AGRICULTURE

HL Deb 13 February 1962 vol 237 cc384-459

3.37 p.m.

LORD WILLIAMS OF BARNBURGH rose to call attention to the state of agriculture; and to move for Papers. The noble Lord said: My Lords, it is not my intention this afternoon to cover either a wide range of agricultural problems or a wide range of commodities, or to speculate about the ins and outs of the Common Market. Less still shall I attempt to deal with the millions of figures that were used in another place yesterday. Rather shall I confine myself more or less exclusively to meat and the marketing of that commodity, which has received such a wide and varied publicity during the last few weeks. There have been loud and sustained whispers about who got away with the missing millions on the meat account. Wholesalers and meat traders and butchers have all been under fire. It does not seem to me to matter very much who got the millions, since they got away anyhow, and I shall not deal with any of the figures of prices, output and that kind of of thing, because I have no doubt in my mind that the results were foreshadowed and were known well in advance, ever since the Government of 1953 laid the foundation of their new so-called agricultural policy. I shall try to explain why I feel that way.

Your Lordships will recall that, during the war and well afterwards, to ensure fair shares in food supplies not only had we rationing but also prices were fixed. By the end of 1953, however, increased output in our home country and increased output all over the world brought the end of rationing very near, and brought to an end not only rationing but also a certain form of marketing and distribution which had served its purpose very well during that period. Therefore alternative means of marketing and distribution had to be introduced in the new circumstances of nearer plenty. But of course there were certain new factors which had to be taken into account. Our home farmers were already, by 1953, producing 50 per cent. more food than they were pre-war; secondly, to fulfil the conditions of the 1947 Act, guaranteed prices had to be fixed and the form of deficiency payments arranged within the new marketing scheme. Whatever the difference between the guaranteed price fixed at the February Price Review and the market price, called deficiency payments, the Treasury had to meet the bill.

Therefore the Government's proposals on marketing and distribution were eagerly awaited, I should think, in your Lordships' House as well as in another place. We were hoping for, and were entitled to expect, something as far seeing, or more so, as the production policy embodied in the 1947 Act. But we were in for a shock—and the shock has been reverberating throughout the Houses of Parliament ever since. The proposals emerged first in a speech in November, 1953, by the then Prime Minister, and secondly in more detail in a White Paper, Cmd. No. 8989, of November 3, 1953. I must make a quotation from the then Prime Minister which was made in another place yesterday, for this was the beginning of a new agricultural policy for this country. The Prime Minister said [OFFICIAL REPORT, Commons, Vol. 520, cols. 26–7]: The House knows that it is our theme and policy to reduce controls and restrictions as much as possible and to reverse, if not abolish, the tendency to State purchase and marketing which is a characteristic of Socialist philosophy. We hope instead to develop individual enterprise founded in the main on the laws of supply and demand and to restore to the interchange of goods and services that variety, flexibility, ingenuity and incentive on which we believe the fertility and liveliness of our economic life depend. I need not remind your Lordships whose statement that was. That was the new Conservative Party marketing policy—I repeat, individual enterprise, the laws of supply and demand, flexibility, ingenuity, incentive, fertility, liveliness, a "free-for-all," no controls, but boom and slump.

That really was the basis of the policy that broke down in 1961. I am not going to attempt to blame either the meat retailers, the butchers, or indeed anybody else but the Government and their successors, who laid the foundation for this perpetual breakdown, thanks to the old auction mart system. We thought that this was not only not a policy, but just a doctrinaire onslaught on planning and controls, and "damn the consequences!". That was how we and the farming community saw it at that moment, and agriculture, with the rest, was now back in the cockpit of Party politics with a vengeance. The statement at that time appeared to me as both ill-considered, half-Liberal, half-Conservative, and absolutely half-baked, especially as applied to agriculture. Instead of the well-thought-out, constructive proposals for a new marketing scheme especially for meat, comparable with the productive capacity and efficiency of agriculture as it was then, we were presented with a grand new policy resurrected from 1860—free markets, no controls, the law of supply and demand, a complete retreat from the planning and essential control which had done so much for agriculture and the nation.

That is the simple explanation for the much discussed Supplementary Estimate over these last two months. How does it arise? Because the size of the deficiency payment to be met by the Treasury is determined not by the Treasury, the February Price Review, the House of Commons or your Lordships' House, but on the auction mart, and there is no possible safeguard for the Treasury if the system breaks down, as it has done frequently. The producer gets nothing out of it, the consumer is little better off; but the Treasury has to pay.

Noble Lords may wonder whether this system was an accident, a gamble or an act of faith. I do not know. The Government were warned, however, of the weakness in this—indeed, they were aware of it, for paragraph 14 of their White Paper, Cmd. 8989, reads as follows: The Government recognise that the pre-war fatstock auction system was unsatisfactory in certain respects. If it was unsatisfactory in pre-war years —and it certainly was—how much more unsatisfactory is it in post-war days, when the Treasury is so deeply involved? But they still persist with this unsatisfactory system, and there is no point therefore in setting up inquiries or employing a Sherlock Holmes to try to discover where the missing millions went. The Government must know where they went; they must have known that it was inevitable that they should go. So long as there is a modest surplus to immediate requirements of any commodity, then their beloved law of supply and demand comes into operation. Then prices fall and Treasury payments simply rise.

It is true that the Minister in another place yesterday said that the 1961 breakdown was unfortunate, but it was due to a combination of circumstances that caused this Supplementary Estimate: there were too many lambs; there were too many pigs at the wrong time, and the weather was good when it should have been bad—all very trying, of course. But the Minister admitted that the increase of supplies amounted to only about 4 per cent., which shows how delicate the free marketing mechanism is; and he has no power to control or influence the timing of home or imported supplies. Indeed, the Minister said in another place yesterday that what had happened this year was that a number of circumstances, all of which could lead to bad estimating had combined together, as they had done not infrequently in years gone by. So what happened last year has been happening almost ever since 1954. Nobody blames the individual Minister—it was beyond his power to prevent this outsize Supplementary Estimate—but there is a break- down of the auction marts. This system has been operating for eight years.

But I am more concerned with the producer than the Treasury, because the producer gets nothing out of these periodic crises except nearly all the blame, and he knows that the system of guaranteed prices is always in danger because the public is never given all the facts relating to the cost of a Supplementary Estimate. In 1953 the then Minister of Agriculture promised—to use his own words: If anything of this kind does develop the Government will certainly take special steps to deal with it. Later on the same Minister went on to say: If such a situation does materialise—that is the absence of real competition in the auction marts—the Government have given the House the assurance that they will deal with it. But noble Lords will remember that they have not been dealt with, nor have any of the last three Ministers of Agriculture, following the right honourable gentleman who was Minister in 1954, been able to deal with this thing.

The simple fact is that neither one Minister nor all four of the Ministers of Agriculture could deal with it effectively without suitable powers of control, especially over the timing of supplies. They have been as successful with this problem as their Government was in sealing the hole in the housewife's purse several years ago. Their auction mart system has failed; they have dodged the column and left the producers to bear the odium. Not only that, but once or twice they have threatened them with dire consequences at the Price Review. Well, they put that right yesterday because they found they had no alternative —that they cannot inflict those dire consequences on producers, at least until the next Election. In regard to the policy pursued by the Government, I think that they, and they alone, stand condemned for this new large Supplementary Estimate.

Noble Lords will recall that this is not by any means the first breakdown. On one occasion they asked for a million more pigs. To their astonishment the pigs arrived the next year. But, unfortunately, the Government had done nothing about marketing the pigs intelligently. The inevitable result was a collapse of prices, and chaos, with tens of thousands of pig producers going out of production. This is not continuity, nor does it lead to prosperity. The only difference between 1954 and 1961 was in regard to beef. What might the deficiency have been if imports of meat last year had been normal, instead of being 10 or 14 per cent. down? We should have required at least another "little Budget".

My Lords, what of the future? I approach this matter without either political or ideological bias; perhaps more in hope than in confidence. In view of the dramatic changes that have taken place since the war, in view of the enormous increase in output, the allover increase in efficiency (rated by Conservative Ministers of Agriculture as being worth £25 million a year), and remembering the capacity of the industry to respond to any call made on it, whether it be in relation to pigs, or sheep, or cattle, is it too much to hope, even at this late hour, that the Government have now learned their lesson? Is it too much to hope that they are now prepared to drop their ancient inhibitions and doctrinaire frustrations and to provide an efficient marketing scheme, especially for fatstock, one that might well compare with the productive capacity and efficiency of the industry to-day? After all, they have had ten long years to think this all out. They remind me of the Parliamentary candidate who was just arriving at his second or third meeting. He was just rushing up the steps into the hall, when someone stopped him and asked: "What does the candidate think about …?" And the candidate turned round and said, "I have no time to think. I have to talk!" For ten years the Government have been talking, but have been doing very little thinking.

I know I am asking quite a lot when I ask the Conservative Party to give reasonable consideration to the question of marketing, for I remember very well that in 1931, the Conservative Party voted solidly against the Agricultural Marketing Bill of that year, and their hostility to marketing is implicit in the Prime Minister's statement which was quoted to us. Many of the rank and file of the Conservative Party are ahead of their leaders an this theme of marketing, and it would be a fascinating spectacle 'to witness the leaders trying to catch up with their followers. But if they were to take their courage in both hands, it would be of great value both to the nation and to the industry.

In the White Paper (Cmd. 8989) it was estimated that the value of home-produced and imported meat was round about £500 million. The Minister said in another place yesterday that the retail value of that meat to-day is worth round about £1,300 million. That is very big business. But can any noble Lord claim that we are employing the most modern business techniques in marketing this vast quantity of meat? Certainly, the delegates at the recent agricultural conference at Oxford did not think so; neither did the delegates at the National Farmers' Union Conference a few weeks ago. The marketing of meat was their main theme.

Whilst there is room for every point of view as to how we ought to approach this matter and its solution, I personally am still unconvinced that a producers' statutory meat marketing board could, or would, fulfil all the conditions. Imported meat, for example, is an important factor. Some form of integration between home and imported supplies must 'be found, and the timing of supplies must be correct. I doubt whether Parliament would entrust this to a purely producers' board. Not that I am against a users' board, but I am convinced it could not do the whole job since imports of meat constitute quite a large part of our supplies. I ventured to suggest in another place some eight years ago that nothing short of a fatstock marketing authority or commission, acting for the Government, would be effective for this purpose, and I still hold that view. It certainly would involve a number of factory abattoirs and more refrigeration space, both 'of which would be of great assistance to retail butchers in helping the housewife to get the meat of her choice.

Noble Lords may say, "But that might be costly". Well, so is this Supplementary Estimate costly—for which we get absolutely nothing. But I would repeat my opinion that it is the only kind of body with the tools for the job that could safeguard the Treasury, the producer and 'the consumer, and at the same time avoid booms and slumps, largely by sensible negotiation with the importing countries.

If the Minister is in doubt about the wisdom of or necessity for controls to allow such an authority to be effective, then I would advise him to reread the Second Report of the Estimates Committee. Certainly, his higher officials are in no doubt about the need for such controls. I should like to quote from the Estimates Committee's Report—at Question 84, page 12, for those noble Lords who wish to follow it: (Q) Has the Minister or the Government any powers on the timing of imports? (A) Absolutely none, absolutely no powers. (Q) So one of the effects of the absence of powers is that imports can come in at such a time as will do most damage to the deficiency payment scheme? (A) That is certainly so. Then, at Question 142: (Q) Are you satisfied with the substantial controls of imports in so far as they affect this whole position? (A) No, indeed, I am not. Merely from the selfish point of view of trying to keep our subsidy payments under control, there is nothing I would like better than a system of import controls.

Then the witness explained that imports were not to blame for the 1961 result, because imports were actually well down. The Estimates Committee sum up their views in paragraphs 16 to 21 of their Report, which I will not at this moment quote.

The Conservative Party have been in office now for ten years; their auction mart system has operated for some eight years. It has been well tried and found wanting. Instead of producing a marketing system worthy of the industry and the nation, they are now going to hide behind a committee—a committee which can only tell the Government what the Government already know. Whatever information it applies for will have to be secured at the Ministry of Agriculture, Fisheries and Food. It is the oldest fraud in politics but they hope it may get them through the next General Election. My Lords, it deserves to fail. I said in another place in November, 1953 [OFFICIAL REPORT, Commons, Vol. 520, cols. 617–8]; This doctrinaire onslaught on planning and controls could cost the country and the producer very dearly indeed. The results are now there for all to see. I hope that the Government, even now, at this last moment, will swallow their pride, if they still have any left, step from the 19th into the 20th century, and establish a fatstock marketing authority with all the powers necessary to make marketing and distribution in agriculture as efficient as it now is in production—or at least make way for a Party that will. My Lords, I beg to move for Papers.

4.2 p.m.

LORD AMHERST OF HACKNEY

My Lords, I am sure we should all like to congratulate the noble Lord, Lord Williams of Barnburgh, on introducing this Motion. He spoke with such a wealth of knowledge and experience that I am sure great attention will be paid to everything that he said. The terms of the Motion are very wide, but the noble Lord has concentrated on a fairly narrow field. It is true that we had a general debate on agriculture after the last Price Review, and presumably we shall have another one after the next Price Review.

I think there is general agreement that on the production side the industry is doing extremely well. Whether or not the industry is getting a fair reward for its increased efficiency is more open to argument, and no doubt we shall discuss those points, certainly after the next Price Review. It seems to me that the two main worries of the industry at the moment are, first, that the present system of price support is under attack not only from the noble Lord who has just spoken but in other fields as well, as he will realise from an article which appeared yesterday in The Times entitled "A System under Sentence"; and the second worry is the possibility of entering the Common Market. I am going to speak first about the system of agricultural support, which is the policy that the noble Lord has condemned so roundly. But of course even the noble Lord, Lord Williams of Barn-burgh, admitted at the beginning of his speech that the policy that had preceded it would have had to be changed in the new circumstances, so the question is not whether we should pursue the old policy but whether the new policy is the right one or is doing its job.

The main objects of the policy, as we all know, were to allow the consumer to buy the widest possible range of goods at reasonable prices, and to take advantage of the abundant supplies from all over the world; and, at the same time, to give reasonable prices to the producer. Obviously, too, any policy must be fair both to the consumer and to the producer as taxpayers. It is, as we all know, not a perfect scheme and it has been modified very considerably at successive Price Reviews. But usually the result has been to minimise the effect of market variations on the receipts of the producer. It is possible that in some ways we may have gone too far in that direction.

But how well has it achieved its objects? Certainly, the consumer has the widest possible variety of choice, and there has certainly been enormously increased consumption. If we take meat alone—that is, pigs, cattle and sheep—the increase has been some 919,000 tons, or roughtly 40 lb. per head of the population. In addition, in the last two years people have been eating an extra 100,000 tons of poultry, which has also added to the difficulties. It is always extremely difficult to decide how much effect the subsidies have had on prices. The President of the N.F.U., speaking the other day, quoted some figures for meat, which I think were for sirloin. He said that the United Kingdom price was 5s. 5d., and he quoted prices in other countries, such as Canada, Belgium and so on, all of which were at least 2s. a lb. above the United Kingdom price. But one always has to take those figures with caution, because we sell our meat with the bone, whilst in some countries the butcher does more to the meat. Therefore, the prices are not always comparable.

