§ "1. The Government have now reached conclusions on the Report of the Reorganisation Commission on Eggs, in the light of the views expressed by the interested organisations. I would like to take this opportunity of thanking Mr. Rowland Wright and his colleagues publicly for their valuable work.
950§ 2. The Government agree that in the changing circumstances of the industry, it would now be right to move to a free market, and to phase out the subsidy. We also accept that in the new situation the industry will need a more broadly based central body than the Egg Marketing Board with the kind of functions recommended by the Commission but with specific provision for representation of producer and trade interests. We believe however that the industry will need a reasonable transitional period to make an orderly adjustment to the new conditions and our aim is to complete the whole operation within the next five years, that is by March 31, 1974.
§ 3. The first step towards these objectives has already been taken with the removal of the "Lion" stamp. We propose t3 start phasing out the subsidy immediately with the objective of completing the operation by March 31, 1974. During this period eggs will remain within the guarantee arrangements and progress towards our objective will be reviewed with the farming industry at each Annual Review. The subsidy will be phased out by reduction of the guaranteed price, and it will be put onto a flat rate basis by abolishing the feed price formula, and accelerating the phasing out of the present profit aid loss sharing arrangement. Moreover, to enable the phasing out to be completed within the transitional period, the limitation of 9 percent. imposed by the Agriculture Act 1957 on the maximum aggregate reduction in the guaranteed price permitted over any three-year period, will he removed from eggs after Match 31, 1971. When the subsidy ceases after Mach 31, 1974, eggs will no longer be covered by the guarantee arrangements.
§ 4. We think that the market should be allowed adequate time to adjust itself to the removal of the stamp. We have therefore asked the Egg Marketing Board to continue with the present arrangements for fixing centrally basic producers and wholesale selling prices until March 31, 1971. During this period the egg subsidy will continue to be paid to the Board. After that date the new body will come into operation and egg prices will he determined by the conditions of the commercial market instead of being centrally fixed. I am sure that we can count NI the Board's co-operation in achieving this orderly transition.
§ 5. After March 31, 1971, the subsidy will be paid to the new central body whose trading functions will be confined to a limited amount of support buying to be determined each year in consultation with the Government. Until March 31, 1974, the funds for this will be earmarked from the payment made to the authority under the guarantee, the balance being disbursed as a flat-rate subsidy to producers in respect of first-quality eggs sold to packing stations. Thereafter, support buying will be the responsibility of the new authority and will be financed by a levy on the industry.
§ 6. In view of the longer transitional period we are proposing, we do not consider that there is a case for any compensation to producers going out of egg production as was proposed by the Commission. We will, however. 951 discuss with the Northern Ireland authorities the provision of special assistance towards sea transport cost for producers in Northern Ireland, and similar provision will be made on this account for producers in the Orkneys.
§ 7. The Commission emphasised in their report the need to safeguard United Kingdom producers from the risk of market disruption by excessively low-priced imports. The Government accept this and intend to open discussions with overseas suppliers with a view to introducing minimum import prices both for shell eggs and for egg products. In the meantime the situation on imports will be kept under close review.
§ 8. Many details of these proposals remain to be worked out and this will be done in consultation with the organisations concerned. The proposals will also entail legislation which the Government intend to introduce as soon as possible."
§ LORD NUGENT OF GUILDFORDMy Lords, may I thank the noble Lord for studying the convenience of the House in this way to give us this very important Statement, which I realise has only recently been put into his hands—and a rather different Statement has been put into mine. While I understand that the noble Lord cannot answer questions now, because of lack of previous warning, I wonder whether he would be good enough, because there are such major implications in this Statement, to take note of the questions that other noble Lords and I may put to him now and perhaps answer them to-morrow.
The first question I should like to ask him is: Has this new policy been agreed by the National Farmers' Unions? The second one is: In view of the major implications of policy here, in that this amounts to a complete change from the existing system of securing a proper return by means of a guaranteed price for a commodity, and that this is the first commodity which has been removed from the guaranteed price schedule, could the noble Lord tell us whether it is the Government's intention that this is to be the forerunner of similar treatment for other agricultural commodities which are now in the guaranteed price schedule?
