the orderly marketing of hops. The Order has been made by the President of the Board of Trade under Section 43 of the Agricultural 747 Marketing Act, 1958, which consolidated earlier legislation. That Act provides for schemes to ensure stable markets for agricultural produce in the United Kingdom.
Before making an Order under this section, the Board of Trade have to be satisfied that there exists a scheme for the reorganisation of the industry concerned, and that it would be jeopardised if imports were not regulated: that the interests of consumers (including manufacturers) are not prejudiced by the Order; and that the Government's international obligations are not broken. On all of these points the Board of Trade is satisfied.
Before 1932 the hops industry was vulnerable to violent changes in world prices. In that year, a marketing scheme was established under the Agricultural Marketing Act, 1931, and this has served well in controlling the marketing, and stabilising the prices, of the home crop. This could not work unless the home market were insulated from the effect of fluctuations in world prices by some control over imports. This was accomplished by an agreement, included in the Report of a Committee set up in 1934 by the then Minister of Agriculture, between the Hops Marketing Board on the one hand and the Brewers' Society on the other. The parties undertook, amongst other things, to restrict imports of hops except in years when the home crop was short, and to allow limited imports of hops for lager and other special beers, the hops for which could not be grown here.
The Hops Marketing Scheme, together with the voluntary agreements, have given the industry stability and settled prices, and have benefited hop growers and brewers alike. By regulating home production and prices, they have ensured that growers do not produce more hops than the brewers can use, and that the growers get a fair price. The brewers, for their part, have agreed not to let down the English grower by buying hops abroad wherever they can be picked up cheaply, and it is this part of the Agreement which will be replaced by the Order. The consumer, I should mention, gains, of course, by having his beer of the flavour to which he is accustomed, and pays no more for it because, after 748 all, the hops element in the price of beer is only about a farthing a pint.
Last year, however, the Hops Marketing Board and the Brewers' Society were advised that the voluntary import restrictions embodied in their agreement would have to come before the Restrictive Practices Court. They were also advised that the Court was unlikely to be able to approve the restrictions. Unrestricted imports would have meant the disruption of the Hops Marketing Scheme, and that would have been a disaster for the hops industry. Fortunately, powers to restrict imports are available in these circumstances. That they were not used in the first instance in place of the voluntary agreement, to which I have referred, was a matter of historical accident, for the Restrictive Trade Practices Act had not then been thought of.
These powers, therefore, have now been used to make the present Order. These secure the effective working of agricultrial marketing schemes. The fundamental problems of the industry have not altered since 1934, and the case for regulation is as strong as ever. The Scheme is an integral part of our agricultural economy, and the regulation of imports is fundamental to its operation. No new control is being introduced, but similar controls to those which have operated since 1934 are being given a legal basis. My Lords, I beg to move.
§ Moved, That the Hops (Import Regulation) Order, 1961, be approved.—(Earl Waldegrave.)
§ 3.32 p.m.
§ LORD STONHAM
My Lords, I was carefully observing the noble and learned Viscount who sits on the Woolsack, because I wanted to "hop" up at the right time. On this occasion, I assure him that he did not look towards the Opposition Benches before he "popped the question". My Lords, I would congratulate the noble Earl on a very nice sense of timing, in that he has introduced this measure on the last sitting day prior to the festive season. I am grateful to him for his explanation of the Order, which I think was necessary in view of the fact that the Special Orders Committee indicated that it was a matter which required the special consideration of the House. I think it would be fair to say that the Order gives 749 statutory force to a voluntary arrangement which has now worked with very great success for 30 years. For those 30 years it has provided—and this is the only branch of horticulture for which it has provided any kind of stability—an assured market and steady prices; no subsidy at all has been paid and it has depended on the control of imports. I would point out to the noble Earl that they are all precisely the factors which I suggested in a Question which he answered earlier this afternoon and which he resolutely rejected as being unsuitable for a different branch of agriculture. I would remind him that it has worked with very great success and I hope therefore that when he considers this question he may take a more favourable view.
There are one or two questions which I should like to put to the noble Earl, about which I hope he will be able to reassure us. He made it clear that this Order is necessary because although the agreement has been registered under the Restrictive Practices Act for some four or five years it was likely to be adjudged a restrictive trade practice and therefore illegal. I have no complaint about bringing in an Order to make something legal which is otherwise illegal, but I would submit to him that there must be many such industries or parts of industries where there is an extremely beneficial though highly illegal practice going on—beneficial to the whole of the industry, to the whole of agriculture or to the whole of the country. I wonder whether in such cases the Government would not consider the possibility of an amendment to the Act to avoid the general uncertainty which must exist in the minds of people engaged in the industry, and if it were possible to do that it would perhaps avoid a whole series of Orders of this type. I would submit that this is a matter for particularly urgent consideration because of our impending (as I view it) entry into the Common Market.
The second question I should like to ask the noble Earl is with regard to the quota. The hop growers operate under a quota system and these quotas are very valuable. That is evidenced by the fact that if a farm which enjoys a hop quota comes up for sale it attracts a very much higher price than it would if there were 750 no quota, although it might be in a hop growing area. Now the noble Earl said that this Order would make no essential difference to the existing arrangements, and would merely give them statutory force, particularly with regard to licensing. But what arrangements exist for new entrants? How and under what conditions will horticulturists who are not now growing hops, but who would like to, be allowed to start? I would submit that if we are going to legalise an illegal practice—and I am all in favour of doing that—we ought to have an assurance that it will not be unduly and unfairly restrictive and thereby perhaps force prices too high.
