§ 2.49 p.m.
§ LORD BESWICK
My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
§ Moved, That the House do now resolve itself into Committee.—(Lord Beswick.)
§ On Question, Motion agreed to.
§ House in Committee accordingly.
§ [The EARL OF LISTOWEL in the Chair.]
§ Clause 1 agreed to.
§ Clause 2 [Constitution of Eggs Authority]:
LORD NUGENT OF GUILDFORD moved Amendment No. 1:
Page 3, line 5, leave out ("five") and insert ("six").
The noble Lord said: I beg to move the Amendment standing in the name of my noble friends and myself. Perhaps the Committee will be agreeable to my discussing Amendments Nos. 2, 3 and 4 with this Amendment, because all four are connected. This is a small technical point of not much substance which I hope the Government will be willing to accept. Clause 2 deals with the constitution of the new Eggs Authority. Subsection (2) and paragraphs (b) and (c) set out the number of representatives on the productive side of the industry, as it were, and the distributive side. The effect of the four Amendments, which are related, would be to move from the distributive section, which is to have four representatives, two categories who are in fact both part of the production of the machinery. The two categories I am proposing should be moved are said to be, in lines 14 and 15:
activities ancillary to the production of eggs, being activities comprised in the hatching or rearing of domestic fowls".
These two activities, of course, are both parts of the productive chain of eggs. I am proposing that they should be moved across into the category which consists of the production side of the industry.
§ There is no doubt that before a hen can lay an egg she must be hatched from an egg and become a chick; she must also be reared in order to become an adult hen. No one could deny that this is an entirely logical argument—the chicken and the egg. Therefore, it seemed to me when I read the Bill that a technical error had occurred in putting these production activities in with the distribution and marketing side of the industry I was puzzled to find it there, and I think that when the new Authority is set up and the Minister comes to appoint his members, he would find it easier if he treated the whole sweep of the production side of the industry as one—that is to say, the breeding flocks, hatcheries rearing units and egg production units—rather than divide it up into two and have part of this section mixed up with the distribution and marketing side. So in order to make this a correct adjustment, I am proposing that the production side should be increased from five members to six, and that the second section covering the distribution side and these ancillary productive interests should be reduced from four to three; so that the total number would not be changed at all. I think it would be easier when the Minister comes to choose the representatives of the different sections whom he is going to appoint to his Authority. This is the simple explanation. I think it would be a more logical thing to do, and I beg to move.
§ LORD BESWICK
I was particularly interested in what the noble Lord had to say because the purpose he had in mind was not entirely clear from the Amendments. I confess that I thought there must be a rather deeper purpose behind them. He said that the Amendments are to institute a technical change. I think, however, that he underestimates the difficulties there would be if we made this technical change. We are faced here, with a number of other bodies, with getting a representative Authority that is not composed simply of representatives of interests. One cannot be too narrow in the definition of those whom it is intended 10 to consult and, if possible, whose views are required on the Authority.
The real difficulty here is that if we accepted the Amendments we should reduce the four members of the Authority who represent marketing, distribution and retailing of eggs, to three. Between twenty and thirty different organisations would have to be consulted. One can see that the Minister is going to have a much more difficult job if that four is reduced by 25 per cent. to three. It means to say that a range of twenty or thirty organisations must be convinced that they are properly represented (so far as that is the correct word) by only three members. I put it to the noble Lord, Lord Nugent of Guildford, who is reasonable in all these matters, that this is really being a little difficult. It is narrowing the scope for the Minister.
I put just one other point to the noble Lord, and I shall listen to what he has to say on this with particular interest, because I know his knowledge of what is involved goes much deeper than that of possibly anyone else in the House. Would he agree that the hatchers and the rearers are not always just hatchers and rearers—that quite a number of them are also concerned with production—and that the knowledge of hatching and rearing will be vested also in those who are actually appointed after consultation with the producing interests? There is also the possibility of that knowledge being represented among the four.
