§ 2.43 p.m.
LORD ST. OSWALD
rose to draw attention to the present conditions in Agriculture; and to move for Papers. The noble Lord said: My Lords, the subject of agriculture, as your Lordships know, is being debated simultaneously here and in another place, although there on a more specific and censorious Motion. Your Lordships normally prefer a wider Motion providing a debate to which a varied wealth of experience can make its varied contributions. Nor do your Lordships normally need formal guidance as to when, or where, or whether to be censorious. Certainly, none of my noble friends has asked me for such guidance to-day.
For all the permitted breadth of this debate, I have no doubt that very many noble Lords will be applying themselves to the recent Annual Price Review, but 1009 I think it proper for me to address myself mainly to this topical matter. The only explanation I can find for this Review is that the Government have tried to typify the popular, but, as to-day, the not always accurate, idea of English weather—grey, damp and dispiriting. That is not to say that when it rains it always rains pennies from Heaven—not in a Socialist Britain, at least not on the increasingly productive and superbly tilled acres of British agriculture.
It has been said with some authority that the present Government's determinations, just published, completely fail to recognise the needs of the agricultural industry in relation to the needs of the nation. Together with that stricture, the National Farmers' Union has sternly drawn attention to the luscious and pontifical pronouncements uttered by present Ministers when still in relatively harmless Opposition. On April 14 last, in another place, the present Prime Minister declared:What is required …is a policy from the Government of the day to expand those industries which can make a big impact on exports … and also to expand industries no less important which can save imports."—[OFFICIAL REPORT, Commons, Vol. 693, col. 287, April 14, 1964.]But, apparently, what is required of the Government of the day less than a year later—and a Government headed by the orator himself—is a Price Review which causes the normally phlegmatic farmers of this country to thrust unwilling chickens at the chicken-scorning Minister and to threaten to block the roads of this country with their tractors. I gather that they achieved a blockage of traffic at Paddington this very morning.
On September 30 last, from a platform which I had the pleasure of sharing with him, the present Minister of Agriculture said that the Tories have never produced a Minister of Agriculture comparable to Tom Williams. He has since made it quite certain that the Tories will never produce a Minister of Agriculture remotely resembling Mr. Thomas Frederick Peart—that would indeed be a curious target to set ourselves. He added, on the same occasion:Labour has never let down agriculture. We will give the industry a square deal.
§ THE MINISTER WITHOUT PORTFOLIO (LORD CHAMPION): Hear, hear!1010
LORD ST. OSWALD
The noble Lord, Lord Champion, says "Hear, hear!" But what we have before us to-day is the most cock-eyed conception of a square deal ever produced by the mind of man. Only in its most abstract art form could the noble Lord claim that his right honourable friend had drawn a square on this occasion.
I am not setting out to-day to cover the whole field of Government failure and imposture. The noble Lord, Lord Champion, and I had an early exchange, fourteen days ago, on the Statement itself. It certainly seems to me that what was touched on then by the other noble Lords and myself contains most of the material of the Government's demonstrable failure set in the vacuum of things neglected.
Let me, in deference to the Government's own propaganda, examine first the main plank of the current agricultural support as hopefully advertised in this Review. The Minister repeated tirelessly, and at times petulantly, that the dairy farmers were being given £11 million extra by his generous hand. The total award is £10 million, which means that more has been taken away from the industry as a whole than has been given to the dairy farmers. I do not think the noble Lord can be under any illusion that the dairy farmers consider themselves either fortunate or favoured by this treatment. They do not. It is noticeable that the rest of the industry, most of whom have in one way or another been partially deprived of support, do not consider that the dairy farmer has been especially cosseted in this Review. The noble Lord will argue, as he is entitled to do, that the extra penny a gallon covers the increased production cost. It may do so. He and his colleagues have the figures, and we shall be grateful to be told them.