What about the producer? During the last ten years production has gone up by 40 per cent. Of the 919,000 tons of extra meat which has been consumed, no less than 546,000 tons. or well over half, has come from our own farms, which, apart from anything else, has had a considerable effect on the credit side of our balance of payments. Certainly, the producers think that it is a good system. May I quote only one person, who speaks with a certain amount of authority, the President of the N.F.U.? He said at the annual general meeting: Our British system is admitted to be the best-designed method of agricultural support in the world… This is the system which the noble Lord has just condemned as completely half-baked.

LORD WILLIAMS OF BARNBURGH

My Lords, I am sure that the noble Lord would not like to misinterpret what I said. It was the marketing proposals implied in the ex-Prime Minister's statement on November 3, 1953, that I was condemning as half-baked; not the system embodied in the 1947 Act, which I helped to create.

LORD AMHERST OF HACKNEY

My Lords, I must admit that I had understood it as meaning the system which is now in force—which, after all, involves developments from the system which we all acknowledge from the noble Lord. But, in fact, the noble Lord said that the new system was "half-baked".

LORD WILLIAMS OF BARNBURGH

No.

LORD AMHERST OF HACKNEY

Or the system that was being introduced.

LORD WILLIAMS OF BARNBURGH

My Lords, I am sure the noble Lord would like us to get this straight. I should not like to misinterpret any other noble Lord. I was referring to the new proposals by the then Prime Minister for agricultural marketing and distribution, not the production policy and the payment policy embodied in the 1947 Act. I am sure that that is what I said.

LORD AMHERST OF HACKNEY

I will not labour the point. The President goes on to say: …and it should be remembered that all industrialised countries have agricultural support systems of one kind or another, usually based on import control. He then goes on to mention the difficulties due to imports and dumping. But certainly this system—which, after all, has been modified by the Government for the last ten years—is still considered by the N.F.U. to be the best in the world.

However, it has two weaknesses. The first is that, so far as the Treasury is concerned, there has to be, to a certain extent, a blank cheque—and the noble Lord quite rightly referred to that. Secondly, there are the difficulties of estimating correctly what will be the cost in the next year—and, certainly, if a market collapses, the taxpayer can bear a very heavy liability. It is true, too, that the estimates are prepared with three unknown factors: the results of the Price Review, the quantity of production, and what the market prices will be. One would therefore say that they were very largely guesswork.

My Lords, I think we must keep our sense of proportion over this, although I am in no way trying to minimise the size of the Supplementary Estimate of £78 million. But there were no complaints in 1955 and 1956, and in 1958 and 1959, when there were savings in each case of over £50 million. If one takes the first six years together—that is, excluding this year—and a total estimated cost of all guarantees of £1,022 million, the cost was in fact £53 million less. If we take the whole seven years, and an estimate of £1,288 million, the excess of expenditure over the estimated expenditure is £25 million. Although it may be guesswork, taking the swings and the roundabouts, one commodity with another, the guesses have not worked out badly in total. I do not think we have had sufficient evidence to make us wish to scrap the whole system. By that, I do not mean that this is an excuse for doing nothing, but I do think that it is a pity to condemn this system (which has at least the confidence of the producer and which, I think, on the whole, has worked fairly well for the consumer) just at the moment when we are starting, negotiations for entry into the Common Market; and certainly one gathers that, if it were possible, the producers would like many of the elements of this system to be adopted by other countries, and for them to become policy within the Common Market.

VISCOUNT ALEXANDER OF HILLSBOROUGH

My Lords, will the noble Lord excuse my interrupting him? He says that, on the whole, this has worked well for the consumer, and certainly a support price was intended to cushion the consumer to some extent, but would he think that the consumer had been cushioned when beef was at 98s. 6d. per hundredweight instead of 160s. or 150s. or 170s.? Did the consumer get the benefit then?

LORD AMHERST OF HACKNEY

I know there is a certain amount of dispute about how much of that went to the consumer, and I will admit to the noble Viscount that there have been various theories put forward. I understand that it varied very much between butcher and butcher and between joint and joint. Very much less came off the top-grade joints, but I believe that in some cases the lower-grade joints went down very considerably indeed. But obviously the Government are not satisfied with the system, and with what has happened this year. As the noble Lord has said, we have not been dealing with an excess of imports; we have been dealing with a fairly small increase in home production coming, as he said, on to a very sensitive market. It seems to me that what we should do—this is what we should be thinking of—is to see how we can make that market slightly less sensitive, so that we can deal with the periodic surpluses that we are bound to get from our home production. The producers, certainly, are well aware of this problem, and a great deal of the time of the recent National Farmers' Union Conference was devoted to the problems of marketing.

Obviously, this is a highly complicated problem of how much the sale should be by deadweight and grade and how much it should still continue to go through the market (obviously, with deadweight and grade there is less of a gamble; the product is more accurately assessed); of whether we should limit the number of slaughterhouses, which have increased at an enormous rate (I think there are over 3,000 now, whereas there were only 600); and of how much could be done by processing all meat to make the smaller joints which are more in demand, particularly for pre-packing, and also to help the smaller butcher in time of glut. The smallest quantity of beef that a butcher can order is about 160 lb., whereas with lamb it is somewhere under 50 lb., and by having facilities for the further processing of the meat, it might make it more reasonable in time of glut for the smaller butcher to reduce his prices to sell a little more meat; whereas at the moment, if he has to take another 160 lb., it would probably be more difficult.

The other question is this. If we agree that there should be more processing of meat, who is to do it? At the moment, the F.M.C. is proposing to do a considerable amount in that way, and a great deal more meat has been going through the Fatstock Marketing Board during the last year. After all, our problem is not that of dealing with a vast quantity of meat; it is to try to help take off the market the smaller surpluses which arise from time to time, and to prevent the market from breaking. After all, a market breaking is of no benefit to anybody, including the home producer or the importer. But, apart from meat, I am quite certain that the present system has done a great deal to keep down prices, particularly, say, in cereals, which has allowed us to have comparatively cheap feeding stuffs for our cattle.

My Lords, I have tried to argue that, although the present system has a considerable number of defects, they are all defects which can be quite reasonably, and, we hope, comparatively easily remedied, and that it would be unwise at the moment to make a complete change.

4.23 p.m.

LORD STONHAM

My Lords I think I have had the pleasure over the last four years of hearing every speech which the noble Lord, Lord Amherst of Hackney, has made on agriculture, and they have all been of the kind which have enabled his noble friend to speak of them as constructive. Therefore, it is quite a shock, and a measure of the censure which the Government's agricultural policy has now so richly earned, to find that the noble Lord has felt able to say that the present system has a considerable number of defects; that it is not altogether perfect; that the Government may have gone too far; that the system has two weaknesses. This, coming from the noble Lord opposite, is criticism indeed.

He has even gone so far as to say that the present system, and his approval of it, is no excuse for doing nothing. But, my Lords, the Government have not a clue as to what to do, because the only possible honourable, sensible thing for them to do is for the Minister to come to the Box and to say: "We admit that we were wrong in 1953; that our policy is an abject and costly failure". Of course, for understandable political reasons, they do not feel able to do that, so they do not know what to say, and no one on that side, either in this House or in another place, is able to say anything sensible at all.

I think it was the Duke of Cambridge, or one of the sons of George IV, who was somewhat of a weather expert and was very interested in farming. It is also said that he had the peculiarity of making very audible comments at awkward moments. He was in church one day when there was a prayer for rain, in which he joined. Then when he rose from his knees, he was heard to say, "Not a bit of use while the wind is in the East". The trouble with the Minister of Agriculture is that he does not know what kind of weather to pray for. For if it is good growing weather and there is a good crop, then there is a very large bill for the taxpayers; if it is bad growing weather and there is a poor crop, then there are higher prices for the housewife to pay. So the Government just do not know what to do.

The noble Lord, Lord Amherst of Hackney, need not have bothered when he said that there is no excuse for doing nothing, because yesterday the Minister of Agriculture specifically declared in another place that the Government have no intention of doing anything. He indicated, for example, that, according to the Act under which we are now operating, the Government could not make any change because they had given a pledge to that effect during this Parliament. The other announcement he made was of the appointment of a Committee of Inquiry; and, as every noble Lord is aware, that ensures that the Government will have a valid excuse, in their opinion, for doing nothing during the life of this Parliament.

My Lords, I do not think the House can be in any doubt about my views on this subject, because I have expressed them frequently, probably dozens of times, over the last four years. I think that the Report of the Estimates Committee is at least four years overdue, because, as some of your Lordships, at any rate, will know, I have produced time and time again these same figures and facts as are now disclosed by the Select Committee, and I have drawn the same conclusions—the only ones which could be drawn. And all that time the noble Earl and his noble friends have obstinately shut their eyes and have refused to acknowledge facts which, to my mind, were as obvious as the bristles on a pig's back. And all that time, while the Government have been pouring hundreds of millions of pounds down the middleman's drain, the farmer's prices have been going down and the housewife's prices have been going up. I should be very interested to hear later whether the noble Earl will challenge any one of those statements.

The country has lost the cost of 30 ground nut schemes in a lottery, a lottery in which there are no prizes if you are a farmer, a taxpayer or a housewife. Everyone, of course, can make mistakes; but in persisting with the deficiency payments system the Government have made a mistake. I am not talking about support for agriculture—let me make that absolutely clear. I had the privilege of serving with my noble friend Lord Williams of Barnburgh on the Standing Committee which devised the 1947 Act, and no one can deny that throughout my political life I have firmly supported a healthy and prosperous agricultural industry. Certainly I voted for Part I of that Act, whereas if any noble Lords now opposite were in another place at that time they voted against Part I of the Act. But by persisting in the deficiency payments scheme, which, as the evidence proves, noble Lords opposite have for long known to be wrong, the Government are exposed as unworthy to be custodians of the public purse.

VISCOUNT STUART OF FINDHORN

My Lords, would the noble Lord allow me to intervene for a moment? He said earlier that this Government were wrong in 1953. I was a member of the Government in 1953. Is it not a fact that they were at that time pursuing the policy of the noble Lord opposite, Lord Williams of Barnburgh, and the Government of 1947?

LORD STONHAM

My Lords, I am not prepared to accept that. If I may make my position clear to the noble Viscount— I am prepared to develop the argument again if he wishes—I do not regard the system of deficiency payments as a substitute for the guarantees which the farmers had under the 1947 Act. They cannot possibly be a substitute, and the evidence is now before us.

The Government cannot plead, as Mr. Soames tried to plead yesterday, that this meat shambles is exceptional. The noble Lord, Lord Amherst of Hackney, said that in some years, due to some things being better than others, the net difference was not very much; but 100 per cent. errors in estimating are quite common and have been going on all the time. So much was admitted by the Committee. The fault lies in the estimators. It is not the civil servants who are at fault here. They have been given a task which is admittedly impossible.

I have no wish to hit anyone whom I regard as a defenceless opponent, but in view of the cynical disregard of the many detailed arguments which have been put from these Benches over the years, I must point out, before I leave the Report of the Select Committee, that it proves that successive Tory Ministers of Agriculture have deliberately evaded the duty placed on them by Statute: to secure a supply of food to the consumer at minimum prices—and I am now quoting the Report of the Select Committee. They do not make the point about successive Ministers of Agriculture, but they do make the point that it is a statutory duty of the Minister of Agriculture to see that consumers get a supply of food at minimum prices. If the noble Earl is looking for my reference, I would refer him to the Report from the Estimates Committee, paragraph 17, under the heading "Dual Responsibility of Minister", where it states: The Minister has a dual responsibility: first towards the producers, whose standards of living he is bound by statute to protect and secondly towards the consumer for whom under statute he is to secure the supply of food at minimum prices. I say that since 1953 successive Conservative Ministers of Agriculture have deliberately evaded that duty.

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

My Lords, Of course, the noble Lord is perfectly entitled to take that view, if he wishes to do it. I am glad that he quoted the actual paragraph in the Report, because I should not like it to go out from this House that the Report took that line at all: that successive Administrations had failed in their duty. I would remind the House that the Committee say, in their conclusion: Parliament must be assumed to have intended to give this blank cheque when the Acts were passed.

LORD STONHAM

My Lords, the noble Earl is entitled to put what interpretation he wishes on the Committee's remarks, and I am equally in that position. But before I sit down, I shall prove beyond any dispute that the Minister of Agriculture has deliberately forced prices up against the consumers as an act of policy. It is no use for the noble Earl to try to say otherwise, because the Committee say—I now quote from paragraph 17: His duty towards the consumer became more important when in 1955 he assumed the residual responsibilities of the Minister of Food. Your Committee assume that the policy implied in the Estimates for deficiency payments is designed to meet these requirements. I am going to prove that it has not met that particular requirement.

Your Lordships will be aware that at £350 million the cost of farm support is approaching the 1951 level. Parliament has thus furnished the Minister with all the money necessary to enable him to discharge his obligations to farmers and consumers under the Act. But, despite this enormous sum, farmers' prices have dropped dramatically since 1951 while consumers' prices have rocketed to record heights. For example, wheat has dropped from 30s. to 19s. a cwt., but bread has gone up from 6d. to 1s. 1d., or more. There is the example of pigs, for which farmers are getting £4 to £5 less per pig, while pork prices have doubled. It is the same story throughout the piece.

The Permanent Secretary to the Ministry of Agriculture told the Committee: We dislike intensely the fact that the benefit has not gone as far as we would have wished in the form of a drop in retail prices. Though the Minister disliked it intensely, he did not do anything about it. I dislike intensely having to pay the same amount of taxes and double the amount for food; and I dislike it still more when the Minister ignores the facts and refuses or does not fulfil his statutory duty to protect the consumer. Indeed, far from protecting the consumer, he has, as an act of policy, raised the price against them. The price of potatoes to the housewives was increased to reduce the drain on the Exchequer, and this was considered a matter for con gratulation. The Permanent Secretary told the Committee that he was entitled to take satisfaction from high market prices which reduce the amount of our calls on Parliament. The Government changed to this system of marketing potatoes with their eyes wide open and in the face of what I described as strong opposition from the Potato Marketing Board and the National Farmers' Union. In the debate in your Lordships' House on November 25, 1958, I protested against the arrangements to use guarantee payments in the purchase of potatoes when market prices were weak. If I may, I will repeat what I said then—I stand by it now. I said [OFFICIAL REPORT, Vol. 212, col. 820]: Surely this is a scandalous and unprecedented misuse of the taxpayer's money. In effect, it means that money willingly furnished by the taxpayer as a means towards a prosperous agriculture is to be used to force prices up against him. In effect…his pocket is being picked twice, once willingly and once unwillingly. I cannot believe that Her Majesty's Government can have foreseen this possibility when they devised these new arrangements. I ask them to think again… My Lords, I said that 3½ years ago, when these arrangements were going to be made, No one can deny—it is there in the Committee's Report—that that is what the money was supposed to do; and the effect of spending the money in that way has admittedly—it has been admitted by the Permanent Secretary, who has congratulated himself upon it—forced prices up against the consumers.

