§ 4.11 p.m.
§ LORD BESWICKMy Lords, with permission, I will repeat a Statement made in another place by my right honourable friend the Minister of Agriculture, Fisheries and Food:
"I should like to inform the House of the main decisions reached by the Council of Ministers (Agriculture) at its meeting of 15–16 July in Brussels.
"The main business before the Council was the difficult situation on the beef market throughout the Community. The Council agreed on a number of measures designed to strengthen the beef market and to assure reasonable returns to producers. Much the most important of these measures was the authorisation of the system I myself proposed for direct premia to be paid to beef producers on finished cattle. The purpose of these premia is to sustain producers' returns and to offer an incentive to them to market beef cattle in an orderly manner through the autumn and winter. The maximum rates rise from £9.24 per head in August to £32.34 in February. Arrangements for March and April will be decided following a review in December. The cost will be borne by the Member State from August to October, but thereafter Community funds will bear a proportion rising from 50 per cent. in November to 70 per cent in February.
"The premia will be subject to reduction or suspension only if market prices rise far enough to make this desirable—there is no automatic cutoff price. The Government intend to introduce this scheme with effect from August 5 and I shall announce full details as soon as possible.
"The effect of these premia will be to assure beef producers of a reasonable return, and to offer a real incentive to phase marketings in such a way as to maintain stable market conditions. They amply fulfil the intention I announced to the House on 26 June 1149 of giving our beef producers an assurance that, over a period, their returns would not fall below about £18 per live cwt for clean cattle. If the industry responds to the assurance which these premia will provide, average returns over the period till March should substantially exceed this figure. Permanent intervention still remains an option, but these premia represent an alternative way—in my view a far better one—of supporting the farmer whilst marketing the beef. In this sense they can fairly be said to represent a major change in the Community's beef regime and a new approach to this sector of Common Agricultural Policy. They will sustain producers' returns by direct assistance, while enabling consumers to buy beef at prices they can afford.
"The Council also decided on special measures to encourage beef consumption in the Community. First, they noted the Commission's intention of authorising member countries to arrange for the purchase of frozen intervention beef, at reduced prices, by nonprofit-making organisations. Secondly, they agreed to authorise member countries, at their discretion, to operate schemes under which those in receipt of social benefits could receive financial assistance towards the cost of buying fresh beef in the shops. The authorised rate of assistance is likely to be about £1 per head per month. 50 per cent. of the cost would be borne by Community funds. The Government are considering whether to operate this scheme in the United Kingdom. Thirdly, the Council decided to make aid available from Community funds for campaigns to promote consumption of beef and other meat.
"Finally it was decided to suspend temporarily the issue of licences for imports from third countries, except for the quantities covered by the GATT levy-free quota; and to suspend temporary importation for processing and re-export. Licences which have already been issued will enable some beef imports to continue. The Council also noted the Commission's intention to put intervention beef into cans, so as to provide a stockpile for use in future shortage and as food aid to the hungry people of the world. We think 1150 there are opportunities for much of this beef to be canned in the United Kingdom and I shall be pursuing this with the industry.
"I regard the outcome of the Council meeting as very satisfactory for both producers and consumers in this country. It is a good omen for the further negotiations we intend to carry out in this field."
That is the Statement, my Lords.
§ 4.15 p.m.
EARL FERRERSMy Lords, although this is the third Statement this afternoon, it is none the less important. I should like to thank the noble Lord, Lord Beswick, for repeating this Statement; it will be welcomed throughout the farming community, particularly because it helps to put a floor into what was a very difficult problem, one which was not difficult only to the United Kingdom nor only to Europe, but to the whole world. I should like to congratulate the right honourable gentleman for having worked this problem out with the other Members of the E.E.C. This is the right way to deal with the matters; they have provided not a solution, but an aid in time of trouble.