The theme which was plugged by Mr. Wilson most monotonously before the Election was "import substitution". Unlike some of his themes, he continued to promote it when in office. Let me take only one instance. In Swansea, in January, he said this:I would particularly stress the need to develop import-saving industries. This should be tackled with at least the same energy as the export drive.1011 Where, and how, has this energy been applied to this Review? Yet this is the obvious and undeniable long-term means of achieving import substitution. The remarks I have just quoted might be taken to vindicate the 15 per cent. surcharge. But this was a short-term and disruptive action, which the Government must have regretted since. If they talk in terms of the long term, let them take that road, and be seen to take it. They have gone down a very different track in this Review.
When the noble Lord says, as I assume he will say, that the penny a gallon covers the increased production costs, my answer is that this is slide-rule stuff. In the Statement which the noble Lord, Lord Champion, read out last week, there appeared certain words which I picked upon at the time:In view of the importance of the dairy herd, not only for milk but also for beef. …We are told—and I have no reason to doubt it—that many milk producers were waiting for this Price Review to govern their decision whether to stay in or get out. Does the noble Lord have the impression to-day that he has persuaded them to stay in? This is a loaded question, loaded in his favour, if he can bring himself to answer, Yes. If not, if a great number will be going out of milk after this Review, does he think that it matters? Does he think that it may even be a good thing?
In the answer he gave to my noble friend Lord Eccles, the noble Lord appeared very sanguine on this point, basing his assurance on the claim that the decline in milk production had stopped. This in itself seemed to some of us a pretty unsteady peg on which to hang his confidence that this Review would not start the decline off again. But may I encourage him to make the best of what case he has by giving some figures? These figures would naturally make clear what sort of period they have been taking. Since when has the decline been halted? Would he also agree that once a farmer has gone out of milk he is very unlikely to return to the heavy work of a seven-day week? It is the clear opinion of most agriculturists that the Government are, at best—and I think that not many would con- 1012 cede them even this—cutting it pretty fine. It would be all too easy to pass the point of no return in milk production—or, should I say, milk reduction?
Does the noble Lord take at all seriously the belief that the Review will affect, is bound to affect, the supply of dairy calves for the beef industry? If he is as confident of the virtues of the Review, as he himself pronounced the other day, this is the sort of question that should positively delight him. Milk is the psychological and economic hinge of the whole fanning industry in this country, and since, for that reason, many other noble Lords will be referring to it, I do not intend to pursue this particular theme.
The Minister will, I assume, wish to deal also with cereals in his winding-up speech and I use the word "wish" in its more euphemistic and Parliamentary sense. He will not, I think, claim, as he stated in the closing words of his Statement, that he is "giving the industry an opportunity to improve its income" by the expedient of cutting the wheat and barley guarantees by 1s. 1d. and 1s. 4d. respectively. An angry but efficient farmer from Hampshire, who takes the lamentable and mistaken view that all politicians are as bad as one another, attacked me last week—though without, I am happy to say, any physical violence. He recited to me, in a kind of ferocious chant: "1s. 4d. cut in barley—£2,000 a year loss; increased fuel tax: 15 per cent. surcharge on essential imports—another £1,800: making £3,800 to find, in all, in one farming year." Where was the money to come from, he demanded to know. If the noble Lord can tell me that to-day, I will pass it on to the complainant, acknowledging the source of wisdom, with my normal open-handedness in these matters. This farmer is a relatively big man—big because he has grown by his own efficiency and confidence in the past several years. But what of the smaller men (supposing, as I should myself expect, they survive), all of whom are affected in direct ratio, but can hardly have the same resilience or resources to call upon? It is all very well for the Government to encourage small farmers by enlarging the scheme which they inherited from us, but what is the point of this encouragement if they kick 1013 the poor chap in his corduroy breeks when he bends over to dig?
When I quizzed the noble Lord upon the cereal cuts, he said that the action was forced upon his Government by the Minimum Imports Agreement concluded by their predecessors. He did not, in fact, use the word "forced", and if I am distorting his meaning, he will doubtless correct me. If not, then we ought to examine the words as I understood them. They refer, I think, to the opening sentence of paragraph 11 of the four letters published in Command Paper 2339, under the title of Exchange of Letters and Notes. Because this cut is such an important one (in fact, it is in one case, the maximum permitted, and in the other very nearly the maximum under the Act of 1957) I feel that it is worth scrutinising the precise words of this undertaking, to examine exactly what was, and remains, the force and scope and application of this undertaking, an undertaking which was approved, as I recall, by the Opposition of those days.
