§ CEREALS
§ 1. With effect from July 1 the new minimum import price and levy arrangements will reflect those now in force, but the present "co-operating country" and "country levy" provisions are being discontinued and the new system will be based on variable general levies assessed on the difference between lowest representative offering prices and the relevant minimum import prices.
§ 2. The range of products covered will continue as at present and will include all the cereals and cereal-based products normally traded (other than rye and rice). Maize intended for industrial uses will be allowed levy-free entry. Denatured wheat, flour not suitable for human consumption and malting barley of high diastatic quality will have separate minimum import prices.
§ 3. The present level of minimum import prices will be increased, in average terms, by £3.50 per ton starting in July 1971 and continuing for the year August 1971 to July 1972; and for the period August 1972 to December 1972 by an amount which for the crop year 1972–73 as a whole would be £6 per ton on average above present levels. The level of minimum import prices thereafter will be the subject of later determination.
§ 4. The minimum import prices will rise seasonally throughout the year from August to July in order to encourage orderly marketing. The total range of the variations will be £3.
467§ 5. The forward period for which contracts may be registered will continue at 3 months and announcements of prospective rates of levy will be made accordingly.
§ MEAT
§ 6. With effect from the first week in July (beginning on July 5, 1971) imports of fresh, chilled and frozen beef and veal and of fat cattle will be subject to a system of general variable levies to support minimum import prices, on a weekly basis, for the various main categories of imports other than from the Irish Republic. These minimum import prices will be related to an annual target indicator price for fat cattle in the United Kingdom market, which for 1971–72 will be E10.35 (207s. 0d.) per live cwt. Levies will be chargeable if for any week the average market price of fat cattle in the United Kingdom falls below the target indicator price for that week. Levies will be payable at the time of import or withdrawal from bonded warehouse.
§ 7. With effect from July 1, 1971, imports, other than from the Irish Republic, of fresh, chilled and frozen mutton and lamb will be subject to import duties at specific rates. For bone-in mutton carcases the rate will be half that for other mutton and lamb, for which the rates will be £9.33 per ton from July 1 to December 31, 1971, £18.67 per ton from January 1, 1972 to June 30, 1972, and £28.00 per ton from July 1, 1972.
§ 8. Special arrangements to apply to imports of fat cattle, beef and veal, and mutton and lamb from the Irish Republic are currently under discussion with the Government of the Republic. These arrangements will be linked to changes in the United Kingdom Fatstock Guarantee Scheme, which are outlined in the White Paper "Annual Review and Determination of Guarantees 1971" published to-day.
§ MILK PRODUCTS
§ 9. With effect from July 1, 1971 minimum import price arrangements, enforced where necessary by levies, will be introduced for milk products other than butter and cheese. They will be set at these levels:
| £ a ton | ||
| fresh cream | … | 351 |
| canned cream | … | 249 |
| skimmed milk powder | … | 157 |
| whole milk powder | … | 273 |
| condensed milk | … | 135 |
§ 10. Arrangements are also being made to ensure that the prices of imported chocolate milk crumb and animal feedingstuffs containing milk solids will not be out of line with the prevailing prices for milk products. Special arrangements consistent with the objectives of the scheme have been agreed in principle with the countries concerned in respect of imports from the Irish Republic, of whole milk powder from New Zealand and Australia and of canned cream from Denmark. Further discussions on the details and operation of the scheme will be held with domestic interests and with some overseas suppliers in the immediate future.
468§ LORD BESWICKMy Lords, I am sure we are all grateful to the noble Earl for repeating this Statement. Bearing in mind what he said about the debate, I shall endeavour to keep my questions to the minimum. First, may I say how much we shall all welcome the news about the progress of the brucellosis eradiction, and we shall look with great interest at what exactly is being announced in the other Statement.
May I ask him whether he agrees that the abnormally large sum, £138 million, is not an indication of generosity towards the farmers but rather an indication of the abnormally high rate of inflation of costs which they have to meet? May I ask him a little more about the figure of £138 million? What proportion of this relates to the changes made last October, and what proportion relates to the increase which the housewife will find, for example, in the increase in milk and the increase in sugar prices? Of the increase of ½p in the retail price of milk, will he confirm that this is an increase of ½p per pint? Is that increase increases in feedingstuff prices indicated costs already being met by the dairy farmer but also the increased costs he will have to meet as a result of the increases in feedingstuff prices indicated in the other part of the Review Statement?