EARL WALDEGRAVE

My Lords, I am sorry to keep on interrupting the noble Lord. I hoped that he was quoting what was said in another place yesterday. I would remind your Lordships, as my right honourable friend reminded Members of another place, that the Consumers' Committee, which was set up under the Agricultural Marketing Act, examined this very problem of support for potatoes last year and gave it as their opinion that it was right and that in the long run consumers would not suffer.

LORD STONHAM

My Lords, I do not have to repeat the speeches which the Minister of Agriculture made in another place yesterday. May I keep on making my own speech and drawing my own conclusions? It does not matter what he thinks; it is a fact beyond any question or dispute that it was an act of policy—namely, using public money taken from the Treasury to buy potatoes on the market-550 tons of them, some of which were sold for cattle food and some dumped—to take them off the market in order to get a high market price. The Parliamentary Secretary knows that this is right. In other words, the taxpayers' money is being used to force prices up against him. That is exactly what I said in 1958 would happen; and it has happened.

If your Lordships do not agree with me (because the Government did refuse to "think again", and continued with that policy), let me read what the Committee say—and, after all, it is an all-Party Committee of Members of the other place, who only present their opinion on the facts and evidence put before them: When the crop is better than average the consumer finds the market price is artificially maintained and he has to pay a higher price. I would sooner take the verdict of a Committee in another place than of any other body. Is the noble Earl going to repudiate that statement of the Committee? It is a fact. The Committee then say: When the crop is substantially below average he may expect to be charged high prices on the grounds of scarcity. So the Government's policy towards the housewife is, "Heads we win, and tails you lose!" And Mr. Soames, instead of carrying out his statutory duty of ensuring minimum consumer prices, has adopted a policy, as a matter of policy, which has increased prices. I should like to know when it is going to stop. When is the noble Earl going to face up to and acknowledge the facts, and tell us whether he agrees with what the Select Committee say on the facts and evidence they had before them?

In that same 1958 debate to which I have referred, the noble Earl said this: Our system is to provide a safety net of guaranteed prices for the producer, with freedom f the consumer to buy at the market price. This keeps down the cost of living". Does the noble Earl still say that, now that we have an official admission that prices have been forced up? In the face of disregarded warnings and the unnecessary loss of hundreds of millions of pounds, I would ask the noble Earl whether he is still, as in 1958, quite unrepentant about our policy", and whether he is as sure now as he was then that the real safeguard against excessive margins in the food trade is not controls but competition", even when the Government rig the market against the consumer, which is what is happening. I hope that in the light of events the noble Earl will be a little more forthcoming than he was in March of last year, when he dismissed the case and the facts which I had carefully put forward by saying that the first time I made that speech, three years earlier, it had worried him, but it did not worry him any longer. I think the noble Earl should begin to worry a little now, because the Price Review discussions are in progress and, as I understand it, under the present arrangements £15 million is the maximum cut that can be made in the guarantees.

According to the Minister of Agriculture in another place yesterday, the Government intend to ignore the Estimates Committee and carry on as if nothing had happened. If that is so, then we may be presented with another £350 million bill next year, plus low prices to the farmer and high prices to the housewife. I should not have the slightest objection to the taxpayer paying £350 million or £400 million if it could be seen that the farmers were directly benefiting from it and that the consumers were also benefiting by means of lower prices. I should like to see a system where both those things happen, or, at least, where one happens, so that the money is going into a channel that we can see benefit from. The system we have now demands of the taxpayer almost as much as the £400 million that was demanded in the days of the late Sir Stafford Cripps, yet it is impossible to say that either the farmers or the housewives are benefiting.

I would mention that the Select Committee met on December 19, and one day later, when I should have thought the noble Earl would have a shrewd idea of the trend of events, he may remember that I put a Question to the Government. I asked [OFFICIAL REPORT, Vol. 256 (No. 25) col. 725]: Whether they will implement the guarantees to farmers by abandoning support subsidies and substituting minimum prices, supported, when necessary, by Government buying and control of imports? The noble Earl gave me a firm "No" in reply to that Question. I should like to repeat the question to-day; and if, as seems not unlikely, he gives the same answer when he comes to reply, I should like to know why the Government will not consider that proposal and what alternative they have in mind. Would the noble Earl bear in mind that his right honourable friend said yesterday in another place that if we join the Common Market considerable changes in the present system of price support will have to be made? With that 1 entirely agree. But if considerable changes have to be made a year hence, why not now? We could be gaining some experience.

I should like to know, also, whether the Government will reconsider their refusal to set up machinery for regular inquiry into the wholesale and retail prices of meat. Six years ago, as the noble Earl will probably be aware, the Interdepartmental Committee on Social and Economic Research recommended the compilation and publication of an official series of farm wholesale and retail prices of a number of food products. That is a different thing from the special Committee which the Minister is now setting up. I want to see regular machinery, so that we shall know these things and not have this speculation all the time as to where the money is going and everyone blaming everyone else. I submit that it is fantastic that although the public spend nearly £1,500 million a year on meat and bacon products, the Government still profess official ignorance of the prices they pay. It seems extraordinary for the Government to say they do not know what prices they pay. I think it is high time they found out.

We should also be told whether the Government have yet decided, at least in principle, in favour of orderly marketing.

After all, farming opinion, as my noble friend Lord Williams of Barnburgh pointed out, is overwhelmingly in favour of a Meat Marketing Board. I do not know whether or not it was at the request of the Government, but the N.F.U. leaders have managed to fob them off for another year. I submit that if instead of 3,400 slaughterhouses we had a system of central abattoirs and a statutory marketing board, with full powers over production, distribution and marketing, us, indeed, was asked for by the National Farmers' Union of Wales, this present costly farce would be no more, and housewives and taxpayers would get a fair deal.

I would suggest that anyone who has any lingering doubts of the imperative need for such a board should read a research pamphlet called Meat Marketing Margins in Britain by Mr. George Houston, of the University of Glasgow. which was published on December 18 last. It concerns an investigation in Glasgow, and it gives figures for the break-down of prices and total realisation of a 300 lb. side of bullock or heifer. It shows that, on top of his costs, the retailer added nearly 60 per cent. in arriving at his retail price—a fantastic margin. This was in the autumn, 1961. Of course, Mr. Houston draws the conclusion that a large part of the fat stock subsidies might well be debited to the retail trade.

More recently, in an article published in a Glasgow newspaper, Mr. Houston commented on the Minister's statement that consumers had a £35 million bonus, which was 5½per cent. of consumers' expenditure on all meat in 1961–62. My Lords, 5½ per cent. on £600 million does not work out at £35 million. The Minister has ignored, apparently, all imparted meat, because the consumer consumed more than doable £600 million worth, and I think that is as faulty as the other reasoning. Then, too, on the basis of figures that he has produced, Mr. Houston thinks that the retailers' bonus was more like £30 million. But, above all, is it the fact, as is said in this article, that the request for background information is "being treated as a matter of parliamentary politics"?

Here we have a situation where a mistake of £78 million has been made—an unavoidable mistake, so far as the estimators were concerned. It is our money. There is an argument about who has benefited, and the Minister says, "We don't know", and we get all kinds of fantastic answers. I submit that we should be put in a position of knowing. There should be this investigation, not just the once-for-all inquiry that we are to have, and these statistics should be made available. I think they are essential if we are to get down to sensible marketing. I believe that the final conclusion in that research pamphlet is unanswerable. It is this: The basic weakness in the present system of guarantees is that we have what is virtually a support price system for fatstock, without an essential clement of such a scheme—a buyer of last resort. One cannot talk of a 'free' market when, for institutional reasons, supplies are virtually unaffected by price falls below a certain level. It is unquestionable, my Lords, that the Government's farm policy lies in ruins. It stands condemned by every section of informed opinion throughout the country. Though individuals may do so, it does not lie in Governments to apologise. I believe that, if the present Government have the least pretensions to be considered a Government, we shall hear from the noble Earl tonight that this question of deficiency payments is being seriously investigated and considered and that in their place we shall have a return to the 1947 Act, modified as necessary in accordance with present conditions, but with firm prices related to specified quantities, with control of imports, and with a powerful, vigorous, marketing board for each of the staple commodities. If the Government cannot promise that, they will, in my opinion, have forfeited the right to speak to, or for, the British agriculture.

4.55 p.m.

EARL. FERRERS

My Lords, the noble Lord, Lord Stonham, said that over the past four years he has listened to every speech that the noble Lord, Lord Amherst of Hackney, has made. I think I in turn can say that over the past four years or so I have listened to nearly every speech the noble Lord, Lord Stonham, has made. One sometimes gets used to the things people say, and the way they say them. One is used to the noble Lord making rather sweeping statements. I confess that I am filled with alarm at speaking this evening, having been told that nobody on this side of the House is capable of talking any sense at all. Those kind of things are sometimes rather dangerous, because they land back at one's own feet. I am reminded of (I think it was) the present Leader of the Conservative Party, who, in another place, said, "Why is it that when the Opposition have the choice of weapons they always choose boomerangs?"

LORD STONHAM

My Lords, if the noble Earl will allow me to say so, I was confining my remarks to the dilemma in which, as I see it, the Government now find themselves, and to the fact that no sensible suggestion had come from the other side for a way of getting out of it.

EARL FERRERS

My Lords, I thought the noble Lord's enthusiasm possibly carried his logic away for a few minutes. However that may be, I did not intend to say much on the question of meat subsidies, but I should like to say one or two things in order to clear the air a little. The noble Lord, Lord Williams of Barnburgh, mentioned, as have many people, the little phrase "the missing millions". I remember when I first heard that phrase somebody said, "A lot of money has gone astray here". Of course, when we look into it we find there are in fact no missing millions at all, because, as noble Lords know perfectly well, if a farmer sends a beast to a market he receives the market price and the Government make up the difference between the market price and the guaranteed price. Where the market price is lower the guaranteed price is higher.

In this instance, £35 million more than was expected has been paid to farmers on account of beef. Can we get this point straight first? There is no question of any missing millions, because the millions have been paid to the farmer. The butcher and the wholesaler have had cheaper meat; and I am with the noble Lord, Lord Williams of Barnburgh, when he asks "Who has had the benefit of the £35 million?" Certainly it would appear that the butchers have had the benefit if they have received cheaper meat and yet have sold it at a higher price. But there is no question of millions having gone astray, as it has now been blown up to appear to the eyes of the public. In fact, the millions have been paid out to the farmer.

I have come here this afternoon hoping to be a little more constructive as opposed to destructive, and looking a little towards the future rather than at the present, because I think, without question, there is a feeling of anxiety in the agricultural industry not created solely by Governent policy, as noble Lords opposite would have us believe—although Government policy receives about 95 per cent. of the blame—but created by sheer economic facts. Costs have gone up and continue to go up, and prices have come down and show every likelihood of continuing to come down. Somehow, within this general framework, the farmer has to secure a reasonable income, both now and in the future. There are two ways in which he can do this. Either he can reduce his costs or he can increase his output. If he increases his output he may well be subscribing to over-production; and to reduce his total costs, when each individual cost is rising, is very difficult without running into either over-mechanisation or over-capitalisation. It is small wonder therefore that the farmer, the small farmer in particular, is worried. On top of this place the mantle of the Common Market, with all its unknowns, and indeed its loose talk, and it is hardly surprising that one finds farmers apprehensive about the future. I do not share their alarms to the full, although I think I appreciate them to the full; and I would say first that I would beg the Government not only to understand the farmer's problems but to be seen to understand them. Too often the Government is credited, wrongly in my view, with not fully appreciating the fears of agriculture and in being about to enter into some commitments which will permanently damage agriculture. I believe the Government understand these, and understand them fully, but the farmer wants to be aware that that is so.

In all these deliberations over agriculture I should like to see the Government and the industry tackling the problem together and facing the unknown together, because it is the fear of the unknown that is the root cause of all the trouble. It is for this reason that I was sorry at the last Annual Meeting of the National Farmers' Union that a Resolution was passed saying they would support entry into the Common Market only if Annual Reviews and guaranteed prices were kept, and horticulture and a producer-controlled marketing supported. I thought it a great pity the industry should take this intransigent view and I trust the Government will not be unduly affected by it.

My view is that if we go into the Common Market farmers should feel that agriculture will be protected; and that the Government have pledged. That is, after all, the strategy of the operation, but the tactics of the operation are how that support is to be offered; whether by Annual Reviews, guaranteed prices, tariffs or what-have-you. In this immense field, into which we are moving, we must first and foremost make the right decision on strategy; shall we go into the Common Market and, if so, shall our agriculture be supported? Having taken that decision, we should then take the decision on tactics; and we must let tactics result from the strategy and not determine it.

I myself hold no fixed views over the advisability of continuing Annual Reviews and guaranteed prices should we enter the Common Market. Certainly I should like them. Under the existing circumstances they suit us well. We have come to know them, we have become used to them and we like them; but if we go into the Common Market conditions will be totally different, and our existing machinery for the protection of agriculture may well prove inadequate, impractical or unsuitable for these different circumstances. As an industry, therefore, we must be sufficiently flexible to allow our organisations to be altered, if need be, and to realise that machinery must be made to fit conditions and not try to make conditions fit the machinery.

The Common Market is a subject of such great complexity that I tremble to mention it in your Lordships' House. It is one about which everyone talks and thinks and about which, because of its very complexity, the majority of people, in which category I include myself, are only partially and barely informed. But a decision whenever it is taken, and whichever way it is taken, is going to affect each person and each industry deeply, and possibly agriculture more than most. I used to think that if the prospect was worrying for agriculture it was very much more worrying for an industry that depends on a 33 per cent. tariff for its support. I was talking to somebody the other day who is high up in the motor manufacturing business, and he told me, "We are all ready to have a go". I thought then that if that is the view of the motor manufacturing industry and they are ready to take the plunge, then so, indeed, it ought to be of agriculture.

In the simplest of terms—and I realise the danger of reducing a very complex and difficult argument to simple terms—if industry is prosperous, then the country will be and then agriculture can be, although it does not necessarily mean it will be. If industry is not prosperous, then the country will not be prosperous, then certainly agriculture will not be. If agriculture is to depend on a prosperous industry, then, indeed, it is up to us to encourage a prosperous industry. Should it be considered, and wisely considered, that by joining the Common Market industry will be enabled to be more prosperous, then I feel that agriculture should be prepared to support it. In fact, I would even go one step further and say that I myself would be prepared to support entry into the Common Market, if I thought it right for industry, even though agriculture might be adversely affected by it.

VISCOUNT ALEXANDER OF HILLSBOROUGH

My Lords, it is a very interesting line that the noble Earl is putting up. May I ask him whether he thinks that all the industrial part of the nation, in every trade, takes the view of the motor car industry with regard to going into the Common Market? Is there a difference of opinion throughout the industrial production side of the country? Why should agriculture have to suffer?

