HL Deb 19 March 1964 vol 256 cc984-1032

4.44 p.m.

Order of the Day for the House to be again in Committee read.

Moved, That the House do now resolve itself into Committee.—(Lord St. Oswald.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD MERTHYR in the Chair.]

Clause 2:

Grants for improving efficiency of small production businesses

(6) In this section "small horticultural production business" means, in relation to any scheme, a horticultural production business which is conducted on land not exceeding in extent such area as is specified in that behalf in the scheme, and which satisfies such other requirements (whether as to minimum area or otherwise) as may be so specified:

Provided that a horticultural production business shall not, so far as concerns a programme relating to the business submitted at any time for approval under a scheme, be treated as ceasing to be a small horticultural production business by reason only of any increase after that time in the area of the land on which the business is conducted.

LORD STONHAM had given Notice of two Amendments to subsection (6), the first being after "Provided" to insert (a), and the second to add to the proviso: ("(b) that notwithstanding the inability of an applicant to comply with one or more conditions of the scheme the Minister if satisfied that in all the circumstances it is reasonable so to do may approve the payment of a grant to that applicant in connection with the programme as aforesaid, and (c) that where two or more businesses have combined to submit a single programme, which has been allowed by the appropriate Minister, these businesses shall be treated as one business, which shall not cease to be regarded as a small horticultural business by reason of being conducted on land exceeding in total extent the area specified in that behalf in the scheme.")

The noble Lord said: I beg to move Amendment No. 7, and I hope that it will have the agreement of the Committee if discuss with it Amendment No. 8, which is the substantive Amendment. It will be recalled that when we adjourned the Committee stage on Monday evening there was some little confusion, which appears to have translated itself on to the Order Paper to-day. In fact, with respect to Amendment No. 8, I wish to move only the second paragraph as printed on the Marshalled List, because the first paragraph was the Amendment moved by my noble friend Lord Wise on Monday. I hope that that will be in order; and I trust, also, that the purpose of the Amendment will be crystal clear and its merit immediately apparent. If the noble Lord, Lord St. Oswald, should feel the urge to get up and accept it immediately, without development of the case, I shall be only too happy. Apparently, the noble Lord is not going to accept that very generous offer, so I will state the case for the Amendment.

The Amendment is expressly designed to assist and encourage co-operative production. Thee are many production projects which are highly desirable but which would be beyond the resources of the average farmer, although they would be of a kind which would qualify for a grant and for which the Minister would be anxious to give a grant. In such cases a number of farmers joined together in co-operative effort could, with the appropriate grants, manage the job. Treated as one business, however, as the Bill now stands, they would have a combined acreage which would put them outside the scheme, beyond the upper limit of the scheme, as I understand it. We seek to rectify what is in our view an obvious defect and omission. This is a new point which has not, so far as I am aware, been raised in any previous stage of the Bill, and apparently was not thought of by the Government.

What we are asking the Government to do is to recognise and legislate for the fact that the family farm, whether an agricultural or a horticultural holding—and many are both—faces a threat to its existence which during the next ten years will either have to be contained or submitted to. We believe that these family farms must not be allowed to go under, because they are the backbone of British farming and the countryside. Under the present system there is nothing to stop large firms, with main interests hitherto lying outside agriculture, from using their resources and experience to substitute agricultural mass production and horticultural mass production for the custom built agriculture and horticulture that we have known hitherto. Technological skills are already available and resources are unlimited; there are all the economies of scale and range that are possible be, cause so many operations are brought under the same control. There is nothing lacking—not even, apparently, AMDEC grant—to speed the new development on its way. The Farmers Weekly on February 7 recorded the fact that an AMDEC grant was to be made available to the £80 million international meat company, Union International, which had been awarded a grant from the £1½ million fund created by the Minister of Agriculture to improve marketing. Apparently, if you are big enough and wealthy enough you have no difficulty in getting a grant from public money; but if you are small and want to get bigger you will probably be told to manage without it.

It is generally accepted that the best hope for the survival of the family farmer as an economic unit is in many cases by some voluntary surrender of a measure of independence in co-operative systems of various kinds. Only in this way too, can the family farmer achieve the necessary economies and exercise real buying or selling power. The Horticulture Act of 1960 offered some incentives, which have fully justified the description which was made in your Lordships' House of "the one imaginative conception of the Bill". I have in my hand a report on horticultural development under the 1960 Act up to October of last year, and more than twenty major projects have either come into being or are planned and will soon be functioning. For example, in the West Midlands, some nine months ago 21 growers formed themselves into an organisation known as the Wye Fruit Limited, for the storage, grading, packaging and marketing of the members' apples and pears. They estimate that their output will be 240,000 bushels and the capital cost about £167,000. Thirty growers in Bedfordshire have a marketing project and their initial turnover is to be £400,000 a year on a capital outlay of £88,000. In South Devon sixteen small growers have got together to improve the local market. At Blackpool and district there is a small project, and at Hemel Hempstead another with a turnover of some £35,000. These are the kind of schemes which enable small people to get together and actually have an efficient and viable marketing unit.

This is the outcome of the 1960 Act, under which so far we have provided assistance and encouragement for co-operative buying and selling and, to some extent, co-operative service. Now this Amendment asks the Government to look to, and cater for, the need for co-operative production—that is to say, the integration of a number of perhaps adjacent, but not necessarily adjacent, holdings for the purpose of adopting one production programme, involving agreement on materials to be used, on varieties, on methods of husbandry, on equipment and so on, with a view to lowering all-over production costs and raising overall efficiency.

These experiments in co-operative production ought to be preceded by a thorough examination of the legal, managerial and economic difficulties which they are likely to encounter. Such an investigation has already been proposed, as the noble Lord is probably aware, and I understand that it has been favourably commented on by the Development Commission. In my view, this sort of development of a number of comparatively small or medium-sized horticulturists and farmers getting together in a common productive effort is going to be one of the most important developments in this country in the near future, and we ought to be providing for it and helping it in this Bill.

On Monday my noble friend Lord Wise spoke to an Amendment at the bottom end of the scale, as it were, to bring within the orbit of the Bill people who are just under the four acres limit but whose holdings could be viable. This Amendment is at the other end of the limit. It proposes to bring together in a productive effort a number of people whose aims are wholly in accordance with what the Minister wants to do, but who, if taken together as one business with one object, even though ownership or tenancy of their separate farms will continue separate and individual, will have a combined acreage beyond the upper limit of this scheme. This Amendment proposes that, notwithstanding that, they should still come within the orbit of the Bill and their scheme should qualify, if approved, for grant. I think that this is a wholly desirable objective and I hope that the Amendment will commend itself to your Lordships. I beg to move.

Amendment moved— Page 5, line 29, after ("Provided") insert ("(a)")—(Lord Stonham.)


I hope that the noble Lord has made his intention crystal clear, because, if he has, I can make it crystal clear to him that it is not necessary. It all hinges on what exactly the noble Lord means by "one business". By the way in which the noble Lord has explained this Amendment, I understand that he assumes that two or more growers with separate businesses may put forward a plan jointly for purposes of grant, while continuing to be separate for all other purposes, and that these businesses as a whole shall not cease to be regarded as small horticultural businesses because they are above the maximum limit for a small business that may be prescribed in the scheme.

I cannot see that such an arrangement would be of any advantage to growers eligible under the scheme, for they would be perfectly free, without this Amendment, to put forward proposals for joint co-operation with any other growers as part of their business plan and, provided these proposals were approved, they would each be entitled to the business grant. I think that I can underline this for the noble Lord by saying that, if in the separate plans they put forward there were an element of co-operation with another grower, this would not exclude them. I think that this is the point that is worrying the noble Lord.

On the other hand—and I hope this is not what the noble Lord means—if two or more growers combine their holdings and run them as one business, in the sense of being a single business and not merely coming under one business plan, providing the holding is within the limits laid down in the scheme, any approved programme will enable grant to be given; but I do not think that we can justify such a business being entitled to grant if its eligible acreage was above the maximum to be laid down, when we have to refuse grant to other partnerships formed before. I am sure that it is unnecessary to repeat to the noble Lord that, if he wants these people to be qualified for their business plan, by remaining separate they would be entitled to grant even though this element of co-operation enters into each of their business plans.


If the noble Lord is thinking that there is in this Amendment any attempt to create a device whereby the upper limit could be evaded simply by two or more farmers coming together in actual partnership by capital and everything else, I can assure him that the Amendment is not intended to cover that. I think that he has answered the point by saying twice that, if I am thinking of an organisation where there is an element of co-operation—and I am thinking of a growers' co-operative—this would not be precluded, just as they have joined together in common patent schemes and things like that. If so, I should find his answer wholly satisfactory. But I would now ask the noble Lord if he would mention whether the provision comes in under Clause 2, and under which subsection.


I am absolutely certain that the noble Lord and I have understood each other. It is what I took him to mean, and what he took me to mean. If I could give a happy example, supposing he and I had holdings reasonably near to each other and we did not want to form an actual business partnership but wanted to use certain useful elements in a horticultural business together, we should, without forming an actual partnership, each be eligible for grant. It comes under Clause 2.


Frankly, I am completely at a loss to understand the reply that has been given to my noble friend. Do I take it from the reply that there are two growers and each independently would be entitled to the grant if they were operating independently, but that should they join together and sacrifice a measure of independence on the productive plain their total acreage would be such as to deprive them of their joint claim to that support?


