HL Deb 02 February 1993 vol 542 cc88-135

3.11 p.m.

Read a third time.

Clause 2 [Applications for approval]:

Lord Mottistone moved Amendment No. 1: Page 2, line 25, after ("trading") insert ("including the arrangements for pricing and allocation of milk").

The noble Lord said: My Lords, I must apologise to your Lordships in general and to my noble friend the Minister in particular for not having been in my place to move these amendments on Report on Monday of last week. I was under the misapprehension that that stage, like this one, was being taken on a Tuesday and so arrived late.

The amendment is a probing amendment, although naturally I hope, as I always hope, that my noble friend will accept it, or the next, as being a good solution to the problems in question. The amendment reflects my anxiety that the full details of the intended trading practices of successor bodies should be included in any application for a reorganisation scheme. The amendment on the same subject that I moved in Committee achieved some degree of support, but there appeared to be opposition to parts of it. In particular, my noble friend's reply in Committee did not take into account the regulated nature of the milk market through institutional prices and quotas under the CAP, with the resulting inadequate supply of milk in the United Kingdom.

The UK milk market is not, and cannot be, free while those CAP constraints continue. Deregulating the MMBs will not solve that problem. Those constraints make the trading practices, especially with regard to the pricing and allocation of milk by any successor bodies, of crucial interest to users. Users —that includes processors and the general public—have legitimate worries about the future availability of adequate supplies and pricing policy. Given that, even after deregulation, there will not be a free market, full details are required to enable manufacturers to plan and to be confident when taking decisions on the size and location of investments in manufacturing and processing capacity in the UK. Hence, my suggestion that it would be helpful to everyone, and a wise thing for the Government to do, to have the details that I suggest in the amendment included in the Bill. I beg to move.

Lord Gallacher

My Lords, we on this side of the House have looked carefully at the amendment. We find it defective, because it seems to us that it assumes, inherently, that a voluntary producers' co-operative will operate in a fashion similar to that of a statutory milk marketing board. That is manifestly not so. If there are any doubts about that I suggest that your Lordships read the financial section of The Times today.

A voluntary co-operative will be subject to market forces in acquiring, pricing and selling milk. For example, it is uncertain as of now how many current producers will even bother to join the voluntary co-operative because they may have better offers from other sources. If many of them do not join, then selling prices fixed by the board may have to be adjusted to reflect competition in the marketplace. Instead of being able to allocate milk, as it now does, the co-operative may incur further costs in selling it to processors, some of whom will undoubtedly arrange their own supplies.

Even if the co-operative—I am thinking especially of England and Wales in this context—still spoke for a substantial market share, commercial confidentiality would, in our opinion, preclude acceptance of the amendment as drafted. There may be some consolation for the noble Lord, Lord Mottistone, in Clause 3(2) (b), which incorporates an amendment tabled by us at a previous stage, and accepted by the Government, which obliges the Minister to consult about the principles of the scheme before he proceeds with it. For those reasons, if the amendment were pressed, we could not support it.

3.15 p.m.

Lord Wade of Chorlton

My Lords, although when my noble friend produced a similar amendment at an earlier stage I said that I had a certain sympathy with his point of view, I cannot support the amendment. The whole purpose of the Bill is to get rid of an arrangement for the pricing and allocation of milk. The noble Lord, Lord Gallacher, said that it would be the market which would decide the pricing and allocation of milk. It is clearly the responsibility of anyone who wishes to buy milk to make clear to his potential suppliers the arrangements for the pricing of milk. Through that, he will hope to persuade them that it will be in those producers' best interests to sell to that operator. I cannot support the amendment.

The Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food (Earl Howe)

My Lords, I am grateful to my noble friend Lord Mottistone in that he has evidently given considerable thought to the remarks which I made on the amendment to Clause 2(2) (c) which he tabled in Committee. I said then that it would be wrong to require a statement of proposed trading practices by a successor body to cover matters such as continuity and the settlement of disputes, those being appropriate to the content of a milk marketing scheme but not to the establishment of a structure relying on normal commercial freedoms.