§ LORD MERRIVALE
Before the noble Lord, Lord Nugent, makes up his mind as to the decision he will take regarding this Amendment, may I ask the Minister this question regarding the Eggs Authority which is to be set up? I see that the Authority is to consist ofnot more than fourteen members … one shall be appointed as being a person who in the opinion of the Ministers is specially conversant with the interests of consumers of eggs".I believe that there is a recent body of opinion in this country of people who feel that mass-produced eggs are all very well but they would like to see more free-range eggs. I should like to know whether in effect one person would be sufficient for this purpose. Could that person take a balance in this matter and bear in mind the interests of consumers who rather prefer the free-range egg?
§ LORD NUGENT OF GUILDFORD
May I thank the noble Lord, Lord Beswick, for answering the argument for my Amendment. May I say immediately that I understand the difficulty of setting up a body of this kind, and the intensive bidding that goes on from all concerned to try to get a hand in it. I entirely take his point that these are not representatives; they are in fact appointed by the Minister, after consulting the various sections of the industry which he feels ought to be in some way represented, although there ought to be a knowledge of these various matters on the Authority in the end. I appreciate that point. I also appreciate the point the noble Lord made, that to reduce in paragraph (c) of subsection (2) the marketing and distribution side from four to three would itself present a problem. But if he wishes to keep paragraph (c) as it is, the Minister is going to be confronted with the problem that he must cover the marketing and distribution side, which as the noble Lord said covers some twenty bodies who want to have a voice in this. But because these ancillary activities of hatching and rearing are covered in this clause, those interests will undoubtedly expect to be covered as well.
The noble Lord's point that hatching and rearing is often carried out on the same farm as production is true up to a point, but becoming less true every day. The industry is becoming more and more split up into specialised units, so that to-day the greater part of the hatching is done in specialised hatchery concerns and a very great part of the rearing is done in specialised rearing farms. Thus, these people will undoubtedly expect, and with some justice as they are specifically mentioned, that they are going to get representation under this clause. So the noble Lord will not have an easier time. He will still have only four places to give away and he will have to include at least one from these two outfits along with the marketing and distribution side. I should have thought that the Minister would find it much less difficult if these two sections were included in the production section in paragraph (b). Where he has five at present I am suggesting that number should be increased to six, but even then there will be some intensive bidding to get them all inside that number. In 12 so far as the Minister is able to argue that rearing and hatching is to some extent covered in production, he will get some benefit from that argument if he has these people in paragraph (b).
I certainly would not press the noble Lord to take a decision on this point now, or indeed invite the Committee to do so. It is only a technical point, but I think there is something in my argument that might be considered, and I hope that the noble Lord will be prepared to take this back for further thought before a final decision is taken.
§ LORD BESWICK
Anything the noble Lord has to say on these matters is worthy of consideration and I will certainly see that what he has said is considered again, although of course I can give him no undertaking. In any case, the noble Lord himself says that even if this change is made, not everyone will consider that they are going to get a proper mouthpiece or a proper expression of a point of view on the Authority. I take the opportunity to stress again that we need here a collective viewpoint and not a body of different viewpoints. One hopes and expects that the Authority, when constituted, will take into account all the various elements which go to make up this industry even though there is no person who comes hot-foot from a particular section of it.
With regard to the question asked by the noble Lord, Lord Merrivale, I cannot give him any guarantee that the consumer of free-range eggs will have any special representation as distinct from the producer of other types of eggs. There is a market and there are consumers: I know my family will always go for free-range eggs if they see the chance of getting them.
I say again to the noble Lord, Lord Nugent, that if he will leave it there I will undertake to see that the point is considered. If he has any statistics about separate hatchers and rearers as against the farm that produces eggs—which is what this is about—where the hatching and rearing is one whole enterprise, I shall be interested to see those figures.