Paragraph 11 (I am quoting from one of the four letters) reads:If it is found as a result of a review of the minimum import price arrangements under paragraph 9 that they have resulted in an appreciable distortion of the pattern of trade in the products which this Letter covers between co-operating Governments supplying the United Kingdom and in consequence have damaged or threatened to damage the trade interests of the Government of Canada, the Government of the United Kingdom shall take effective corrective action in consultation with the Government of Canada and other cooperating Governments and in accordance with the procedures outlined in paragraph 7 to remedy the situation.The paragraph ends by stating that in particular circumstances… the United Kingdom shall take effective corrective action at the earliest practicable time to remedy the situation.The reference to paragraph 7 concerns the actual form which consultation shall take. Now, consultations between the British Government and those of Commonwealth and foreign countries are a delicate matter. I appreciate that the noble Lord may not wish to divulge or describe the detailed course of such consultations. But he can, I think, tell me whether any consultations did take place, and in what form.
I am not intending to take unfair advantage of him when I say that the 1014 impression given by his reply the other day is that other Governments were so insistent upon this maximum cut, imposed upon the British farmer, and deployed their arguments so convincingly, that Her Majesty's Government had no other recourse than to submit to their demands. I hope that he will find it possible to forgive me if I place a somewhat different, a significantly different, construction upon it; that is, that Her Majesty's Government lost so many friends at one blow on October 26, with the surcharge of 15 per cent., that they now need friends with a desperation that no British Government has ever felt before. They are so bent on winning back those departed, those offended friends, that someone has to pay a heavy price for winning some of them back—and the British farmer has been detailed to foot this bill.
These very startling cuts, only partly compensated by an increase in the standard quantities, reminded me of an intervention by the noble Lord, Lord Walston, during my speech at the other Dispatch Box last year. It makes interesting but somewhat doleful reading. The noble Lord asked me whether he could take it as absolutely definite that an increased consumption of cereals in this country would be shared in some proportion between the home producer and the importer. I replied, with great certainty, "Yes". The noble Lord then wished me to specify what the proportion would be, and this I could not do, although in anticipation of continued and stimulating Tory Government, I myself felt pretty optimistic. I think that if I had forecast the disappointing ratio as between the levels of deficiency payments and standard quantities, as published in this White Paper, the noble Lord would have assailed me with wholesome glee.
I ask the noble Lord opposite to-day: is this really the best the Government can do for the British cereal farmer? One of the most harmful reputations a Government can acquire is the reputation of being a bad bargainer on behalf of their countrymen. The Government will find it very hard, I think, to free themselves convincingly from that reputation. However, if the noble Lord, Lord Champion, can persuade your Lordships this afternoon that his colleagues have not been 1015 out-negotiated on this occasion, he will be doing them a signal service—and performing something of a debating miracle.
My Lords, in case I should be taken as deliberately selecting the weakest points of the Government's case—taking advantage, that is, of their generosity in providing such points I should in fairness turn to those awards that they are most openly pleased with: hill-farming and beef. The hill farmers have been favoured in two ways. First, the hill cow subsidy has been increased from £12 to £13 per eligible hill cow, and the stocking rate has been raised. Secondly, the hill sheep subsidy has been brought into the Review at a flat rate of 18s. per ewe for the standard rate flocks and 9s. for reduced rate flocks. I have great respect for the hill farmers. I was Chairman of the Advisory Committee in my time, and it was one of the most absorbing responsibilities given to me. I was able to look at hill farms in several parts of the country, including Yorkshire, and even in Scotland, though heavily disguised and under an assumed name. The full importance of hill sheep to the industry as a whole is not simple to understand, but it is certainly valid and an essential component of our fatstock industry.