I should like to ask the noble Lord, Lord Beswick, what he reckons to be the estimated cost which we as a country will have to stand by virtue of the arrangements which we are responsible for looking after up to October. Also what will the cost be to the European Community, and what will be our share of it when the European Community takes over part of the responsibility for this subsidy from October onwards? In the Statement it was said that the European Community authorised Member countries to operate the social benefits scheme. One of the drawbacks of the C.A.P. has always been our expenditure towards it. I hope that the Government will take this opportunity, if there is an opportunity of us getting benefit from the Community, of receiving it. Will the noble Lord give the assurance that when the Government are considering this matter, as the Statement says, they are only considering the mechanics of how to operate the social benefits scheme and not the merits as to whether it should be operated?
Can the noble Lord also give an assurance that die fact that the Minister of Agriculture deliberately decided not to 1151 buy beef into intervention will not itself prejudice or prevent us as a country from taking advantage of the schemes relating to meat which is in intervention? The last point to which I should like to refer is this. I recognise that this is a package and one of the drawbacks of the package—and I recognise this was difficult for the right honourable gentleman to accept—is the cancellation of licences for imports. Can the noble Lord, Lord Beswick, say for how long this is going on, which countries are affected and the quantity of meat affected?
§ 4.18 p.m.
§ LORD GLADWYNMy Lords, while associating myself with the last suggestion made by the noble Earl about imports, on behalf of my noble friends I should like to observe that this apparently satisfactory agreement clearly demonstrates the truth of our constant contention in the Liberal Party that the best way to modify the conditions under which we joined the European Economic Community is by patient negotiation within the existing machinery of the Community.
§ 4.19 p.m.
§ LORD BESWICKMy Lords, I thank both noble Lords for their welcome to this Statement and I also thank the House for the forbearance which it has shown for this third Statement. As the noble Earl said, this is undoubtedly a breakthrough so far as the Common Agricultural Policy is concerned. I do not attempt to deprive the noble Lord, Lord Gladwyn, of the satisfaction he has in being able to say, "I told you so".
So far as the social beef scheme is concerned, the noble Earl asked me whether we shall look at it simply in terms of the administrative difficulties and not as a matter of principle. I have to tell him that there is this question of the merits of increasing the cash availability to those on social security benefits, and this is a point which must be taken into account. Nevertheless, having said this, we are looking carefully at the advantages of the social beef scheme.
The noble Earl asked me about the cost. The total cost will be about £40 million. Of that the cost to the Exchequer could be up to £23 million up to the end of February. Of course, if it goes on beyond that then there will be an addi- 1152 tional cost. The import ban will be up to October 31, and the countries mainly concerned will be Australia and the Argentine. I think that that answers the questions that were asked of me.
§ LORD CLIFFORD OF CHUDLEIGHMy Lords, as a beef producer may I ask the noble Lord whether I am right in assuming that we are going to get £18 per live cwt. as from to-day as a guarantee? Secondly, as I am also an Australian beef producer may I ask whether he could answer the question which I think was put by the noble Earl, Lord Ferrers, as to how long that is going to continue? Thirdly, does he not think that the present capacity for storing beef in Europe is abysmally small? Would it not be a good idea to increase that capacity over the years so that we do not have this up and down fluctuation?
§ LORD BESWICKMy Lords, so far as the dates are concerned I said that this scheme will be in operation as from August 5. I am not saying what the noble Lord will receive for his cattle if he sends them to-morrow. The way this works out is that the noble Lord will receive from the market what he gets at the market and in addition will receive this amount of headage payment, and generally it should bring the figure up to at least £18 per live cwt. I was asked what the situation is so far as Australia is concerned. I believe I answered that. The import ban will be up to October 31.
§ VISCOUNT BROOKEBOROUGHMy Lords, the Commission have agreed in fact to help the Irish Republic during the period from August 5 to October. The Commission have also agreed not to alter the M.C.A., the green pound, at this stage. That has been deferred until December. But if in September the M.C.A. is raised—that is, the green pound recognises devaluation of the pound—that will produce a very big advantage to the Irish Republic. In that event, will the noble Lord represent to his right honourable friend that the Commission should also help Northern Ireland, so that the problem which might have existed between Southern Ireland and Northern Ireland to-day, and could come to exist in September after devaluation of the pound, is not allowed to arise? It is a complicated matter because the green pound is something which it is 1153 difficult to understand; but if one lives on the Border and sees the smuggling going on, then even though one might benefit from it oneself one appreciates it is bad from the point of view of the situation in Northern Ireland.
