HL Deb 14 February 1978 vol 388 cc1336-44

Lord WALLACE of COSLANY rose to move, That the Beef Premiums (Protection of Payments) Order 1978, laid before the House on 11th January, be approved. The noble Lord said: My Lords, I beg to move that the Beef Premiums (Protection of Payments) Order 1978, which was laid before this House on 11th January, be now approved.

This order makes statutory provision to protect Community and Exchequer payments resulting from the operation of the Beef Premium Scheme. Perhaps it would help if I were to remind noble Lords of the essential elements in our beef support system. Alone among Community countries, we operate intervention and variable premiums in tandem. Intervention here is run on broadly the same basis as elsewhere in the Community. The premiums are similar to the deficiency Payments which we used to operate under the Fatstock Guarantee Scheme. What is unique about our arrangements is that intervention and premiums are linked. The average target price is worked out on a seasonal scale of weekly target prices very similar to the old Fatstock Guarantee Scheme scale, but within limits laid down by the Community. When the average market price for clean cattle in any given week is below that week's target price, a premium is payable to make up the difference between the average market price and the target price. This secures producers' returns.

A good deal of money is at stake in the premium system. Since 1974, we have paid in successive years £56 million, £90 million and £9 million, to the end of the last financial year. Most of this comes from the United Kingdom Exchequer. In point of fact, as f understand it, the proportions are 75 per cent. United Kingdom and 25 per cent. EEC. I should say, however, that the expenditure for the current financial year is estimated to be over £20 million. It is, therefore, very important that our payments should be adequately protected and that is what the order before your Lordships seeks to do.

It provides for the examination, certification and marking of animals and carcases by and on behalf of the Intervention Board for Agricultural Produce; for records to be kept of purchases, sales and slaughter of certified animals, and for the production of these records and movement records pertaining to cattle. It affords protection against double payment of premium and prohibits the use of certified animals for breeding or milking and authorises the Board to require their slaughter.

This order replaces similar legislation which was approved by the House on 17th April 1975. The House will therefore wish to know why it is now necessary to re-make the order and add new powers to it.

The new provisions are necessary for the following reasons. First, since the 1975 order was passed by the House, the requirements of the EEC have been tightened up to require that an animal on which a premium is paid must be slaughtered in the Member State where it is certified and not elsewhere in the Community. However, this requirement can be waived if the premium that the animal has earned is repaid to the Intervention Board. This means that the exporter must know how much premium was paid and be under art obligation to repay that amount to the appropriate authority. The order now before the House makes such provision.

Secondly, the House will recall that, as from April 1976, certification for premium in Northern Ireland has been confined to carcases, with the exception that eligible live animals exported to Great Britain may be certified at the port. This order makes provision for the marking and certification of such animals.

Thirdly, the order will permit the Board to require the marking of animals imported into the United Kingdom. This is necessary to ensure compliance with the EEC Regulation which permits premiums to be paid only on animals born and reared in the Community. It will also protect against a second premium being paid on any animal. This provision was previously contained in the Imported Livestock Order 1958, the relevant sections of which are revoked by this new order.

It has also been necessary to amend the marking provisions for animals approved for certification to permit marking in either but not both ears. As this is a complicated matter to explain, we have placed a memorandum on it in the Library and, indeed, in the Printed Paper Office. Briefly, the need for the changes comes about because of the imminent ending of calf subsidy. At present animals presented for certification have generally either received a calf subsidy (right ear punched), or have been imported (left ear punched). In each case the opposite ear is then punched on certification. Clean eared animals—that is to say animals which have neither ear punched—may not be certified live.

Thus fraudulent representation of certified animals can be prevented. Because of the ending of calf subsidy, an increasing number of animals presented for certification will in furure have clean ears and to avoid the need for double punching and to maintain protection against fraud, we need to move to punching the left year only for certification.

As the first step to achieving this, it is necessary to change the import mark to the right ear as soon as possible. After a period of transition during 1978 we shall then be able to drop the marking of animals imported from the Community countries into Great Britain, but it will be necessary to continue ear punching imports from the Republic of Ireland into Northern Ireland. Thus, we shall in due course be able to reduce very considerably the amount of ear punching. So as to avoid any confusion among applicants for premium or others associated with the marketing of fat cattle, a notice indicating which ear is to be marked will be displayed at every centre while marking is in progress.