My noble friend Lord Balerno is learned in matters of genetics and knows what is required to maintain the strain of lowland sheep, which cannot be done without regular reinforcement from the hills, and we cannot do without the hill farmers, who live more remote and less comfortable lives than most others. I hope they will get what they need, and I am certainly not going to carp or question before the results of those changes are shown. My noble friend Lady Elliot of Harwood will be speaking later with far greater knowledge than is possible to a lowland farmer like myself, and especially a farmer in a coal-mining area, who rashly tried keeping sheep for one ruinous year, blinding himself to the fact that nearly every miner keeps a dog and that dogs run a great deal faster than sheep. I will not carp, but I will point out that what the hill farmer is interested in is not simply and solely raising his sheep, but selling his sheep. If the Government had been able to be more helpful to the fattener down below, the hill farmer's 1016 market would have been more promising; therefore benefit given may prove a limited benefit. I shall listen with interest to any comment the noble Lord has upon this, and I am sure he will have a thoughtful answer ready.
But before leaving this subject, I must say one word in defence of the Minister himself, in respect of one specific canard, in case his noble friend has to omit it from among all the things he has to defend. On January 22 I read on the second page of the New Statesman that Mr. Peart has become "the hill farmers' darling". I think it is absolutely wicked to suggest—and I protest at the suggestion—that the present Minister should seek the affection of one particular section of the industry among all others. I think it is monstrous, and I am positive that if he wishes to be loved by any farmers, he wants to be loved by them all. He has not, so far, to my observation, been entirely successful. I have heard talk of "friendly Fred Peart" of "fumbling Fred Peart", and other affable alliterations, but never, so far, any reference to "darling Fred Peart".
To turn to the other bid for love and understanding, it is clear that the Minister intended to encourage the beef producers. Here, again, we shall have to watch for results. It looks as if the authors of this particular part of the Review may have been playing hopefully with mirrors and ended up by confusing each other. It is, at the moment, not easy to see how the increase of 4s. per cwt. can help very much so long as the present high prices hold. The noble Lord has probably been shown the F.M.C. Midland Area Circular, which says:If market prices were to remain unchanged during the week commencing 29th March, the effect of the Price Review would be to reduce the overall return to producers by 3s. 8d. per cwt. or ¾d. per lb. It is therefore expected that cattle which this week were group one will be reduced by 1d. per 1b. or 5s. per cwt. next week, and that our price list will, with regret, have to reflect this alteration.Aware that this upsetting opinion has been expressed, the noble Lord will doubtless have a reassuring answer ready, and we shall be interested to hear it. By the look of it, at present nothing less than a real decision, lucidly and persuasively set out, on long-term measures, could have given the confidence which Labour spokesmen promised so frequently before the Election.
1017 There are, in fact, four allusions—no more than allusions, piously worded—to long-term policy on which the noble Lord, Lord Champion, must hang his whole case to-day. They occupy altogether about five full lines of the 48 pages of the White Paper. They are subsections (a), (b), (c) and (d) of paragraph 3. The first two are the maintenance and stability of the industry and the further progressive introduction of new technological improvements; better farm management; and improved marketing. This is comprehensible, because it simply and wisely continues Conservative policy, and I hope will continue the success of that policy. Subsection (c) is theencouragement to farmers generally to obtain the benefits of scale in production and marketing.The noble Lord can help us a great deal by telling us what this means. Once he has done so, we may discover more cheer in subsection (d), the consequential further release of resources for use elsewhere in the nation's economy. This is compendious, cloudy and utterly meaningless as it stands. Here, again, the noble Lord can help us. Does this refer to the release of land or labour or machinery, two of these, or all three; and how is he going to set about it; and, again, when?
My Lords, whatever the intentions of the Government were, this has been, demonstrably, a depressing Review. The Government may exhibit righteous astonishment, but they cannot doubt that farmers are depressed. Still, nothing can ever weaken my personal fondness for the noble Lord opposite, and I put no blame upon him.