EARL FERRERS

I was endeavouring to look at the scene from a rather wider angle. As the noble Viscount knows, I am engaged in agriculture myself, and I do not wish to see agriculture suffer. I was trying to enable agriculture to look at the wider context rather than look at entry into the Common Market from the standpoint of agriculture solely. As I was about to say, I should be prepared to support entry into the Common Market if I thought it were going to aid the industry of the country in general, even if agriculture itself might appear to be adversely affected, because if we did not join and industry as a result suffered, agriculture in the long run might find itself far worse off outside the Common Market, with a sick industry, than it would have been inside the Common Market with a thriving industry. But that, I realise, is looking on the black side. I feel that agriculture should be prepared to accept the challenge willingly, and we must remember that the challenge is not the challenge of entering the Common Market; it is merely to take a decision to explore the possibilities of doing so. There are seven countries, each of whom fears for its agriculture in some shape or form, and it would appear to me there must be some common denominator other than fear to which these countries can hold to ensure that their agriculture and, indeed, their country as a whole, prospers. I cannot believe that patience and time will not uncover it.

Whatever decision is taken in that respect, one thing I feel sure is that we are bound to see great increases in the size of units, whether the unit is a herd of cows, a holding, a machinery syndicate or anything else. In my opinion, we have hardly scratched the surface in this direction. It is a trend which personally I deplore and it is a trend which the Government will not acknowledge, but nevertheless I feel we must accept the fact. Machinery syndicates, for instance, must grow in size and number. I remember saying in your Lordships' House about a year ago that I thought the machinery syndicates would not have a great future because, although they were economically sensible, practical farmers do not like co-operating; and for that remark I got a rap on the knuckles from the noble Earl who speaks for the Government, and I believe, in retrospect, he was right.

Since then, not, incidentally, because of his strictures upon me, I have changed, or rather modified, my views. I still think that machinery syndicates are economically sensible; I still think that farmers instinctively do not like them, but I still further think that farmers have jolly well got to use them because otherwise they will find themselves out of business. Machines get more and more expensive and can be justified only by being used on large areas. In East Anglia the use of sugar beet harvesters has increased enormously, and one finds farmers, sometimes next door to each other, farming 15 or 20 acres, each using his own beet harvester. Clearly these implements are used for only a quarter of their capacity; and that this type of thing should happen is little short of stupidity. But farmers will have it that way if they can, as with other methods of co-operation, for one reason only, and that is that they value their independence. I would only say that independence is becoming not only a very expensive commodity but a very expensive luxury.

I think we must see co-operation not only in machinery but in every other aspect of farming, even in breeding. The days are passed when the leading pedigree breeders could afford to buy a bull on its pedigree and its looks. The advent of artificial insemination and deep freezing of semen has altered that. Big pedigree breeders will have to amalgamate, and again forgo some of their independence, and employ a competent geneticist to conduct their breeding policy. To conduct any genetic policy which is not to have chance and guesswork as two of its principal ingredients, large numbers are essential. If the pedigree breeders are not prepared to put large numbers at the disposal of the geneticists then they can expect no great advances, either in performance or in uniformity of their stock. What is more, they will find themselves rapidly outstripped and ousted from the position of leading the world in pedigree breeding. Because already a group of farmers in America have done this; they have joined together and employed a geneticist to control the breeding policy, and he has some 20,000 cattle under his control. The time may well come when a bull will not be fully used until after he has died and has been proved successful, and then he will be used by using semen which was taken from him during his lifetime and frozen. These may seem unlikely possibilities, but I believe it is merely a question of time before we see them in operation.

The poultry industry has already adopted this principle of calculated genetic breeding, with outstanding results, and the improvement in poultry strains in the last ten years has been amazing. It may be a more simple problem with poultry than with bigger animals, but the principle is there. If we are to make use of science and genetics, then our pedigree breeders must be ready to forfeit their independence, to amalgamate and adopt an overall policy controlled by a geneticist. If they fail in this respect they will be left standing at the starting point whilst others overtake them. I realise that agriculture faces vast obstacles in the future which will require intelligence and initiative as well as care and, indeed, foresight to overcome. One can only hope that the Government and the industry together, and not apart, will be prepared to meet these obstacles and overcome them, which in turn will benefit not only agriculture but the country as a whole.

5.15 p.m.

LORD WALSTON

My Lords, I am sure that all your Lordships are most grateful to my noble friend Lord Williams of Barnburgh for having inaugurated and initiated this debate. I think we are also particularly grateful to those two courageous and noble Lords—one might almost say gallant Lords—who have been found on the opposite Benches to speak in this debate. I am only sorry that they did not have more reinforcements from the wealth of agricultural experience which certainly normally is sitting there. I can only imagine that they found the task of defending this present agricultural situation beyond either their skill or their conscience.

So far, and very properly, in my opinion, this debate—with the exception of the speech of the noble Earl who has just sat down, which I must say I found extremely interesting and with a great deal of which I agreed on the purely agricultural side—has concentrated on the question of meat prices and the Supplementary Estimate. It seems to me that that is quite right, because, after all, the object of any agricultural policy must, in the final analysis, be the welfare of the consumer. Any agricultural policy which is based solely upon the farmer or the farmworker or the landowner or on the middleman is bound to fail. The criterion must be not only: "Does it give fair rewards to all those engaged in producing and distributing food?" but, "Does it succeed in giving the consumer the food which he wants at prices which are right and proper?" Therefore, I am glad that this debate has so far concentrated on this particular aspect. But perhaps it has stuck just a little too closely to the immediate topical problem of meat. It is an important one, it is perfectly true, but it is not by any means the only one. What has happened to meat in the last twelve months is not the only criterion by which to judge the success or failure of the Government's policy.

I would ask your Lordships to look back over the last ten or eleven years, because we have there quite a long period of time in which to see how the Government have succeeded in ensuring that the people of this country have enough food, good food and cheap food. My noble friend Lord Stonham has quoted some figures which are very relevant to this aspect, and I hope your Lordships will bear with me if I give you a few more, presented in a somewhat different fashion.

Since October, 1954, in the last six years up to October, 1960, according to the official index the price of fat cattle has risen by 11 per cent.; the index of retail prices of beef has risen, not by the same 11 per cent. but by 35 per cent., a larger spread on the retail side than on the farm side. During the same period, mutton and lamb prices fell by 23 per cent., but instead of there being a corresponding fall in retail prices those retail prices over the same period rose by 12 per cent. That, I believe, ought to make one think and look round to see whether it is happening elsewhere, or whether it is confined to fat cattle, beef and mutton.

If your Lordships look at a few other important commodities the picture is interesting. Look, for instance, at butter— imported butter, not home-produced butter. Here you will find that between 1950–51 and 1961–62 the wholesale price of New Zealand butter, taking the former year as 100, has dropped to 86, whereas the retail price of butter in the same period has risen to 113. The price of milk to the farmer has risen by 4 per cent.; the price of retail milk has risen by 55 per cent. Remember, my Lords, retail margins for milk are fixed by the Government. The price of bacon pigs has, as my noble friend pointed out, dropped in that same period by 10 per cent. The price of imported Danish bacon, which constitutes the major part of our imports of bacon, is virtually the same—it is, in fact, 102 per cent., in place of 100 per cent. But in spite of that, in spite of what is on weighted average, a slight drop in the price of bacon, the retail price has not remained the same; it has risen by 62 per cent. in that same period.

Finally, what about wheat? In the case of home-grown wheat, again emphasising what my noble friend has just said, the guaranteed price to the farmer is now 4 per cent. less than it was eleven years ago. The figure for imported wheat is 10 per cent. less than it was eleven years ago. By now your Lordships will not expect me to announce that there has been any reduction in the price of flour or of bread. In fact, the price of flour to-day is 64 per cent. higher than it was eleven years ago, and the price of bread 145 per cent. higher than it was eleven years ago. There must be some answer to this problem. The Government must give us some answer to it. They cannot sit back and say "Our agricultural policy has succeeded" when those figures, taken from official sources, show without any question of doubt whatever that in many cases the price to the farmer, both at home and abroad, has fallen, and in every case the price to the consumer has risen; and even where the farm price has risen somewhat, the retail price to the consumer has risen out of all proportion. That is clear proof of the absolute failure of this attempt by the Government to combine freedom for importers and businessmen and, to a certain extent, to farmers, with, at the same time, security for farmers. Freedom and security are both admirable things, but, like champagne and caviare, they are very expensive things indeed and it will require an extremely rich uncle—far richer than Mr. Selwyn Lloyd has any chance of ever becoming —if we are going to live on such a costly diet.

There have been criticisms of this system, and I would add my own criticism. Because it really is, my Lords, if you look at it from any distance at all, a cock-eyed system. Just imagine yourself in the, shall I say, enviable position of the noble Earl the Parliamentary Secretary in his office in the Ministry of Agriculture one morning when his private secretary comes in with his face long and sad because he has just heard news that the lamb crop has been an all-time record; that we have produced more lambs than ever before in this country. Of course that is no cause for rejoicing at all. All it means is increased Supplementary Estimates. And where is the money to come from?

I have never had the privilege of sitting under the noble Earl's desk and listening to this, but we can imagine it happening: imagine a few months later that he is approached by one of his officials with a beaming face because the latest reports show that the drought has so stricken the barley crop that it will be the lowest for the last ten years. There will be rejoicing in the Ministry of Agriculture and in the Treasury, because they will save in Supplementary Estimates, and perhaps thereby get away with the increased Supplementary Estimates that they ought to put forward for these tiresome lambs. This is the way this system is supposed to work. And it cannot work. We see that it does not work. We see that it is illogical and unreasonable. We hope that the Government may accept that and, before it is far too late, may do something about it.

Let us now look a little towards the future. I know that it is easy to criticise, and particularly easy to criticise what has been going on in the last ten years in agricultural politics. It is not always so easy to be constructive. With your Lordships' permission, I will be bold and try to be a little constructive. I emphasise that such constructive ideas as I put forward—if indeed they are constructive—are entirely personal; they are in no way the official policy of my Party. We have now emerged—many years ago we emerged—from the prewar situation of agricultural shortages. Then it was essential for us in this country and in all European countries to produce all the food we could to feed a starving world. It was with that background that my noble friend Lord Williams of Barnburgh, when he was Minister of Agriculture, created his admirable and famous agricultural policy. It was based on two things: on security and on the need for rapid expansion. Those days have now passed. There is still a world food shortage. There are still many people in this world who are starving.

I should like to see the time come when there is evolved a system whereby the food surpluses of the New World, and such food surpluses as exist here, were put at the disposal of the starving millions elsewhere. But I am afraid that at this moment that is not practical politics, and it is certainly not a practical solution to our present situation; although I hope that we shall continue, with the Government and internationally, to strengthen our efforts to increase the purchasing power of the people who need the food that we want to produce and which is, when we do produce it, such an embarrassment to us. But, as I say, we cannot rely on that; we have to look elsewhere for a solution.

Before coming to that, I want once more to emphasise the second point of my noble friend's 1947 Act, which was security. We, as farmers, must have security—I think that is accepted by everybody to-day. The reason for the need for that security is not in order to increase our own incomes as farmers: it is to enable us to do our job properly; to make the necessary investments without which it is impossible to farm efficiently, and without which it is impossible to bring about any long-term reduction in the price of food and at the same time compete, as we want to compete, with industry in paying higher wages to those who actively do the work and produce the food. So security must be the underlying keynote of any agricultural policy.

But this security, because we no longer have the overall need in this country for increasing food, must not be in the form of an open-ended guarantee which gives a fixed price regardless of the quantity that is produced. In my opinion, it must be for limited and agreed quantities. That, I suggest, is best carried out by some system of long-term contracts, principally, though not invariably, operating through producer boards. I should like to go into far more detail on this, but the time is late and I will not detain your Lordships with any more details of this form of scheme, details which you can fill in for yourselves. But that should be the basis of our agricultural policy; and, in my opinion, if we enter the Common Market such a system, based on long-term contracts, will fit in in a most desirable way with the system which ought to arise on the Continent as the Common Market develops.

But if we are going to have this situation, where unlimited expansion is held up, where we are not encouraged to produce all we can, where production in some cases is even restricted and curtailed, and if at the same time we want to maintain our own standard of living and to pay a higher wage to the farm worker (which not only do we want to do, but the sheer force of competition with industry will force us to do), there is one inescapable conclusion which we must have both the logic to draw and the courage to face. It is an unpalatable one. It is this: we cannot have on the land so many people as there are to-day. My Lords, that is what is, in fact, happening; the sheer force of economic circumstances is bringing that about. We talk of the drift from the land; we talk complainingly about it as if it were a bad thing. We talk about the shrinking number of farmers and the growing size of farms. It is happening in this country to-day, in the United States, and all over Europe, and is bound to happen. In my opinion, my Lords, the fewer people that any country has engaged in producing its essential food, the higher the standard of living that country is likely to enjoy.

So I see nothing to complain about when this drift from the land takes place. But when I do complain is when it takes place in an uncontrolled, uncoordinated manner, causing grave hardship and great suffering to many people who have devoted their lives to producing food and who are denied the opportunity of looking for their living elsewhere—denied those opportunities by reason of their geographical situation, or their former education. But, above all, because of their age: they are too old to move to some other industry.

There, my Lords, is where Government policy should come in. Government policy should not sit, like Canute, trying to keep the tide from wetting its feet. The tide is inevitable; it will advance. It is the job of any forward-looking, honest Government to see that people are not harmed and hurt by the advancing tide. I suggest to your Lordships that we shall do far greater good and deserve far better from the farming community if we face this fact than if we say that we must maintain our agricultural structure as it is and do our best to put the clock back. In the long run, that can result only in far greater hardship to those involved than would a policy of accepting this and looking forward to it.

There again, without going into any detail, I suggest to your Lordships that the right answer to this problem of having a smaller labour force on the land and a smaller number of farmers, a larger unit producing more efficiently, is to be found not only in the suggestion of the noble Earl, Lord Ferrers, of co-operative use of machinery (with which I am in complete agreement), and other forms of co-operation, but also in other ways. It lies in an actual incentive to what we can call the marginal farmer to remove himself from farming by receiving a down cash payment, an annuity or a pension, in return for which he will either give up his land and receive his cash payment, or his pension, if he wishes it, or retain his land and the house in which he lives (which is often more important than the land) until his death, receiving, in exchange for his offer to the Government to hand over his land to a Land Commission at his death, an annuity to carry him on until that time.

That is the proposal which I think a forward-looking agricultural policy should make, and which I suggest to your Lordships will do far more over the next 20 years to make our agriculture—I will not say efficient, because it is to-day efficient, but to help it to retain its place as one of the most efficient agricultures in the world, and at the same time to ensure that those who have devoted their whole lives to the industry do not in their declining years suffer hardship from the inevitable squeeze of prices that is bound to come.

My Lords, this, as I say, is only a very brief and inexpert exposition of the way in which minds should be working at the present time, and I do urge upon the Government that they should have the courage to-day to admit that their attempt to combine security with freedom has failed and has proved a disastrously costly policy to the country, to the taxpayer, to the consumer; that they should draw a veil over an unhappy episode in their past and should courageously look forward to what the true facts of economic and agricultural life show in the future; and that they should base their policies upon that future, instead of harking back to those bad old days which have been only too well described by the figures which noble Lords have quoted.

5.37 p.m.