§ LORD NUGENT OF GUILDFORD
I thank the noble Lord for being accommodating. I have no figures to my hand but I can probably get some. Indeed, I am not sure how much information is 13 available. I should say that I have not received any representations on this point from anyone, but on reading the Bill it struck me as being odd that this part of the production cycle should have been included in the distribution and marketing cycle, and I thought the Bill would look better as re-drafted. However, I am happy to accept the noble Lord's undertaking to look at this point and beg leave to withdraw my Amendment.
§ Amendment, by leave, withdrawn.
§ On Question, Whether Clause 2 shall stand part of the Bill?
§ LORD LEATHERLAND
During the discussion on the Amendment moved by the noble Lord, Lord Nugent of Guildford, I had intended to refer to this solitary representative of the consumer of eggs, but I thought that probably I should be out of order. However, the point has been raised by the noble Lord, Lord Merrivale, and I should like to urge my noble friend to give the consumers of eggs more than a single representative. We have heard about 20 associations which are engaged in distribution. There are millions of people who are engaged in consuming eggs, and if the advertisement on television of the little boy who advises us to eat more eggs is successful, there will be more and more eggs consumed each year.
When my noble friend comes to consider this clause in its totality I think he will find that he can meet the situation without much difficulty. For example, the clause says:The Authority shall consist of not less than twelve and not more than fourteen members …Cannot my noble friend make it 14 members, and then he can give six for the organisations who represent the producers, and two to the representatives of consumers, instead of one? That brings the total exactly to 14, and it seems to me to be a fair way out.
§ LORD BESWICK
I do not disagree at all with my noble friend. That would be an eminently fair way of doing it, and he has put the case most persuasively. Unfortunately, one has heard equally persuasive cases put by other organisations and other interests that the numbers should be increased even more, to ensure that they get a representative on the 14 Authority. Indeed, if all the claims were met one would be left with a mass meeting rather than an executive Authority, and I think the figure to which the Minister has now come is about right.
On the consumer point, one is provided for specifically; on the other hand (and I speak with some knowledge of consumer organisations; I have spoken for them now for a good many years), if one looks at the organisations that have to be consulted in the second category one sees that there are quite a number who understand what the consumer problems are. I refer, for example, to the Co-operative Union. No better organisation can be found in the country than the Co-operative Union as representative of consumers. Moreover, I have a sneaking suspicion that a good many of the other people, whether they be producers, retailers or packers, or anything else, also on occasion have an egg for breakfast.
§ Clause 2 agreed to.
§ Clauses 3 to 11 agreed to.
§ Clause 12 [Contributions, etc., by Minister]:
§ On Question, Whether Clause 12 shall stand part of the Bill?
§ 3.7 p.m.
§ LORD NUGENT OF GUILDFORD
I should like here to raise a point for the consideration of the noble Lord, Lord Beswick, and the Government. Clause 12 gives the Minister power to make contributions towards the expediture of the new Eggs Authority, but it limits the Minister to making contributions to the functions under Clauses 2, 4, 7 and 9. These clauses are substantially those which cover the administrative functions of the Authority. There are two points that I want to make on this. The first is that I was surprised that Clause 12 excludes the functions in Clauses 5 and 6; that is to say, research and development, on the one hand, and quality control, on the other. It seems to me that both these functions are essential functions for the Authority, rather than optional, and in their nature they are not likely to involve any very large financial commitment; that is to say, compared with Clause 3, which is concerned with support buying and processing.
15 I find it difficult to understand why the Government have not included these functions among those qualifying for financial aid, and I am hoping that they will reconsider this matter. I am not making any great point of it at this moment, but quality control seems to be directly related to the marketing functions—the improvement of the market in Clause 7—and quality control is surely something that must be attended to. Similarly with Clause 5, which relates to research and development, I should have thought the Authority would be seriously handicapped if they were inhibited from financing research and development because they had to raise the money by a levy on producers. It seems to me that if this Authority are to be effective they should be concerned with this range of functions—quality control, research and development—and that the Government might well make a contribution towards expenditure incurred for this purpose.
