§ 3.42 p.m.
EARL FERRERSMy Lords, with the leave of the House I should like to repeat a Statement which is being made in another place by my right honourable friend the Minister of Agriculture on the meeting of the Council of Agricultural Ministers in Brussels this week. The Statement is as follows:
"The main subjects discussed were sugar, beef and the problem of protein for animal feed arising from United States controls on exports of soya beans.
"There were two issues concerning sugar before the Council. The first related to the subvention to United Kingdom sugar refiners which I announced to the House on March 28, and which is designed to enable us to continue refining Commonwealth Sugar on the same basis as before. The European Commission had warned us that they might have to take the view that this arrangement was incompatible with the Treaty of Rome. I received notification yesterday that the Commission was of that opinion, and so I immediately raised the issue in the Council of Ministers. I explained the importance of this subvention to the honouring of our Commonwealth commitments, and I am happy to tell the House that the Council immediately and unanimously decided to authorise its continuation for the next 12 months.
"The second issue related to the arrangements for sugar from 1975, with the three interrelated aspects of continued imports from the developing 1162 Commonwealth, the European Economic Community's membership of the International Sugar Agreement and the future arrangements for sugar beet in Europe. The Commission tabled farreaching proposals on all these aspects. Obviously they will require detailed study, but I should like to call attention now to three points. First, they provide for the continued import of the full 1.4 million tons a year from the developing Commonwealth, and so are intended to honour the Lancaster House assurances in letter and in spirit. Secondly, they would enable the Community to participate very constructively in the resumed negotiation for a new International Sugar Agreement. Thirdly, they should provide scope for us to secure a justified increase in British beet sugar production as the Australian quota is phased out. I am glad to say that, although obviously all wanted a chance to study these proposals further, the will to honour the commitment to continue to import 1.4 million tons was evident in the initial comments of most Ministers.
"The Council also discussed the reduction in cattle prices which has taken place recently. It was decided that import duties which are at present suspended should be restored if the average Community market price falls below 103 per cent. of the guide price for one week. The effect on United Kingdom retail prices should be marginally beneficial, since although we should have to reintroduce import charges these would be offset at the current value of the pound by the application of monetary compensatory amounts as subsidies on our imports. Exports from the Irish Republic both as stores and as fat animals which have recently been attracted away from their traditional outlet in the United Kingdom will be likely to revert to this country.
"On protein feedingstuffs, the Council decided to put in hand the consideration of the possible diversion from intervention stocks of 50,000 tons of dried skim milk for use in pig and poultry feed between now and the end of the year if the need should arise, and also the possibility of expanding protein production in the Community. These matters will be considered further 1163 in the light of the outcome of the visit which the Agricultural Commissioner, Mr. Lardinois, is to pay to Washington this week and in the light of the protein supplies likely to be available from the U.S.A. and Canada.
"I also raised briefly the question of welfare of animals in transport and at slaughterhouses. The matter is to be discussed now at official level and will be on the agenda of the Council for further discussion in September."
§ My Lords, that concludes the Statement.
§ LORD HOYMy Lords, we are grateful to the noble Earl for repeating the Statement made by the right honourable gentleman the Minister of Agriculture in another place. May I ask the Government what steps the Minister is going to take regarding transport of live animals? After all, he is faced with the position created in another place which so overwhelmingly told the Government that there must be no more export of live animals. How do the Government propose to undertake this task? One has also to take into account the importance of this section of the industry so far as agriculture is concerned, so that we should be grateful to hear what proposals the Minister has to place before the other Ministers when they meet in September.
On the subject of the difference in cattle prices, I wonder if the Minister could say whether these falls have been reflected in the purchasing power of housewives at home. Have they been reflected in the shops? This is where the importance of any reduction will be appreciated. Secondly, I should like to know why the Minister thinks that, merely by changing the form of compensation that is proposed, more cattle, either store or fat, will be diverted from Southern Ireland to this country. How does he think that this simple change will allow this to take place? Since the figures we have of imports from Southern Ireland are fairly well established under the Anglo-Irish Treaty and the Irish Agreement, the House would also like to know, I think, whether in fact they do meet that commitment in this respect.