Yes; the noble Lord is quite right. If they remain operating separately as independent growers, in co-operation with each other putting forward the business plan—a separate business plan—which would be needed to qualify for this grant but which they could not, either of them, afford without an element of co-operation, this would qualify.


But the whole point of this Amendment is to secure full cooperation on the productive plane. My noble friend made a strong plea and indicated the extension of co-operatives in marketing and the like. He felt, quite rightly, that there is need for this grant, in the face of increasing competition by people who would be operating in this field to the detriment of the small grower, and this Amendment is intended to give support to the small grower. It is felt that it is in keeping with the whole principle of the Bill to give assistance to the small man. I take it we are being told now that if we have two growers who, in their own combined interests and obviously in the combined interests of the nation, get together in order to develop their land more economically and effectively, and in so doing naturally sacrifice some element of individual control, they would not be entitled to the grant. This Amendment clearly states a case strongly and with justification, in my opinion, that in such circumstances the grant should be made.


In all justice, if these two growers, or more growers, formed a single company, and the total land was above fifteen acres, they would no longer be small growers. This seems to make sense.


It may well be that I have misunderstood the noble Lord. I clearly put it, when he mentioned the element of co-operation, that if the members of a growers' co-operative decided to go in for a common production programme—it might be for the marketing and production of a particular type of crop, and eventually they would see it right through to grading, prepacking, marketing and so on—they should be eligible for grant. All the other things they need for distribution are already eligible for grant under the 1960 Act, but not grant for production schemes to co-operatives. What I am expressly asking for in this Amendment is that where members of co-operatives wish to go in for production schemes like that, they shall not be precluded from grant by reason of the fact that collectively their holding exceeds fifteen acres. That is what the Amendment means, and that is what I understood the noble Lord to say in the first instance was already covered by Clause 2 and would be in order.


Perhaps we have not understood each other as well as I hoped. The form of business created would have to be judged on its merits, and such elements as whether there were common accounts and interchange of labour would, among other things, have to be taken into account. What I thought and hoped the noble Lord had in mind was, for example, two neighbours saying: "By ourselves we cannot afford a business plan under this Act without helping each other. We want to remain independent, but shall we be able, by clubbing together in this way, to present two separate business plans with an element of co-operation between us?" The answer is "Yes".


I am afraid I have misunderstood the noble Lord. When he used the expression "an element of co-operation", I read more into his first words than was obviously there. The point is not being conceded. The Amendment is certainly not covered by Clause 2. I say again to the noble Lord that I should have thought this principle, which has now been fully expounded and explained, would have commended itself to the Government. It seems to me to be entirely in line with what was done in the 1960 Act, except that it just extends it from marketing, distribution and other things into the field of production. Surely that is wholly desirable. I do not think there is anything much in winning Lobby victories, but everything in achieving your objective, and I am always out to get results in that way. I hope, now that the matter has been explained, that the noble Lord may say to us that he will take this back and have a look at it, so that we can return to it on the Report stage, as undoubtedly we will.


I do not know whether the noble Lord will see it in my way, but it seems to me that what he is asking us to do is to enable a large horticultural business to be described for the purpose of grant as a small horticultural business, in order to qualify for the small business plan, whereas in fact it is not a small business. This I think we could not do.


May I interrupt to ask the noble Lord how the grant will be fairly divided between two growers who have a loose system and there is no partnership?


I hesitate to give examples, because if I give examples it may be taken that in the event they would qualify. But there must be, and indeed there are, many ways in which two neighbouring small horticultural growers can help each other by acquiring facilities and vehicles which they could not use fully themselves individually, but which, by co-operating with each other, they could use to the full.


I do not know whether the point has been dealt with during the course of the afternoon, but might I ask the Minister this question? What is the position of a father and two sons, none of them eligible for the grant by reason of their smallness, and they do not qualify? If they come together and their eligibility does not override the 20 acres, or whatever it is, are they entitled to a grant or not?


This is what the noble Lord described as being the other end of the scheme This is the opposite end.


But it is a partnership.


As I said on Second Reading, we are discussing with the National Farmers' Union whether, in spite of the very formidable difficulties, any way can be found of allowing a viable business of less than four acres to qualify in its own right. If, in spite of our joint efforts, we are unable to find a solution, there is still the alternative of small growers going into partnership. This, to my mind, would be a very satisfactory solution.


But it is a solution which is only possible if you have another small grower with whom you can go into partnership. That really is the essence of the case that I put—to have a lot of people in a co-operative, some quite small, some larger, but getting together with a common production objective. I feel that in the beginning there was certainly not complete understanding on either side. I think we are much closer to it now. I believe we should study carefully what has been said on both sides, and perhaps the noble Lord will give a limited undertaking that he will look at it again in the hope that the Government may be able to come forward with their own Amendment to cover the point. Failing that, we shall have an opportunity to return to the charge on the Report stage, when we shall both have a clearer picture of what we wish to do.


I do not know whether I made it clear to the noble Lord. In point of fact, given this degree of co-operation each grower would receive the grant in his own right. I do not mean that the grant would have to be divided among them. The thought I would leave with the noble Lord is this. How can we explain, under his plan, that what has become a large horticultural business within the qualifications of this clause is not a large horticultural business—that because two or three people have joined together into one business, it is really still three small businesses? This is very difficult to explain.


I do not think there is any difficulty at all. If Brown, Smith, Jones, Harrison and Robinson, all tenant farmers, still paying their rents and running their farms, join together in a co-operative enterprise for a specific purpose, and the only sovereignty they surrender is in relation to that productive enterprise, they are still small businesses and still qualify for grant; but, for the matter of administrative and financial convenience, helpful to the Ministry and helpful in every other way, they make one application through a co-operative. I should have thought that was perfectly clear and more desirable. That is what I want the Government to accept. If they cannot do it now, I hope they will come to it by the Report stage.


May I say that nothing would please me more than to assist the noble Lord? But the fact is that unless we are talking about the same thing—and it does not seem to me that we are—I cannot promise him that we shall be able to help very much on Report stage. On the other hand, what I should like to do is to talk to him and let him know exactly what we mean by this form of co-operation, find out from him what he means, and then conceivably we shall find that we are as close as we thought we were when we started, and closer than we think we are at this point.


I should not think that we shall find ourselves very close, but it is conceivable that by the end of the day we shall find we are. Having said that, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 2 agreed to.

Clause 3 agreed to.

Clause 4 [Grants for improvement or initial operation of co-operative marketing businesses]:

On Question, Whether Clause 4 shall stand part of the Bill?


There is one point I should like to put to the noble Lord arising out of this clause. It concerns the investments in a co-operative society, which, as the noble Lord is aware, are constantly revolving. For example, one member retires and is refunded his share in the society, and another takes his place with a new share. It would be nonsense if, in a scheme for helping growers through a co-operative, the Minister were to say that, because one member has retired and taken £500 out, his shareholding in the society, and the society has had ten new members with £50 each, these are not going to count towards grant because the society's total capital has remained unchanged. If, therefore, established co-operatives are not to be discriminated against, that is a point which has to be considered.

A further practical point which has to be taken care of in the regulations is that there are a great many people who are neither specialist farmers nor specialist horticulturists, but who have a mixed business and expect their cooperative society to cater for all sides of it. If, for example, a member in Worcestershire Farms Limited, which is a general purpose society with a strong horticultural marketing division, responded to an appeal from his society to increase his investment so that some new horticultural marketing division could be financed, it would be somewhat frustrating if the scheme were to say that part of his investment was to be eligible for consideration in respect of a Ministry grant, and part of it not. This is just the sort of thing that might happen unless great care is taken with the wording of the scheme to avoid that happening. I wanted to raise that with the Minister now, and I hope he will be able to say that the point is seized of and will be taken into account.


What the noble Lord is saying is that he wants us to take this into careful account when the scheme is formulated. This I will certainly undertake to do.

Clause 4 agreed to.

Clause 5 [Grants for co-operative markets]:

5.19 p.m.

LORD STONHAM moved, in subsection (2)(b), after sub-paragraph (iii) to insert: (iv) A special grant of £20,000 shall be paid to the Gloucestershire Marketing Society, Cheltenham, being the sum which would have been paid towards the expenses of building and equipping a new market for the society, including provision of an experimental clock auction, if the references, in subsection (1) of this section, to section 1(2) of the Horticulture Act 1960 had been included in that Act.

The noble Lord said: This Amendment is an appeal for belated justice on behalf of the Gloucestershire Marketing Society, which is a society of growers founded in 1918 and which has some 600 members. It is therefore one of the oldest and largest of the societies, and it is currently suffering for having been one of the most enterprising. It went ahead with the building and equipment of a new market, covering some £120,000, of which £15,000 was for the provision of an experimental clock auction. They expected to get £32,000 in grants, but have received only about £12,000, and as a consequence they have had to borrow the shortfall of £20,000 on mortgage and are finding this is a crippling burden. There is no question but that they were encouraged by the Government to go ahead with the market and indeed with the clock auction. However, they have had a Government grant for only £3,000 through the now defunct Horticulture Improvements Scheme plus £8,800 from the Agricultural Market Development Executive Committee, and the Government say this represents 80 per cent. of the cost of the clock auction and have washed their hands of the affair in this way and presumably absolved their troubled consciences—that is always assuming that Conservative Governments have consciences. The plain fact is that this society, in the midst of an important horticultural area, proceeded with this project not only on their own behalf but for the benefit of the whole country.

