HL Deb 06 March 1963 vol 247 cc409-22

2.53 p.m.

LORD WILLIAMS OF BARNBURGH rose to call attention to the situation arising from the failure of the negotiations with the European Economic Community; and to move for Papers. The noble Lord said: My Lords, no doubt noble Lords will wish to have a very wide debate covering almost every aspect of the "might-have-beens" inside the Common Market, and, of course, the "ought-to-have-beers" within the Commonwealth, EFTA, GATT, East-West trade and all those glorious uncertainties inside the Community of Six. I shall leave the wider question of the hopes and fears of general industry, whether inside or outside the Community, to those noble Lords much more competent than I am to deal with them. I shall tend to confine my remarks to the simple issue of domestic agricultural policy, and the actions, speeches and attitudes of Her Majesty's Ministers during the course of the last twelve months. But I should like to make it transparently clear that nothing I hope to say to-day is intended to reflect in the slightest degree on any one of the Ministers within the Community in their conduct of the negotiations on behalf of their various countries. We know, of course, that each country have their own form of support for their own agriculture, and, not unnaturally, they think that their support policy is best. Therefore, if I happen to think that our system is best for us, we can disagree, at all events, without being disagreeable.

After all, my Lords, agriculture is still the largest industry in this country, still employing something like one million people, with another million or more who are serving the industry in one form or another. The industry has just passed through a very difficult stage of suspended animation and glorious uncertainty, most of which has been created by the speeches of the Ministers of the present Government. Finally, of course, it has emerged from the promised sunshine of the managed market to the deep freeze of de Gaulle. Throughout this period, both the farmers and 95 per cent. of the people have been in a state of utter confusion, due entirely to their lack of knowledge or information about what was taking place. I make that statement despite a number of negative reports in another place; and the Foreign Secretary confirmed my belief on Wednesday last when he said that we could not have the information because the discussions were confidential. If the noble Earl thinks that the facts will remain secret and confidential when six other countries know all about them, all I can say is that he is the world's greatest optimist. But, so far, the only source of information to us has been through the National Farmers' Union economists, and they are entitled to our thanks for what scraps of knowledge we have had brought to us.

When discussions started in Brussels our agriculture wax firmly based on the Agriculture Acts of 1947 and 1957: guaranteed prices and deficiency payments to provide confidence and stability in the continuous campaign for increased efficiency. This involved the Treasury, who are responsible for the deficiency payments; 50 million consumers, who have been enjoying cheaper food than would otherwise have been the case; and industry, especially exporters, who have had a direct or indirect interest in the scheme. This system may not be the final answer to our prayers—indeed, supplementary action has been necessary for some time to safeguard the interests of the Treasury, as was pointed out by the Sub-Committee of the Estimates Committee in another place in 1961, when they drew attention to the fact that, in the absence of any ministerial power to exercise control over imports during periods of glut, world prices were bound to fluctuate and there were no means of safeguarding the Treasury. But, my Lords, that was no fault of our support system: that was the fault of the Government, which took no action despite the advice and guidance of the Sub-Committee of the Estimates Committee. Nevertheless, in the peculiar circumstances of this country, it is the only system which has stood the test for any length of time, and produced highly satisfactory results.

However, despite the wonderful achievements over the last fifteen years, to which I shall refer later, we are still obliged to import some 50 per cent. of our food. Therefore, if we are to shelter our own farmers from wildly fluctuating world prices and continuous uncertainty, and to allow our consumers to enjoy the benefit of free entry of food, especially from the Commonwealth, apart from the exceptional circumstances I have just referred to, the basic principle of the 1947 Act is as important to-day as it has been over the last fifteen years. But, my Lords, during the last twelve months, the Prime Minister and the Deputy Prime Minister, as well as many other Ministers, have indulged in far too much "double talk". At one moment they have had their hands on their hearts declaring that they would never let British agriculture down: on other occasions they have stated in public that the managed market abroad, with its tariffs, levies, target prices, intervention prices and the 116 regulations governing the Community's agricultural policy, so far as they have one, is better than our own system in this country, although it has been demonstrated over and over again that the Community system could never give our farmers the stability they have enjoyed over the past fifteen years.