Most important, of course, is the question of the Sugar Agreement. I must say 1164 that the Minister's account of it appears to be quite cheerful, but if one cares to read the official reports of the meeting the position is not quite as the Minister has put it in his Statement. First of all, the Minister quoted the date on which we debated the Sugar Agreement, March 28; and the House was then assured that the position of the Commonwealth sugar producers had been totally safeguarded. Now we hear that the Commission have intimated—not only did they intimate but they told the Minister pretty firmly—that what Britain was doing was in fact a contravention of Article 92 of the Treaty of Rome. Having had this unanimously agreed to, we then had to adopt another tactic, as I understand it. And is it not a fact that when we went to the Committee of Ministers we were appealing against a decision arrived at by the Commission? While the Ministers have agreed to give us the waiver, it is a waiver that will last only for 12 months. Surely this cannot give any great assurance to the Commonwealth sugar producers, because they cannot continue the practice of producing sugar on a year-to-year basis. They understood when the first Agreement was reached that they had an assurance for practically all time. Can the Minister tell us what is proposed in order to put the Commonwealth sugar producer back to where he thought he was when the first Agreement was made in March of this year?
§ LORD WADEMy Lords, I should like to join in thanking the noble Earl for repeating this Statement, but would also ask him whether he can give a little further clarification on the subject of the timetable. I certainly welcome the announcement that the commitments of Her Majesty's Government to the Commonwealth countries will not be inhibited. I think we are all aware that the production of sugar is very important to certain of the Commonwealth developing countries, particularly those in the Caribbean. Long-term planning is essential for sugar production. It is not quite clear to me what the position is over a period of time. The noble Earl referred to the next 12 months in the case of this extension, and under what he called the "second issue" he referred to arrangements for sugar from 1975. Is he able to say for how long a period the safeguards of the interests of the sugar 1165 producers in the Commonwealth will continue, or is that a matter for resumed negotiations? If I remember rightly—this is my last point—even the Lancaster House assurances were not in any way indefinite; they were only for a period of years. I think the crux of the matter is the period of time for which the safeguards will continue.
§ 3.52 p.m.
EARL FERRERSMy Lords, perhaps I may answer the questions put by the noble Lords, Lord Hoy and Lord Wade. The noble Lord, Lord Hoy, first asked what Her Majesty's Government were going to do about the export of live animals, having regard to the view expressed by another place the other day. Quite clearly, Her Majesty's Government will take into account that view, and are at present considering what action should be taken to give effect to the view expressed by another place last week.
The noble Lord also referred to the falls in the price of beef to which the Statement referred, and asked whether these would be noticeable in the price of beef in the shops in this country. Of course the falls that have taken place in the European Economic Community have varied from country to country. In this particular country over the last few weeks the fall in market prices for beef has been of the nature of 1½ per cent. Various countries have experienced greater falls, the highest being Germany, where there has been a fall of up to 10 per cent. Therefore, in this country, where the fall has been in the nature of only 1½ per cent., the effect will be less marked than would otherwise have been expected.
The noble Lord, Lord Hoy, was also concerned as to why exports of beef from Southern Ireland should now find their way into this country as opposed to the European Economic Community. The fact is that once the price of beef falls below 103 per cent. of the guide price for a period of one week, then the European Economic Community will impose the tariffs which it had previously removed. This would in fact be a direct disincentive to sales from Southern Ireland to the other members of the Community, which the removal of those tariffs had reversed, and it would, therefore, tend to make the products from 1166 Southern Ireland, which temporarily have been going to the European Community, come to this country.