Some weeks ago, when debating an entirely different subject, I invited the noble Lord, Lord Champion, to stay with me in Yorkshire, on a Ministerial occasion. His noble Leader asked me, most gratifyingly, if that invitation extended to the whole of his Front Bench. The somewhat cautious nature of my reply on that occasion was due to awareness that the visit would be after the Budget—and after Ministers had begun to receive their increased emoluments. Dazzled by my mental picture of the new Ministerial standard of living, and abashed by the austerity of what, by that time, I might be able to offer them, I was understandably reluctant to ask dis- 1018 tinguished Ministers to "rough" it in my own establishment. At the same time, so went my hasty calculations, since virtually all my living now comes from farming, I thought a favourable Price Review might just enable me to entertain them. In the circumstances we are now discussing I must ask the noble Lords on the Bench opposite, entirely in their own interests, to limit their numbers for May 19. However, in spite of all things visible and invisible—made visible two weeks ago and still invisible until next week (saving yet another leak before then, of course)—the noble Lord and his Leader will be very welcome, even if I have to share my last crust with them. But perhaps there is yet hope for something better. The luncheon at Downing Street to-night—
§ THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE, HOME OFFICE (LORD STONHAM):Luncheon—to-night?
LORD ST. OSWALD
The dinner at Downing Street to-night. What will come of that? A transformation—who knows? The Prime Minister is never happier than when playing the role of a modern Machiavelli, reared on Worcester sauce. What would be more pleasingly Machiavellian than instructing dependable Mr. Pearl to cast the farmers into the present dungeon, and then—"Open Sesame!"—into No. 10; and the treasure chests of the neighbouring Treasury are flung open. All is forgiven, and only a few of us choke from the smoke of that inescapable pipe. All within a fortnight! How is that for "Stop-Go"—dynamic Stop-Go? Fanciful, I suppose, but not inconceivable, judged on current behaviour.
There would be a casualty, of course. But you cannot make an omelette without breaking eggs; and this particular egg is visibly cracked already. The Minister denied on Sunday, on Tyne-Tees Television, that this most unpopular Review had been forced upon him by his colleagues, as many have charitably assumed. He said it was his, and his alone. This is loyalty carried to commendable and even heroic lengths. Those of us who have an affection for him—and we are many—would prefer to believe otherwise. In fact, it looks as if the do-it-yourself tar and feather kit, which 1019 seems to be part of the standard equipment of every Socialist Minister, has been applied here by cold-eyed colleagues with an almost Ku Klux Klan gusto to this entirely amiable man. That is the picture that many people have in their minds. I do not think that ever before have the N.F.U. found it necessary to take whole pages at £5,000 each in national newspapers to put forward their protest.
LORD ST. OSWALD
This was up to this Price Review. The noble Lord, Lord Champion, will do his best at the end of the day, and his best is always impressive. But what has he to fight with? To defend this Review the noble Lord has already trotted out a number of glossy-coated but seriously spavined arguments, which he would far better have left in the stable. He said that the first explanation of the flourishing agriculture which the present Government inherited was an exceptionally good year for farming weather in 1964. No doubt he will do his best to blame bad weather for the looming misfortunes of the industry when the time comes. But, in any case, the line of argument seems to imply that farmers cannot expect such exceptional aid from nature in the coming season. Instead of Tory weather, we shall have Socialist weather. In this expectation, the farmers might have looked for a more helpful, not a less helpful, Review. But in fact the noble Lord regards it, as I heard his remarks, as an excuse for curtailing support.
He said there was also a good Price Review in 1964. "Good" was the noble Lord's adjective, which he attributed to an Election year. He made great play, as did his right honourable friend in another place, with that attribution. And yet I recall that the then Opposition were very coy in admitting that they, last March, would have presented a less favourable Review—almost as coy as was the noble Lord more recently in admitting, as we now know, that this year's Review was in fact imposed. My right honourable friend Mr. Christopher Soames challenged the present Minister on that very charge after last year's Statement. He said: 1020If, from the inference he has drawn, the honourable Gentleman thinks that the Government have been over generous in any particular, let him tell the House.Mr. Peart on that occasion remained curiously silent. Perhaps the noble Lord will be more forthcoming to-day in stating that in 1964 the Labour Party favoured giving the same short shrift, the same parsimonious treatment, to agriculture which they have imposed on attaining office.