Then may I ask what estimate has been made about the resultant increase in the cost of living, the cost of food, to an average family of four? Finally, is this an agreed Review with the N.F.U?
LORD HENLEYMy Lords, so far as I can see, this is a very good Review, provided that the noble Lord can assure me on two points. The first is whether he is sure that the costs really have been met. I think that there is some disagreement on this point. Secondly, can he assure me that he will be able to keep costs down in the coming year, because those costs have risen so fast that this very large Review has had to be necessary. Finally, I should like to say that, from a technical point of view, it seems to me that the structure of this Review, introducing the levy system for the first time, is ingenious, and I hope that it may well prove a pattern for the future.
EARL ST. ALDWYNMy Lords, I should like to thank both noble Lords for their welcome of this Review. The noble Lord, Lord Beswick, asked me a series of questions. He asked first, what proportion of the £138 million was in fact awarded in October. The answer to that is £54 million. He also asked how much the Exchequer support would be. My Lords, it is an increase of somewhere about £47 million—that is, of course, an estimate. If prices remain high, it may not be anything like so much as that. That does not include the £29 million which resulted from the October Review. He is quite right in saying that the ½p increase in the retail price of milk is per pint. This ½p is expected to cover production costs, the expenditure in connection with brucellosis eradication, and the distribution costs.
The noble Lord, Lord Henley, asked me whether these figures were agreed. The position is that the N.F.U. agreed that our calculations were correct in relation to the Statute, but they felt that there were other expenses outside the statutory ones which should have been taken into consideration; and this is where we disagreed. The noble Lord, Lord Beswick, also asked me whether this is an agreed Review. While the N.F.U. do not in fact accept this as an agreed Award, they are satisfied with our calculations. But, basically, they felt we should have gone further.
§ 4.0 p.m.
§ BARONESS SUMMERSKILLMy Lords, am I to understand from the noble Earl that he is going to make another Statement on brucellosis to-day, after it has been made in another place?
EARL ST. ALDWYNNo, my Lords. There is not to be another Statement, but in both Houses there will be a Written Answer which will appear in Hansard to-morrow.*
§ BARONESS SUMMERSKILLMy Lords, I should like to ask the noble Earl a question. Is it in order for me to put a question about the statement on brucellosis? I should like to ask the noble Earl whether these changes are going to be limited to financial incentives. Can he tell me when the Government are going to start compulsory
§ *See col. 553
470§ slaughtering? After all, that is most important in this matter. Other countries, smaller than ours, have done it for many years and of course have eradicated brucellosis. Therefore I should like to know what the Government propose.
EARL ST. ALDWYNMy Lords, I do not think I can go into great detail at this stage. It will be about 18 months before there is compulsory slaughter in the eradication areas, and that is because we felt it was essential to have the agreement of the industry to the progress that is to be made. The industry felt that a reasonable time was required to allow the farmers to adjust themselves and to make their preliminary arrangements, so that they would not be faced with slaughtering when there were probably no replacements available.
§ BARONESS SUMMERSKILLMy Lords, is the noble Earl aware that those who have been interested in this matter will deplore this decision? The Government have yielded to the most unprogressive clement in the National Farmers' Union, and instead of getting on with eradicating brucellosis, they are now going to wait a few more years. It really is deplorable.
EARL ST. ALDWYNMy Lords, I cannot accept that, because if we are going to slaughter these animals it is essential that replacements are available—and they will not be available. It would mean a considerable reduction in our dairy herds, and I do not think the country is in a position to stand that.
§ LORD HILTON OF UPTONMy Lords, as a spokesman for the farm workers in this country may I welcome this Statement, which I think is very much on the right lines? I have one question that I should like to ask. For some years agriculture has been regarded as something for real team work between farmers and farm workers, and for years this arrangement has worked out very well. The only point was that farm workers never thought they received their fair share of the increases that were given to the industry. May I ask the noble Earl whether he can contact his right honourable friend the Minister of Agriculture, to ensure that this time farm workers get their fair share of this increase which is to be made available? 471 Like the farmers, they have a splendid record of production in recent years, but they have not had a fair share of the increases that have been given. Will the noble Earl ask the Minister to see that this time farm workers are not left out in the cold but get their fair share of the increase?