Finally, the opportunity has been taken to obtain statutory cover for an arrangement to overcome problems which some applicants for beef premium can face in the more remote parts of the United Kingdom. The provisions in the order will enable a producer in such a remote area who owns animals intended for slaughter in his own butchery business, to obtain premium payments by having his animal accepted for certification and marked at a live market but leaving the certification process to be completed only when the animal is actually slaughtered in his own abattoir. I commend the order to the House and beg to move.

Moved, That the Beef Premiums (Protection of Payments) Order 1978, laid before the House on 11th January, be approved.—(Lord Wallace of Coslany.)

6.54 p.m.

Lord SANDYS

My Lords, your Lordships will be grateful to the noble Lord, Lord Wallace of Coslany, for repeating the details of this order. It is, in fact, a very controversial order. Noble Lords may have examined the Ninth Report from the Joint Committee on Statutory Instruments, the Committee of both Houses which scrutinises delegated legislation. In its report that Committee had a great deal to say about this particular order. It is significant in the Ninth Report, where they were considering no less than 26 Statutory Instruments, that this particular one aroused their anxiety.

The Committee said: In the opinion of the Committee, section 6(3) of the European Communities Act 1972 does not have the effect of extending section 5(1) of the Agriculture Act 1957 to cover arrangements which may be made as well as arrangements in force, and the Order would be ultra vires of construed in the way intended by the Ministry. The Committee consider, therefore, that the drafting of the Order is defective in that article 3(1) refers merely to "Community arrangements", rather than to "Community arrangements in force", thereby inviting a construction of the Order which would make it ultra vires". This, of course, is a matter of great concern, but I understand that the law officers, who were invited to examine this matter in detail, have been able to report to another place that it is, in fact, entirely in order. We understand that a Statement was made to that effect by Mr. Bishop, the honourable friend of the noble Lord, Lord Wallace of Coslany, this afternoon. I believe that on all occasions we should take note of what the Joint Committee says about a particular Statutory Instrument, and I hope that for record purposes what I have said this afternoon will settle that particular point.

There are three questions that I should like to ask the noble Lord about this order. First, can he confirm tile date of the ending of the calf subsidy? Secondly, in regard to the memorandum by the Agricultural Departments and the Intervention Board on marking the ears of animals, can he confirm that copies of this document will be liberally available at ports and other centres? The noble Lord referred to that, but, of course, it is important that the notices to be displayed at ports and other places should be changed at the dates mentioned, because, as the noble Lord described, this is a complicated matter.

Thirdly, I think it would be helpful if the noble Lord could give us a few more details about both the carcase trade and the live trade with Northern Ireland and the Republic of Eire—indeed, I have given the noble Lord private notice of that question. Finally, we, on these Opposition Benches, welcome this form of support. The combination of premium and intervention has worked well since the Scheme was introduced early in 1975.

Lord GLADWYN

My Lords, I hesitate to intervene in this discussion because I am in no way an expert on beef premia. I do so merely because my noble friend Lord Airedale cannot be present at the moment and he has asked me to say a few words, which I suppose should follow on from the remarks just made by the noble Lord, Lord Sandys.

I should like to refer to the Ninth Report from the Joint Committee of both Houses appointed to scrutinise delegated legislation, to which the noble Lord, Lord Sandys, referred. I understand that the Ministry of Agriculture, Fisheries and Food maintains that Section 5(1) of the Agriculture Act 1957 must be interpreted as meaning that orders made under it cover arrangements which may be made in the future, as well as arrangements in force at the time of the making of the order; whereas the Joint Committee feels that the wording of the section and more particularly its reference to "arrangements in force," limits its effect to arrangements in force at the time of the making of the order and not to future arrangements.

If it is merely a matter of drafting, no doubt Article 3(1) could be altered so as to refer simply to "Community arrangements in force rather than to "Community arrangements". But, on the face of it, there seems to be a rather fundamental difference of approach on this matter. If the Minister of Agriculture, Fisheries and Food is right in praying in aid Section 6(3) of the European Communities Act 1972, which seems to provide that Section 5 of the 1957 Act: shall apply in relation to any Community arrangements for or related to the regulation of the market for any agricultural produce", then presumably we might not be acting in accordance with the provisions of the Treaty or Rome if we restricted the application of the order in the way proposed by the Committee.

I understand, however—and I had not heard this before—from the noble Lord, Lord Sandys, that this matter has been referred to the Law Officers of the Crown who have pronounced against the opinion of the Joint Committee and in favour of the thesis put forward by the Ministry of Agriculture, Fisheries and Food, in which case there is nothing more to be said. Of course, if the matter ever arose in the future and this order was reversed in spite of legal obligations, I imagine that in the last resort the point would have to be submitted by the Commission to the European Court; there would be no other alternative. I hope that I have it right.