But this resentment of what the noble Lord, himself classifies as a "good" Review last year, carries an even more significant and disturbing implication. What the noble Lord appears to be saying, at the top of column 375 of Hansard of March 17, is that the farmers, having enjoyed thirteen years of wise, understanding, and helpful Tory Administration, are now in for a spell of purblind and punishing Socialist policy. That is the way I read his observations, and I assume that is the explanation most farmers will find for the nature of this year's Review. The same impression was being given, with far more harshness, at the other end of the building by a Government supporter who complained that another £11 million was being poured down the drain for this industry. These are the kind of indications the farmers are bound to note, with all their foreboding. How startlingly they contrast with the gay, exotic pledges given before the Election by Labour spokesmen! We had Mr. Richard Crossman telling the farmers in advance:Produce all you can. We will get rid of it because the world needs it.This is translated into maximum cuts in the wheat and barley guarantees, with other cuts in lime and fertiliser subsidies. We had Mr. George Brown trumpeting his fourteen points at Swaffham, with the assurance that the first part of Labour's food policy would be on the world stage, with the presentation to the United Nations of new proposals aimed at channelling food surpluses to starving countries. In fact, the first part of that food policy has been to discourage our own producers, and perhaps the noble Lord will tell us when the United Nations is likely to have this plan presented to it.
We had Mr. Peart a year ago promising "an improved price policy affecting 1021 milk", and foretelling an expansion of the dairy industry. Is this the improved policy? Is this the impulse to expand? We had fine fighting talk about "low interest credit for farmers." What has happened to that? We questioned the noble Lord two weeks ago about the longterm policy for beef. He said that that, of course, was a matter for further consideration. I quote Mr. Peart from the Farming Express on May 21 last year:One of my first jobs, if I were Minister of Agriculture, would be to thrash out a five-year or more policy for agriculture. You can't afford to go along from one expedient to another.There has been plenty of thrashing around by the Labour Government in the past five months, but dynamism does not seem to extend to agriculture.
I am not one to rub salt into the self-inflicted wounds of anyone, especially the noble Lord opposite. But when I referred the other day to the contrast between promise and performance, he replied beamingly with that old bromide about "the mess they had not expected to find." I must say to the noble Lord, in the greatest friendliness—indeed, in recognition of his personal qualities—that this retort was totally unworthy of him. This apologia sounds emptier every time it is used. Nobody has kept count of the number of times it has been used, and it sounded empty enough at the beginning. It looks suspiciously as if the Labour Party had this protective smoke condensed and bottled in the vaults of Transport House for cover against the indignation which a potential Labour Government would inevitably call down upon itself.
This was foreseen from within the Labour Party over many years. Sir Stafford Cripps said:I cannot imagine the Labour Party coming into power without a first-rate financial crisis.That was in 1934, but we all know that the Labour Party has not changed in thirty years. Mr. John Strachey said, only ten years ago, that if a Labour Government even attempted to implement its policy the national reserves of gold, dollars and foreign exchange would pour out of the country in a torrent. Prophetic words, my Lords—a pity that not enough people heeded them in 1964. But do not pin it on a Tory Government, particularly not in agriculture. The more 1022 we look at the policy of this Government, and compare it with our policy, the more clearly we see the difference between our two approaches. The Labour Party loudly describes its championship, loudly proclaims itself the farmer's best friend—and then defaults, as it has in this Review. We make no vaunting or ingratiating claims. We quietly, effectively, consistently prove our esteem for the industry in the administration we offer, and take quiet joy from its health and achievements. I beg to move for Papers.
§ 3.18 p.m.
My Lords, may I thank the noble Lord, Lord St. Oswald, for bringing this debate before us to-day? I enjoyed his attacking speech. But I am not sure that he was not attacking much the same sort of thing as I suspect a Tory Minister of Agriculture might well have to be doing too. Obviously, the terms of reference of this debate are very wide and, equally obviously, I am going to address myself in the same way as the noble Lord has, to the White Paper and the Price Review. I want to follow him, first of all, on the subject of the question of home production and food imports. I always look at these annual Price Reviews every year in terms of the balance of home production and food imports, because it seems to me that this is the central problem of our agriculture. I look at it from the point of view of what effects on the balance between home production and imports the Price Review is going to have and whether those effects are going to be good ones. If the balance between home production and food imports that we have at the moment is right—I repeat, if it is right—then perhaps the Price Review is not unreasonable; but I do not believe that this balance is right. In fact, I am more and more convinced that it is wrong; and I thought the Government thought it was wrong, too.