Speaking at Llandudno, the Prime Minister said: Although a gradual change over a period of years would be involved for our farmers, the system of managed markets adopted by the Community could have many advantages over our present system. In other words, he was willing to give away our system. Speaking at the same conference the Deputy Prime Minister, as he then was, said that in Europe the system of rewards came from the market price and he contended that there was an advantage in such a system over the subsidy system. So the Deputy Prime Minister was willing to give away our system. Then he "went overboard" at the Saffron Walden farmers' annual dinner. There he said to the farmers: Please do not fear adventure. The weakness of our present system is that you might sit back. He did not say the feather bed was too soft, but it was a very broad hint that the farmer's armchair was too comfortable. He ought to know something about comfort and discomfort in chairs because he has sat in quite a few over the last eleven years—sometimes with quite pathetic results.

Finally the Deputy Prime Minister put a rhetorical question, asking whether 4 per cent. of the population could stop what 95 per cent. thought right about the Common Market. Very clever indeed! But far too disingenuous; for when did the Government take a referendum to ascertain what the 95 per cent. did think? Why did the Deputy Prime Minister imagine that 95 per cent. of the 50 million consumers were bubbling with excitement to pay 10 or 12 per cent. more for their foodstuffs? Moreover, had the Deputy Prime Minister forgotten what happened in 1923 when the then Conservative Government fought the election on food taxes and lost? For that was the position then. Now from those quotations it is crystal clear that the Government had no confidence in our own support system. They were willing to exchange it for a foreign system. In other words, if there was any give-away or giving away, then they gave the lot away at the Llandudno conference and subsequently. They were contemplating a form of protection described by my late colleague Hugh Gaitskell as the most devastating scheme of protectionism ever devised, and they were contemplating that without consulting the electorate.

How does that square with the many pledges made by the Ministers in the Government generally? I can quote at least half a dozen White Papers and any number of ministerial speeches which all read something like this—and this is from a Government White Paper: But the Government firmly adhere to the principles of the Agriculture Act, 1947, and fully accept their obligation to make alternative arrangements to secure a stable and efficient agricultural industry. That statement has been repeated time and time again; yet, from the quotations which I have just made, noble Lords will see that both the Prime Minister and the Deputy Prime Minister were willing to give our system away. It is no wonder, therefore, that between them they have created the maximum uncertainty in the farming community. This was no great surprise to me for I could never trust a Conservative Government where agriculture is concerned. I say that after sitting face to face with them for forty years. Throughout that period no Conservative Government ever had an agricultural policy worthy of the name—except the one they inherited from the Labour Government in 1951; and they have steadily undermined that ever since they took office. Now they are willing to give the remainder of the carcase away to foreign countries.

If noble Lords want any justification for that statement, then all I need to do is to remind them that Conservative Governments were in power with large majorities between 1919 and 1923, 1924 and 1929, 1931 and 1939. And in 1939 (the last year before the, war) the output of agricultural produce in this country was little better than in the first year of this century and most of those engaged in the industry were in dire poverty. All the facts are on record. They never tried to produce a policy that would bring confidence, stability and prosperity to our basic industry, although during that period there were no fewer than seven Ministers of Agriculture. No noble Lord on either side of the House will persuade me that all those seven Ministers were failures; they failed only because their Government would never allow them to produce a policy that was really worth while.