It is also a fact that the Minister has since admitted to an anomaly in the 1960 Act which was the omission from the Act of the words or for conducting a market for the sale of horticultural produce". These words are now, of course, being added to the Bill and the anomaly will therefore be removed. The third indisputable fact is that if this society had waited another two or three years until this Bill became an Act, they would have had no difficulty in getting the full £32,000. Another fact is that because they were enterprising and because they trusted the Government they have been fined, as it were, £20,000; and I think the only way to redress that is to accept this Amendment.

The Government naturally become very legally minded and say they cannot do it because it would be retrospective, and that if they agree to that then every farmer repairing a cottage or a greenhouse without grant would come forward with a claim. I suggest that is nonsense. We are merely suggesting that one case arising out of the anomaly should be corrected, and this is the only society in this precise position which has been caught by this anomaly. The Government say that the society's enterprise is highly commendable and that they are doing a service to their country. Therefore, surely the Government are bound to pay this debt of honour; indeed, I think they should pay a bonus because, judging by Continental experience, the establishment of a clock auction is likely to do more than any other single thing to redress the position. I think the case is a strong one, and f hope the noble Lord will accept it.


We have followed this argument with the greatest interest. As the noble Lord says, the whole project was estimated to cost about £120,000, of which £15,000 was for the clock auction facilities. As he has said, the Horticultural Marketing Council made a grant of £3,000 and the Agricultural Market Development Executive Committee promised another grant estimated to be about £8,800. In addition, the society will have received a grant which is expected to amount to about £14,000 in respect of that part of the work which is eligible for one-third grant under the Horticultural Improvements Scheme. I think the noble Lord left that out.

However, because the terms of Section 1(2) of the Horticulture Act, 1960, limit the amount which may be paid under the Horticulture improvements Scheme to facilities for storage of horticultural produce, this grant is confined only to part of the whole cost. That part which has regard to facilities for conducting the market, as distinct from preparing produce for market, is ineligible for grant under the terms of the Act. The Amendment refers to the provision of an experimental clock auction and grants estimated to he between £14,000 and £15,000, as has been said in another place, have been made. What the Society has missed is something up to about £20,000 which they might have expected if this Bill had been passed and they had made a scheme covering the whole of the rest of the Society's proposals before they applied for the grant. I think they received a grant of about 80 per cent. for that part of the project concerned with clock auction facilities.

The Society believes that it is the only co-operative which has missed in this way a grant for which it would have been eligible if it had been less enterprising and had waited a few years. Whether or not this is so there are others, if not in precisely the same circumstances, both co-operatives and individual growers, who are in a similar position and I think they would have had something to say in this matter.

We have announced our intention of widening the scope of the existing improvement scheme as soon as legislation has been enacted. For instance, we have said that the replacement of an existing glasshouse will be eligible for grant.

The noble Lord says that they are in different circumstances. That does not mean that they would consider themselves less hard-done by but they regret that grants were not available for the purpose at the time.


I think it only fair to both the noble Lord and myself to make it quite clear that I did not read his speech before I made mine.


And I certainly did not read the noble Lord's speech before making mine! However, to revert to the point under discussion, this sort of thing is bound to happen whenever the Government introduce a scheme for grant. There will always be someone who would be just outside, and I cannot see that we should be justified in undermining what is a well-established principle; that is, that legislation of this kind should not be retrospective. The noble Lord has said that he is making an appeal for justice, but if this were recognised as an appeal for justice there would be many other such appeals, even though he thinks this should be considered as a case entirely apart.

5.28 p.m.


The noble Lord has said that he has no desire to undermine some principle. But I think his comment and his recital of the sequence of events since 1960 indicate an undermining of the basic principle of this Bill. I should have thought the Amendment would be welcomed by the Government: because, when all is said and done, there is the attempt, and I believe it is an honest attempt, to encourage self-help, whether it be in agriculture or anywhere else. The purpose of this assistance should be to aid and encourage people to do something for themselves; to stimulate enterprise; to stimulate effort among agriculturists and horticulturists, and here we have an actual case. In 1960, according to the statement of my noble friend, a co-operative embarked upon an enterprise of the type which this Bill is seeking to encourage. At that same time they expected (and I believe they were almost led to expect) that they would secure assistance for that particular effort under the 1960 Act. Unfortunately, they were mistaken, and this present Bill corrects one of the anomalies of the 1960 Act which precluded the Gloucestershire Marketing Society from securing the £20,000 mentioned by the noble Lord opposite and by my noble friend.

I need not reiterate the points which have already been made. It has been suggested—and it was the only argument mentioned by the noble Lord opposite—that it could encourage others to come along with a claim. But it has been categorically stated that there is no other co-operative or other enterprise that has embarked upon a scheme of this character which could legitimately make a claim for a similar amount. Even had there been more than one, I should have thought that, in keeping with the whole principle of this Bill, which is to encourage enterprise, a claim would have been granted; because in itself that would do a great deal of good. It would stimulate people, rather than cause them to wait year after year before embarking upon something in the hope that the Government might come along and give them some assistance. I know that there is always the question of creating precedents, and that retrospective activity, like retrospective legislation, is not in all cases good. But here is a case where having a good heart can mean good sense. I should hope that at least once in a while the noble Lord opposite, expressing the point of view of the Government, would combine that good heart with good sense and say: "Yes, we will accept the Amendment."


I hope that we shall not be led away by such—I almost said nonsense. These grants are controlled by Acts of Parliament, and the Horticulture Act lays down the terms under which growers may become eligible for grants for various works. The Gloucester Co-operative made an auction clock—


What I am expressing now is undoubtedly not nonsense, and I am sure the noble Earl opposite must realise that under the 1960 Act it was appreciated by the Gloucester Society that there would be no particular assistance in connection with the auction clock. The point which is being put forward from this side has no reference to the expense which was incurred in connection with the auction clock.


The point that is being made is that some thing, or some form of work, which admittedly did not qualify for grant under the 1960 Act would become eligible under a subsequent Act. This happened over and over again, and is bound to happen over and over again. In the general agricultural sphere, I well remember a great many people putting up silos, and they received no grant assistance. Later on, a special Act was brought in which enabled people to get assistance for silos. Are we to go back, merely because a subsequent Act provides for grants to be given in particular cases and, on the specious plea that they have been doing a good agricultural process, say that grants should also be given to all the other people who put up silos? There is surely no means by which we can deal with public funds except by Acts of Parliament and under the rules and regulations laid down. It would lead to the most terrible precedents if, because subsequently an Act makes something eligible which was not eligible at the time, we were to say: "This was very bad luck; we shall I make you a retrospective grant". Should we do that the other way round, with taxation?

On Question, Amendment negatived.

Clause 5 agreed to.

Clause 6:

Supply of produce to co-operative marketing businesses

6.—(1) A grant under section 4 of this Act or section 1(2) of the Horticulture Act 1960 (as amended by section 5 of this Act) shall not be made to an association whose business comprises the marketing of horticultural produce grown by its members unless the appropriate Minister is satisfied that the constitution of the association contains provision designed to secure that a sufficient proportion of the horticultural produce grown by a member is made available by him for marketing by the association.

5.35 p.m.

LORD STONHAM moved, in subsection (1), to leave out "is satisfied that the constitution of the association", and to substitute: having regard to the purposes of the association, is satisfied that its constitution".

The noble Lord said: Clause 6 was introduced into the Bill as a result of a proposal put forward in Standing Committee in another place. When the clause was originally drafted it set out to do two things: first, to safeguard the Government's investment, as it were, in a society which had received grant aid; and, second, to enable such a society to recover damages to its business through any failure of a member to honour his obligations in delivering produce. Actually, the real point at issue was the second point, which had aroused a great deal of interest during the 1960 Horticulture Bill discussions. Since, however, there could be no question of defaulting on an obligation unless there had been a prior agreement, it was necessary that the Minister should be given some power to require that provision for such agreements should be included in a society's rules. It was further considered that the Government investment in a society by way of grant was a sound justification for doing so.

The possibility of including in a society's rules any penalty for non-compliance with an agreement has already been examined in some detail by the Godber inter-departmental Committee which reported in 1961. This Committee concluded that there was insufficient case for altering the law in the particular instances of horticultural co-operatives to allow such a penalty to be imposed. Thus, this particular point, which was the real justification for originally moving the new clause, has since had to be abandoned. We are therefore left with the extraordinary position that a clause which was originally a means to an end has become an end in itself. The provision for contracts for societies and their members has become the main object in this clause, whereas in the earlier draft it had been merely a means whereby penal sanctions could be introduced.

I would say at once that the clause is not the less valuable for this change in intention, but there can be little doubt that in many branches of agriculture and horticulture contractual agreements between growers and their co-operatives will become an absolutely necessary counterpart of the contracts that these co-operatives are required to enter into between the bodies through which the produce is distributed. It is right that the Government should recognise this growing trend and encourage societies to make provision for it, quite apart from the necessity of securing its investment in societies to which it has given support.

But it is very important not to be carried away with the idea that contractual arrangements are in all cases a necessity. As was pointed out during a debate in Standing Committee in another place by the honourable member for King's Lynn, circumstances may well exist where, for example, a wide variety of produce is being grown and where insistence on hard and fast contracts between members and the society at a particular stage could very well slow down, rather than promote, the growth of co-operative marketing, because it would, in many cases, prevent the setting up of new co-operatives at all. There are difficulties where, for example, a society has a mixed agriculture and horticulture business or does a large part of its business in horticultural requisites, and therefore cannot easily apply the rules to one part of its membership which do not also apply to another. On the other hand, everyone will agree that where there is a specialist society—for example, one dealing in top fruit—contractual arrangements of the kind I have referred to are virtually indispensable.