My major point here is that Clause 12 gives the Minister power to make contributions to the Authority under the particular clauses I have mentioned, leaving out those I should like him to include. Therefore the Minister could, if he wished, give 100 per cent. of the cost of those particular functions—that is, generally the administrative cost of the new Eggs Authority. But the noble Lord, Lord Beswick, told us, on the Second Reading of the Bill, that it is the Government's intention to give only 50 per cent. and to expect the new Eggs Authority to raise the other 50 per cent. by means of a levy on producers. The noble Lord, Lord Beswick, relied upon the report of the Reorganisation Commission to support him. They recommended that there should be no grant at all; that the industry should pay for the whole of the cost. I will allow that the noble Lord has a point there, but it is the only point he has in his favour.
There are two substantial points against this decision and in favour of the Government's paying 100 per cent. of the administrative cost. The first point is that this Bill is proceeding to abolish the present system of guaranteed prices for eggs. That is a very big step indeed, and one which, as noble Lords will remember, the National Farmers' Union is still bitterly opposing. But everyone, I think, accepts that it must happen, and 16 so far as I am concerned I think it should. But having saved by this stroke, as the Government will have saved, some £13 million a year, here they are boggling over paying £100,000 or £200,000 a year. The administrative cost, as estimated by the Reorganisation Commission, will amount to about a quarter of a million pounds a year; that is, about 2 per cent. of the total saving of £13 million that the Government are about to make. If the Government were wise enough to accept my advice and include the functions in Clauses 5 and 6, it would put it up to half a million pounds a year, but that would still be only 4 per cent. of the saving they are making by cutting off the guaranteed prices system.
§ LORD ROYLE
May I interrupt the noble Lord? I am looking at the Bill and I am wondering whether I am following him correctly. He refers to the first part of the paragraph at the top of page 10, which says:… namely, sections 2, 4 to 7 and 9 and Schedule 1".I interpret that to mean that Sections 5 and 6 ar included in Sections 4 to 7. Am I wrong?
§ LORD NUGENT OF GUILDFORD
It sounds to me as if the noble Lord is right, in which case I have got part of my argument. I thank him very much. Let me then pass on. I am accordingly talking about the approximately half a million pounds which this total range of functions will cost. I should have thought that the saving of £13 millions is so substantial that the Government might well be prepared to pay the whole of that expenditure instead of the half of it. The Government are making a very big saving indeed, and therefore they could still maintain that they have served the public purse well if they gave away only 4 per cent. of what they are saving.
The second point is the difficulty of collecting a levy. When the Reorganisation Commission made their report about two years ago the Government did not realise that it would be impossible to collect the levy for the training board for the agricultural industry. As noble Lords will know from reading the Bill, Clause 10 gives statutory acknowledgment to that. In future the finance for the training board is to be raised by Her Majesty's Government as part of the Price Review settlement. Therefore it 17 will come out of Government funds, and the levy scheme for the agricultural training board for the industry is to be scrapped as unworkable. In the face of this searing experience, I should have thought it most unwise to leave this new Authority to start off by depending immediately on raising a levy for quite a small sum of money from the farming community. At the worst, the levy scheme will suffer the same fate as the levy for the industrial training board and prove to be completely uncollectable. At the best, it will be difficult to collect and there will be a continuous wrangling in the effort to collect levies from the unco-operative section of the industry. That kind of activity is bound to poison the relationships between the new Eggs Authority and the producers, and it is bound to affect its prospects of giving valuable leadership and having a valuable influence on the industry.
As I said earlier, fortunately Clause. 12 gives the Minister of Agriculture power to make grants of any size he likes. Thus, if he likes, he can make a grant of 100 per cent. of this expense. I most earnestly urge that the Minister of Agriculture should think again about this point. He has quite a long time to do it in. In the next three years Government monies will be coming in through the Authority. I hope most earnestly that the Eggs Authority will not have to start off by raising a levy from the industry; I am sure if it does it will be in great difficulties. I do not expect the noble Lord to give a forthcoming affirmative answer to-day, but I would urge that he should take this point back and ask the Minister to look at it again.