My Lords, at least we did learn something during the discussions in Brussels. We learned that the Government have got both a positive and a negative policy; not a home-made one, an imported one. Their enthusiasm for a foreign managed market was equalled only by their dislike of our own system in this country. They were ready, willing and anxious to sell our farmers and their stability as well as the consumers to get that Continental system. What became of all their pledges? Perhaps the Foreign Secretary will tell us something about these. What of the speeches at Llandudno and the pledges that have been made by Ministers from time to time about never letting the agricultural industry down? Now, almost in the twinkling of an eye, the present Conservative Government have made progress backwards to 1923, to adopt an almost similar policy to that which then they tried and failed to get with the electorate.

What are the chief arguments advanced by the Government in favour of this fundamental change in our national policy? So far as I can gather, these arguments were limited to one; they were feverishly anxious to get rid of the deficiency payments to relieve the taxpayer. They were to leave the farmers to get all their income from the market price, as the deputy Prime Minister said at Llandudno. That is exactly what happened to the farmers in the 'twenties and 'thirties: they got all their income from the market price; and a pretty miserable income it was for both the farmer and the farm worker! And the small production from our limited acres during that period was little short of a national scandal.

Noble Lords ought not to need reminding but they cannot be reminded too often that the total net income of farmers in 1939 was £56 million. I would ask noble Lords to divide that £56 million by the 500,000 farmers in the United Kingdom, and they will find the average for each farm (taking the one-acre farm with the farm of 1,000 acres) is just £112 per year. That was the income of the farmer in 1939 after nine years of Conservative Government: £112 per year for the farmer and his wife. No wonder therefore, when there was a danger of going into the Community, of adapting the Community farm policy, so far as they have one, that there was grave anxiety in the countryside. Thanks to a fortuitous circumstance, that nightmare has passed, at least temporarily, and instead of basking in the sunshine of the Community the Government have got to do some homework.

The Prime Minister had his preliminary canter on the subject in another place on February 11, when he said [OFFICIAL REPORT, Commons, Vol 671 (No. 54), col. 950] that the open-ended commitment of support must be brought under greater control —whatever that may mean. There must be consultations, conferences and cabals of every kind with overseas suppliers, including the Commonwealth, long-term contracts, import control, commodity agreements, which the Prime Minister described as a great hope to avoid excessive price fluctuations. My Lords, we were saying that about 35 years ago. What a pity it has taken the Government at least a dozen years to think up that old pearl of wisdom: that something must be done at the earliest possible moment! However, we welcome this belated discovery that something needs to be done, something home-made and not imported from elsewhere. And, not wishing to be political, I think that we ought to do all that we can to help the Government.

But, I wonder, have they the wisdom, courage and foresight to set up a commodity Commission for meat on the lines recommended by the Lucas Committee in 1947? A Commission, made up of impartial authoritative persons, could plan and co-ordinate the home supply and imports, so avoiding periodic gluts, depressed prices and outsize Supplementary Estimates. I dare declare that if such a Commission had been in existence in 1961–62, the better part of that £78 million could have been saved, and saved very largely by sensible negotiation. And have the Government now the vision to see the need for a series of well-sited factory abbatoirs, with adequate storage, the final need for the efficient marketing of meat, which is now worth something like £600 or £700 million a year? If their concern for the taxpayer is so intense, is it too much to expect them to forget their idealogical doctrinaire inhibitions for a moment and do something constructive on the lines indicated to help their down-and-out friends, the taxpayers?