Clearly, there are a wide variety of different circumstances and there should be an equally wide variety of methods of dealing with them. I do not doubt that this is the intention of the clause as it is now drafted, but if that is the case there is considerable doubt whether the intention is as clearly expressed as it should be. To begin with, it refers to an association whose business comprises the marketing of horticultural produce grown by its members", which clearly includes all co-operatives having even a small part of their total business concerned with horticultural marketing. The words, "that the constitution of the association contains provision" seem to imply that the rules themselves must contain such provision, whereas it is more normal practice for provision to be made by a separate marketing agreement and not in the rules at all. The words "designed to secure" could have alternative interpretations—either provisions of a sort to secure, unless it is not complied with (in which case the appropriate remedy would be applied), or merely provisions which could be called upon if necessary.

To appreciate this it has to be seen what it is to be secured, and the thing to be secured is that a sufficient proportion of the horticultural produce grown by a member is made available by him. Leaving aside the question of any difficulties in ascertaining how much produce is grown by a member, without which it is impossible to say anything about the proportion, what is meant by "sufficient"—sufficient for whom? Sufficient in the eyes of the grower, his society, or sufficient in the view of the Minister of Agriculture?

The clause as it stands, I think noble Lords will agree, is loosely worded, and the looseness of its wording gives enormous discretion to the Minister and creates considerable doubts in the minds of actual and potential members of co-operatives. I may be reading too much into subsection (2) to infer that he intends to exercise this discretion with greater strictness than in the past, but even if this inference were correct I should not necessarily quarrel with it. But this Amendment seeks to ensure that where he does exercise his powers he will take all the circumstances into account, remembering that however desirable new practices may be, growers have to be persuaded, led, and cannot be driven into adopting them.

I believe this Amendment, with the words we propose to insert and to which we attach very great importance, will provide all the safeguards it is necessary to obtain, and will make it much more likely that existing and potential co-operatives will go ahead with marketing schemes. That is certainly a major objective on this side of your Lordships' House in considering this Bill; and it is an objective which I hope the Government will share. We feel quite strongly that this Amendment will contribute to it. I beg to move.

Amendment moved, Page 7, line 44, leave out from ("Minister") to ("contains") in line 45 and insert the said new words.—(Lord Stonham.)


I am grateful to the noble Lord for explaining the purpose of the Amendment, and indeed we do recognise that there are many differences between individual societies. This has indeed been recognised by the wording of the clause, which leaves quite open the scope of the required provision in the constitution of these marketing associations. The provision can thus he of the kind which best suits the particular circumstances of an individual association. The noble Lord asked, as an instance, I think, what "sufficient" might mean and who would decide what was sufficient. I think the answer is that the society itself would decide and would have to define it, and of course the definition would have to be approved by the Minister. But I do not think this is a very difficult achievement to imagine. The Minister has no intention of requiring all co-operatives to have the same kind of constitution.

Moreover, granted the constitution as a whole satisfies the Minister, he has no intention of insisting that any or all sanctions shall be applied in every case. I think the noble Lord visualised a stricter, more rigid application than is envisaged. It will remain open to the co-operative itself to waive them if the member's default has occurred for any excusable reason. The noble Lord had in mind that it might be inappropriate to require such a provision in the constitution of an association whose activities are mainly, or partly, concerned with matters other than the marketing of horticultural produce. I agree the provision might be awkward to frame, but it should not be by any means impossible to relate such provision solely to those activities with which the clause is concerned. I think we can both imagine such a provision.

I myself belong to a farmers' organisation which is mainly interested in agricultural produce, partly interested in horticultural produce. I do not think it would find it very difficult to frame words which would cover this question. It is, after all, not very unusual or difficult to amend the constitution of a co-operative; nor is it an expensive proceeding. It requires merely the agreement of a special meeting of the association. The Amendment, in fact, would require the Minister to have regard to the purposes of the association in considering the adequacy of any such provision.

With respect to the noble Lord, I cannot see any necessity to amend the clause if the Amendment is aiming at that. The purpose of the association must necessarily be taken into account when the Minister studies its constitution, which will at least implicitly disclose its purpose. The definition of a co-operative in Section 8(4) of the Horticulture Act, 1960, which the Minister must observe, is also a definition couched in terms of purposes. The noble Lord will remember that a co-operative must have the purpose of storing and preparing for marketing or marketing members' produce. Accordingly, I can assure the noble Lord that the purpose of the association must in any event be taken into full account; and I should hope that, with this explanation, he would agree to withdraw his Amendment as being unnecessary.


I am most grateful to the Minister for his explanation, and I think he has certainly cleared up some points of doubt. We shall study the whole reply with very considerable interest, and with that I ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 6 agreed to.

Clause 7 agreed to.

On Question, Whether Clause 8 shall stand part of the Bill?

5.49 p.m.


There are two points I want to raise. I think one is more appropriate to Clause 7, but these clauses come together. The first of the two points is the difference in treatment now that the amount of grant is to be increased under Clause 6 as compared with the 1960 Act—an increase which, of course, we warmly welcome and which under the 1960 Act had excellent results. In the 1960 Act Section 4 routed grants through a central body, but by Clause 4 of this Bill grants are to be made direct. I know that the two situations in the two measures are not quite parallel, but the difference has the unfortunate effect that, while central organisations could apply for, and have received, grants under the 1960 Act towards carrying on their promotion work, there is no similar possibility of their making application under Clause 4 here, although there would be just as much need by growers' organisations under this Bill as under the 1960 Act.

The Amendment to this clause which was introduced on the Report stage in another place is a recognition of the fact that, during the first months of the life of any new society, it will not be able to carry on any marketing business, and it may well be a year or so before it becomes a commercially viable institution. During all that period the society is bound to lean heavily on the A.C.C. for the aid and support that it will require, and of course the Agricultural Central Co-operative Society is doing a great deal for co-operation in all kinds of ways. It is largely due to its efforts that there is a new feeling and drive and imagination behind farm co-operative development which was quite unknown a few years ago.

The Ministry gives the A.C.C. and other central associations general support, quite apart from reimbursing them for services rendered. But we feel that the amount of this support is something which should be looked at in the light of the extension of responsibilities: for example, A.C.C. with its vastly greater responsibilities, receives a smaller grant towards the promotion and encouragement of agricultural and horticultural co-operation than do either the Welsh or Scottish agricultural and horticultural associations. Therefore, if we are serious in our belief in the fundamental importance of co-operative action, this is surely a matter which wants looking into, and I hope that the Minister can give us an assurance that this will be considered.

The other question that I wish to raise concerns the eligibility for grants of pre-packaging machinery and equipment. In my submission, it is wholly desirable that producer co-operatives should be helped and encouraged to undertake pre-packaging. As we all know, horticultural pre-packaging has made a tremendous advance in recent years, and in many ways it is the chief hope of the industry. The present annual produce turnover of self-service stores and supermarkets alone is some £42 million, most of it in pre-packed goods. There is also an increasing tendency in chains of self-service stores to contract buying from growers. This is also a most desirable development, because it not only means that growers are sure of their markets, but that the cost of distribution from the grower to the consumer is reduced to the lowest possible amount.

Under the 1960 Act, as the noble Lord is aware, pre-packaging machinery and equipment is not eligible for grant, largely because the Government take the view that it is easily saleable. I would submit that that is not really a valid objection, because it would be quite simple to make a condition of grant that the equipment should not be sold for a specified period without the approval of the Minister. This is what the Ministry of Education do in making grants for equipment and furniture in my youth club. Indeed, they hold a proprietary interest in the equipment for several years. I hope, therefore, that this matter will be favourably considered, and that the noble Lord can assure us that for approved schemes pre-packaging machinery will be considered for grant.


We will certainly look most carefully at everything the noble Lord has said. In answer to the first question, I can tell him that the provisions of Section 4 of the 1960 Act continue in the Bill. He raised the question of pre-packaging equipment. Of course that is something that is in our minds, and naturally we shall look at it, I will not say with renewed interest, but certainly with even greater interest and concern. He himself named the problem that faces us, in that some of it is dual purpose equipment and could be transferred to another industry. This is the difficulty. What I will do is to undertake to bring his views to those who will be framing the schemes and see what we can do to meet his wishes.


I am most grateful for that undertaking. On the second question that I raised I do not expect a positive answer. On the first question I raised, if there is any point which is not clear I hope that the noble Lord will write to me about it.


I thought the noble Lord actually asked me to look at it. Did he ask for a direct answer on anything?


No. I wanted the noble Lord to look at the matter. I thought that it would be quite impossible to give a public answer on the second question. All I am really concerned with is that it will be considered in regard to the schemes. But on the first point, if there is anything that I said that was not clear, perhaps the noble Lord will write to me.


No, I do not think so.

Clause 8 agreed to.

Clause 9 [Grants towards fulfilling guarantees of bank loans]:

5.57 p.m.

LORD PEDDIE moved, in subsection (1), to leave out all words after "make", down to the end of the subsection, and to insert: grants to the Agricultural Credit Corporation Limited, the Agricultural Finance Federation Limited, and any other institution properly constituted to provide credit facilities for agricultural and horticultural businesses, in respect of expenditure incurred by them in fulfilling guarantees given by them as securities for loans made in the course of banking transactions to persons requiring loans for the purpose of horticultural businesses carried on by them ".