I wonder whether the noble Lord, Lord Beswick, would be good enough to look at this particular point again. The setting up of the Eggs Authority is going to involve a lot of upset of what has gone on previously, and everyone is concerned to see that this body should be a success. At the same time, it is perfectly natural for producers and others to feel a certain amount of apprehension. In view of the fact that the savings which the Government are going to make will be so substantial, of the order of £13 million, and that they are anxious that this Eggs Authority should succeed, would it not be possible for the Government to be responsible for 18 a larger proportion of the cost of the Eggs Authority, if only in the first two or three years, to see it properly on its feet? As my noble friend has said, there has been great difficulty in getting a levy from farmers for the agricultural training board. This one would be at least as difficult, it not worse; all the producers are to be asked to pay a levy to an Authority in which they have no control or representation. I think there is a strong argument for the Government, if they cannot go the whole way of 100 per cent. responsibility for the Eggs Authority, at least to do so for the first two or three years, to see the Authority on its feet.
§ LORD ROYLE
I feel that the noble Lord and the noble Earl are being a little selfish on behalf of the producers. My mind goes back at once to the time when a levy was to be put on for the establishment of a meat and livestock authority. On that occasion the whole of the levy arose at the point of slaughter; therefore it had to be paid by the people who were distributing. Although that authority was established in the main to help the producers, the producers themselves contributed nothing whatever to it; the whole of it was contributed by the distributors, either wholesale or retail. Here we have an instance where the farmers are actually being asked to pay some kind of levy in their own interests, and it seems to me to be a little selfish that they are objecting to it and trying to push the burden on to the shoulders of the Government.
§ LORD BESWICK
I am always ready to say that we will look at a matter again, and I have already undertaken to look at one point again. I feel, however, that if I were to say that this point also will be looked at again I should be offering something chat has absolutely no value: because if one aspect of the Bill has been carefully looked at and considered, argued and reargued, it is this aspect; and I think that the decision to which the Government have come is something that I must ask your Lordships to accept.
I am bound to say that I am a little surprised when I hear noble Lords opposite arguing in favour of a Government contribution towards market support. After all, they are the noble Lords whom in previous years in agricultural debates I have heard arguing in favour 19 of the Continental method of arranging agricultural affairs. Time and time again I have been told that if the Government subsidy were reduced we should get a fair price paid by the consumer and we should reduce the bill of the taxpayer. Yet here, when we have one industry which was considered most carefully, and the Government, in their undogmatic and empirical way, came to the conclusion that we could accept the kind of policy which the Conservatives were proposing, when we accept it in relation to the egg industry we have them with cold feet saying "No. After all, this industry cannot stand on its own. It must get Government support." They are really going back on the principle which they have been advocating over the years.
I am surprised, too, to hear the noble Lord, Lord Nugent, say that the Government are saving £13 million. The Government are not saving £13 million. The Government are supporting agriculture in various ways, and I should be most surprised if the total amount of support given to the agricultural industry had been increased by this amount if we had not had this scheme for the egg industry. It is the fact that an amount of money larger than usual is being directed to assist the agricultural industry in those fields where we think it will give the best return to the nation, the consumer and the industry as a whole.
Noble Lords opposite have time and time again said that they want to extract from the 1947 principle certain areas of agriculture. This was one, when it was first announced, that they agreed should be so extracted. I therefore cannot accept that we are saving £13 million, in the way the noble Lord suggests, if we are looking at Government support for the agricultural industry as a whole.
He makes the point that there will be difficulty in collecting the levy. I take that point: of course there will be some difficulty. There is always difficulty in collecting taxes or levies or anything of that kind. In this case, the difficulty would be increased still more if we were to accept the new Clause 13 which we shall discuss later. But I put it to the noble Lord, Lord Nugent, and to the noble Earl, Lord Ferrers, that there is in this Bill provision for the kind of phasing 20 for which the noble Earl, Lord Ferrers asked. The industry will not immediately be dependent upon the levy. It will be possible—in fact it is expressly provided—that in the first year, at any rate, the levy will be paid for out of the residual subsidy, and it will be for the Authority themselves to decide how the levy is to be raised in the succeeding years.
