HL Deb 20 March 1973 vol 340 cc635-41

4.36 p.m.


My Lords, there are two Motions down in my name on the Order Paper, one concerning the Fatstock (Guarantee Payments) Order 1973, and the other the Calf Subsidies (United Kingdom) (Variation) Scheme 1973. Again it may meet the convenience of the House to discuss both Motions at the same time. As your Lordships will see, both Orders deal with subsidies and with stock. I should like at the outset to refer to the market price for fat cattle as this forms the background to these Orders.

The market price of fat cattle has over most of the past year been above the level of the guaranteed price because of the world market situation of beef. As a consequence, no guarantee payments have been made since the week beginning May 8, 1972, and it seems clear that no more will need to be made in the last week or two of the current fatstock year. The fat cattle guarantee has therefore already become rather theoretical. On February 1, the United Kingdom adopted the Community mechanism of support for beef. This means that market prices will, if necessary, be supported by the system of duties and levies on imports and by new intervention arrangements which the Community has decided to introduce.

These new arrangements provide beef producers with a firm assurance against the possibility of market prices falling to an unduly low level and so they are fully adequate to replace the guarantee arrangements. That is why we decided to terminate the guarantee for fat cattle. This was done by laying the Common Agricultural Policy (Termination of Guarantee Arrangements) (Fat Cattle and Rye) Order. That is not the subject of debate this afternoon as it requires the Negative Resolution procedure.

My Lords, that is the background to these two Orders. The Fatstock (Guaran tee Payments) Order which is before your Lordships merely re-enacts to a considerable extent the provisions of the Orders which it revokes. But it excludes provisions for fat cattle, since they are no longer required. As before, the provisions for fat sheep enable guaranteed payments to be made each week if the market price falls below the guaranteed price expressed on a weekly basis. It also enables the rate of payment to be adjusted if prices fall below the levels estimated for each week. This mechanism is to encourage producers to market sensibly and to hold off their marketing if prices fall unduly low.

The two changes for pigs are also straightforward. The first is that the flexible guarantee for pigs, which has provided a kind of production target, will cease to operate after March 25. The setting of a United Kingdom production target would no longer be appropriate within the European Community, and it could also have imposed a disincentive on the home producer at the start of transition. Secondly, the arrangements relating to the feed formula are being slightly modified. The new Order enables Ministers, should they think it appropriate at some stage, to terminate the feed formula while retaining the basic guaranteed price.

My Lords, the Calf Subsidy (United Kingdom) (Variation) Scheme merely makes essential legal changes so that the existing Scheme can continue. These changes are necessary because, as I explained earlier, fat cattle will be removed from the guarantee arrangements from March 26. I trust, my Lords, that that explanation will indicate what these Orders are about, and I beg to move the first Order.

Moved, That the Fatstock (Guarantee Payments) Order 1973, be approved.—(Earl Ferrers.)

4.42 p.m.


My Lords, we are grateful to the noble Earl, Lord Ferrers, for explaining what these Orders are about. It is a little unusual when the Minister producing an Order says, "You know, this is a complete misdescription of this Order, and guaranteed prices are no longer guaranteed." What the Minister has said is that the price level has now risen so high that the guarantee is of no use. To bring in an Order of this kind, describing guaranteed prices and an assured market, seems to me to indicate that the Minister and the Department of Agriculture, Fisheries and Food, might well be prosecuted by the Department of Trade and Industry under the Trade Descriptions Act. Here they have introduced an Order which they say means nothing at all and which certainly does not conform with the description. But I will not quarrel with the noble Earl over that. In the old days I used to argue that the Treasury should have been a little more generous over guaranteed prices because they never had to pay out what they guaranteed.

I may have misread the Order, but I differ with the Minister so far as the pig guarantees are concerned. On page 3, the Order states, in paragraph 5: Provided that in the case of fat pigs any such guaranteed price may be related to a price per hundredweight of a basic feedingstuffs ration determined in respect of the guarantee period. I find it a little difficult to understand what that means, and I am not offered a further explanation if I turn to page 5, where, in paragraph 11, it states: The Minister may until such time as he may determine ascertain in respect of each week of each guaranteed period an average price per hundredweight of the basic feeding-stuffs ration; such price to be ascertained by reference to the prices of the basic feeding-stuffs during such period as may be determined by the Minister. I think that calls for a little explanation. Secondly, is the Minister saying that it is a change in the price that is being announced? Is he saying that the guaranteed price will go and that the Government will substitute an intervention price for pig feed? It is a little difficult to understand. I would not ask the Minister to explain what all these guaranteed weeks or periods mean, but I am certain that he would be delighted to tell your Lordships whether these particular provisos in this Order intimate changes so far as guaranteed prices are concerned.


My Lords, may I ask my noble friend a question? He referred to the E.E.C. guarantee as being better than our own. Would he illustrate that with the figures? My other point is: is it not time that we stopped calling these animals "fatstock"? The British people do not like fat. They would much prefer to have Orders dealing with "mature stock" or some such term as that. "Fatstock" revolts them.


My Lords, I will certainly take note of the fact that my noble friend, Lord Hawke, does not like the word "fatstock". I do not know whether he would like it if all animals consumed by the public were to be described as "leanstock". I doubt whether that would suit his palate or his plate.


My Lords, that is exactly what the public are asking for.