LORD WISE

My Lords, I want to intervene for just a few moments in this debate, but, before I do so, I should like to endorse what the noble Lord has just said about the noble Lords who are taking part in this particular debate. Looking through the list, I see there are three from Norfolk, one from Suffolk, one from Cambridgeshire, and one from Essex. That is a very good example of East Anglian life. Let me tell the Government that if East Anglia rises up against them, well, they had better look out, because we in East Anglia are a very united and stubborn race. I intervene only because it seems to be the usual practice in our agricultural debates that I should say a few words from this side, and that the noble Lord, Lord Amherst of Hackney, should always represent the Government on that side. Well, we are true to form to-night. And I also include my good friend Earl Ferrers, who is also from Norfolk.

I think this discussion has come at an opportune time. I do not want to go into a lot of facts and figures, nor do I want to deal with the Report of the Committee, but I wish to say a few things more or less from the point of view of the ordinary farmer. We have spoken many times from this side on the question of marketing. I think in no discussion on agriculture has the question of marketing and the need for the revision of marketing conditions not been brought to the notice of the Government. We have given various warnings year by year, but these warnings have apparently always been in vain. At long last, however, there is a sign that the Government are taking some notice. Farmers are now beginning to realise the uncertainties and the vicissitudes of their industry. Present events are touching their pockets. They are not only assessing their falling stock and crop values, but taking note of their profit and loss positions. I speak in that respect of general farm practice as operated by probably 90 per cent. of our farming community.

There may of course, for one reason or another, be exceptions among those farmers who are possessed of great wealth—some of them are—acquired in other industries, by inheritance or by the fact that they are owner-occupiers of their land. Opportunities are open to farmers of those types which are denied to others. In the ordinary run of life of a British farmer rising costs, lower returns and depreciating values have made him appreciate the precariousness of his business. He has been caught up in its uncertain activities, its outmoded systems and the difficulty of meeting his financial commitments.

My noble friend a moment ago mentioned the question of freedom. The idea of freedom, so readily promised in some quarters, no longer touches the farmer's imagination or raises any enthusiasm in him. He has at long last become aware that promises are often spurious and cannot be implemented. He has come up against hard economic facts. He has been passing through a period of drastically fluctuating prices, changing week by week for no reason whatsoever so far as he is concerned, but almost invariably to his detriment. He has heard of high borrowing rates, of credit squeezes, of pay pauses. He can feel the effects of these upon himself and on the ability of the consuming public to purchase home products from his neighbours or from his own farm.

The economic health or sickness of the nation can be judged in no small way by the prosperity, or lack of it, of those engaged in the basically important industry of agriculture. In health it can proceed upon customary ways and feel all right, but in sickness remedies must be tried and, so far as farming practices and procedures are concerned, speed of application is now essential. None can say at the moment what will be the outcome of the consideration which is being given to the February review. We cannot yet say what far-reaching decisions, if any, regarding British agriculture will be taken in connection with the Common Market. Discussion on the Common Market will naturally follow later. But whatever our views may be arising from the scanty information on this matter which is before us, we must unfortunately just wait and see. I think, however, it is quite fair to say that throughout the farming industry there is much hesitation in expressing any favourable comment on the wisdom of amalgamation, such as may be contemplated. I cannot bring myself to believe that amalgamation with France at the present time would be acceptable to this nation.

I mentioned a few days ago in your Lordships' House that in the last year 19,000 farm workers had left the land. This drift from the land is not singular to any recent year; it would seem to have been continuous. I cannot entirely agree with what was said a moment ago by the noble Lord, Lord Walston, behind me. Personally, I am sorry to see the men leaving the land. It is not fundamentally a question of modern machinery and methods supplanting manual labour and simplifying production and harvesting; it is economic; it is tied up with the financial structure of the industry. Admittedly, some workers may have left the countryside in the hope of receiving higher wages with better prospects for advancement in the cities or the towns. Some may have gone to the Commonwealth. However, it is my experience that farmers do not readily dispense with the services of their workers willy-nilly; it is generally with regret that they cannot afford to employ the same number of men as hitherto. Loss of labour on the land is no sign of a healthy industry; it is a sign of creeping decay.

It is interesting to hear that the Government are taking steps to consider reorganisation of the fatstock marketing system. Reorganisation, however, should not stop at fatstock marketing. This Government awakening has been a long time coming, and may be owing to the recent improvement of marketing conditions within the industry itself. If it is, then I congratulate those who have brought about some realisation on the part of the Government that our present system of fatstock marketing is still open to the operation of manifold abuses, gambling and malpractices.

It is said that a Committee will be appointed, and the setting-up of the Committee has already been criticised. But I hope that they will arrive at a decision without delay that our marketing systems, whether in respect of stock, crops or any other agricultural or horticultural products, should now be carried out on sensible and fair lines. An investigation into other aspects of agricultural selling and buying would be just as appropriate at the present time. The marketing of cereals is carried on in the most haphazard and unsatisfactory manner, with the odds against the producer. It is the merchant's wits and knowledge against the farmer's overdraft worries. Those who had to sell barley directly after the harvest unjustly suffered and will bear this out.

I want the people on the land, who work twelve long, weary months producing our home-grown food, to have a fair deal and a fair price for their products. There cannot be any justification for the violent fluctuations in the prices that farmers receive for these products. They do not occur in the articles —machinery, feeding-stuffs, manures et cetera—which farmers have to buy. It is time the idea ceased that the farmer is easy game for easy money. I hope that time has now arrived.

Apart from fatstock marketing, there are many matters in farming practice which could well be investigated and set right, to the advantage of those who obtain their livelihood from tilling the land. I particularly stress tilling the land, as I am more concerned with them than with others who possibly take some part in the industry. I need not refer again to rural amenities—housing, village developments and suchlike. We spoke of them a few days ago. But there are one or two things of which I think the Government should take notice in assessing the industry right through, so that possibly some improvement might be effected in these directions. Access to the land is denied to many young men wishing to farm, by reason of the abnormally high price of farming: the capital outlay involved in entering the industry; the scarcity of small farms and smallholdings to let; heavy borrowing charges; heavy costs of machinery, implements and repairs; the letting of farms by tender rather than by agreement at a fair rent; transport and contractors' costs, and the measure of profits and basis of costings and discountings of merchants and manufacturers. All these are matters which have their effect upon the prosperity of the industry, and ones of which, in my view, the Government, through the Minister, should take note if the farmers and farm workers are to be assured of a steady and satisfactory livelihood.

5.52 p.m.

BARONESS ELLIOT OF HARWOOD

My Lords, I intervene for only one moment, and through the kindness of the noble Viscount, who has said he would not object to my saying just a few words, because I am a farmer and am deeply interested in this debate. I apologise for not being here at the beginning, but I was in fact at the Home Office engaged on my Committee. Because of that, I was unable to listen to the noble Lord, Lord Williams of Barnburgh, but I shall read his speech with immense interest because he is extraordinarily knowledgeable and so very helpful. I have been stung into rising by reason of the fact that, as has already been said, this debate has been between Norfolk and East Anglia, and the noble Earl who is going to wind up farms in the South of England. I farm in Scotland, and if I might say one word from that part of the world I think it fits into the picture because agriculture is one of the very important industries in Scotland.

I should like to add only one or two things to the debate. In the first place, I do not entirely share the strictures of Lord Stonham and one or two others from the Opposition, although no doubt all farmers have a grumble—and I have my grumbles, too. But, before I relate my grumbles, I should like to say to the Minister that I think there are one or two excellent policies which Her Majesty's Government have been pursuing in the last years for which I, for one, should like to say "Thank you". In Scotland, we are a great country for breeding both cattle and sheep. I think we probably produce the best beef and the best mutton in almost any part of the United Kingdom. We have a very big hill-farming area, and I should like to thank the Government for the effects of the Hill Farming Scheme which has now been in operation for, I think, nearly ten years. I have not the statistics, but I am quite sure that, if the statistics were available, your Lordships would be delighted with the enormous amount of improvement which has been made in hill-farming under the Hill Farming Scheme—the improvement in drainage, in cottages, in access to far-away shepherds' houses by roads and so on. All that has made the running of great farming areas in this way very much easier, and that has added greatly, I think, to the efficiency of the production of cattle and sheep.

I should also like to thank them for the grants which have been available for things like hill draining, land draining, for help with fertilisers and so on, all of which has improved the quality of our land, our grass and our hills. I should like to say "Thank you" to the Government for all that and for a highly successful Scheme which I trust—and this I say with some feeling—will not be abandoned in the future if we have to make any alterations due to changes in our position in the European Market. But I think we have a really efficient and good breeding stock industry, certainly in Scotland, and, I think, in other parts of the United Kingdom, although I know much less about what is happening in England in these ways.

The question of efficiency is of vital importance; and, unfortunately, as the noble Lord, Lord Wise, has said, it very often means the replacement of manpower by machines, because that is one of the ways in which you can reduce your costs and get greater efficiency. However, in the particular section of the industry in which I am interested, the livestock industry, it is more difficult to get efficiency by that method than by any other, because, in fact, you cannot replace shepherds and stockmen by machines. They just are not interchangeable. Therefore, you must keep your shepherds, you must keep your stockmen, you must pay them good wages, and you must give them good conditions. Then, at the end of the day, the amount of the product you have does not depend on anything except the fact that the breeding of animals is controlled by forces outside your influence.

One may be lucky and get a lot of twin lambs; one may, on the other hand, be not so fortunate. But, whatever you do, you can get them only in the breeding cycle, and you cannot increase that, make it any faster or anything else. So your efficiency and your product is controlled, to some extent, by conditions outside your own control. Therefore, the price at which you sell your product is a matter of great importance; because while the wages go up—and I am the last to grudge any shepherd or agricultural worker a good and proper wage—whereas in some sections of the industry you can economise and thereby reduce your costs, in the matter of hill-farming and of producing livestock (storestock, this is, not fatstock) it is very difficult to reduce your costs in the way of manpower. What we get in the market is really the only way in which we can recoup ourselves for any additional costs. Prices, therefore, are of very great importance indeed to us.

There is one other point, which I do not know if anybody has yet mentioned, on this question of costs. Not only is there the question of economy in manpower, but, once you get (as you do in arable farming) a tremendous amount of machinery, then one of your big costs is that for diesel oil. I think that the Chancellor of the Exchequer occasionally looks upon oil as a taxable commodity because it represents people running about in motor cars or motor buses, and he does not realise that it enters into the cost of farming very much indeed. I hope that possibly, at some period, that will be considered as something of which we might be relieved, or that the tax will be brought down at any rate in the farming industry.

At this point, my Lords, I am not going to enter (nor could I) into this question of Common Market or no Com- mon Market, or whatever is going to happen, but I am concerned about a certain Report which was published in Scotland the other day about the economic condition of Scotland at the present time, and which is known as the Toothill Report. It got immense publicity. I think it was a very remarkable document. I have not had the courage to wade through its 500 or 600 pages, but I have seen some of the summaries. Not one single word in that Report was given to agriculture—not one. This was a Report on nothing except urban and industrial conditions. I feel very disappointed about that, and I hope that the Minister who is going to wind up will pass on to the appropriate authority in another place the fact that in Scotland, where agriculture is a very large part of our economy, we have had a Report on the economic condition which never mentioned the word "agriculture" in all its hundreds of pages.

The noble Lord, Lord Stonham, mentioned a subject which for many years has been on the agenda of Ministers of Agriculture. I am sure the noble Lord, Lord Williams of Barnburgh, inherited it from his predecessor; and I can remember when my husband was Minister of Agriculture before the war, and it was on his Agenda then. It concerns the best method of slaughtering cattle. There are those who are strongly in favour of central slaughtering. I once had the very doubtful experience, while in Sydney, Australia, of being taken to see the central slaughtering arrangements of that city. I am afraid it put me off central slaughtering for ever and ever. They conveyed hundreds of cattle to these vast abattoirs during the war —although they may have changed now. To begin with, it is a horrible job on a very large scale for the men working there, and these men were perpetually on strike. When they were on strike no one slaughtered the animals or fed the animals, and consequently, they became thinner and thinner. Finally, when they were slaughtered, their flesh was not comparable to anything which we would consider good meat over here. I think that before we embark on a policy of central slaughtering, we must consider whether or not the wonderful fresh meat which we can get in this country, which is slaughtered as near as possible to the place where it is bred, is not the result of a good method. I am not defending the existing arrangements for slaughtering in this country; they could be very much improved. It is now the duty of local authorities to take responsibility for slaughtering and slaughtering arrangements, and I should hope that we might press them to exercise their authority and to see that the slaughtering arrangements are good arrangements, rather than to embark upon central slaughtering, which I am sure would not give us anything like such good results as the results we have at the present time.

When the Minister replies, I hope that we shall have some assurance about what is in the mind of the Government at the present time in regard to our agricultural policy in the future. I echo the uncertainty which Members on both sides of the House have expressed today, although I have great confidence, as we have been assured many times by leading Ministers of the Government that they have no intention of letting agriculture down, that we shall be safe from that point of view. However, there were just one or two points which I felt I must make, particularly as no one has spoken about this aspect of our industry—the breeding of livestock, particularly in Scotland—and I ask the Minister to consider one or two of these points I have made, and to pass them on to the Minister of State, Scottish Office, if he thinks that is the right thing to do.

6.4 p.m.

VISCOUNT ALEXANDER OF HILLSBOROUGH

My Lords, I am sure that we on this side of the House welcome the sudden invasion of the debate, as it were, by the noble Baroness who has just spoken. It is good to hear of her interest in farming still, and to listen to her references to her late husband's interest in agriculture while he was living. I turned one thing over in my mind as she spoke about Scotland, and its pre-eminence in this and that. Yesterday I bought some Scottish Condor oat seed, and the seedsman assured me it was very much better value than I could get in England. I am not sure whether he was right or not, but that is what he said. He also said that the marvel is that it could be produced in Scotland with the weather conditions they have to face; that Scotland could still produce oats or barley or wheat of such quality. I hand that on a plate to the noble Baroness, and I will tell her more about it in six or seven months' time, when I see how it turns out.

We have had an interesting debate, but not nearly as interesting as it ought to have been. This subject is so urgent in the minds of farmers themselves—and it was obviously very much in the minds of Parliamentarians yesterday in the other place—that we cannot quite understand how it is that, when the Opposition puts down a Motion of this kind, it produces on the list of speakers only two Members representing the Party which has always reckoned that it was the principal agricultural Party in the State. It is not as if there is nothing to debate; the Minister of Agriculture showed clearly yesterday just how very much there was to debate. The lack of interest shown on the Conservative side to-day seems to me quite remarkable.

The position which was laid before us this afternoon by my noble friend Lord Williams of Barnburgh, subject to what the noble Earl says presently (I have to wait and hear what he says), has certainly not been answered in the debate to-day. There is no answer, so far as I can yet see, to the general case that he has put. First of all, there is the culpability of the Government, and the Government alone, through its policy, in the situation which was debated yesterday in another place, which is only one of the immediate aspects of the state of agriculture. My noble friend clearly showed that in 1953 the attitude of the Party to which he and I belong to the proposals to change the marketing system which had been operating up till then, by reintroducing free auction marts, and similar provisions, was that this would lead to disaster.