We learned in Brussels that the present Conservative Government are no longer afraid of an odd control here and there. In fact, they have indicated that they are prepared to swallow both the gnat and the camel. I understand that there are already 116 regulations governing agriculture in the Community, and this Government were willing to swallow the lot, and more. But, despite all the specious attractions of the Common Market, I am still an unrepentant supporter of the system of this country and shall remain so until something much better is produced. On this occasion, I am in fairly good company. Speaking in your Lordships' House on November 8 of last year, the noble Earl, Lord Avon, said [OFFICIAL REPORT, Vol. 244, col. 414]: There are two things to be said about these support costs, because I think there is some public misunderstanding about them. First, the system was not the result of clamour in the agricultural industry; it was a political decision taken by the Government of the day with the purpose of giving agriculture a fair return while also benefiting the nation through modest prices of foodstuffs. It is quite true that that system has become expensive, particularly in recent years, and particularly for some items, and the consequent burden has fallen on the taxpayer. But if our nation's taxation is graded according to the ability to pay, it is probably fairer and more satisfactory than a rise in the price of food which must be most hardly felt by the poorest in the community. In other words, if somebody has to pay more, better the taxpayer than the consumer of foodstuffs. That puts the whole thing in a nutshell. It is totally contrary to the conception of the Prime Minister and of his deputy, and totally contrary to the conception of the Government as a whole. In fact, the inventor of our system could not improve upon it. I hope that the noble Lord, Lord St. Oswald, will be good enough to take a copy of that and hand it to the Prime Minister—and one to his deputy, too.

In the meantime, I should like to remind your Lordships of what has been achieved under our own system, facts that cannot be repeated too often. I regret the necessity for using figures, but it seems to me the only way to demonstrate the facts. First, I give the increased efficiency as expressed in yields, comparing the average of the last three pre-war years with the average of the last three post-war years. The yield per acre of wheat has gone up from 17.8 to 28.5 cwt.; barley, from 16.5 to 25.8 cwt.; oats, from 16.1 to 21 cwt.; potatoes from 6.7 to 8.6 tons; sugar beet from 8.2 to 14.2 tons. The yields per cow, in terms of gallons of milk, rose from 540 to 630 per year. Eggs per hen on farms have increased from 148 to 187. In the production of livestock and livestock products, beef and veal have gone up from 578,000 to 867,000 tons; mutton and lamb, from 195,000 to 267,000 tons; pig meat, from 435,000 to 745,000 tons; milk for human consumption, from 1,556 million to 2,566 million gallons; eggs, from 385,000 to 759,000 tons. The net value of the output of agricultural produce in 1939 was £290 million. Last year, it was nearly £1,750 million. Above all, output has actually increased by 83 per cent. over pre-war.

Your Lordships will readily appreciate that increased production of food is of as great a value to our balance of payments as increased exports of manufactured goods. But that is not all the story. In 1939, we produced about £2½ million worth of agricultural machinery, and we exported £1.4 million. Thanks to a rejuvenated agriculture, we produced last year over £200 million of agricultural machinery and exported £144½ million worth. We are now the greatest exporters of agricultural machinery in the world, so that many of our larger industries have a very healthy interest in a thriving, efficient and prosperous agriculture. It is worthwhile reminding your Lordships that the farmers are spending between £850 and £900 million every year on goods and services from other industries—a classic example of interdependence between town and country.

So, before the Government start subjecting the 1947 Act to any surgical operation, they would do well to consult their political surgeons—not that I have confidence either in their political surgeons or in their diagnoses. In this anxiety to relieve the taxpayer at the expense of producers or consumers, or both—and, after all, we are all taxpayers to-day, if we gamble, drink, smoke or play bingo—if they had their way, the result would be largely a blood transfusion to the healthy at the expense of the anæmic. We on these Benches are just as anxious to avoid wasting the taxpayers' money as anyone else. But we are equally anxious to ensure that the fullest economic use is made of our land, our only raw material, except perhaps coal, and that it is allowed to play its part in our economy.

I have tried to show that, with the right conditions, the industry has fulfilled almost every hope and expectation we had, except perhaps in the field of marketing, whether in efficiency, output or as a contribution to our balance of payments. It is now time that the Government, who have been mesmerised for so long by the European Community and dogged by their ancient inhibitions, woke up and recognised that agriculture in this country is something more than a nuisance just to be tolerated; that it is a living productive part of our national life, where every person engaged produces enough food for himself and 25 others, and deserves a far better fate than that which has been overhanging it for the last eighteen months. My Lords, I beg to move for Papers.

3.22 p.m.