The noble Lord said: I rise to move this Amendment standing in the name of my noble friends and myself. It would appear at first glance that, following the comments that were made by the noble Lord on Second Reading, this is really pushing at an open door, and I feel quite confident that the noble Lord opposite will accept this Amendment. It is based upon the noble Lord's comments on Second Reading, which I will quote. He said [OFFICIAL REPORT, Vol. 256 (No. 46), col. 257]: What we are now doing is to offer the Federation one-tenth of the sums to be made available under the clause, and the Federation, in employing this share, will have the same status in the eyes of the Ministry as the Corporation will have in employing their share. They will, in other words, be grant-aided bodies operating in parallel under the same conditions. That we welcome, with certain reservations which were expressed on Second Reading.

However, there is the need to be precise about these things, because the conditions referred to do not require to be laid before Parliament at a later stage, and therefore we must deal with them now. It is right and proper that this should be incorporated in the Bill. The first point is that the grant towards fulfilling guarantees of bank loans is a novel form of financial support—and, incidentally, at no stage have we had any precise information as to how it would operate. I think it was obvious from the start that there was the apparent intention, whether conscious or not, that there should be only one administering body. Now, of course, for a variety of reasons, the Government have awakened to the fact that there are at least two bodies capable of securing assistance and doing good work in this particular field. I will not proceed any further on that point because, as I said at the beginning, this Amendment is based solely upon the welcome statement made which accepted the A.F.F. as being a body undertaking work parallel with that of the A.C.C. I beg to move.

Amendment moved— Page 8, line 28, leave out from ("make") to end of subsection and insert the said words.—(Lord Peddie.)


Did the noble Lord say that he wishes to take Amendments Nos. 11 and 12 together?


Yes, and No. 13.


The effect of these Amendments, as I understand them, and as the noble Lord has indicated, is to make it obligatory for the Minister to use the Agricultural Credit Corporation and the Agricultural Finance Federation as his instruments for implementing the grant-aided credit-backing facilities under Clause 9. It is only fair to say at the start that, despite the arguments put forward by the noble Lord and despite his optimism, I am not going to advise your Lordships to support these Amendments. Noble Lords will remember the debate on the Second Reading of the Bill a fortnight ago. I referred then to the discussion in another place regarding the Government's original intention to give grant aid, under this Clause, to the Agricultural Credit Corporation, and to that Corporation alone. The Government had considered the arguments put forward in another place directed to the importance of making further provision for the needs of co-operatives as well as of individual growers. The Government's thinking on this subject at that time had been that as there was only one body, the Agricultural Credit Corporation, actually operating and possessing relevant experience in this field, it followed that this should be the body to receive grant aid under the clause.

An argument was then advanced, however, that a substantial proportion of the business to be done under these arrangements would be done by, or on behalf of, co-operatives. It was further pointed out that there was in existence a body, the Agricultural Finance Federation, catering particularly for the financial needs of the co-operatives. From this it was predicated that it would be right to allow the Federation funds under this clause. This reasoning the Government accepted, and consequently we now intend that out of the sum of up to £100,000 which may be made available annually under Clause 9, 10 per cent. should go to the Agricultural Finance Federation.

This being so, I had hoped, overoptimistically as it proves, that the noble Lord would not think it necessary to move these Amendments, although his noble friend Lord Stonham had soliloquised upon their embryo existence. What I should like to impress on noble Lords is that, as the clause stands, the Minister has the power to grant-aid both bodies. Moreover, it has now been made clear that he intends to do so. This being so, I cannot see any advantage in amending the Bill in this way. To write in the name of the bodies affected would certainly be contrary to normal legislative practice, and could cause future difficulties. But, reiterating the promise I have given, I hope that the noble Lord opposite may be prepared to withdraw his Amendment.


I thank the noble Lord for that explanation: I appreciate the reiteration of the promise that the A.F.F. will be fully considered. He will recollect that at the time of the Second Reading I had some doubts about the division of those funds; but I do not propose to develop that argument now, as I recognise that the principle has been conceded. I recognise also that Her Majesty's Government were not fully informed as to the activities of A.F.F. It is perfectly obvious that there was some misunderstanding as to the volume of its business and its area of operation. But, in the light of the promise made quite specifically to this House, that the A.F.F. will be recognised as a body operating in that field and deserving of the fullest consideration, on a par with that of the A.C.C., I beg leave to withdraw this Amendment.

Amendment, by leave, withdrawn.

Clause 9 agreed to.

Clause 10 [Grants for wholesale markets of national importance.]:

6.6 p.m.

LORD STONHAM moved to add to subsection (1): and for this purpose the Minister shall prepare a plan for the regional organisation of markets which shall be laid before Parliament and approved by affirmative resolution of both Houses of Parliament".

The noble Lord said: This clause permits the Minister to make grants of up to one-third of the cost of starting, reconstructing, or extending national horticultural markets of major importance. We have been told that the yardstick of "major importance" will be an actual or potential turnover of not less than £5 million a year. The clause also stipulates that, to qualify for grant, the markets must be of major importance in the national system of distribution of horticultural produce". By this Amendment we seek to ensure that the Minister will produce a plan for the regional organisation of markets, so that we shall be certain that all factors will be taken into consideration in a truly national system of distribution. For this purpose the Treasury have to provide the substantial sum of £25 million; and, personally, I would not grudge a penny of it. It is hoped that the wise expenditure of this money will bring our marketing system up to date. But efficient marketing does not begin and end with the technical and mechanical excellence of the marketplace. It depends just as much on the position of the market in relation to centres of population and to the main producing areas, and on the adequacy of transport facilities by road, rail and water. All these factors are major reasons for requiring the Minister to put forward a plan which, although considered and administered regionally, will be truly national in its application. Without this Amendment, there is no certainty that this will be the case, for these reasons.

The first is that only some 15 to 20 markets are likely to satisfy the £5 million requirement—that is, 15 to 20 main horticultural markets, in a population of 54 million people, fairly soon to be 70 million. That is not nearly enough to give us national coverage. It would indeed accentuate, rather than reduce, the volume of reconsigned produce, which is the main curse of the horticultural industry. We have at present first-hand, second-hand and even fourth-hand wholesalers—each taking a profit, and each adding handling and freight charges. So, for an efficient marketing system, it is essential to arrange the markets so that dealings with first-hand wholesalers become possible in the overwhelming majority of transactions.

The second point in regard to an efficient marketing system is that the present proposals leave development entirely to the initiative, and perhaps the local pride, of local authorities, and of the proprietors, if they be private proprietors, of existing markets. I do not deny their initiative or local pride, but individualistic methods cannot possibly provide national coverage or put the markets in the right places. It is seven years since the Runciman Committee urged local authorities to press on with the modernisation of markets, but only Sheffield and Coventry have done so. My third point is that present markets are mostly in the centre of cities dense with traffic, and they create major problems of traffic congestion. But the proprietors, understandably, have a deeply vested interest in staying where they are. They will fight tooth and nail against re-siting. No single proposal, I am sure, will come from them which will be in line with the national interests in land use or the Buchanan recommendations.

We really must get down to these important problems if we mean business about not having our cities choked to a standstill. We have only to think of Covent Garden and the shambles created by the Government's muddled thinking and palsied inaction, and the obstinacy of the wholesalers. This, after all, is a horticulture Bill to assist horticulturists: but their interests were not considered when Covent Garden was before your Lordships. To a man, the growers opposed the Seven Dials site, but the Government ignored them. If we had a regional plan for the Home Counties, London would undoubtedly have four perimeter markets, but we shall never get them if we rely on the initiative of the owners or wholesalers in the present markets. The same story can be told of Birmingham, Manchester, Liverpool, Newcastle and the other existing main centres of distribution.

In the national sense, we shall waste our £25 million if we spend it without first making a comprehensive national plan. In my view, during his speech on Second Reading in another place the Minister, Mr. Soames, showed his complete ignorance of the most vital point about the distribution of horticultural produce when he said [OFFICIAL REPORT, Commons, Vol. 686 (No. 23), col. 591]: … these should be local markets, … and not a national organisation, because they deal with local problems". I was quoting the Minister. Birmingham market and the other big provincial markets are only local in the sense that most of the people who buy there come from the surrounding area, but in the horticultural sense they are national markets. They receive tomatoes from the Lea Valley and Las Palmas, broccoli from Cornwall and Roscoff, cherries from Kent, apples from Essex, strawberries from Wisbech and oranges from Israel—all of them.

These markets must be planned with an eye to availability and co-ordination of transport facilities. We need markets sited, not within big cities but in relation to population and geographical areas. For example, there must, in the interests of horticulturists, be a major market in the South-West of England, and there must be another in Scotland; but we shall never get them unless there is a regional plan within a national plan. Without it, the words in the Bill, a national system of horticultural distribution will remain useless words in a Bill, and will never become a reality.

Thirteen years ago my noble friend Lord Walston and I were members of a committee which produced a "Plan for Horticulture"—and, despite the lapse of time, it is still the only comprehensive plan in existence. Throughout that thirteen years we have suffered the misfortune, coincidentally, of having a series of Conservative Governments, and nothing—literally, nothing—has been done for horticultural marketing. Some parts of our plan—for example, a teleprinter information service and the development of the clock auction system—have been implemented with great success on the Continent. Perhaps the noble Lord will tell us in his reply whether such projects as that—the teleprinter and clock auction—would qualify for grant under this clause in connection with markets. Another of our ideas, a common container service, is now belatedly enshrined in the present Bill.