But in the Labour Party we were not alone in this matter. I have to-day looked up the debate in this House in 1953, which was introduced by my noble friend the Lord Listowel; I remember I wound up the debate. He quoted at the time this article from the Sunday newspaper, the Observer, with regard to livestock marketing: A closer examination suggests that this is a stop-gap scheme open to serious criticism on several grounds. It revives the absurd guessing game of livestock auctions, and underwrites them with an unlimited Treasury guarantee, thus throwing the meat market open to the speculators, dealers, and price rings which battened on to the industry before the war. Such a scheme can only discourage the much-needed expansion of our livestock industry, and would be likely to put such a burden on the Exchequer that ultimately the whole conception of stable prices for farmers might be discredited. That is a quotation from the Observer in 1953.

So often it seems to be assumed by very good thinking Conservative agriculturists that it is only we wicked Socialists who thought these things about marketing and its effects both upon the farmer and upon the consumer. That is not so. These consequences were widely forecast by many economists—not that I am very much in love with economists, as a rule —and by many others who think, speak and write about public policy. In that detailed argument submitted to the House to-day by my noble friend Lord Williams of Barnburgh, it has been proved to have been an absolutely uncertain, repeatedly failing, system compared to the system which we have had in operation and which we had, in principle, in mind in the forming of the 1947 Act, and which we should have been willing to bring into proper perspective, still maintaining the same objective, when the time for ending food rationing came.

What was the principle behind the decision of the Government in 1953? The Government would have nothing to do with anything which they thought smelt of State trading. You will see it specified in the White Paper of 1953. Read the speeches made at the time. There is a tremendous fear of any kind of trading which might be in public ownership and not in private competitive hands. So the Government changed it. I agree with the noble Lord, Lord Amherst of Hackney, that there have been different experiences in different years since then, but some failures came through alternately as the years went by, to the great cost of the taxpayer and without bringing a corresponding benefit to the consumer.

Nobody who goes to markets can escape seeing what goes on in the auction ring. I suppose it varies a good deal in different areas. I mentioned this last year. Although I do not go to market often, I have been there recently, and it seems to me that there is no question at all that the public auction does not produce the appropriate price for an animal that it ought to bring, except against an actual shortage. People who ought to be able to make long-term contracts under any decent system of marketing have to spend money and time journeying to provincial markets. Those who supply London, for instance, have to go to Chippenham, Ipswich and Norwich in order to get supplies. And once they get to the provincial markets, they find that there is an arrangement between dealers. This is the system Chat Government policy has put back into operation and we are paying the price for it in these Estimates, which have caused so much criticism. It is having its effect everywhere.

It is amazing to find that there is still the feeling in the minds of Conservative politicians and businessmen that there is something hallowed, sacred and certain in saying that competition is the life of trade. I say again that in my view just the opposite is true. Competition is death. It is the law of the jungle. Only co-operation is life. When we come up against any problem which is the result of capitalist competition in the world and the pride and graspingness of other people as well as of ourselves, in the end we have to look to co-operation. When there is war and we are faced with great problems, we look for national co-operation. The problems facing our country and the world population in regard to food cannot be cured by competition. They have to be cured by collective action and by co-operation.

I wonder how many of us have troubled to read the last Report of the Food and Agriculture Organisation of the United Nations. It shows that 60 per cent. of the population of the world are underfed. Yet we have a movement in the United States to damp down food production. It is becoming too expensive to support farm prices with all this hullabaloo about space research and its cost, perhaps backing up a new form of nuclear deterrent in the future.

We have this damping down of agriculture or, on the other hand, production on a cheaper basis by fewer men and more machines.

It is sixteen years since we set up the United Nations Organisation, which was going to be better than any body for collective action which we had before. In this country, we tried to tackle agriculture on a collective, co-operative basis. We all talked with suave approval of schemes of co-operation, such as that in machinery, which the noble Earl, Lord Ferrers, mentioned. He was right and I agree with him. All over the country to-day we find effective agricultural co-operative societies, with a large throughput, with a share capital owned by the farmers themselves, which are not only merchants for supplying other people's goods to farmers but also producers in their own mills and works for treating seed and the like.

I find the most fantastic nonsense being written about this matter by sections of what is called "leading farming thought". A capitalist society is always driven back upon itself when it comes up against a failure and has to have co-operation with other people to get it out of the difficulty. A big new trading organisation is now going to be set up. I must not call this one a cooperative society. This must not be something like a farmers' co-operative. It must be a big capitalist concern, operated by the National Farmers' Union and some association of agricultural cooperative societies. A big leader of industry and capitalism must be brought in to take the chair. But the purpose is to create a great collective body. Would it not be more reasonable, in the end, if the Conservative Government could say that they are working on the principle of collectivism? We are having this now. But it is an argument which neither the Conservatives nor the Liberals can accept, because they could not go into an Election and say, "We are the friends of the little man". They are all saying that that day has gone and is past. Everything has to be big; everything has to be collective. And the only great question to be settled is, who is to own this collective organisation? For whose benefit will the surpluses and profits be made; and how will they be spread? That is the situation, and I would challenge anybody to deny it.

When we come to look at agriculture itself, what do we find? The system which had perforce to be put into operation during the war was expanded after the war through the Agriculture Act. I was glad that the noble Baroness, Lady Elliot of Harwood, referred to the great benefit to Scottish agriculture of the hill farming scheme. She was so thankful to this Government and praising them. I suppose that the noble Lady forgot all about the 1946 Hill Farming Act, which provided for new benefits and opportunities on no fewer than 23 sections of agriculture. That is part of the way in which we were turning over to the new mutuality and helpfulness, which was first a desirable practice during the war, something that had to be done in order to save us from losing the war, and later in trying to reconstruct for the future. Anywhere I go and talk to agriculturists, they all turn to me, in the end, after arguing about this and that, and say: "We have to admit that Tom Williams was the best Minister we ever had." And you can easily judge of that by the manner in which he presented the case to your Lordships' House, with so few Conservative noble Lords to receive his views and his message.

Then what happened? The 1947 Act came in when we were trying to climb out of national bankruptcy. We had a terrific task to face. But agriculture went ahead. How different from 1920 and 1921! No talk about deflation with a Labour Government in control. We just wanted to keep down inflation as much as we could, with no talk of deflation. We listen now to the Tories in all that is going on in the so-called financial reconstruction of to-day; the new policy of Mr. Selwyn Lloyd; the pay pause, with reduced incomes for everybody, as he says there must be—we shall have to wait and see how that works out. All this is going on, and in the future incomes or wages are to be settled only according to the amount of increase in production.

What is happening to us in the farming industry? Let us just look at that. Is Mr. Selwyn Lloyd's principle working there? If your Lordships look at the reports, which come from so many sources, on the condition of British agriculture you will find that what the noble Earl, Lord Ferrers, said is right: that the big farm, the big machine ownership, manages to get by. But there are over two-thirds of the farms which are of less than 150 acres; and, as has been said over and over again, the kind of capitalisation, either in building or in machinery—and I admit that in the last few years there have been Government aids towards doing something in that direction—is not within the scope of the ordinary farmer; he cannot do it to such an extent as to be able to make a real success, in the light of current Government policy, let alone any other factor.

Look at the principle of the Review of Prices every year. If there is a subsidy being paid, it is right that there should be a Review. But how should it be handled in the details of the Review? It is necessary to look at the condition of the farmers, and especially the two-thirds who are below 150 acres. What has been the result of the Reviews? The result has been, according to all reports of economists who have made detailed farm studies, that the farmer with below 150 acres is far less well off than he was ten years ago. Many of the farmers with 100 acres and less, where the man works and toils all the time he can possibly put in, when he looks at the return upon his capital and everything else, is not receiving, in some cases, even the wage under the now standard of wages of the farmworker. That has been proved again and again from the university studies which have been made. Where is Mr. Selwyn Lloyd's principle? You have your Annual Review, and you make a charge upon farmers for improved efficiency, which is reasonable in principle, though it should never be allowed to get out of hand. Or where is the reward to the farmer; where is the inducement or the attraction for him to produce more? As I say, two-thirds of the farmers are worse off now.

Some interesting figures were given by my noble friend Lord Walston, and although I am not experienced in some of them as a farmer, perhaps I may take the case of milk as an example. It has been greatly helped by the special arrangements and inducements to adopt the clean milk herd; to eradicate bovine tuberculosis and the like. Bonus has been paid for four years as a minimum up to about two or three years ago for any new entrants. Let me put to the House my own experience. I had the T.T. bonus in my first milk herd in 1950, and, if I take December and January as the peak winter months' price, it was that year 4s. a gallon. This year, having eradicated tuberculosis in our county, like so many other counties, I am thankful to say, that no longer counts. However, the price for December and January this year was not 4s. but 3s. 2d. Wages have advanced by 70 per cent. since 1950; but the milkman's price is down, even if you eradicate the 4d. T.T. bonus, by at least 6d. a gallon.

How do you manage costs in these matters? Many of my old friends, if they had been here, would know that I have some knowledge about distributing expenses. The Milk Marketing Board brought stability into the general milk marketing and distributing business. But they could not do without the extraordinary network of distributors that exists to-day. You have a yearly review in milk distribution as you do in farming. But what a different basis; and with what a different result! In the milk distributive business you have your review, your costs admitted, your accountant's report; and always at the end you arrive at an agreement which maintains on the average—I would not say with every distributor—a net profit from 2⅛d. to 2¼d. per gallon. There is no such guarantee to the farmer. And the distributor could say, with truth, today that if you did not get him a price of that kind, and either reduce the price of milk to him from the farmer, or give him a little extra cut in the Price Review, he would not be able to get the men or women who distribute the milk. That is the position.

I feel that in the last eight years since 1953 the Government have been exceedingly fortunate that the basis of their method of carrying this on has not failed them before. This year it stood out a mile. The farmer at large has been suffering also from the same desire of the Government to cut him down. I have mistrusted since its inception the Working Party in barley, wheat and oats. I have never seen any improvement in prices to the farmer as a result of this body—none at all; only a desire to see that the merchants and the people in the trade will set the price, not by what the British product is worth, but by what they settle in advance shall be their gambling prospects of the price of the imported grain. That is not good marketing, because in the end it will discourage entirely the man in this country whom you want to see making an honest living, and who has as much right to an expanding living as any other section of the community. That is the position we face with regard to the state of agriculture.

I was rather disturbed by the arguments of the noble Earl, Lord Ferrers, to whom I have always listened, as he knows, with great interest on agricultural debates, in his references to the Common Market. I cannot help thinking that he would be wise to take a look for a moment—though I do not say that I agree with every word of it—at one of the most centralised arguments, almost the epic of journalism by Lord Beaverbrook on the front page of the Sunday Express last Sunday. He pointed out briefly that they had argued with the Conservative Party for years about having an Empire policy, a Common Market in the Commonwealth. It was rejected by his own Party, the Conservatives, because it involved what was called a "stomach tax". Now, apparently, the position is that we reject the Commonwealth, but we hasten and hurry to enter a Common Market with an external tariff on food which surely can have only the same label, a "stomach tax". I wish the noble Earl, Lord Ferrers, would get the Sunday Express, if he has not seen it, and read it, so that I could put it to him better.

EARL FERRERS

I certainly read the article; but I confess that I was impressed with its journalism rather than with its facts.

VISCOUNT ALEXANDER of HILLSBOROUGH

I was impressed with both, because sometimes in those past years I myself often opposed his arguments. Now the years go by. As the noble Earl said to-night, time passes on, and I have come to see the strength of the argument which is in that leading article, although, as I said, I do not say that I agree with every word in it.

My Lords, what we need to make up our minds about in this country is this.

If the world is so rapidly changing, it will not be possible for the Government to get the workers in the world, and the workers in this country, to accept a situation in which they can gradually be translated into a great mass organisation of industry of any sort, and take, lying down, the sort of treatment that may be handed out to them. I would say to the Government: if that is the most you can get to in your Conservative policy and your Liberal policy of, "Every man for himself and the devil take the hindmost" then you will not have achieved the permanent freedom of a Socialist democracy. You will be passing it over to the same mass of dictatorial control of a Soviet State under the name of capitalism. That is your danger, and if you think it out carefully you will find that I am right. I wish I could always be right. I am very often wrong, but on that principle I am right. If you think you ace going on for the next 50 years with a system of competition being the life of trade and the life of agriculture, you wild find you are wrong. You had better hurry up to get into the kind of spirit and the kind of scheme that we started in 1946 and 1947, and let whoever may take the credit if, in the end, they can get the results and still maintain the principle of co-operation and freedom with it.

6.37 p.m.

EARL WALDEGRAVE

My Lords, your Lordships' House has a great reputation for agricultural debates, and like the noble Viscount who leads the Opposition, I am sorry that it is not a fuller House. I was delighted, as I am sure we all were, that this debate was opened by the noble Lord, Lord Williams of Barnburgh. Ever since his first period in office as Parliamentary Secretary, he has been held in great affection by farmers and the people who worked for him. I myself was chairman of one of his war agricultural executive committees. I hope that your Lordships will believe me when I say that I find no pleasure in having to say to you now that I hope you will reject his advice—not merely because I sit on this side of the House and he sits on the other, but because I cannot conscientiously believe that the argument he has used is sound in to-day's circumstances.

I hope the noble Viscount, Lord Alexander of Hillsborough, who leads the Opposition, will forgive me if I do not follow him entirely in speaking about Socialism, about which he has spoken to us this afternoon with passionate sincerity. I think for me to answer him would call for a different occasion.

I feel that the problems which faced the noble Lord, Lord Williams of Barn-burgh, when he was himself Minister of Agriculture, were, as he has stated, so fundamentally different that they almost have no common basis with the problems which face my right honourable friend as Minister to-day. He had to face the problems of shortage and we have to face the problems of plenty. But the common objective we are both attempting to achieve is the same, and it is enshrined in the 1947 Act. It could be paraphrased very simply in this way. This objective is to promote and maintain a stable and efficient agricultural industry, capable of producing the food we want as cheaply as possible, provided that we can get a proper level of remuneration for the people who work in the industry and an adequate return on the capital invested in it.

The speech of the noble Lord seemed to me to imply that, because we were not using exactly the same methods to implement that objective, therefore the objective itself was in doubt. I cannot accept this argument. The noble Lord, Lord Williams of Barnburgh, I am delighted to recall, opened the debate with a quotation from the Prime Minister in 1953. I think that we all like to be reminded of the wisdom and the wonderful language of that greatest of men. It was in 1953 that he made the speech that was quoted, and I have looked it up to see its complete contents. I have no quarrel with it, and I do not believe your Lordships will have any quarrel with it. The Prime Minister did not make many agricultural speeches, but this was the agricultural section of his speech in the debate on the Address. He said [OFFICIAL REPORT, Commons, Vol. 520, col. 26]: We hope instead to develop individual enterprise founded in the main on the laws of supply and demand and to restore to the interchange of goods and services that variety, flexibility, ingenuity and incentive on which we believe the fertility and liveliness of economic life depend. I have no quarrel with that. Later in his speech he was interrupted on one point and said, in a characteristic answer to the interrupter: Honourable Members want the good without the evil; that is often very difficult to solve. He went on: Moreover, the gap must not only be bridged in the industry as a whole by maintaining average returns but we must also, in the case of what are called fatstock—a technical term covering a very considerable field—provide safeguards for individual transactions where necessary. I am glad that the noble Lord, Lord Williams of Barnburgh, reminded us of that great speech because I would prefer to base my thoughts on agriculture today on that speech rather than on the quotation that was given to us by the noble Viscount, Lord Alexander of Hillsborough. He said that competition is death. I do not know where the quotation comes from.