There is one other point I would make in reply to what the noble Earl, Lord Ferrers, said about imposing this levy system on the industry. There will be no question of imposing it on the industry. The noble Earl speaks of apprehension. But if there are legitimate reasons for apprehension, then of course your Lordships will have an opportunity of considering the levy scheme when it is put before the House, as it must be before it is eventually adopted.
§ LORD NUGENT OF GUILDFORD
I am sorry that the noble Lord, Lord Beswick, is not quite so sympathetic this time. I must correct him on one point of fact in his argument which otherwise seemed to flow very well, although I could not agree with it. The point of fact is that of course this range of payment does not in any way concern market support. These are entirely administrative functions for the new Eggs Authority and they will in no way affect or support the market. They might—I hope they will—over a long period provide some gradual improvement in giving leadership to the industry, but no more; and we are not in any way deviating here from our general principle.
Nor do I agree with the noble Lord's point about this not being a saving of £13 million. It certainly is. There will be £13 million not paid to the egg producers which has been paid in the past. It may be that this Government, or some other Government, may pay more in other respects, but it would be difficult to convince the egg farmers of this country that they are not going to receive £13 million less than they have had before. To that extent this must be regarded as a saving of £13 million to public funds.
§ LORD BESWICK
As we are checking each other on facts, may I say that I am sorry if I included market support? But if the noble Lord himself did not include market support in the list of 21 functions which he thought ought to be financed out of the Government's contribution, then I am even more surprised at the general tone of his argument, because in each of the other cases there is a 50 per cent. Exchequer contribution.
§ LORD NUGENT OF GUILDFORD
My argument was that it ought to be 100 per cent. I think it is a mistake to raise a levy on this activity. I am coming to this question of the levy for market support in my new clause. That is certainly not my argument, that the Government ought to contribute to it. However, just to complete this point with the Committee, I take the noble Lord's point that the transition will be gradual. It is to the credit of the Government that they have decided to taper off the existing guarantee payments system over three years. Therefore the new Authority will have time to decide how they wish to handle these difficult problems. It may be that during this period the Minister of the day will well take the view that I am advocating, that on the whole it would be better if the Authority, instead of being financed as to 50 per cent. from Government funds, were financed 100 per cent. I have made the point that I feel should be made here, and I hope that it will be given consideration in the Ministry of Agriculture.
§ Clause 12 agreed to.
§ Clause 13 [Provision for levy]:
§ 3.29 p.m.
LORD NUGENT OF GUILDFORD moved Amendment No. 5:
Page 10, line 30, leave out paragraphs (b) and (c).
§ The noble Lord said: I beg to move Amendment No. 5. Perhaps the Committee would be willing to discuss with it Amendments Nos. 6, 7, 8 and 9 and the new clause. These first five Amendments are all paving Amendments in Clause 13 to the new clause which appears over the page at Amendment No. 10. The purpose of the new clause is to provide machinery for a poll by which the Eggs Authority will consult producers before raising a levy to finance the functions laid down either in Clause 3 or in Clause 8. Clause 3 gives the Eggs Authority the power of reserve buying and processing of eggs, and Clause 8 gives them power to raise money for national advertising campaigns.22
§ I must start by admitting that our new clause and Amendments are the product of my own amateur hand and are inevitably defective in drafting, but I hope that the substance of the new clause is adequate to bring this important issue before the Committee and to enable us to debate its merits. I am hoping that the Government will be so convinced that they will then be willing to accept the principle of a poll of producers for these purposes, and will then redraft the provisions in the form which they prefer and with the help of their expert resources, ready for the Report stage. On the Second Reading debate I drew attention to the need for the new Eggs Authority to have effective means of consulting with producers before taking the major steps involved in Clauses 3 and 8. I added that my argument was directed to the period after March, 1974, when the transitional arrangements of the Government for financing the Eggs Authority would have come to an end and when that Authority become totally dependent on raising a levy from producers to finance these functions.