EARL ST. ALDWYNMy Lords, I am sure that the noble Earl is aware, as I am, that there is perfectly good machinery for dealing with farm workers' wages, and, as he knows, there has been a very considerable increase very recently. I entirely support him in his remarks about the tremendously good work which the farm workers have done and are doing, and I am sure they will continue to do it. But I do not think it is for me to say to the Minister that because of this Review he should make special arrangements about farm workers' wages.
§ LORD HILTON OF UPTONMy Lords, there is a fairly substantial increase—£138 million is the sum mentioned. All I am asking is that the farm workers are given their fair share of this.
§ LORD STONHAMMy Lords, can the noble Earl say what part of this £138 million, expressed as a percentage, will be borne by increased prices to the consumer? The noble Earl said that only some £40 million-odd will be paid by the Treasury, and that will leave a great deal to be recovered. How much is it going to add to the cost of living?
EARL ST. ALDWYNMy Lords, I am afraid that I cannot give the noble Lord overall figures about the cost of living, but I can give him figures about the increase in the price of milk. From memory, I think it is one-third of 1 per cent. on the cost of living in relation to milk.
§ LORD BESWICKMy Lords, I did not get an answer to the question—
§ LORD ERROLL OF HALEMy Lords, I wonder whether there can be a question from this side.
§ LORD BESWICKI am sorry, my Lords, but I did not get an answer to the question which I put.
§ LORD ERROLL OF HALEMy Lords, I have not yet had the chance to put a question.
§ LORD BESWICKMy Lords, in that case the noble Lord is in the same position as I am, except that I have put a question and have not had an answer. May I ask the noble Earl whether he can say what proportion of the £138 million will be raised through the housewife, in respect of the increased costs of milk and sugar?
EARL ST. ALDWYNMy Lords, I should have said that it means an increase of three-quarters of 1 per cent. in the case of milk. I am afraid that I do not have the figure in regard to sugar. Basically, there will not be any material increase—certainly, in the case of the levies on meat and cereals. As I said, I am afraid I do not have the figure for sugar, but I will let the noble Lord know as soon as I can.
§ LORD ERROLL OF HALEMy Lords, if I may, and with your Lordships' agreement, I should like to put a question to my noble friend about sugar. As he has already said that he does not have the figures, I do not expect an answer now; but I am delighted at least to be able now to put my question. Can my noble friend explain to me why the British taxpayer should have to pay more money to the British farmer to produce more sugar beet at a time of world sugar surplus? Can he also explain why, at the same time, under the Commonwealth Sugar Agreement the British taxpayer has to pay more money to Commonwealth sugar producers because of the sugar they are producing?
EARL ST. ALDWYNMy Lords, the noble Lord may certainly ask me, but I am afraid that I cannot answer him.
§ LORD ERROLL OF HALEMy Lords, I am much obliged.
§ LORD HOYMy Lords, may I ask the noble Earl whether it is not a fact that £54 million of the £138 million, which he has quoted, was saved at the last Price Review and was provided by the last Labour Government? Will the noble Earl tell me whether it cost the Treasury anything to provide the £54 million in October, and was it not met out of savings from the last Price Review? 473 Secondly, does not sixpence on a gallon of milk produce £54 million; and is this not what the housewife will be faced with as a result of an increase of this kind? Is it not also true that £5 million or £6 million will be put on the cost of sugar beet, which must also be met by the consumer? So that, as a result of this Review, on those two items alone the consumer will have to find £60 million in increased costs. Perhaps the noble Earl will say that this is, in fact, a cost-minus Review rather than a cost-plus Review, in as much as feedingstuffs, which were previously included in annual Price Reviews and taken into consideration, have been left out of account on this occasion.
Finally, when the noble Earl says that they propose to cut away the £10 million provided by the last Government as a fertiliser subsidy and to give a cash injection into the agricultural industry, may I ask whether he is now saying that they propose to bring that to a halt and put nothing at all in its place?