Both the noble Lord, Lord Hoy, and the noble Lord, Lord Wade, were concerned, and with justice, about the future of sugar. Clearly, the Community decides the intervention prices for raw and refined sugar one year at a time, and the present prices will last until the end of June 1974. The Community will have to decide the prices for 1974–75 before then. But it is a fact that the Commission made it perfectly plain that they thought that it would be indefensible for the Community to import less than 1.4 milion tons, and indeed I think no country other than France challenged this. I have no doubt that the Lancaster House assurances, which were given by this Government after consultation with the Commonwealth producers will be met. Indeed in the Treaty of Accession, in Protocol No. 22, Section 3, which was signed by the Community and this country, it says:
'The Community will have as its firm purpose the safeguarding of the interests of all the countries referred to in this Protocol whose economies depend to a considerable extent on the report of primary products and particularly of sugar.This is a commitment made by the European Community. All the Ministers, with the exception that I mentioned, have agreed in principle that the figure of 1.4 million tons for the import of Commonwealth sugar is reasonable.
§ LORD HOYMy Lords, the noble Earl has not dealt with the main point. Is it not a fact that the Commission said that it was a contravention of Article 92 of the Treaty of Rome for Britain to pay this £4 a ton to Commonwealth sugar producers, without which, obviously, it would be quite uneconomic to send sugar to this country? Was it the Commission who said that Britain was wrong to do so, and so was contravening Article 92? The waiver took place only when the matter went to the Council of Ministers, and that waiver will last for only twelve months.
EARL FERRERSMy Lords, of course the £4 a ton to which the noble Lord refers is not paid to Commonwealth producers, but to the refineries in order to enable them to have the equivalent of £17 a ton margin. It is perfectly true 1167 that the Commission put their view that this was in contravention of the European Economic Community's obligations. But, of course, under Article 93, Section 2, of the Treaty of Rome any Member State is permitted to appeal to the Council when it considers that there are special reasons for disagreeing with the Commission. This Article permits the Council to derogate from the conclusions of the Commission. It was upon that basis that my right honourable friend the Minister for Agriculture took this matter to the Council of Ministers, and they agreed unanimously to derogate from this particular recommendation.
§ LORD BESWICKMy Lords, I am sure the whole House warmed to the noble Earl when he quoted these words, that we were going to honour our obligations in letter and spirit. If the noble Earl really means to honour our undertakings in letter and spirit after 1975, we shall be behind the Government in that regard. But would he not agree that there is room for some doubt still when one looks, for example, at the statement made in Brussels by M. Henri Cayre, the President of the Confederation of European Beet-growers, when he said that had the Council really meant that they were going to let 1.4 million tons of Commonwealth sugar come into Europe they would never—and I quote—
…have taken the trouble to search out the now famous wording of Protocol 22".M. Cayre went on to say:European producers are guaranteeing European self-sufficiency and have every intention of going on doing so.In the light of that sort of attitude, what would be the position of Her Majesty's Government?
EARL FERRERSMy Lords, first, let me make it plain to the noble Lord, Lord Beswick, that what the Statement refers to as the intention to honour the Lancaster House assurances in letter and spirit does not apply just to Her Majesty's Government but to the European Economic Community.
§ LORD BESWICKAfter 1975?
EARL FERRERSYes. It is perfectly true that the French have always had a different attitude, and up to a point their attitude is understandable. They have 1168 always made it plain that it would be difficult for them to accept a cut-back in their own production to make room for Commonwealth sugar. But I can only assure the noble Lord, Lord Beswick, that discussions and negotiations are bound to go on, and people will put conflicting views. The European Economic Community accepted what is known as the aura à cæur, as indeed did this country, and it is our belief that the European Community as a whole intend to honour this particular agreement.
§ LORD SHINWELLMy Lords, is it not remarkable that Mr. Godber, who I am certain is doing his best in the interests of the United Kingdom, in the course of his Statement made no reference to the intransigent attitude of the French Minister of Agriculture who for the past ten days, according to reports in reputable newspapers in the United Kingdom, has been breathing fire and fury and declaring that on no account must there be any interference with French agricultural interests? Is that not the reason why so many of the items which have been referred to by the noble Earl arising from the Statement made by Mr. Godber have been deferred until the next meeting of the Council of Ministers? Is it not also the fact that we are experiencing considerable difficulty because of the attitude of the French?
