HL Deb 22 November 1979 vol 403 cc284-6

3.22 p.m.

Earl FERRERS

My Lords, I beg to move that the draft Milk (Extension of Period of Control of Maximum Prices) Order 1979, a copy of which was laid before this House on 25th October 1979, be approved.

The purpose of the order is to extend for a further five years from the end of 1979 the power of the Minister of Agriculture, Fisheries and Food or the Secretary of State to control the maximum prices to be charged for liquid milk. These powers—which are permissive—derive from Section 6 of the Emergency Laws (Re-enactments and Repeals) Act 1964, which provides for their renewal by Order-in-Council at intervals not exceeding five years. In 1974 Parliament approved an order, similar to the one now before us, which extended the powers until 31st December 1979.

I think it would be for the convenience of your Lordships if I were to be tolerably brief about the reasons why the Government believe it right to seek an extension of this sort. First, about 50 per cent. of all the milk we produce goes to the liquid milk market. Secondly, there is the special nature of the marketing arrangements for milk. Virtually all of the milk produced in this country is sold through the Milk Marketing Boards and the processing, bottling and distribution of liquid milk are carried out to a great extent by a small number of large firms.

There is, however, now a further reason for price control which did not exist when the last order was approved in 1974. Since the ending of the guarantee arrangements for milk when we completed the transitional period to full membership of the EEC on 31st December 1977, producer returns have been derived exclusively from the liquid and manufacturing milk markets. In a period of rapidly increasing costs, both for producers and for distributors, this change has thrown greater emphasis on the interlinked problems of ensuring that the producer receives an adequate return for his milk, that the distributor has an adequate margin to safeguard the long-term future of the doorstep delivery system for milk, and that the housewife continues to enjoy the excellent value for money which she has come to expect from milk. The continuation of price control at both wholesale and retail levels is of very great importance in making sure that these objectives are achieved, and it is something which all sides of the industry continue to support in the interests of greater stability. In an uncertain world, particularly for the dairy industry, I suggest that this is something well worth retaining.

My Lords, with that short description of the draft order, I would like to commend it to the House and seek your Lordships' approval of it. I beg to move.

Moved, That the draft order laid before the House on 25th October be approved.—(Earl Ferrers.)

Lord WALLACE of COSLANY

My Lords, first may I thank the noble Earl for his very short but very explicit explanation of this order, which we on this side of the House find to be generally very welcome. It not only protects the producer; to a great extent it protects the consumer, too. I am assuming that this order will receive the approval of our lords and masters in the Common Market and in particular of our lords and masters in Paris who seem to have certain views on British agricultural produce.

May I put one or two questions to the Minister. First, may I ask him whether the supply position of milk is satisfactory so far as the country generally is concerned? Secondly, how much of our milk is being used to produce British butter, a point to which we referred yesterday? Thirdly, will there be available adequate supplies of school milk, assuming that the Government, instead of cutting such a provision, still allow an adequate supply of school milk to be provided?

Earl FERRERS

My Lords, I am grateful to the noble Lord, Lord Wallace of Coslany, for his welcome of the order. I can assure him that the supply position of liquid milk is satisfactory. Approximately 50 per cent, of the milk produced goes into liquid use while the other 50 per cent. goes into manufacture.

I think I can give the noble Lord an assurance relating to the matter about which he is concerned. There will be sufficient milk available for school deliveries of milk to those local education authorities who wish to use it.

On Question, Motion agreed to.