Lord WALLACE of COSLANY

My Lords, I am grateful to noble Lords who have spoken in this debate. So far as the legal side is concerned, the Government were concerned that the Joint Committee considered that the order could be construed as being ultra vires. While we are all in full sympathy with the Committee's desire to protect the rights of Parliament, the Joint Committee's view did not accord with precedent, and, if accepted, would make it necessary to have a new order every time a change was made in the Community arrangements covering beef premiums. Since there can be no assurance that the timing of such changes would permit a new United Kingdom order to come into force simultaneously, there would be thus a serious risk of a hiatus in the legal cover for the protection of the premium payment made from public funds. We are very glad that the law officers have expressed the view that the order is not defective, and I sincerely trust that this view will be accepted by the House.

May I take this opportunity, as a former member of the Joint Committee on Statutory Instruments, to say that, unless noble Lords have served on this Committee, they probably will not realise the tremendous amount of detailed work and close examination that takes place. Therefore, although they have been critical in this case and in other instances too, that does not mean that they are not doing a first class job in the service of the country and protecting the consumer and the citizen as a whole. I should like to place on record my own personal tribute to the Committee for the very hard and not exactly cheerful work they have to get down to. It is what some people in another place might term "gutty work".

The noble Lord, Lord Sandys, asked about the calf subsidy date. I am grateful to him for giving me advance indication of what he wished to know. The calf subsidy was introduced under the Agriculture (Calf Subsidy) Act 1952. It was announced at the 1975 Annual Review that the subsidy would come to an end with the end of the United Kingdom transition period into the EEC this January. The necessary legal powers to end the subsidy have already been taken. The last animals to qualify for subsidy will be those born before 30th April 1977. The majority of eligible calves are certified at about 10 months old. They must be offered for certification before 1st May this year. Carcases certified before 30th June 1978 will also qualify. But after these dates neither calves nor carcases can qualify for subsidy—though payments will probably continue to be made for some months yet. Incidentally, imported animals are not eligible for calf subsidy.

The other point that the noble Lord made was about display of this somewhat complicated information. I can assure noble Lords that there will be a full display of information by statutory notice at ports and live markets at all times. The noble Lord asked for some words on the Irish trade, which of course is quite a considerable business. Imports of cattle from Ireland have been a traditional part of British beef production for many years. Noble Lords will recollect that the Anglo/Irish Free Trade Area Agreement of 1965 envisaged that the Irish Republic would send us 638,000 store cattle each year. These store animals are needed by beef producers in this country; and together with Irish fat cattle imports provide valuable work for our slaughterhouses. In the past, all these animals had one ear punched on import. This put them on the same basis as United Kingdom animals that had received the calf subsidy—in other words, when they were offered for certification at liveweight, they did not have two clean ears. As the calf subsidy is phased out we expect that, by the early autumn, we shall cease punching the ears of Irish cattle shipped direct to Great Britain.

However, cattle from the Republic of Ireland will still have their ears punched when they go into Northern Ireland. This is because we have agreed with the Government of the Irish Republic that there should be a domiciliary period before cattle from the Irish Republic can move on from Northern Ireland to Great Britain. I believe that it is a period of 13 weeks.

If there was no domiciliary period it would be easy for southern cattle to flood into Northern Ireland whenever a high rate of premium was payable there and then go in transit to Great Britain.

So far as the trade in carcase beef from the Irish Republic is concerned, the order does not apply to this beef. It is concerned with protecting payments on live animals and on carcase beef produced in the United Kingdom. But I recognise the recent concern that, as Irish exports of live animals have gone down, falling well below the figure of 638,000 for some years, carcase beef imports from the Republic into Great Britain have risen. Irish sendings of carcase beef were particularly heavy in 1977, partly because of the shortfall in our own production and also because of monetary factors. The action which the Government have taken to reduce the monetary compensatory amounts by a total of 7½ per cent. by the beginning of the new beef marketing year will in fact reduce the net monetary compensatory amount on Anglo/Irish trade by one-third and thus should lessen any adverse impact on the United Kingdom beef market from this source. Those are all the points that I have to make. I hope that I have met the noble Lord's case, and I sincerely trust that the House will now accept the order.

On Question, Motion agreed to.