EARL FERRERSMy Lords, I do not think that it would have been helpful had my right honourable friend mentioned, in a cool and reasoned Statement, that the attitude of the French Minister was intransigent. Our purpose is to negotiate over details and problems of the European Community. We have always accepted, and indeed every member has accepted, that there will be differences of opinion and differences of demand and requirements from different countries. It is in order to resolve this that there will be decisions and discussions at which different points of view will be put forward.
With regard to the question of the Sugar Agreement, it has been acknowledged and accepted as part of our joining the Community that we and the Community should have respect for the obligations that we have previously had to the sugar developing countries. To the best 1169 intentions of the European Economic Community, this is what they intend to honour.
§ LORD BESWICKMy Lords, in the statement from which I quoted from M. Cayre, he also said:
Sugar is just one vehicle for aid. Its absence in one country can be replaced by another form of aid.Has this possibility been part of the discussions to which the noble Earl referred? Is there a suggestion that we should buy off the Commonwealth countries by some other form of aid?
EARL FERRERSMy Lords, there has been no suggestion, to my knowledge, that any of the Commonwealth countries should be bought off by any other kind of aid. The whole purpose is to ensure that the sugar production from those countries should have a ready place within the Community. I can only repeat that, with the exception to which noble Lords have referred, the Ministers of the Council have been of the opinion that this should be done.
§ LORD WIGGMy Lords, does not the noble Earl realise that it is no use the Government, on the one hand, blaming the sharp rise in the price of commodities on to world conditions when they, by their action, have created the conditions of shortage? Is he not aware that one of the consequences of the uncertainty about the future of refining costs is to diminish the production of sugar in Jamaica? Is he not aware of the extraordinary situation last winter in Jamaica, a country which is one of the most natural low-cost producers of sugar, that it was without sugar because production had been cut down under the shadow of the agreement which the Minister has announced to-day?
EARL FERRERSMy Lords, there was a conference at Lancaster House some two years ago which was attended by all the countries of the Commonwealth who were involved in sugar production. It was decided then what would be the appropriate level of imports of sugar from those countries. With regard to the future, it is Her Majesty's Government's hope and intention that that undertaking should be approved and should be kept. Of course it is up to the Commonwealth sugar producing 1170 countries themselves to negotiate directly with the European Economic Community on future supplies, in which of course Her Majesty's Government are extremely interested.
§ LORD NUGENT OF GUILDFORDMy Lords, is my noble friend aware that his observation that there is likely to be an improved prospect for sugar beet growing in this country will be very welcome? Can my noble friend, knowing, as he does, the great value of sugar beet as a break in the corn rotation, tell us how this prospect might mature in terms of an increased sugar beet acreage here?
EARL FERRERSMy Lords, I think that we are getting a little premature on that. I would tell my noble friend Lord Nugent that the reason behind this is the fact that there will be the phasing out of the Australian sugar quota in the course of the next few years, and that supply of sugar which, at the moment comes from Australia, will have to come from some other parts of the European Economic Community. It is cur hope that some part of that will come from this country.
§ LORD BALERNOMy Lords, may I ask my noble friend whether the Government are aware that a continuation of this acute shortage of vegetable protein will almost certainly result in a rise in the price of beef? May I ask whether he has any information as to when, if ever, the United States is likely to raise its embargo on the export of soya beans?
EARL FERRERSMy Lords, it is perfectly true that the shortage of protein is bound to cause great concern to producers of beef, and indeed to the Government, because it is bound to result in a rise in prices. I can only tell my noble friend Lord Balerno that M. Lardinois is going over to America this week to discuss the position with regard to soya beans. My understanding is that there is likely to be a better crop there of soya beans this year than last, and if this is so possibly it will help to lessen the effects of the world shortage of protein. I cannot give my noble friend the answer as to whether and when the United States will lift the embargo on exports of soya beans.