VISCOUNT ALEXANDER OF HILLSBOROUGH

John Ruskin.

EARL WALDEGRAVE

I stand corrected. I am an uneducated man. This is a deep philosophical problem and I myself am quite content to take my stand on this speech by the Prime Minister. In the last ten years the differences between then and now are so tremendous that you will not want me to go into any detail. I will mention only two differences.

British farmers in 1950–51 were producing about 1,¾ million tons of barley; in 1960–61, ten years later, they were producing about 4¼ million tons of barley. Over these last ten years the gallonage of milk has gone up by 460 million gallons. In those days the noble Lord was engaged on trying to find fats in Africa because of the dreadful shortage that then existed. We are now engaged at the G.A.T.T. in Geneva in trying to regulate the almost unlimited flow of butter into this market. I do not want to go into this in any greater detail, but I should like to say with all the emphasis I can command that I agree with the noble Lord, Lord Amherst of Hackney, and also with the noble Lord, Lord Ferrers, that this system of support has not broken down.

This is the time of year when we hold our Annual Review. We have our consultations with the farmers' unions.

They are, in fact, at the moment in progress. In accordance with the usual procedure, we are exchanging views about the many factors which must be taken into account before we can make a determination which will be fair both to the industry and to the nation. We shall have full and free discussions with the unions, and we shall be dealing with the points where our interpretation of the evidence differs from theirs. But it is only fair to say that one of the factors we must take into account this year is the mounting cost of Exchequer support for agriculture. The Review determinations must take into account the need to bring Government expenditure into a proper relationship with the resources available.

Our determinations for the coming year will, of course, be governed by the long-term assurances contained in the 1957 Act. The Government stand by their pledge that these assurances will be maintained unchanged for the lifetime of this Government.

VISCOUNT ALEXANDER OF HILLSBOROUGH

Until the Election.

EARL WALDEGRAVE

No Government can give a pledge as to what other Governments will do in the future. These assurances, by setting limits to the reductions that can be made in the individual guarantees and in their total value, are of great worth to the farmer. They safeguard not only his returns from individual lines of production but also the net income of the industry as a whole. I should like to remind your Lordships again that the policy that was set out in the White Paper (Cmnd. 1249) issued after the talks between the Farmers' Unions and the Government in 1960 still stands. I think that we should remind ourselves of what was in the White Paper, and I quote from it: In 1947 there was virtually unlimited scope for expansion in the national as well as in the agricultural interest. To-day the very success of farmers in increasing their output, coupled with an easing in the general overseas supply situation, has meant inevitably that there is more difficulty in getting a profitable outlet for all farm produce. A profitable outlet for all farm produce: this is a problem that faces farmers in every developed country.

We must be realistic and recognise that to produce more of any product than you can sell or the market can absorb is of no use. Production is not concerned only with producing larger quantities. Production must increasingly be concerned with producing better quality and what the consumer wants. The matter does not end here. As in every modern and successful industry, increasing attention must be given to marketing. There is enormous scope here. The "take it or leave it" days are gone. Goods need selling. Food is no exception. It is not sufficient for the seller to be passive and wait for the active buyer to come along. Presentation, packaging and standardisation are becoming ever more important. There are new types of shops, new types of selling, and those, in turn, need new types of production. Some farmers may have been a little slow to realise this. I think that many of us were still selling wheat in four-bushel sacks weighing 2¼ cwt. and getting our men ruptured in the process while we expected fertiliser merchants to be supplying their wares to us in ½-cwt. paper bags. These points are of great importance, particularly in the horticultural industry. We must grade and package our fruit attractively and conveniently for the shopper. It is by these methods that we shall be able to increase demand, and that is what we hope for.

If I may, I will quote again from the White Paper (Cmnd. 1249): It makes no sense to produce in such quantities as create a surplus for which there is only a weak market or no market at all. But it does make sense to do everything possible to stimulate an increased demand. Have the Government done nothing about this? Noble Lords have forgotten that we introduced the Horticultural Improvement Scheme. They have forgotten the Horticultural Marketing Council and the Covent Garden Market Authority. There was a Bill on Covent Garden in your Lordships' House, which I do not think your Lordships will have forgotten.

VISCOUNT ALEXANDER OF HILLSBOROUGH

My Lords, if those are the examples I cannot say I am very impressed. If, on the other hand, it is a slow, progressive conversion, then I approve. But I remember the Conservative Party voting dead against the Agricultural Marketing Act of 1931. I remember the late Mr. Walter Elliot bringing in amending legislation afterwards of a very different character, and we perhaps have been all the slower in progression in consequence.

EARL WALDEGRAVE

My Lords, I do not know whether it is more relevant that I should remind your Lordships of legislation passed in the last year or two or that the noble Viscount should remind your Lordships of what happened in 1931. As we said last year, we hope it will be possible as part of the Review settlement to make available some funds for an experimental period to support marketing research and development rather than production. Noble Lords would not expect me to anticipate in what way we may encourage farmers to pay more attention to market requirements. But there is no question but that we consider this of first importance. We have already taken action to improve our basic knowledge of some of the factors that influence quality. For instance, the Government have approved proposals by the Agricultural Research Council to establish a Meat Research Organisation which will undertake new studies into factors affecting meat quality.

If I may turn now to meat marketing, which so many noble Lords have talked about to-day and which was the subject of the debate in another place yesterday, at this late hour I do not want to go through again the reasons for the increase of £67 million over the original estimate of the cost of fatstock support by the taxpayer. But it is really a concatenation of circumstances which no estimator (and I see that the noble Lord, Lord Williams of Barnburgh, nods his head in agreement) could have avoided. There were increased home-produced supplies of meat coming on to the market, one after the other, first cattle and then lambs and then pigs.

The point I want to make is that it is the object of the deficiency payment arrangements to guarantee producers' returns if the market price falls. That is what they are there for. That is what the insurance policy, as it were, is for; and this year, when market prices were low, farmers did less well out of the market but the increased payments from the Exchequer maintained their returns at the guaranteed level. I know that your Lordships will not mind if I reiterate again that there can be no mistake about this: the money that was paid out from the Exchequer and for which we have had a Supplementary Estimate has gone to the farmer. It has gone nowhere else. I was very glad that the noble Earl, Lord Ferrers, said there are not any missing millions. It is a point that the noble Lord, Lord Stonham, has often made (I will come to his remarks in a moment), that the money has, as it were, been lost. But that is not so. The money that is paid out in the guaranteed payment as a deficiency payment goes to the farmers.

This is a point I should like to make clear. The general difficulty of estimating would be the same whatever Government, of whatever colour, were in power. If noble Lords opposite say that they do not like this present system of deficiency payments, they are quite entitled to their opinion. They would prefer to have commodity commissions, managed markets, bulk buying, regulation, control, "what-have-you". They could plan those controls or their arrangements only by first of all making just this kind of estimate. They would have to estimate how much the farmer was likely to produce and how much the overseas producer was likely to want to sell here, so that they could know how much they would need to regulate supplies. They would need to have forecasts of the weather, lambing averages and all the other things we have now. When they had those facts they would have to apply them to any system which they put into operation, in exactly the same way as we do.

But I would suggest to your Lordships that if we were to have this Socialist system of controls and State buying, as there would have to be, of all the produce from the farmer and from the overseas supplier, in times when the estimates were wrong—and they would be wrong sometimes, because it is impossible to tell what is going to happen to the weather or whether the lambs will be drowned or the potatoes flooded in the ground—then something would have to give. And who would give?—the taxpayer.

LORD STONHAM

He does now.

EARL WALDEGRAVE

He does now and he would then. This is no cure.

If you are going to guarantee the farmer, and your figures are wrong, and if you are going to uphold your insurance policy, you could do that. But the way in which it was done might be a very much more unpleasant way. I can think of cases in which, owing to an honest miscalculation, there were very large surpluses. What are you going to do about them? They are going to be issued. You are not going to have surpluses of this kind on Government account and have everybody buying poultry instead. The housewife is going to have to buy the meat you have obtained. That is the kind of difficulty you might be in.

VISCOUNT ALEXANDER OF HILLSBOROUGH

But there is the other side. The present Government's policy brought to an end State trading of a kind which included long-term contracts with the Dominions which were of great benefit to the Dominions and of great benefit to the British exporter to the Dominion market. They were good all round, and enabled us to have an arrangement for mare level delivery from them, as we could then arrange for more level delivery from this country. That actually happened. You brought it to an end. You could have had your Common Market in the Commonwealth. You broke it up.

EARL WALDEGRAVE

I think that probably I had better try to proceed and keep the thread of my speech. Long-term contracts were certainly made in those days and that is just what I am worried about. Under this kind of State trading of course you made the contracts, because the figures showed that you were going to be short of meat. So you made long-term contracts with Australia to pay them deficiency payments—contracts which still exist. Luckily the Australians found another market and have lately been sending meat to America. Otherwise the British taxpayer would have a heavy bill to meet to honour that long-term contract. The best thoughts of the Government at that time were that there would never be any fats. We had to spend these enormous sums of money on having not only fats from monkey nuts in Africa but also eggs from Uganda. Now we produce 97 per cent. of our own eggs. State planning is not any easier, as can be seen by the examples of what happened then.

LORD WALSTON

My Lords, I apologise for interrupting the noble Earl. What he is saying about these long-term contracts is very interesting. Would he agree that this would also apply to the present system of buying sugar beet, which is a long-term contract on a fixed basis at fixed prices? If his strictures against long-term contracts are applied in general, why do Her Majesty's Government continue with the long-term contracts for sugar beet?

EARL WALDEGRAVE

My Lords, one of the great beauties of the system we are now operating is its great flexibility; and we are not doctrinal about it. In milk we have control of the market all the way through. We have a sugar régime which is a special régime. We have support buying in potatoes. We do not have it in meat. We try to operate the policy which will best suit the particular commodity, and we are not going to take a doctrinaire line and say that what we do for one commodity in one set of circumstances is necessarily good for another commodity in another set of circumstances.

LORD WALSTON

My Lords, the noble Earl will agree, will he not, that long-term contracts have their use for certain commodities in certain cases?

EARL WALDEGRAVE

Long-term contracts and short-term contracts both, of course, have their uses in certain circumstances. On this matter of meat, we believe that a thorough, efficient and impartial look at the entire régime of meat marketing ought to be undertaken. Noble Lords will know that in another place my right honourable friend announced the terms of reference of the Inquiry that he is going to set up—namely: To investigate the organisation of the marketing and distribution of fatstock and carcase meat in the United Kingdom and the existing facilities and present methods employed; to consider whether changes are desirable; and to make recommendations. We cannot rely on the recommendations of Committees that have not been implemented, whichever Government appointed them.

The Lucas Committee was set up by the Government of noble Lords opposite, and they did not implement that Committee's recommendations. There was a Commission set up before the war, and there has also been the Linlithgow Committee. We cannot go back to Commissions or Committees which have been set up in entirely different circumstances, and take something out of a pigeon-hole, though that would be a simple thing to do. My right honourable friend has therefore said that, conditions having so radically changed, we must set up an inquiry into the conditions which are relevant to-day. We need an up-to-date investigation based on conditions which exist to-day.

The noble Viscount who leads the Opposition, clearly, from what he says, loathes the auction market system. He may be right in his view, though I should doubt it. I know that he does not curry popularity, but he will not be popular with the farmers if he tells them that the auction market is the root of all evil. But this Committee will, of course, be looking at this point to see whether the noble Viscount may be right. They will have a number of administrative points that they can look into in regard to the working of the system now. They will not be dealing with import policy, but they will be free to take slaughtering facilities into consideration, and they will also be free to consider—indeed, they will have to consider—a Meat Marketing Board. On slaughtering they might concern themselves with the views of the noble Baroness on central slaughtering; they will certainly read what she said in the House to-day.

In addition, the National Farmers' Union have announced support for the commercial development of meat marketing by a producers' organisation, and the Chairman of the Fatstock Marketing Corporation has referred to the Corporation's proposal to expand by normal commercial means. This approach by the industry itself is greatly to be welcomed. My right honourable friend has also had a discussion with the President of the National Farmers' Union, and entirely agrees with the Union's conclusion that the pros and cons of a statutory meat marketing scheme ought to be examined, but that before any decision is taken on this proposal a great deal more study should be made of all the problems involved. Examination of this question will be within the terms of reference of the Committee, and the industry will, I am sure, be greatly helped by the result of the investigation.

It will be some time before we get the Committee's Report, but meanwhile the Government will do what they can to get greater stability in the meat markets—

VISCOUNT ALEXANDER OF HILLSBOROUGH

Is it proposed to issue the Report before the Election?

EARL WALDEGRAVE

My Lords, meat imports have been lower this year.

VISCOUNT ALEXANDER OF HILLSBOROUGH

And Election promises, apparently.

EARL WALDEGRAVE

Meat imports have been lower this year, but it will not be in the interests of either the overseas exporters who send meat to us, or of ourselves, that the bottom should fall out of the meat market. Therefore, the Government have looked ahead and have approached all the major meat-exporting countries and asked them to take full account of the state of the market when planning their exports to us in this coming year.

At this point may I come to the defence of the distinguished civil servant who gave evidence before this Committee. He has been quoted to-day, and I think it only fair to say that when he replied to Question No. 84 and to Question No. 142, which have been referred to, what he was saying was strictly circumscribed. What he said in regard to Question No. 142 was: Merely from the selfish point of view of trying to keep our subsidy payments under control, there is nothing I would like better than a system of import controls. That is no more and no less than the Foreign Secretary saying, "My foreign policy would be much easier if there were not any Russians." Sir John Winnifrith, in answering that question, was putting his comment on import controls on the basis that if he was simply looking after the Treasury, there was nothing he would like better than a system of import controls, because he would know exactly what he was going to get.

LORD WILLIAMS OF BARNBURGH

Will the noble Earl kindly quote Questions Nos. 84 and 85 and the answers?

EARL WALDEGRAVE

Certainly. I know this by heart. Question No. 84 is: Has the Ministry or the Government any powers on the timing of imports? And his answer was: Absolutely none.

LORD WILLIAMS OF BARNBURGH

And Question No. 85.

EARL WALDEGRAVE

Question No. 85 is: So one of the effects of the absence of powers is that imports can come in at such a time as will do most damage …? And he said, "Certainly", because one question surely follows from the other, and that second question began with the word "So". The Government do not control imports.

LORD WILLIAMS OF BARNBURGH

The noble Earl will know the point I am getting at. I do not want to detain him. Question No. 142 is closely tied up with Questions Nos. 84 and 85, and is it not correct that the Permanent Secretary to the Ministry of Agriculture was really saying that there is no power either over imports or over timing imports?—timing, perhaps, more than restricting.

EARL WALDEGRAVE

We can all draw what deductions we like, but I think it would not be fair to judge remarks except in the context of the questions which he was asked and the answers he gave. I think that this has been exaggerated, not in your Lordships' House but it may be outside, into a report that here is the Permanent Secretary of the Ministry saying that we ought to have import controls. That is not what he was saying. I wanted to establish that point.