The noble Lord, Lord St. Oswald, pointed out the sort of things with regard to agricultural expansion that Ministers of the present Government have been saying in the last year, stressing how very important it is to equal the efforts towards import saving to those towards exports. The Prime Minister has said this very strongly; so have Mr. George Brown and the present Minister for Agriculture; and I thought that what this meant was that the new Govern- 1023 ment were going to re-examine what seems to me to be the old 19th century concept that Great Britain was overwhelmingly an exporter of industrial goods and overwhelmingly an importer of food. Is this any longer true? I do not believe it is. Once again we have a serious balance of payments crisis. It is endemic. Obviously we must export industrial goods, but similarly, and at the same time, we must save more than we are doing on imports. It is the balance between these two things which is wrong, and it is the sort of balance that can in some measure be put right by a changed outlook on the whole agricultural policy. The endemic balance of payments difficulties seem to me to be a proof of this.
May I remind your Lordships that imports of food from temperate climates amount to £1,000 million a year? This is equivalent to one-quarter of all our exports; and if import saving means anything at all, surely we ought to be making great efforts to try to reduce this £1,000 million. I should have thought that if we took quite a small figure like 5 per cent. per annum, we would reduce this £1,000 million by a third in the course of five years.
Does the Price Review even point in this direction? I certainly do not think it does. The Price Review, it seems to me, accepts the status quo; accepts the fact that the balance between home production and food imports is right. It is the same old view that British agriculture should be small. In a world with population explosion on top of us, has this any longer the same significance that it had for 19th century Britain? Does the view that British agricultural expansion means a diversion of scarce resources into marginal efforts really any longer apply? I do not think it does.
It seems to me that, in so far as it is accepting this old view, the Price Review is taking a wrong view of the real cost to the Exchequer. The real cost to the Exchequer is not just a straight subsidy to farmers. Again, may I remind your Lordships that there is a very large element of consumer subsidy in the whole complex of our agricultural subsidies. May I remind your Lordships also that a great part of this subsidy is a subsidy to industrialists in the form 1024 of cheap food, and that part of it is maintaining our currency at 2.80 dollars to the pound. We can do this only by subsidising the food industry in the way we do. Similarly, there is an indirect subsidy to invisible exports, such as shipping and insurance. In fact, one cannot help feeling that the country has had very good value out of the subsidies, which amount really, in terms of support, to very little more than most industrialists have had in the way of tariffs.
It is rather interesting that just at this very moment when we have had a new Price Review the Russians have announced a great new look in agriculture. What this really means, so far as Russia is concerned, is that they are recognising, probably for the first time, the tremendous burden that their agricultural industry has borne in enabling them to make the colossal industrial advance which they have made in the last fifty years. A great deal of that tremendous industrial advance has been on the back of the Russian agricultural community. The Russians are obviously now in a way afraid that perhaps their agricultural industry may turn sour, and they are having a new look at it. I think the same thing could easily happen here. It is no longer true to feel that agriculture in England can be brushed aside, that it is a relatively unimportant thing and that we must go ahead with all our resources put to industrial effort. It might have been true a hundred years ago, but it certainly is not true now. We must look at this matter from a totally different angle from the one from which we have been viewing it in the last fifty years.
My Lords, I come back to what I said before: that within the framework of the present status quo this is not an altogether unreasonable Review. I do not believe that within that framework, if you accept that framework, the farmers could very well have asked for more. Certainly it is better than a good many of the last Reviews we have had: those in 1958, 1960, 1962 and 1963. I do not believe that a Conservative Government, accepting this same framework, could have done anything different at all; and the explosion which has come from the farmers now, the rage and despair, is, I think, that they genuinely felt that now that Labour had come back into power there 1025 would be a new look at this problem. I think the farmers are disappointed in feeling that this is not a new look; it is the same old thing as we have had before.