Thirdly, is the noble Lord aware that for this commodity of eggs this is, in my belief, the right treatment: to move to a free market, with a control on imports to protect the home market by means of minimum import prices. Fourthly, would the noble Lord say whether he recognises that the imposition of a further levy 952 on farmers is likely to be very strongly resisted by the poultry industry—a levy to finance the future of the new authority which will be responsible for the marketing? Fifthly, will the noble Lord inform us whether any special arrangements have been made to deal with the production and distribution of eggs from Northern Ireland, where there are certain peculiar features about their marketing arrangements?
§ LORD BESWICKMy Lords, I am grateful to the noble Lord opposite for the understanding he has shown so far as my own difficulties are concerned. I am glad that he thinks that in general this is the right treatment for this particular aspect of agricultural policy. I do recognise—answering such questions as I can immediately—that this is an important Statement; it does mark a significant departure from previous policy. It would be wrong to assume, however, that because we have shown ourselves ready to consider new ideas, because we have shown that we are not hidebound or dogmatic in these matters, this is a policy which is going to be extended to the rest of the field of agriculture. No decisions at all have been taken, apart from this particular commodity of eggs.
The noble Lord asked me whether the Statement had been agreed with the National Farmers' Unions. I do not think that on present understanding, I can go beyond what is in the first paragraph of the full Statement which he has in his hands, which says that the
conclusions have been taken in the light of the views expressed by interested organisations.I understand what he says about the reluctance of the poultry industry, or indeed any other section of the agricultural industry, to accept a scheme which involves a levy. This is a natural reluctance which has to be taken into account, and there will have to be discussions about this. I am sorry that I cannot answer the noble Lord's question about Northern Ireland, but I will make inquiries and let him know to-morrow when answering any other questions, put to me.
LORD HENLEYMy Lords, from these Benches we welcome this Statement on the face of it, subject to satisfactory 953 answers being given at a later date to some of the points raised by the noble Lord, Lord Nugent of Guildford.
§ LORD BALERNOMy Lords, may I ask two questions, not for immediate answer, which I think are matters of considerable interest? In the first place, do the Government contemplate that support buying and control of imports will take place simultaneously, or are they alternate methods considered by the Government? Secondly, as regards the control of imports, do the Government contemplate a levy on imported eggs?
§ LORD BESWICKMy Lords, so far as the first part of the noble Lord's question is concerned, the phasing out of the subsidy and the introduction of the support price will be a simultaneous operation. So far as the second part of the question is concerned, I had better look at that and answer it to-morrow. May I also take this opportunity of saying "Thank you" to the noble Lord, Lord Henley.
EARL FERRERSMy Lords, may ask the noble Lord just one question? I think that this Statement has far-reaching effects and will need to be studied with great detail. But as he has virtually put a bomb under the existing arrangements for the guarantee of eggs, will he give an assurance that he will give the greatest possible study to the effect that this will have, and ensure that home producers will be given the chance of providing, if necessary, the whole of the market for eggs'? And, although there will be a levy on imported goods, will he make sure that the levy is such that the home producer will be able to produce for certainly the largest proportion of the market?
§ LORD BESWICKMy Lords, I take account of what the noble Earl has said in the latter part of his question. So far as his description of "a bomb" is concerned, it is a bomb with a lengthy fuse, because the whole operation will not be completed until 1974.
§ LORD SILKINMy Lords, when my noble friend comes to elaborate on this Statement, will he give us some kind of idea of the effect on the consumer? Is it contemplated that the price of eggs 954 will rise or fall, or will it remain stationary?
§ LORD BESWICKMy Lords, I will see whether I can give my noble friend a satisfactory answer to that question to-morrow.
§ LORD NUGENT OF GUILDFORDMy Lords, may I thank the noble Lord, Lord Beswick, for so admirably answering our questions "off the cuff".