§ The first point to which I should like to call attention is that both these functions—that is, reserve buying and processing, and national advertising— are important and expensive functions. In the Reorganisation Commission's Report, which was largely the foundation for this Part of the Bill, it was estimated that the cost of reserve buying and processing would be about £500,000 a year, and of a national advertising campaign about £250,000 a year; £750,000 altogether. Personally, I think that these estimates were very conservative. At the present time the Egg Marketing Board are spending about £1,250,000 a year on advertising alone. Expenditure on processing and storage runs in the Egg Marketing Board's accounts into several million pounds a year, but, as the accounts do not give a separate statement on this activity it is not possible to tell what the net cost is. Possibly it makes a loss in some years and a profit in others. The point I wish to make here is that the potential for making a loss in a reserve buying function is very large. My own estimate is that the Authority would be more likely than not to run into a loss of more than a million pounds a year, on average. The potential cost 23 of these two activities, taking what information we have before us, would be at least £2 million a year, and possibly more, and I would say that the Reorganisation Commission's estimate was not realistic. This is quite a large sum of money to fall on the egg farming industry. I should estimate that it would cost them something of the order of 9d. to Is. a laying hen; something of the order of 15 to 20 per cent. of their profit margin. The point that I am making is that the levy is likely to amount to a substantial charge on producers, something that they would regard as heavy.
§ My second point is that there is a serious doubt among producers whether either of these activities will be for the benefit of egg producers. The National Farmers' Union is in favour of the reserve buying function, but only if Her Majesty's Government are prepared to pay 100 per cent. of it. They are silent on the advertising function. The British Egg Association, and the Poultry Stock Association, which are the two major specialist organisations of the egg producing industry, are both firmly against either reserve buying or national advertising. They believe that reserve buying by the Eggs Authority is more likely, on balance, to weaken the market than to strengthen it; they also think that national advertising is wasteful and that on the whole brand advertising by the major distributors is more effective and better value. Thus the position is that the cost of these functions to producers would be substantial, and there is weighty evidence that important sections of the industry are not in favour of them and think they would not be in the best interests of the industry.
§ This brings me to the question of the poll itself and what the grounds are for consulting the industry by means of a poll. I suggest that there are two grounds: first, principle, and secondly, expediency. It is against every democratic principle for a Government-appointed Authority, as this will be, to mulct any section of the farming industry of a large sum of money without proper consultation. There is no provision at all in the Bill for consultation. The tradition of the farming industry over the past forty years has been to set up a 24 number of commodity producer marketing boards to organise the marketing of each commodity, and part of what this Bill does is to bring to an end the Egg Marketing Board. These marketing boards, which the industry is used to, have usually had power to raise money from their producers by means of levies, but in mosts cases the levy could be deducted from Government monies paid on account of guarantees. Always the marketing boards have been substantially elected by producers and therefore answerable to them. Furthermore, most marketing boards include an ultimate safeguard allowing producers to hold a poll and enforce the winding up of the board if they wish. Noble Lords may remember that that is what happened to the Tomato and Cucumber Marketing Board when producers no longer had confidence in it.
§ In the light of this tradition, noble Lords will see that this new Eggs Authority, equipped as they are in this Bill with important trading powers, are startlingly out of line with previous precedent and tradition in the industry. Indeed, it would be true to say that no Minister-appointed statutory authority in the farming world has ever been set up before with trading powers. If the noble Lord can tell me of one I shall be very interested to hear of it. In addition, there is no means of consulting producers. I have looked at the precedents and I should be very interested if the noble Lord can enlarge upon them. The precedents are that two new statutory authorities have been set up during the past ten years, one for cereals and the other for meat. In some respects the Eggs Authority resemble them, but in important respects they differ. Both the Home Grown Cereals Authority and the Meat and Livestock Commission are entirely appointed by the Minister, as are the Eggs Authority, and both of them can raise levies to finance their operating expenses; but there the similarity ends.