EARL. ST. ALDWYNMy Lords, may I take the noble Lord's last point? As I am sure the noble Lord is aware, at the 1970 Review the previous Government said that that was purely for one year and would not be repeated. We have merely stuck to that, and I think it is right. Then did I understand the noble Lord to talk about 6d. extra on a pint?
§ LORD HOYI do not want to be at cross-purposes on this matter, but the Award in fact represents, in old coinage. 6d. per gallon—I think the noble Earl could confirm this from his advisers—and one penny (using the old penny for this purpose) in fact produces £9 million. So if my arithmetic is correct and I convert the 2½ new pence into six old pennies and multiply what it produces by nine, it makes £54 million.
EARL, ST. ALDWYNI agree; that is more in line. As I said, my Lords, the additional cost to the housewife, on the retail index, is three-quarters of 1 per cent., and this, we hope, will cover not only the production costs but the money involved in brucellosis eradication and the distribution costs.
LORD NUNBURNHOLMEMy Lords, as a farmer, I welcome the Statement made by the noble Earl, but I should like to ask him one point on milk. How much of this extra 2p a pint goes into the pocket of the producer and how much goes into the distributor's pocket? Because it has always seemed to me in the past that the distributor has come in for the bulk of any increase. There is another point that I should like to bring up, and that is that we are changing the system of farm subsidy and putting all the costs of the increase to the farmer on to the housewife. Now is that right at this time, in our financial state? I understand that it is most likely that the pound is again going to be devalued. I am not asking the noble Earl to comment on that, but if it is devalued—
EARL JELLICOEMy Lords, I hesitate to interrupt the noble Lord, but we have spent a very long time on this Statement and perhaps he could put his question very shortly. We are not discussing the possible devaluation of the pound.
§ BARONESS PLUMMERMy Lords, am I right in assuming that the increased cost index to the housewives is to acclimatise them to the possibility of our entering the Common Market?
EARL ST. ALDWYNMy Lords, I do not think it is a question of acclimatisation. We have said for a long time that we felt that a higher proportion of these costs should be borne by the consumer, and that is the effect of what we are doing.
VISCOUNT GAGEMy Lords, has it been established that the housewife gets no benefit at all from a reduction of taxation? They do pay taxes.
§ LORD WALSTONMy Lords, may I put one brief question to the noble Earl on minimum import prices, on which, regrettably, he has been rather—shall I 475 say—hesitant? The cost of production of all livestock products depends to a large extent on the cost to the farmer of the food that he has to feed to that livestock. The cost of that food depends to a very large extent upon minimum import prices. At a given level of minimum import price, the figures which the noble Earl has announced may be adequate—they probably are adequate—but if that minimum import price is in fact going to be higher, those figures may be entirely inadequate. It is impossible for us to judge on this point unless the noble Earl tells us what the minimum import prices for grains are going to be. Could he give us that information?
EARL ST. ALDWYNMy Lords, the minimum import prices will be raised to an average of £3.50 per ton from July, 1971, and to a minimum of £6 from August, 1972, until December, 1972.
§ LORD WALSTONMy Lords, I am afraid I do not quite understand those figures. At the moment, speaking from memory, minimum import prices for wheat are in the neighbourhood of £24 a ton. When he says that they are going to be raised £2 or £3—
§ LORD WALSTONBy £2 or £3. So there will be an increase of something over 10 per cent. in the minimum import price, and therefore, presumably, in all feeding-stuff costs.
§ LORD KILBRACKENMy Lords, will the noble Earl answer the question put by my noble friend Lord Nunburnholme about the proportion of the increase in the price of milk which will be paid to the producer?
EARL ST. ALDWYNNo, my Lords, I am afraid I cannot divide this amount into the proportions for which the noble Lord was asking; but I will try to get the figures for him.
§ LORD STONHAMMy Lords, does the noble Earl agree that this is a record Review, a marvellous Review, if you are a farmer, and a disastrous one if you are a consumer?
EARL ST. ALDWYNNo, my Lords, I would not accept that. I think it is essential for this country to have a reasonably 476 profitable agricultural industry, and the increases that the consumer is involved in are really quite small.
§ LORD BESWICKMy Lords, could I ask finally one easy question? Are we to take it that these increases in various items of food are in accordance with the pledge given by the Party opposite to reduce prices "at a stroke"?