I feel that this framework, which is too much accepted by members of both the other two main Parties, has, in fact, become a straitjacket, and that we have got ourselves into a very difficult position in that only milk and cereals are really very profitable. Indeed, so far as milk is concerned this has aggravated our structure problem in this way: where the small farmer, in relation to the rest of the industry, should possibly be concentrating on meat, he cannot, because the profit is not there, and he has to concentrate on milk. That has had a deleterious effect on the whole situation. We cannot make a case at all for further expansion of milk. On the other hand, we do need—if I am right in suggesting that we should be concentrating more on import saving—very much more meat and cereals.
The line we probably ought to take—this is the sort of difficulty one is in: how we are to make this balance right—is to allow cereals to find their own price. There is a great difference between the price of cereals in this country and the supported price abroad. So this means, in fact, a rise in cereal prices. I think the effect of this will be that it will gradually eliminate subsidy on cereals. As the noble Lord, Lord St. Oswald, says, a share for the British farmer in an expanding cereal market is not enough. We must have something more. It is necessary to allow the price of cereals to go up and save a certain amount of imports by letting the price go up. The same also applies to the cattle herd. We have to increase it, but in such a way that we do not flood ourselves with milk. What this means is that we have to make beef more profitable. The hill cow subsidy and the hill sheep subsidy are an improvement and a great help, but they are simply not enough. What we want is a totally different conception both of beef and of cereals, as regards subsidies.
This is, after all, Common Market policy. This is what has been happening in the rest of Europe, and it is what the Liberal Party have been advocating for a long time. In this context I quite 1026 genuinely feel that ours has been the only truly expansionist policy with regard to agriculture. I notice the noble Lord laughs. I have often admitted that, so far as this Party is concerned, in many ways our agricultural policy is not particularly strong, but nor is that of the noble Lord's Party or of the Party now in office. We are all in the same predicament; so are the Americans, the French and Russians. This is one of those extremely difficult problems. There simply is no easy solution. Be that as it may, this is the general Common Market policy, and I think we ought to be steering towards it.
I know that this may mean that meat is going to rise in price. We are the only country, or very nearly the only country, not paying the proper price for meat. If you like, why not use some of the saving on cereals, if you let the price rise there, in a consumer direction so far as the rising price of meat is concerned? In any case, I feel it is not reasonable that we should always consider that we must have our food for nothing. So far as consumer goods are concerned people are prepared to go on paying more and more, but so far as food is concerned there is always this feeling that food must be "for nowt".
We must re-examine the whole relation of the home production and food imports, and this is what the Price Review and the White Paper do not do. Nineteenth century conditions do not apply. Again, may I remind your Lordships that technically British agriculture is probably the best in the world. In relation to American agriculture it is higher as regards output per man than British industry is in relation to American industry. The national productivity over the whole country has risen by 3.2 per cent. and that of agriculture by 6 per cent. May I remind your Lordships, too, that it has less protection than it has in any other country in Europe. In fact, the degree of protection is more or less the same as British industry gets. The British farmer is not overpaid. If you look at the average incomes over the last 16 years, I think you will find that the N.F.U. have a good point in suggesting that whereas the national income has risen by something like 56 per cent., farming income has risen by only 1 per cent. I am not suggesting that this has anything to do with guaranteeing 1027 farmers' income. I am saying there is a tendency for a lot of the so-called farm subsidies to be, in fact, the other way round. The farmers are carrying the burden for a lot of the improved conditions industrially.
Most of our imports come from the U.S.A., from Australia and from Canada. Are we really going to hurt them so much it we change the balance in this direction by quite a small amount? I do not think we are. In any case they are all countries with a much higher standard of living than ours. Also, it might help to make food available for some of the poorer countries. One tends to forget that before the war something like one-third of the population of the poorer countries was undernourished. The appalling fact is that it is now something like one-half. In those circumstances, can the expansion—this is what we are talking about now—of British agriculture, which is so efficient, damage British industry? I do not think it can. I do not think that these old 19th century views about the place of agriculture in the British economy are any longer valid. But I see no signs that this view prevails in the present Government's policy towards agriculture.