§ LORD BESWICKMy Lords, as the noble Lord says, the implications of the green pound are very complicated indeed. They are being studied, and if any decision is taken after the study it will be announced.
§ LORD WALSTONMy Lords, may I ask my noble friend in the first place whether he would add my congratulations to those of other noble Lords to my right honourable friend for this very satisfactory outcome of a very difficult problem? May I further ask him whether he would urge my right honourable friend to look with the greatest possible favour upon this proposal for welfare meat, as one might call it, as helping to solve the existing problem and preventing in the future the accumulation of these difficult surpluses, and also promoting valuable social welfare at a difficult time; similarly, to look with favour on the proposal for canning this meat, which has the same beneficial effects on the meat producer and implements the Government's often repeated wishes to help the under-developed countries, particularly those with the lowest standards of nutrition? Finally, perhaps I may ask my noble friend a rather more specific question. As I understood him, these premia are fixed quantities per head of livestock sent. They have nothing to do with weight. They apply equally to a lightweight animal, provided it is fit for grazing, as to a heavyweight animal. Is that so? That is the first specific question of detail. Secondly, he mentioned something like £32 for February. Is that amount to be paid regardless of the price the animal fetches at market, even if it were to fetch £19 or £20 a cwt.? Does it come in solely if the price falls below £18 per cwt., or is it adjusted depending upon the average price an animal will fetch at that time?
§ LORD BESWICKMy Lords, I said we were looking, and I think it is possible to say looking sympathetically, at the welfare meat proposal, although this has an implication which also has to be studied. May I say, in answer to the previous 1154 question that I did not fully answer, that we certainly believe that this is a definite improvement on the intervention scheme, the storing of beef which is both costly and not good for the beef. We are, again as I said in the Statement, looking at the proposal to put the intervention beef into cans—or at any rate I should say "the Commission" because this beef is already in store; and the possibility of putting it into cans for conceivable distribution in certain other areas of the world is something which is being considered. So far as the minimum weight problem is concerned, as my noble friend will know there always has been a minimum weight. The animal at the market has to be approved, has to meet requirements, and there will undoubtedly be a minimum weight. As for the mechanics of this, I thought I had tried to explain the position. The receipts to the farmer will be the amount which he gets at the market plus the figures which I have stated in addition to what he gets in free market.
§ LORD ROYLEMy Lords, in thanking my noble friend I wonder whether I might ask him a question purely and simply on the distribution side. While I have every sympathy in the world for assistance to people on social security, I can envisage so many administrative difficulties in distribution in that way that I believe there would be many loopholes of which people could take advantage. Would it not be better that the meat should be distributed through wholesalers and retailers and ultimately to the consumer at a controlled price for the whole of the Community, rather than to do things in the way which is now suggested?
§ LORD BESWICKMy Lords, the way that is now suggested was agreed at about half-past one this morning in Brussels, and if this is taken up by the individual countries the mechanics will have to be worked out. The difficulties to which my noble friend has referred are one factor which will have to be taken into account.
§ LORD ROBBINSMy Lords, were we to understand the noble Lord to say that this meat which is put into cans will be distributed to areas outside the Community, in which case no senior citizens in this country will have an opportunity of getting a can of intervention meat?
§ LORD BESWICKMy Lords, what I said in my Statement was that the Commission were intending to put into cans that beef which is now in cold store. The idea will be to use this canned beef as a stockpile for emergencies or for possible distribution to the poorer areas of the world.
§ LORD BALERNOMy Lords, in welcoming this Statement, may I ask for elucidation on one point regarding imports—the GATT levy-free quota? Does this constitute a major part of the existing beef imports, or is it either by quantity or by percentage?
§ LORD BESWICKMy Lords, the amount of fresh and chilled beef involved for the whole of 1973 was about 40,000 tons. Only about 15,000 tons were imported in the first half of 1974.