§ LORD WIGGMy Lords, would the noble Earl not agree that the problem can be expressed arithmetically quite simply? In Jamaica we are paying £64 a ton, but the agreement for beet sugar which was welcomed by the noble Lord below the gangway is at £100 a ton. Of course the farmers in this country welcome it. That is what the French want—£100 a ton. The French being what they are, is he not aware that they have hit on the slick idea of withdrawing the subsidy for refining costs, and as it is more expensive to refine the sugar from Jamaica, if they withdraw the subsidy here it will work against the sugar that comes from the Commonwealth?
EARL FERRERSMy Lords, the point is that the subsidy has not been withdrawn. I would only say, in deference to the noble Lord, Lord Wigg, that when he says that he found that the problem was arithmetically simple, I have never found anything to do with sugar, Commonwealth sugar agreements or international sugar agreements, in any way simple.
§ LORD WIGGMy Lords, the point is that the row with the French is that they want to withdraw the subsidy on refining because they want us to favour beet sugar.
§ BARONESS WHITEMy Lords, would not the noble Earl agree that it is all very well for the noble Lord, Lord Nugent, to speak up for the beet sugar growers in this country, but they are capable of growing other crops, whereas there are many sugar islands, particularly in the Commonwealth, which are not capable of growing other crops? Surely we have always regarded sugar as the touchstone of whether or not the Economic Community was really concerned about the Third World. If we do not speak up for the Commonwealth sugar countries and prefer to take votes from East Anglia, we are really in breach of our moral obligation to our Commonwealth partners.
EARL FERRERSMy Lords, I think that the noble Baroness, Lady White, has 1172 slightly turned the implication—I am sure unwittingly—which my noble friend Lord Nugent put into his question. Her Majesty's Government have always been concerned about the Commonwealth sugar interests. That is the reason why they convened the Lancaster House Conference, and that is the reason why, having come to an agreement, they were able to persuade the European Economic Community to write into the Treaty of Accession that which has been written into it and which I have quoted. I would only repeat—and I accept that this is a very important point—that the Commission made it plain this week that they thought it would be indefensible for the Community to import less than the 1.4 million tons, and no country other than France challenged that.
§ LORD ABERDAREMy Lords, I wonder whether I may suggest to your Lordshops that as we have been nearly half-an-hour on this Statement, and are in the middle of a most important Committee stage of a very important Bill, we could perhaps have just one more question and then call it a day and move on to the next Business.
§ LORD WALSTONMy Lords, I shall put my point as briefly as I can, declaring my interest as an East Anglian sugar producer but one who does not have a vote. I hope the noble Earl was not accurately reflecting Government policy when he indicated that the coming to an end of the Australian sugar quota would mean that this sugar would be replaced by sugar beet from Europe. I should hope a good proportion of that sugar, if not all of it, might come from the developing countries of the Commonwealth and elsewhere. May I at the same time, while welcoming the one year's Agreement which has been achieved and about which I am certainly very happy, as I am sure the sugar producers in the Commonwealth will be, reiterate the point made by my noble friend Lord Hoy and by my noble friend Lord Wigg, that sugar production is a long-term business, and express the hope that Her Majesty's Government and the Minister of Agriculture, in particular, will press upon their colleagues in the Community the overriding necessity of having long-term agreements for all these products, particularly sugar?
EARL FERRERSMy Lords, I sympathise with the wish of the noble Lord, Lord Walston, to have long-term agreements for these commodities, a wish which I think will be shared by a great many people and by a great many countries. I hope that I did not give the impression that when the Australian sugar quota came to an end all of that production would be absorbed by beet growers in this country. If I gave that impression, it was an erroneous one. Clearly, there will be a gap left by the sugar which at the moment comes from Australia, and it will be a matter of negotiation as to how that gap will be filled. It is not impossible that some of it might be filled from elsewhere.
§ LORD SHINWELLMy Lords, I do not want to put a question. I want merely to ask whether I may voice a vote of thanks to the noble Earl, Lord Ferrers, for having made a better defence in this House of the Statement which was made in the other place by the Minister of Agriculture.