Maybe they are, my Lords, but I think that the noble Lord would find that if the public were presented periodically with lean animals which were either immature or too mature, that would not be palatable. I take my noble friend's point, but I think it would be promising too much to suggest that this word would be altered in future.

To deal with my noble friend's question first, it refers of course to fat cattle. His question was, what would be the comparative prices of fat cattle? It is always difficult to assume a direct comparison, and, if I may preface my remarks with that observation, I will give my noble friend such figures as I can. The guarantee system is different from the European Community system and therefore it is difficult to get an exact figure, but if there were no change in the Community guide price for cattle for 1973–74, the United Kingdom guide price—which, of course, would be different from the Community guide price because of the transitional period—would be £14.87 per live hundredweight. That refers to all cattle, including culled cows to which the guarantee does not apply. It is the equivalent of a price of at least 80p. per live hundredweight higher; in other words about £15.70 per live hundredweight, if it is looked at in terms of the price of clean cattle which would be eligible for the guarantee. So if my noble friend will take that figure of about £15.70 and refer back to the existing guarantee level for cattle, which is £13.20, I think he will get an idea of the comparison.

The noble Lord, Lord Hoy, said that it was a bit of a swindle to call it a guaranteed prices Order when there was no guarantee. There is, of course, a guarantee, which is that if the market price drops too much, the Government come in, and that produces a guarantee. I agree with the noble Lord that over the last several months this action has not been necessary in the case of fat-stock. He drew attention to paragraph 5 of the Order and asked me to explain what this meant. In fact there is no great change from the Order that existed previously, other than that it states: Provided that in the case of fat pigs any such guaranteed price may be related to a price per hundredweight…". In the old days it read: …shall be related to the price per hundredweight". This permits the Minister to incorporate the feed formula system in the guaranteed price but it does not make it mandatory on him to do so. As I explained earlier, there may be an occasion in the future where the food formula will be removed from the guaranteed price. That is the only alteration in that section.


My Lords, this is the reason why I raised the point, because every time this question has come up in your Lordships' House or in another place we have always been told by Government spokesmen, irrespective of Government, that "may" means "shall" and shall "means "may". I wondered if what the noble Earl is now saying indicates that the two words have a completely different meaning. I wanted to know this for future reference.


My Lords, as one who used to speak from the Dispatch Box, the noble Lord, Lord Hoy, surprises me if he thinks that "may" and "shall" are the same. I should have thought that there was a considerable difference, in that one makes it mandatory upon the Minister to do something and the other makes it permissive. That is the change. With regard to page 5, to which the noble Lord, Lord Hoy, referred, this is merely the continuation of the new formula.


My Lords, before the noble Earl sits down, perhaps I may ask a simple question. I find it difficult as an ordinary consumer to follow about "clean cattle" and "fat cattle" and so on. Can the noble Earl give us any indication whether we. can expect the retail prices of beef, pork and so on to be higher or lower?


My Lords, as this scheme works, it will not affect retail prices at present.


My Lords, I thank my noble friend for those figures, which were most interesting. I think this proves that the high price of beef in the shops has nothing to do with our going into the Common Market. I make out, from his figures, that approximately 6p to 9p a lb. in the butchers' shops will be the difference between our old guarantee and the new guarantee; and, goodness knows!the price has gone up a great deal more than that. So it is a scarcity price and not an E.E.C. price that we are suffering to-day.


My Lords, I am grateful to my noble friend for confirming this. The Government have been saying for a long time that the high price of meat is due to a world shortage, and a world increase in the price of cereals, as opposed to our entry into the Common Market. My noble friend is quite right in saying that the high prices which we are experiencing, and which we deplore, have nothing to do with the Common Market.


My Lords, I do not want to prolong this discussion unnecessarily, but I am provoked into doing so by the noble Lord, Lord Hawke, who said that he is delighted, because the only reply he got was that as a consequence of going into the Common Market the price would go up still further. I am not going to argue at this time as to what has been responsible, but when you get an answer of that kind and seek to convert it into a saving to the housewife, then I think the noble Lord goes a little too far.


My Lords, the Government must not be allowed to get away with this canard that their difficulties arise from world prices. It is true that world prices have risen, but as the noble Lord, Lord Butler of Saffron Walden, will know, when he was in charge of Conservative propaganda in the 1950–51 Election, the fact that world prices were moving against the Labour Party was treated with cries of derision from Tory quarters, and it was said that it was not an argument that could then be put forward. Nor was the fact that from 1950 up to the 'sixties the terms of trade on a world basis moved in favour of this country and was of considerable assistance to the Conservative Administration over those years. Those facts were completely ignored. Only now when the question of world prices have moved against this country (and this is true) can it be used as an excuse. They must not be allowed to get away with it, because at a time when world prices are rising they have abandoned the historical cheap food policy of this country; and without any shadow of doubt, the fact that they have done so and have gone into the Common Market has exacerbated an already difficult situation. So that the responsibility for rising prices is the responsibility of the Government. They cannot be allowed to get away with it and, so far as I am concerned, they certainly will not. Yesterday this House passed a Bill which was I may say the vernal instalment of our entry into the Common Market. On April 1 we move forward to the second instalment, and we shall go on. We are paying instalment after instalment, arising from a muddleheaded, obstinate, incompetently applied policy by the Government, and I shall on every occasion nail them down on this issue.

On Question, Motion agreed to.