In our view, all these functions should have been administered by a public marketing authority, whose prime function would have been the setting up and improvement of markets—which function is now to be performed, haphazardly, by we know not who, presumably another subsection of the Ministry. We feel that the regional planning and administration of markets envisaged in our Amendment should be conducted by a public authority acting as the agent of the Minister, and that it might well be that the Covent Garden Market Authority, with a different title and suitably enlarged powers, could be the instrument for this work. I mention that because the Government believe in public authorities for marketing, because it appointed the Covent Garden Market Authority.

What I am suggesting is not merely a local Seven Dials version, but something which will cover the whole country. I invite the noble Lord, Lord St. Oswald, knowing the eager enthusiasm with which he always approaches the subject of Covent Garden, to let us know what he thinks of that suggestion. Also, will he let us know whether the Covent Garden Marketing Authority would qualify for a share of the £25 million; and, if so, would he be prepared to forecast how much will then be left of the £25 million for the rest of the whole country?

Finally, I would invite him to tell us how we are to have, in the words of the Bill, a national system of distribution of horticultural produce unless we have some person or organisation to decide where the markets are to be re-sited or built. And if, as I suspect, he tells us that that person is the Minister and the organisation the Ministry of Agriculture, I feel that the case for the Amendment will have been made, because, obviously, the Minister will have to prepare a plan which he will then lay before Parliament; and, equally obviously, since Governments and Ministries change, these provisions must be written into the Bill. I think, therefore, that the noble Lord must accept the Amendment. I beg to move.

Amendment moved— Page 9, line 5, at end insert the said words.—(Lord Stonham.)

6.17 p.m.


I should like to support my noble friend briefly. The noble Lord the Minister, and I am quite sure the House, is aware that a very important Government document has been issued to-day dealing with the South-East of England. This is a plan, in the Government's view, to take account of what one might call the explosion of population in South-East England. It envisages, I think, two big new cities and a number of big new towns. This will make a tremendous impact on South-East England. It may well bring about a further attraction of persons to the area. We well know that the marketing arrangements for agriculture and horticulture are, in the main, based on London and Covent Garden. It is questionable, even if Covent Garden were to be rebuilt, whether this would be sufficient to take into account the explosion of population and the increasing needs of the public since, with rising standards, the consumption of vegetables and horticulture continues to rise—and it is right that it should.

If we are to reduce the cost of living, then obviously, I think, unless it is done at the expense of the farmers—and I cannot see Parliament ever agreeing to that—it must arise from increased efficiency; and I should have thought it would be generally accepted that increased efficiency can come only from the new systems of distribution, upon which these markets very much depend. Now the Minister is taking power to make grants. We have seen grants made available in the past, and I have very much in mind that which was given to the cotton industry. There, the manner in which these grants were to be used was left entirely to the industry, and we saw a great deal of unnecessary machinery go out of commission and be destroyed. But nobody in the cotton industry to-day would say that that industry is a great deal better off than it was before the Government made their grant. I will not say the grant was wasted; but it has not created the type of organisation within the cotton industry that I think the Government themselves would wish to see. This stems from the fact that the Government were not prepared to take the power to see that the proper reorganisation should take place.

My noble friend is moving this Amendment which lays a responsibility upon the Minister to ensure proper regional organisation of markets. I am sure that my noble friend does not wish the Minister to be a dictator in any sense; he would wish to see the Minister have consultations with various local authorities. But let us recognise that at the present moment we do not have regional government in the sense of an assembly of local authorities responsible for the type of areas for which these markets themselves would be responsible.

I can see that the Minister will have difficulty at present in finding the right authority to consult. But this could be overcome. At least we should have some organisation for discussion and decision as to where these markets should be placed in the interests of the general community. I do not think there is any rigidity in this Amendment. If there is, I am sure that my noble friend will be the first to say, "Let us have some flexibility". But we must ensure—and I think the Government would agree with this—that where we are making quite considerable grants in this connection (and money is not as freely available as some would like it to be, or seem to think it is) this money is used to the best advantage. Therefore, there must be some co-ordinating body, some planners, behind it. The Government have to-day accepted the mantle of planning, so here is their opportunity. If they accept this Amendment there will be responsibility on the Minister to have consultations and then to take decisions. We should then see a proper step forward in the new and efficient distribution of agriculture and horticulture. I hope that the Government can see their way to accept this Amendment.


In rising to support this Amendment, I would express the personal view that it deals with one of the most difficult sections of the Bill: that is, the question of developing wholesale markets. I expressed the view on the Second Reading that we all appreciate the need for developing markets, and I recognise how little has been done over the years; but I think it is also essential to keep in mind that the mere spending of £20 million or £25 million by the Government will not solve this problem of marketing. I think it will need a measure of encouragement by the Government, and will also need the really practical encouragement and preparation of planning for regional organisation of markets which this Amendment requires. The situation at the moment is that very few local authorities feel a spontaneous urge towards developing markets. They are carrying on; and there is very little inducement towards development even in the offer of some grant. It has to be brought home to the local authorities by and through the presentation and operation of regional planning for developing markets by the Minister.

Another point of importance, which has already been made to the Committee, is that in another place there was an indication by the Minister that this was a local problem. He could not have been more wrong. It is not a local problem at all. Quite frankly, I think this Amendment would save the Government in the next few years from what could be a deplorable mistake. I doubt whether any single local authority is in a position, or is equipped, to give full consideration to all the factors that are being brought to bear, or are likely to be brought to bear, on this question of marketing.

It is not merely a question of physical transportation of goods, the distances they are carried, and all the appalling problems with regard to the siting of the markets. We all know they bad enough. But, in addition, there are great changes taking place in grading, which this Bill encourages in some measure. Development in the different presentation of goods, the tendency to streamline wholesaling and retailing—all these influences which are brought to bear on the marketing of goods, both wholesale and retail, are bound to have their repercussions on marketing. I fear that there is the possibility of local authorities, with the best will in the world and with encouragement through this grant, embarking on the building of markets which could become hopelessly out-dated during the passing of a single decade.

The acceptance of this Amendment would at least give the power and authority for the Government to make certain, whatever developments of marketing there might be in the future, that there would be some prior thought not merely related to one locality but taking into consideration all the trends and influences likely to have some bearing on this question of marketing. Therefore, I would commend this Amendment to the Committee as a practical and sensible one, and one which, in my opinion, greatly strengthens Clause 10.

6.27 p.m.


I am pleased that the noble Lord, Lord Stonham, has put down this Amendment. By those words I do not want to excite any optimism in his heart. I am pleased because, by putting it down, he has given me the chance of explaining rather more fully than I have been able to do so far something of the thinking which underlies this deceptively short subsection. Noble Lords opposite have stressed the great importance we must give to this question. Therefore, I am going to allow myself to speak at rather greater length—but not at too great a length, I hope—than I normally would have done.

I detected, or tried to sort out, certain trends in the arguments of noble Lords. I should like to take what I think I have sorted out in some sort of sequence. I think the basic point of criticism was that, by simply grant-aiding existing major markets indiscriminately, we might be freezing the pattern of distribution. I agree that we must ask ourselves the question: Are the major markets in the right places and is trade appropriately distributed between them? I think, if we ask ourselves that question, we find ourselves in imagination drawing up a regional plan for major markets, as the noble Lord suggests, and asking ourselves where we would locate them. I suggest that in this country, unlike in some Continental countries where conditions are very different, there can be only one answer at this point of time—I shall come to the point that the noble Lord, Lord Shepherd, raised about the South-East in a moment; I am not ignoring that point, nor am I forgetting it. We should locate them in or near the centres of consumption and distribution. We should put the markets near the people and conveniently close for the retailers who serve those people and who rely on the markets for their produce. This means that we should put them where they are already.

As I said on Second Reading, since our markets system has been allowed to develop freely and naturally, it could hardly be otherwise. Where there has been a need for a growing wholesale trade in horticultural produce to serve a growing population, then that need has been automatically satisfied. The existing market has expanded or overflowed into adjoining streets, or a new concentration of wholesalers has sprung up. The system has been self-adjusting, and the result is that if you plot the main markets on a population map, you will find that the main centres of population are served by major markets of concentrations of wholesalers.


The noble Lord said that there could be no change of location of markets, and that they should be re-sited. But that could mean a major geographical change—for example, Covent Garden might not be at Seven Dials, but at Beckton or Nine Elms.


If the noble Lord is after that, I think that I am going to satisfy him more than, even in my optimistic mood, I expected. As I have already stressed—and there is nothing between us here—many of our major markets are badly sited. They are too near the centres of cities to have adequate space or ease of access. But I think that their faults are topographical rather than geographical. What I am saying is that they are not badly located, in the sense that they need moving to a different city altogether. We are in harmony over this, as the noble Lord has just mentioned the point about Covent Garden moving to another part of the London area. As the Runciman Committee found, there is nothing fundamentally wrong with our marketing system. It simply needs improving and bringing up to date by the provision of good modern facilities. That is precisely what this clause is intended to bring about. I should perhaps add that, even if one wanted to reorganise the pattern of distribution and divert trade from one market to another, I do not see that the present Amendment would provide one with the means of doing so. Not even discriminatory grants at one-third of cost would enable a market chosen under some arbitrary regional plan to attract all the trade away from existing markets which adequately satisfied a real demand. Again, I am not using "arbitrary" in any pejorative sense. To reorganise the pattern of distribution, you would need much stronger powers than this Amendment would give. You would indeed need to take control of all the markets of this country away from those who have run them up to now and who have, broadly speaking, run them very well—though I gather that the noble Lord would not be particularly opposed to doing that.