We are at present, and have been for many years, importing hops, and therefore that fact might be a valid reason for enlarging the home industry. Because hops can now be kept for at least a year and if a surplus arises from a good crop it could be kept to cover a deficiency arising in a bad year. That would avoid the need for imports and it might also help to expand the export trade in British hops to the Commonwealth, and to Ireland, as against the continental variety. I ask the noble Earl therefore whether that also is under consideration.
My last question concerns price. He mentioned that the hop content, as it were, in a pint of beer costs only about a farthing. He did not mention, of course, that the tax content in a pint of beer is 8d. Of course that is the most important part. But, nevertheless, the price of hops is a matter of some importance and since we are creating a completely protected market we should be given an assurance—and I hope the noble Earl will be able to give it— that machinery exists, or will be put into operation, to keep prices at a fair level, always providing that there is a reasonable return to the growers and the workers in the industry. Those are my questions, my Lords, and subject to the points I have raised I think we should warmly welcome this arrangement as one which is of benefit to producers and consumers without recourse to the taxpayer. I only hope that before long the Government will see the wisdom of making similar arrangements for other branches of agriculture and horticulture. If the noble Earl, in what he is going to say, could hold out some hope of sense at last, this would indeed be a merry Christmas for the taxpayer.
§ LORD DOUGLAS OF BARLOCH
My Lords, I should like to follow up one point made by my noble friend Lord Stonham. Is it not the case that, under the Hop Marketing Scheme, the growing of hops was confined to those areas of land which had been growing hops at a certain date before the Scheme was brought into operation, and that it is virtually impossible for any other land to be used for the purpose? That being so, the natural result of the Scheme, as my noble friend has said, is to give a monopoly value to those particular tracts of land, and the real ultimate beneficiaries of it are the people who happen to own them.
§ 3.40 p.m.
My Lords, I am glad that there has been a general welcome for this Order. I think I can reply briefly to the points which have been raised by the noble Lord, Lord Stonham, and the noble Lord, Lord Douglas of Barloch. The noble Lord, Lord Stonham, suggested that this might be a convenient way of dealing with the subject on which he had been speaking earlier in the afternoon—meat. But I really think that there is very little comparison between the volume and the value of hops used in the flavouring of beer, and such an enormous business as that of meat. I believe that the total value of business in meat is over £800 million a year.
We must realise that this Order which we are considering, and I hope now passing, does not do anything new. It does not make any alteration in the arrangements which have been made in the past. It is simply that the arrangements which have been going on all these years since the 1930's in connection with the hop industry are now, as it were, put under another seal. Instead of an agreement between the Brewers' Society and the Hops Marketing Board, the arrangements are now authorised under this section of the 1958 Act. It is not intended that there should be any changes in the Scheme itself. In fact, there cannot be any change in the Scheme itself in an Order under this section. It is perfectly true that a quota to grow hops is valuable. I think that there is nothing wrong in that. There are quotas for the growing of potatoes, as for the growing of hops.
§ LORD STONHAM
My Lords, if the noble Earl will allow me, I would point out that there is provision in the Potato Scheme for new entrants. Will he tell me this: does he not agree that it is a point of substance that we are giving statutory authority to an agreement which was previously of a voluntary nature, and, therefore, would this not be the right opportunity to make provision both for new entrants and for a certain control of prices? They are the two points on which I think we should be satisfied.
My Lords, I am advised that this would not be the proper opportunity to alter the Scheme by making any different provisions as to entry, or by making any other arrangements as to price or price control; but with Notice of the Question I would naturally look into it. I cannot believe that any Scheme under the Marketing Act, or under any other arrangement, is so inflexible and fixed for all time that, if it is desirable or desired, it cannot be altered in the future. I am advised that it is certainly not the intention in this Order to alter the Scheme in any way, but simply to bring, the arrangements under Section 43 of the Marketing Act, 1958, instead of under the voluntary agreement as before. That is the answer which I must give at the moment to the noble Lords who raised that point.
§ LORD SILKIN
My Lords, my noble friend has brought to light a rather disturbing state of affairs. If in fact we are giving now statutory authority for the doctrine that there can be no new entrants in the production of hops, whereas earlier it was a voluntary Scheme, then I think, while it may be that we can do nothing about it this afternoon, it is something of which we shall have to take note. I warn the noble Earl that it is something which we shall have to raise in this House on a future occasion. I do not think we can tolerate a state of affairs where there can be no new entrants to the production of hops in this country. We are creating a virtual, or a real, monopoly for those who are producing them to-day, and are giving them all the advantages which flow from that. Perhaps the noble Earl may be in a position to deal with this matter on an early occasion when we come back.
My Lords, the details of the Scheme with regard to new entries and quotas are not fully in my head, and I should not like to answer as to them at this moment. But I think that it would be unwise for it to go out from this House that we were doing anything new which was alarming or dangerous. Whatever has been done has been done consistently since the early 1930's, and, so far as I am aware, there has been no complaint from any section of the community that by the agreement that has been operated in the past, stability and prosperity in this small section of this trade has been undesirable. I should not like it to go out from this House that here, because we were changing the umbrella under which this arrangement has gone on for all these years, we have suddenly uncovered something which is very bad, which ought to be looked at, and that we should stop it, because on examination I do not think that will be found to be the case. But I appreciate the point which the noble Lord, Lord Stonham, has made. We will, of course, look at this, and perhaps I may communicate with the noble Lord afterwards and discuss with him the question of new entries into hop growing.
§ LORD STONHAM
My Lords, does that mean that the noble Earl will also send me a copy of any communication that he addresses to my noble friend, as I raised the point?
§ On Question, Motion agreed to.