My Lords, one useful result of the breakdown at Brussels is that it has made it clear that the future pattern of Europe cannot be settled only in figures, important as they are in their effect on balance. This is my excuse for leaving figures to other noble Lords who may wish to deal with them. The future of Europe is an involved political problem; to us and, I think, to the world, the most important political question of our day. There is all the difference between planning economic union as a means to an end—that is, real European unity—as did the sponsors of the Treaty of Rome, and being satisfied with a Customs Union in a limited geographical area as an end in itself. If the ideas of Europeans are to stop at the economic level, comfortably established within a Customs Union, through which only non-competitive products would be admitted, Europe would no longer perform the services she has formerly rendered to the rest of the world; and a little charity in the form of assistance to developing countries would be no substitute for the development of world trade.

This is the danger that we and the Commonwealth countries foresaw. Holland, among some other countries, has also drawn attention on a number of occasions to this possibility. Unfortunately, instead of realising at once that in discussing the unity of Europe we were involved in great political questions, we set about trying to widen the limits of the economic arrangements in being in Europe by proposing a whole series of modifications and exceptions. The idea of this sort of compromise upset those Europeans who wanted a tight economy, and did not satisfy those who took a wider world view. So we were in a difficult position from the beginning.

If what was envisaged was only a short period of adjustment in Europe, a case could be made out for a fairly tight Customs Union to give it cohesion and allow the process of unification to be firmly consolidated. But this involves us at once in political questions; whether it is to be in fact a period of adjustment, and, if so, its purpose and its length. This aspect was very important to free traders, like noble Lords on these Benches and elsewhere, who are opposed in principle to such restrictions, certainly if the intention is to maintain them permanently.

Looking back upon the long negotiations at Brussels, I think my comment would be that I am surprised that so much progress was made as to convince Her Majesty's Government that they could submit detailed terms with the confidence that they would be accepted, if not welcomed, in this country and the Commonwealth. This is the tribute I think we should pay to the negotiators on both sides, who must have been both skilful and considerate to the needs of many people outside Europe. I can understand the shock over the break in January, when the British negotiators thought they were safely within sight of the end of the trade negotiations. What puzzles me is that Her Majesty's Government apparently thought that the reaching of an agreement in Brussels on the matters under discussion there meant the end of difficulties over the entry of this country into the Community of the Six.

I do not wish to mention in any detail the difficulties which remained; suffice it to give as an example the applications of Norway and of Ireland for full membership, and of Sweden, Switzerland and Austria for association, to which objections were raised some eighteen months ago, and not in this case by France. As noble Lords know, we were pledged to clear up most of these difficulties before taking up membership ourselves. So I feel the road was by no means clear, even had the Brussels negotiations been completed. Again I must emphasise that these difficulties arose, not because of trade considerations but because of political implications. The point I am trying to emphasise is that in this country the whole question has been treated too much as one of trade and not one of politics. The Lord Privy Seal was the first to take up the political challenge at rather a late stage, when there was little or no opportunity for a general discussion with the Six Governments on the political issues involved.

The other matter which puzzles me is the extent to which the failure of the negotiations in Brussels is being blamed for what are said to be the inadequacies of Western defence. Granted that defence questions could more conveniently and tidily be discussed within an economically and politically united Europe. But, as I was able to confirm by a visit last month to SHAPE, the defence position at the moment is unaltered by the Brussels breakdown. The thinking which is going on started well before the break in Brussels, and the complex questions under discussion could not have been avoided, even if we had reached agreement at Brussels. Economic and political integration in Europe would, of course, have simplified certain aspects of these questions, but they are difficult anyway because of the great dangers inherent in them.

So, my Lords, I can see no reason for despair over what has happened. Dis. appointment, yes, but not despair. Some of us have had to face the same sort of disappointment over European unity or disunity on previous occasions. We do not forget the efforts of M. Briand after the First War. Incidentally, may I ask the Government whether negotiations are still being continued with the European Coal and Steel Community and with EURATOM?