§ Not only does neither Authority have trading powers but—and here is a point which I wish to make as forcefully as I can to the noble Lord, Lord Beswick—when the Home Grown Cereals Authority were set up Her Majesty's Government of the day strenuously resisted the powerful pressure from the National Fanners' Union to equip that Authority 25 with power to act as a reserve buyer, on the grounds that it would be more likely to weaken the market than strengthen it, and could be very expensive. Secondly, both those commodities have prices guaranteed by Her Majesty's Government and are in receipt of substantial deficiency payments from the Exchequer, about £70 million a year for cereals, and about £50 million a year for meat and livestock. In so far as the running of those authorities increases costs of production, the costs will fall on public funds. Certainly if the Home Grown Cereals Authority had been given power to act as a reserve buyer, the cost of the function would have fallen on the Exchequer. As I have said, Her Majesty's Government of the day firmly rejected that, and noble Lords may detect a certain irony in Her Majesty's Government's willingness to equip the new Eggs Authority with this questionable reserve buying power in this Bill, but only because they are going to make the producers pay for it. Suffice it to say that neither the Home Grown Cereals Authority nor the Meat and Livestock Commission provides a precedent for the constitution and functions proposed for the Eggs Authority. Both authorities are operating in completely different circumstances.
§ I suggest that the nearest precedent to the Eggs Authority was, perhaps, the Horticultural Marketing Council, which was set up in 1960 to guide the development of horticultural marketing. In that case, the Government undertook to finance its operation for the first two years, and after that initial period of Government finance the Horticultural Marketing Council was to draw up a charging scheme which was to be levied on the horticultural industry to finance its future operation. The Horticultural Marketing Council, unlike the Eggs Authority under this Bill, had first to consult each section of the horticultural industry, and in the event every section said that it was opposed to the scheme. So the Government of the day wisely decided that it was better not to continue with that Council, and they wound it up.
§ I am really advocating that that precedent of consultation should be written into this Bill. For three years from March, 1971, the Eggs Authority will be financed by Government monies during the transitional period, with the tapering 26 off of the price guarantee. Therefore, during this transitional period the new Eggs Authority can, if they wish, continue with the reserve buying and processing and can continue with national advertising. But I am advocating that before the end of that period when Government monies come to an end they should consult producers, by means of a poll, to find out whether producers want these functions to run on after March, 1974, by which time producers will themselves have to pay for them by means of a levy.
§ The second point is the one of expediency, which I touched on on the Question, That Clause 12 shall stand part of the Bill. I should have thought that the precedent of the agricultural training board showed how very difficult it was satisfactorily to collect a levy from the farming industry, particularly if they are likely to be opposed to it, which is obviously the situation here.
§ I have gone into this at some length, because it is obviously a very important point. Here the Government are proposing to set up an entirely new Authority with a new constitution different from anything we have seen before. I feel that it is absolutely vital for this Authority to have proper machinery for consulting producers, before imposing on them what would be a levy of very substantial proportions. I must earnestly urge the noble Lord, Lord Beswick, and his noble friends to consider whether or not they are able to agree to this point. If they are not able to agree, I urge them to take it back and give consideration to it, because I believe that to proceed with the Bill as it is now, with these substantial and rather risky trading powers written into it, is against the general traditions of the structures in the farming industry and, indeed, against the general traditions of this Parliament. I beg to move.
§ THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE (LORD SHEPHERD)
I hope it may be for the convenience of the House if, in order to hear a Statement, I beg to move that the House do now resume.
§ Moved. That the House do now resume.—(Lord Shepherd.)
§ On Question, Motion agreed to and House resumed accordingly.