My Lords, many points of great interest have been made in this debate. I should like to be able to answer them all, but I am afraid that I have not the time to do that. Before I say a word about the Common Market (I think I owe that to the noble Viscount who leads the Opposition, and to my noble friend Lord Ferrers, who made such an excellent speech), I would say "Thank you" to the noble Baroness for saying "Thank you". I am sorry that it had to be only Scotland which said "Thank you", but still, thanks from any quarter are most acceptable. Of course I shall pass on to the Secretary of State the indignation expressed at the fact that, in some Report, the name of which I did not catch, Scottish agriculture was not mentioned. Scottish agriculture should always be mentioned.

May I now turn for a moment to the question of the Common Market?

I was very grateful for the notable and courageous speech of the noble Earl, Lord Ferrers. The noble Viscount, Lord Alexander of Hillsborough, is obviously sincere—everything he says is sincere —in his doubts as to whether the United Kingdom has a chance of securing adequate safeguards for our agriculture and horticulture in the European Common Market. And he prays in aid a noble Lord who seldom attends your Lordships' House, Lord Beaverbrook. I should like to remind your Lordships that the agricultural objectives of the Treaty of Rome are closely similar to the objectives of our own agricultural policy. The Six are fully committed, as we are, to the maintenance of a stable, efficient and prosperous agriculture. In his opening speech to the Six on 10th October—and I think we should be reminded of this—my right honourable friend the Lord Privy Seal said, in paragraph 55 of the White Paper (Cmnd. 1565): Our purpose in our discussions with you will be to gear what has already been achieved for our own farmers into the general aims and framework of the Treaty. I would hope that, in harmony with the Treaty provisions, we could establish with you arrangements which will enable us to assure our farmers that the development of the common agricultural policy will effectively protect their standard of living. We are often told that the great difficulty will be on horticulture, and on that aspect, he said this: The problem of the removal of our tariffs on imports from the Community countries cannot be considered in isolation from your own existing arrangements and from those which may be made for these producers in the common agricultural policy. We shall therefore need to devise, in consultation with you, arrangements for the different horticultural products which will enable the United Kingdom Government to continue to implement its pledges to horticulture. My Lords, I am sure there is no misunderstanding among the Six Governments, or indeed in this country, about the determination of the Government to secure adequate safeguards for the interests of our agriculture and horticulture. Precisely what form the safeguards will take, and how they will work, will depend on the outcome of the negotiations. Discussions are to open with a meeting of Ministers on the 22nd of February. But we have for some time been working on the various proposals of the European Economic Commission for the common agricultural policy, and we are now studying the texts—provisional texts—of the decisions which the Council of Ministers have reached.

VISCOUNT ALEXANDER OF HILLSBOROUGH

My Lords, the noble Earl said "proposals". Does he not mean "agreement"?

EARL WALDEGRAVE

No, if the noble Viscount will forgive me. We have for some time been studying the proposals. These proposals—I admit that they have now solidified into decisions—have been before us for some time. We have certainly been in constant touch, as the Secretary of State said on 1st February, with the representatives of the farmers, the landowners and the agricultural workers, and we are very alive to the views they hold about, the detailed objectives we should pursue in these negotiations.

VISCOUNT ALEXANDER OF HILLSBOROUGH

Have they been furnished with an English text of the Farm Agreement of the Six?

EARL WALDEGRAVE

No, my Lords. If the noble Viscount will allow me to develop my argument, I intend to come to that point in a moment. I do not think it will be an exaggeration to say that none of the problems which will face our negotiators will be more difficult, or more important, than those connected with the common agricultural policy and its effect on United Kingdom and Commonwealth farmers. But we really must not think that we are the only people to face difficulties. The basic problems are worldwide, and the Six themselves have had prolonged discussions within the past year about their own common agricultural policy. The decisions reached on 14th January were the result of many days of intensive negotiations. The Six reached agreement because they were determined to do so—and in spite of national interests pulling in different ways—because they recognise the value to them all of a common policy for agriculture. We also recognise the value of a common policy for an enlarged Community, and we also will enter the negotiations with the will to succeed.

But the noble Viscount seems to feel that the decisions which have recently been made by the Six will reduce our chances of reaching an acceptable agreement with them. My Lords, I should take a more hopeful view. First of all, let me say that at this stage we do not yet have the definitive texts, and when these are available they will, of course, be placed in the Printed Paper Office and made available to everybody. As I said before, what has happened is that the proposals with which we have long been familiar have now, as it were, solidified into decisions, and the extent to which this will affect our negotiations remains to be seen. We have always recognised that adjustment of methods would probably be necessary if we are to enter the Community. We can afford to be flexible on methods provided that our objectives are secured, and provided always that the changes are made gradually.

Lord Walston spoke of quantitative restriction, and 1ong4erm commodity agreements. He also put forward the suggestion that there should be fewer people on the land, and that each of them should enjoy a higher standard of living. I do not think noble Lords on that side of the House were all in corn-plate agreement with him on that point. The noble Lord also had doubts as to what sort of methods would be suitable for adaptation to a common agricultural policy. My Lords, we shall not know until the negotiations are well advanced what may be the final arrangements that may be acceptable to us. We must recognise that the decisions of the Six have been hammered out by them in the face of very great difficulties.

At the same time, we do realise that adaptations will be necessary. These are agreements reached by the Six for the Six, and it does not necessarily follow that they will be equally applicable to an enlarged Community including the United Kingdom—still less to one that included Denmark, the Irish Republic and possibly others. As these decisions stand, they do not even cover all the aspects of a European common agricultural policy, and, of course, I am not even going to suggest what changes we should like to see in these decisions. This is a matter to be made clear in the confidential negotiations in Brussels. But we shall never lose sight of our fundamental objectives to safeguard the interests of agriculture and horticulture.

One final word about this matter. Both the noble Viscount who leads the Opposition and the noble Earl, Lord Ferrers, spoke with great thought on this Common Market problem, and deserve an answer. I think we could well close our thoughts on this matter by referring again to the statement made by the Lord Privy Seal. I should like to quote paragraph 24, when he said that there were three major problems"— and this was early in his statement— posed by the particular circumstances of the United Kingdom for which we have to seek solutions together. As you all know, these problems are those of Commonwealth trade, of United Kingdom agriculture, and of the arrangements which could be made for our partners in the European Free Trade Association. Now, my Lords, if we are to join the Community we must find these solutions. I am hopeful that, with the will to succeed, we shall achieve what the Six themselves achieved by the labours concluded on January 14—the reconciliation of many diverse interests into a common policy for the benefit of all.

VISCOUNT ALEXANDER OF HILLSBOROUGH

My Lords, what I should like to know is: what is the guarantee to the farmers as a whole if Mr. Heath first says, "I do not require any amendment of the Treaty of Rome", but then we have to cross our fingers against the event that in the course of years, by criteria other than the Treaty of Rome, our policy becomes subject to majority rule? My Lords, that is a serious matter.

EARL WALDEGRAVE

My Lords, we will consider very seriously everything that the noble Viscount has said on this matter. But I cannot be drawn, and I am sure that your Lordships do not want me to be drawn, in these points I am making which are relevant to an agricultural debate, on the whole question of the policy on negotiations on these very formidable and important matters.

Before I sit down, there is just one small point that I should like to make, and which I should have made before. I wanted to mention a remark that was made by the noble Lord, Lord Walston. I have too much affection for him, and too much respect for his judgment, for it to be on record that he said without any qualification that "freedom is like champagne. It is all very well, but it is too expensive for most of us."

LORD STONHAM

It has to be paid for.

EARL WALDEGRAVE

My Lords, he did not say that. I took it down; and what he said was that it is too expensive.

LORD WALSTON

My Lords, I think if you refer to the final written Report you will find that I said that freedom and security together were like champagne and caviare, which were too expensive for us to afford. Freedom alone we can manage; security alone we can manage. But get the two together and they become extremely expensive.

EARL WALDEGRAVE

Well, my Lords, I am still not very happy about this. I wanted to give the noble Lord a chance to correct it.

The noble Lord also mentioned a lot of extremely interesting figures—he always produces extremely interesting figures—of the variations in prices, and how the primary price had gone up by a certain percentage while the retail price had gone up by a greater percentage. The noble Lord will not expect me to go into these figures in detail now, but surely it will be agreed that there are a great many services—quality, presentation and so on—which the public demand to-day, and for which they have to pay. It may not be the whole answer, but it is a great part of it. It is misleading to put those figures flatly down, and to imply that the merchant, the retailer, has nothing to do but take the product and pass it on, so that therefore the margin of retail trade is too high.

I leave to the end, because, with no malice aforethought, I turned over two pages of my notes, the speech of the noble Lord, Lord Stonham. I am afraid that I am quite unrepentant, and I am going to say what I have said before. There were so many contradictions on the other side. The noble Lord, Lord Williams of Barnburgh, and the noble Lord, Lord Stonham, surely are not on the same wavelength, because the noble Lord, Lord Stonham, mounted a severe attack on the support buying of potatoes which, he said, was a deliberate policy of the Government to force up the price against the consumer. But any kind of commodity commission, any kind of support buying which is inherent in much of the thinking of noble Lords opposite, or any kind of import control, will force up the price against the buyers, if it is to stabilise the market.

I can only assume that this is really full-blooded, splendid, theoretical Socialism—that competition is death; that "business" is frightful; that what we have to do is to pay high prices to the farmers (which we will agree is what they deserve and what they must have) and therefore we will settle how much they are to produce, what they are to produce, and also pay a massive subsidy to the consumer, because we think that food, like houses in Dunbartonshire, should be a social service.

LORD STONHAM

My Lords, would the noble Earl allow me to interrupt before he gets on to a housing debate, and would he answer the point I made? My previous point was that the taxpayer's money was being used to buy potatoes in order to force up the price of potatoes against the taxpayer. Would he deal with the point that the Permanent Secretary agreed that the operators of the deficiency payments scheme like high prices? From that I deduced that the prices were forced up. Would the noble Earl deal with that point precisely?

EARL WALDEGRAVE

My Lords, I cannot deal with so misleading and tendentious a point as that at this late hour in this debate. The deficiency payment could be paid on potatoes. You could have it one way or the other. You could let the market go to pieces.

LORD STONHAM

Let the consumer pay less.

EARL WALDEGRAVE

My Lords, you could let the market go so that the farmer got very little indeed, because the potatoes are in surplus and glut. Then the Exchequer would pay a very high deficiency payment, because there is the guaranteed price for potatoes which is paid through the Marketing Board. What Sir John Winnifrith was saying in evidence before the Committee was that if you introduce support buying as well, so that you can control the price, and do not let the price go to the absolute bottom, it may on balance—and it certainly did in this year—redound to the benefit of the Exchequer. We paid out less by a mixture—by the addition to a small deficiency payment of a small support buying programme—than we should have paid out if the market had "gone to pot", and we had had to pay out a large deficiency payment.

LORD STONHAM

But the housewife paid a lot more.

EARL WALDEGRAVE

My Lords, this point was raised in another place. As I said to the noble Lord before, it is very misleading to say that this is a method of diabolically forcing up the price against the consumer.

My Lords, I think I have said enough. I have tried to answer those points, and I am grateful to the noble Lord, Lord Williams of Barnburgh, for having initiated this debate.

7.30 p.m.

LORD WILLIAMS OF BARNBURGH

My Lords, I do not think I ought to attempt to detain your Lordships' House for more than one moment. The first thing I should like to do is to congratulate the noble Earl for having dodged most of the important questions, to which, apparently, he did not have any answer. I forgive him instantly, of course; he knows that. I thought he was a first-class chairman of a county agricultural executive committee. He helped to increase our yields of almost everything by the sort of increases that the noble Earl told us of to-night. I think he was much more successful as a county agricultural executive committee chairman than as the Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food.

However, I should just like to answer one or two points very rapidly. First, my opinion is quite opposite to that of the noble Baroness, Lady Elliot of Harwood. I think that the factory abattoirs, sited properly over the country, could be of enormous value, first to the producers of meat, secondly to retailers, thirdly to butchers, and, finally, perhaps, to the housewife. 1 except those canning firms Which will obviously step in later to meet the new kind of shop that we are seeing opened all over the country. I think the possibilities of the factory abattoir are unique if only the Government will take their courage in their hands and come out of the nineteenth century and into the twentieth. We are all as delighted as is the noble Earl to see the increases in agricultural output. Indeed, that is what we were working for in 1946 and 1947, and the foundations we laid provided the conditions that made this present 70 per cent. increase in output possible.

The noble Earl also referred to the question: what is the point of producing foods we cannot sell? It is a pity the noble Earl could not have been in the House of Commons in 1947, when the Conservative Members of the Standing Committee voted against Part I, because there was some sort of implied limitation on production. Then he put a question to my noble Leader about whether it is more important to think in terms of the 1931 Marketing Act, which the Conservative Party voted against on Third Reading, or to think in terms of a more modern Marketing Act—or, in any case, of more modern references on marketing. If the noble Earl will look again at the ex-Prime Minister's statement that he has quoted in his speech, he will see that the first long sentence finishes [OFFICIAL REPORT, Commons, Vol. 520, col. 26]: …to reverse if not to abolish the tendency to State purchase and marketing which is a characteristic of the Socialist philosophy.

EARL WALDEGRAVE

My Lords, I assume that Sir Winston Churchill meant, "State purchase and State marketing". They surely go together. He cannot have been against marketing. You have to market anything.

LORD WILLIAMS OF BARNBURGH

Why should he not be? The whole Conservative Party voted solidly against the Agricultural Marketing Bill of 1931. Now it does not seem to me that the Conservative Party have come on very far, since it is only eight years since that statement was made. None the less, we welcome the apparent enthusiasm of the Conservative Party for agricultural marketing these days, but we should like to see them do something about it.

The only other thing I would say is this. The noble Earl reminded us that things have changed over the last sixteen years. Of course they have changed. We are always ready to welcome changes, and to try to adapt our policy to meet these changes. I have never claimed that the 1947 Act was the last word in worldly wisdom. and that no changes should ever take place from then onwards. What I said in my speech here this afternoon, or what I tried to say—perhaps I was utterly ineffective, and that is my fault—was that we wanted the Conservative Government not to adopt for marketing the same methods as we adopted for production. We never sought that at all. What we had hoped for—and I said so in my speech—was this. If our production policy in the 1947 Act was successful, we should have liked to see the job completed, because my noble friend and I, and the others, had not the time to do it: that is, for there to be as good and efficient a marketing system in the new circumstances as the production programme was under the 1947 Act. That is all I said that I hoped, or we hoped, and what we were entitled to expect—something on those lines. I did not carry the paint further, and I do not carry it further now.

EARL WALDEGRAVE

My Lords, may I interrupt the noble Lord—I may be very much out of order? If we are to market as well now as we produced in war time, that is what we all wish. That is the objective of us all. Nobody denies the excellence of the production during war-time, during the emergency. Now we must bend our efforts to marketing.

LORD WILLIAMS OF BARNBURGH

My Lords, I am a "young boy" in this House, as your Lordships well know, and I was not aware that I was called upon to withdraw the Motion, but I really beg to do so, despite the fact that the noble Earl has so few answers to our questions.

Motion for Papers, by leave, withdrawn.