It would not be appropriate for me to mention defence as such to-day, in view of the debate which is to take place in your Lordships' House on this subject next week. I had hoped that greater and wider European unity in the political field could have come before the discussions on changes in the defence set-up in NATO, but it seems that, in view of the recent American initiative, far-reaching decisions affecting the defence of Europe may be taken before negotiations between European Governments on greater unity can be resumed. In these circumstances, I think we should emphasise very strongly our wish that nothing should be settled in defence negotiations affecting the relations between any European Power and the United States which might prejudice the success of future negotiations for European unity.

How easily this can be done is exemplified by the fact that it was a defence issue, first mooted in the United States over eighteen months ago, which in my view gravely affected the negotiations between some EFTA countries and the Community. This was the desire to exclude Sweden and Switzerland from the Community of Europe unless they modified their law or Constitution on neutrality in such a way that they could take part in a multi-national system of defence. I hope, therefore, that Her Majesty's Government will try to avoid any arrangements with the United States which do not appear to be acceptable to other European Powers. Perhaps I should say "continue to avoid", in view of the obvious efforts of the Foreign Secretary to this end.

No doubt the Defence debate will deal with questions involving not only the level of conventional forces in Europe, the control of nuclear weapons, tactical and strategic, and the like—all burning questions in Europe, as they are in America—but also how far possible decisions on these questions could help to unite or divide Europe. In this debate, all I wish to do is to draw attention to the impact that defence decisions could have upon the wider political questions we are discussing to-day.

Included in the consideration of to-day's debate, which is really, "Where do we go from here?", I should like to raise again a suggestion I made during the NATO debate, that we should propose to our partners in EFTA the institution of European citizenship, in addition to existing national citizenship. EFTA is the only European association to which we belong upon which we can build without hampering the Six or without being hampered by the Six. We are just as much entitled to lay a claim to use the word "European" as was the community of the Six in calling their assembly the European Parliament.

The common rights to be accorded by European citizenship may need formulation, but as common citizenship was once offered by us to the French, I assume that no great difficulties need be anticipated in definition. So far, in spite of all the institutions established in Europe, the ordinary man and woman has no sense of being a member of any European community, and this applies just as much to people in the countries of the Six as it does to those in this country. It is time we saw that in EFTA as a start they are given such a sense through the suggestion I am making.

I noticed that one report of the recent meeting of EFTA'S Council of Ministers in Geneva was headed: "Wait and see in EFTA". In my view, my Lords, this is no time to "Wait and see in EFTA". This is the time to show in practice what we mean by economic and political integration, of which we have talked so much. Economic and political integration was our professed aim when we talked with the Six. In spite of large directing institutions in Brussels the Six have not as yet progressed far in economic integration. They have made no progress in political integration. Perhaps they have lost the way. We have the opportunity in EFTA to create the institutions necessary, doing in the political field similar experimental work to that done by the Six in the economic field. In the economic field, we should continue to build on parallel lines, only, I would urge, rather faster than the Community. If we do this, I believe that within a short period of years, with the help of the Council of Europe, it will be possible to put our work and theirs together to bring into being a widely extended European unity.

Meanwhile, apart from the development and expansion of EFTA, we have much to do in the reorganisation of our own agriculture which is, I would say (in spite of the views of the noble Lord who has just sat down), a necessary prerequisite to economic unity in Europe. I hope also that the opportunity of the forthcoming Commonwealth Conference will be used to formulate agreements between this country and the countries of the Commonwealth for access to British markets. In this way, in any resumed negotiations Commonwealth products in Britain could be presented as part of British production as a whole, both home and Commonwealth. I believe this method of dealing with Commonwealth imports established in our home market would avoid a lot of misunderstanding on the Continent.

My Lords, I believe we have an important rôle to play; as important as ever. Delay in Europe is disappointing. I believe it need be only delay. We can use the period of delay wisely; more thought is obviously necessary.