I think that underlying the noble Lord's argument, was the feeling that by basing our selection of the markets to be eligible for grant aid simply on their throughput, we might be too generous to some parts of the country and not generous enough to others. This question of the choice of markets to be eligible for aid is undoubtedly a very difficult one. I think that we are not divided on the fact that there must be a choice. No one has challenged the view—which is, indeed, explicit in this subsection—that only markets of major importance should be eligible for aid. These are the markets which handle the great bulk of the horticultural produce marketed in this country, which because of the volume of produce passing through them are the most congested, and which will cost most to redevelop. How, then, were we to draw a line distinguishing between these major markets and the less important ones? It seemed to us that we must find a fair, open and objective criterion. We concluded that the only fair criterion was throughput. The markets which handle the most produce, and so, ipso facto, serve the greatest number of people, are, almost by definition, the most important.

A limiting factor is that the most recent and precise information we have about the value of throughput of individual markets dates back to the Census of Distribution of 1950. That is why we could not, even if we wished, draw up a list of eligible markets at this point in time, as we should be bound to do if this Amendment were accepted; and that is why we have not written a particular figure into the Bill. On the basis of the 1950 figures, and of a certain amount of estimation, we reckon that a potential annual turnover of about £5 million is the right dividing line. It will be for applicants for grant to satisfy us that their market satisfies this criterion, and we have been discussing with the local authority and trade associations concerned how this should be done. I think we shall find in practice that this criterion works out well, and that there is a pretty clear gap between the markets which qualify, and are unquestionably of major importance, and those which do not qualify and are unquestionably of less than major importance. But if we find, in practice, that we have pitched the figure a little high, then of course we shall be prepared to look at it again.

Then, finally, I thought I detected in the noble Lord's remarks a certain distrust or criticism of those who at present run this country's markets. In one of his typically colourful phrases, he said that he saw them "fighting tooth and nail" against re-siting. He seemed to want to take a measure of control out of the hands of the local authorities who run most of our markets. I cannot agree that this is in any way necessary or desirable. It is a most important part of the functions of even the biggest markets to serve a local demand for horticultural produce. We think this means that they can best be run locally, and in the light of an intimate knowledge of local needs and local conditions. I should like to take this opportunity of saying that we do not intend to use our powers to impose conditions of grant in such a way as to interfere with the detailed day-to-day running of markets. We are content to leave this to the good sense of local authorities and the wholesale trade. And I am quite sure that we are right to do so.

The noble Lord, Lord Stonham (and I think also the noble Lord, Lord Shepherd, in one passage of his speech), asked me to say what sort of articles and equipment of the new markets would be included for grant. Of course, we want these markets to be as comprehensively and as modernly equipped as possible. If the noble Lord would like to send to me his suggestions for any useful systems or equipment, I can promise him that they will be carefully looked at. In fact, we should be grateful for any suggestions that he may make. The noble Lord asked whether Covent Garden Market would qualify for grant, and the answer is, Yes. The noble Lord, Lord Shepherd, asked what provision would be made for the South Eastern area, on which the new Report has just been published. This is a forward-looking Report, which visualises conditions lying ahead. The clause, as noble Lords well know, allows for the provision of new markets and not simply for the enlargement of existing markets. I do not think any difficulty should be found, and the Secretary of State for Regional Development has this, among other things, in mind in the plans.

The noble Lord, Lord Stonham, asked me to say something about the special case of the London markets. I think that until we know where the new Covent Garden is to be located (I probably want to know as much as the noble Lord does, though nobody could want to know more) it is simply not practicable to consider whether another new market is necessary or desirable. I do not think that any useful purpose would be served by discussing this further to-day. I would, however, make it clear that it is for any applicant for grant first to convince the appropriate Minister that the market has a potential annual throughput of £5 million; and this is pretty big turnover.

I have done my best to say why I think this Amendment is unnecessary in practice and somewhat mistaken in principle. Now that I have been able to explain more fully our intentions under this subsection, I hope the noble Lord will feel prepared to withdraw the Amendment.


There was one remark, in particular, in the speech of the noble Lord that made me very unhappy and I think showed up the weakness of his whole contention. In referring to The South East Study, which has been mentioned by my noble friend Lord Shepherd, the noble Lord said: "This is a forward looking report". By what he said afterwards, he seemed to imply that it therefore had no connection with the Horticulture Bill. The noble Lord shakes his head. But surely the whole essence of what he has been saying is that, as opposed to the forward looking report on The South East Study, this is something which is not looking forward, which is not trying to develop our marketing systems in the best possible way, but simply going on what happened before, taking any existing markets, wherever they might happen to be, which have complied with the criterion of throughput of £5 million, and saying that because in the past they have had a large amount of business coming to them, therefore they must be worthy of support.

If to-day they have a throughput of only £5 million, whereas ten years ago it was £10 million, the implication is that it is on a declining scale and in another five years' time it may be only £3 million. Yet, according to what the noble Lord says, they will be able to gain from this money in order to bolster up what is, and should be, a dying market. There is nothing to stop that from happening, according to what the noble Lord has said. The grant will simply be made according to whether they have enough throughput or not.

That is the essence of this whole problem. What we want the Government to do is not simply to take the figures and say that anything which comes up to these figures is good enough but anything which does not is not, unless it can be proved that it is expanding itself—the noble Lord gave us that concession on Second Reading. We want the Government to say: "We have a limited amount to spend, and it will not be enough to go all round our markets"—of course it will not. "Therefore we, the Government, will undertake our responsibility to see that this money goes to those areas where the greatest benefit will accrue."

We ask them to make a plan overall. We do not ask for a binding plan or one that is going to interfere with the running of the market by the existing authorities, but we want to make quite certain that the markets which are going to benefit from this injection of capital are those which, in the national plan (and gradually we are coming more and more to having these national plans) will be the ones which give the greatest benefit.

It is not a great thing to ask, and I think it is something which the noble Lord would like to see. We say that as the Bill is drafted there is no assurance that this will happen. Some of the things the noble Lord has said to-day give us a little hope, but others give us a great deal of despondency. By accepting this Amendment, the noble Lord would at least show—if he agrees with it, as I think he does—that he is willing, and his colleagues are willing, to write into this Bill a paragraph to make it clear that this is the objective of the Government and this is how that sum of money is going to be spent.


I think the noble Lord, for the first time in my recollection, has done me a small injustice, although certainly not enough to cause me any resentment: I think anything as large as that is something of which he is incapable. However, I said in my closing remarks to his noble friend that the Minister was unable to approve grant both for the provision of markets and for markets, either proposed or existing, with a potential throughput of £5 million. That potential can, of course, work both ways. If it can be shown that there is a future potential of £5 million or above, then it will qualify. If it can be shown that, even though it has a throughput of £5 million to-day, there is no possibility of its having £5 million in the future, then, by the same token, it will of course be disqualified.


I, too, am grateful for the words of comfort which the noble Lord gave us in explanation, although I regret the more glaring omissions. I am particularly grateful to the noble Lord for his kind invitation to me to write to him about these items of equipment, which I think should be considered, and I will certainly respond to that invitation.

With regard to the Amendment, I think the debate clearly shows that the case has been overwhelmingly made and we could not possibly withdraw it. Indeed, I am sure that in one way or another this proposal must be implemented, because it is unthinkable that we should spend all this money without any kind of plan or direction. We have now nearly finished two days Committee stage on the Bill, and the noble Lord has said "No" to everything. One consolation is that he says "No" more charmingly and less woundingly than anybody I know. But an even greater consolation to me is the certainty, as I see it, that before many months have passed we shall be sitting over there and shall be able to deal with this Bill and with marketing in the way we have wanted to for the last thirteen years.

On Question, Amendment negatived.

Clause 10 agreed to.

Clause 11 agreed to.

Clause 12:

Duties as to grading of produce

12.—(1) Except in such circumstances as are mentioned in subsection (2) below, a person shall not sell any fresh horticultural produce of a description in relation to which grades of quality are designated and defined under section 11(1) above (in this Part of this Act referred to as "regulated produce") unless the produce falls within a prescribed grade and is packed in a container to which is affixed a label in the form prescribed for that or any lower grade or, if not packed in a container, has affixed to it such a label. (2) The circumstances referred to in subsection (1) above are as follows:— (a) a sale of the produce by retail

6.48 p.m.

LORD STONHAM moved, in subsection (2), to leave out paragraph (a) and substitute: (a) the exposure for sale by retail of produce bearing a show ticket to which is affixed the label referred to in subsection (1) of this section and is clearly visible to intending purchasers, and sales of such produce which in the presence of the purchaser was exposed for sale bearing such a show ticket;".

The noble Lord said: I trust that I shall not encounter any too strong resistance if I take with this Amendment Nos. 16, 17 and 18, because these four Amendments are essential parts of a single proposal. We warmly welcome the Government's decision to implement yet another provision in the Labour Party's horticulture policy—namely, the designation of grades of quality of horticultural produce and to ensure their enforcement.

We regard it, however, as most unfortunate, and even disastrous, that they have decided that the prescribed quality grades should not be enforceable for resale sales. It is essential to the well-being of the horticulture industry to keep sub-standard produce off the market, and fully organised marketing cannot be developed until growers can sell their produce over a wide field by recognised grading and quality. They must be able to compete successfully with imported stuff which, I understand, is all graded—the rubbish never comes here. But they cannot compete successfully if, having gone to all the trouble and expense of grading compulsorily, as it will be, at wholesale level, their market is ruined by a flood of substandard produce coming into retail shops by the back door.

The Government appear to think that the proportion of direct sales from grower to retailer is comparatively small; but, to quote one example, the survey conducted in 1957 by Dr. Bennett, of Reading University, showed that in Bedford, one of our most important growing areas, 24 per cent.—that is, nearly one-quarter—of all sales were direct from grower to retailer. That is far more than enough to wreck the market completely and, with it, the attempt to help the industry by grading to a high standard. It must be remembered that growers will be taking a big risk. They know that graded produce must cost more, because grading is a cost in itself, and the selected produce has to carry the cost of the produce that is discarded or thrown away, or sent for processing. In fact, the Agricultural Central Co-operative Association are firmly of opinion that, unless these Amendments are accepted, and grading is enforceable at retail level, there will be unfortunate consequences. First, there will be a big increase both in direct sales from growers to retailers and in the number of grower-retailer businesses; and, as the Bill is now framed, none of this produce need be graded.

The second point is that co-operative marketing businesses will suffer, and, indeed, could, be ruined by losses incurred on graded produce. This is because, since grading adds to the cost, it can be justified only by higher prices, and these prices will not be realised if the market is ruined by half the stuff being sold in the shops ungraded. I know that the Government place reliance on the reserve power in subsection (3) of the clause, which will enable the Minister by order to direct that produce sold direct by grower-retailers must be graded. But the procedure for invoking this power is obviously so framed that it can be used to hold up action indefinitely. It is no good locking the stable door after the horse has bolted, and it would be wrong to insist that growers and co-operatives must grade their produce if, under the terms of the Bill, they stand a fair chance of losing not only the one-third grant they will get from the Ministry, but their own two-thirds capital as well.

There is not a single grower, selling through the market, with whom I have discussed this matter, who is not absolutely convinced that, if we are to have compulsory grading—as most of them think we should—it must apply to sales at retail levels. The grades would then be advertised, the housewife would ask for them, and both she and the grower would benefit. The growers are convinced that, without control at the retail end, the shops would be flooded with rubbish, the market would be destroyed, and the value of this Bill would be destroyed with it. I just cannot understand why, in a Bill designed to help the growers, the Government should act in a manner directly contrary to their interests and advice.

May I briefly explain how my four Amendments would work to avoid this? Amendment No. 15 deletes the exemption for retail sales, and provides for a prescribed indication of grade by a show ticket, prominently displayed. The retailer could then sell from the marked container, and would not be required to put a label on every individual sale, as I understand he is required to do to-day, under the clause as it stands. I should have thought that, for practical reasons that provision would have to be altered at the Report stage. The fact is that under the clause as it stands every individual sale of produce has to be labelled. That would not be required under the terms of the Amendment we are proposing: the duty would apply only to the main container. This is a more practical way of achieving the objective than the present subsection (1).

Amendment No. 16 would exempt from grading requirements grower-retailers selling their own produce in their own shop or store. There are many of these little men, and I see no reason why they should be compelled to grade. Amendment No. 17 calls for the deletion of subsections (3) and (4), and they must be deleted because they will be superfluous if the Government accept our Amendments to subsection (2). Amendment No. 18 places on the Weights and Measures Inspectorate the duty of enforcement at the retail end. It would be their job to make sure that graded produce is sold by its recognised grades in the shop. As I recently accepted appointment as President of the Institute of Weights and Measures Administration, I have to declare a sort of interest; but, frankly, I do not know of any other body of officers with the necessary experience who could undertake this work. It is idle to pretend that it would be appropriate to, or could be undertaken under, the Foods and Drugs Act. Weights and measures inspectors have acted as enforcement officers under the Agricultural Produce and Marketing Acts, and under the Merchandise Marks Acts, in respect of imported horticultural produce.

The Molony Committee on Consumer Protection endorsed the view that, when goods were sold by grading and quality marking, the task of enforcement should fall on weights and measures inspectors. Similar views were expressed by the President of the Board of Trade during discussions on the Weights and Measures Bill of happy memory. They have the knowledge and the necessary national network, and I trust your Lordships will agree that they should be appointed to this important task in this Bill. But, irrespective of the agents of enforcement, the case is surely unanswerable—it is in my view absolutely unanswerable—that if grading is to bring the hoped-for increase in the efficiency and prosperity of the horticultural industry, it must apply not only at the wholesale level but also at the retail level. I trust that the Government will accept that view and this Amendment. I beg to move.

Amendment moved— Page 12, leave out line 8, and insert the said paragraph.—(Lord Stonham.)

6.56 p.m.


The objectives of the noble Lord are identical with those put forward in Amendments in another place, and I have listened very carefully, without, I am afraid, being convinced that it is desirable or practicable that grading should be taken through to the retail stage. As I said during the Second Reading debate, what we want to do is to enable the horticultural industry to compete on equal terms with overseas suppliers. This can be achieved, so far as grading is concerned, by ensuring that home-grown produce is properly graded before it reaches the retailer. That is all that happens with imported produce, and it is not necessary to have compulsory grading in the shops to put our own growers' produce on an equal footing with imported produce.

Here I should like to make it clear beyond all doubt that we will not allow the concept of compulsory grading to be undermined in the marketing of any considerable volume of ungraded homegrown produce outside the wholesale channels of trade. The noble Lord mentioned one example of 24 per cent. of produce being retailed in a certain area. This sounds a little wrong—or perhaps I am not understanding it. I do not know how large an area it was.


It was in Bedfordshire, which is one of the largest vegetable concentrations in the country.


Paragraph (e) of Clause 12 exempts from grading and labelling requirements direct sales of produce to retail outlets from which it is sold, but the Minister has already said in another place that he will not allow this direct delivery, if it grows to a dangerous level, to undermine the general objectives. Under the Bill as it stands the ungraded produce has to be delivered by the grower to the particular shop from which it will be sold and this in itself, we think, should provide an effective limitation. This is a limitation which, of course, does not exist at the moment in Bedfordshire or anywhere else. But should this exemption prove to be a loophole in the grading arrangements, Ministers will have the power—and they will not hesitate to use it—under subsection (3) to make an order restricting these sales. I should like to comfort the noble Lord with that reminder. There will therefore be no more than an insignificant quantity of produce not properly graded arriving in the shops.

Perhaps at this point I might appropriately reassure the noble Lord, Lord Stonham, on an incidental point which he did not raise to-day but which my noble friend Lord Falmouth raised in our Second Reading debate. There will indeed be a minimum quality grade—and this includes size—below which produce may not be sold. This is one of the key features of a grading system. The bottom grade standard would be relaxed only if there were an exceptional shortage of produce such as happened, for example, in the severe weather conditions in the early months of 1963.

Granted that produce has been properly graded before it reaches the shop, let us examine the need for compulsory grading at this stage. The Bill deals, as its Long Title says, with horticultural produce in bulk, which is a very different thing from retail sales. One of the main advantages to retailers of being able to buy by grade is that, where they cannot subject a consignment to a detailed examination, they will nevertheless be sure that it reaches a minimum standard of quality; but, even when buying graded produce, retailers find it pays to look at it whenever possible so as to be able to select that which is nearer to the maximum than to the minimum requirements of a grade, or to select the best packed and therefore the least damaged produce. The consumer is in a different position; she can freely and carefully examine fruit and vegetables in the shop before buying. The appearance and the feel of fresh fruit and vegetables is an excellent guide to quality. There is not anything like the same need for the consumer to be protected against being misled.

The grading carried on prior to produce reaching the shops will ensure a greater uniformity of quality, and I cannot see what the consumer would stand to gain from compelling retailers to sell only according to grade. If, after grades for various commodities have been designated, there is a public demand for produce to be sold by these grades, or if retailers find they are useful selling points, then they will be used in the shops. Both greengrocers and housewives will have the free choice, and the grades will be used at the retail stage to the extent that they are found to be useful. This seems to me to be just as it should be.

Of course, if retailers used the grades incorrectly they would be committing an offence under the Food and Drugs Act, 1955. Section 6(1) of that Act makes it an offence to display a label calculated to mislead as to the nature, substance or quality of goods so labelled. It would be open to the Food and Drug authorities to proceed against anyone in breach of this Act: their authorised officers already have the requisite powers of inspection and sampling, and there is no need to confer a new power upon weights and measures inspectors.

Even if it were accepted that there might be some marginal benefit to the consumer in having compulsory grading at the retail stage, it would, we think, be outweighed by the very considerable burden placed upon the retailer. I have enunciated, as clearly as I can, the reasons why I would urge that these Amendments be not accepted. My reasons are, in brief, that no case has been made out for extending compulsory grading to retail sales, and that the retailers themselves would find it unworkable, and that enforcement could not be effective.


I am most grateful to the noble Lord for that reply, which I shall study with considerable interest. I shall not comment further at this point. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 12 agreed to.

Remaining clauses and Schedule agreed to.

House resumed.

Bill reported without Amendment.