I must say that the new amendment causes me somewhat less difficulty than the previous one. It is reasonable to assume that any statement of proposed trading practices should cover the area of pricing. Like the noble Lord, Lord Gallacher, I do wonder, however, about the implications of the word "allocation". Again, it is clearly accurate to describe what happens under the milk marketing scheme where supplies are allocated according to a hierarchy of prices. But is it accurate to say that a body selling milk commercially necessarily allocates its supplies? I suppose it might have to do so if demand outstrips supply but in that case economic theory suggests that other mechanisms might come into play. And how, I wonder, would the term "allocation" be interpreted in relation to the selling practices of, say, Dairy Crest, which could also be a qualifying successor body in the terms of the Bill.

I do not pretend to have precise answers to those questions, but I believe that the existing requirement in Clause 2(2) (c) to supply a statement of proposed trading practices is drawn sufficiently wide to require the important and relevant considerations to be spelt out in each case. If Ministers feel that the information supplied is insufficient to enable them to satisfy themselves, as they must, that the practices contained in the statement take account of the interests of the purchasers of milk, then they can use the powers in Clause 7 to require further information to be provided.

My noble friend need he in no doubt that those proposed trading practices will be examined carefully. I understand the anxieties which lie behind the amendment. I hope that I have been able to reassure him about pricing and to convince him that the use of the word "allocation" is out of place in the kind of free market arrangements envisaged in the Bill.

Lord Mottistone

My Lords, I am most grateful to my noble friend the Minister for his full reply which reassured me. It was a reassurance required in particular because of the opposition to the amendment of my noble friend Lord Wade of Chorlton and the noble Lord, Lord Gallacher. That shows that it is not an amendment which enjoys the happy support of the House as a whole. With that extra knowledge, I have the pleasure to ask to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Mottistone moved Amendment No. 2: Page 2, line 45, at end insert: ("() Applications for independent ownership of central industry assets may be made by parties other than a milk marketing board.").

The noble Lord said: My Lords, Amendment No. 2 should have been moved last week. It reflects my anxiety that this Bill completely excludes even a consideration of Milk Marketing Board assets being transferred into independent ownership rather than to a successor body of the MMB.

In Committee there was opposition to a similar amendment, but that mainly seemed to be a misplaced view that I sought only bodies "other than" rather than "as well as" the successor body to be able to receive transfers of MMB's assets. This amendment seeks to clarify the point.

I wonder why the Bill assumes that assets should be automatically transferred to MMB's successor bodies. Accordingly, I request further clarification from my noble friend as to why, if other parties can prove that they are capable of providing efficient, cost-effective services for industry and represent a significant number of dairy producers, they should be excluded from applying for a transfer of an appropriate share of MMB assets. It would be helpful if the Minister were to assure me that such transfers would be independently supervised to ensure no discrimination against the interests of producers who opt not to stay with the MMB's successor; that is, no coercion of farmers. I suggest that the matter could be resolved by the Government accepting the amendment. If not, I hope that my noble friend will give me some reassurance in this regard. I beg to move.

Lord Carter

My Lords, as the noble Lord, Lord Mottistone, said, we discussed this amendment in Committee. To make the position clear from this side of the House, I repeat what I said in Committee. We wanted to keep the marketing boards but that is not to be. We shall support the Government in ensuring that a strong producers' organisation succeeds the boards provided that there is transparency in its trading practices and that it is subject to normal competition law.

The reason we support the establishment of a strong producers' organisation is simple. The four biggest dairy companies buy two-thirds of the milk in England and Wales, and 70 per cent. of milk products is sold through just six supermarket chains. As we know, the UK is still in deficit in milk and milk products. Our production is limited by quota, and the EC is 10 per cent. oversupplied. For all those reasons, we support the formation, as is envisaged in the Bill, of a strong producers' organisation.

The noble Lord referred to the confusion which arose about the wording of the amendment in Committee. I believe that that confusion still exists. The amendment could be read to mean that it excludes the MMB's successor bodies from ownership of the central assets. If the noble Lord thought that there was confusion, he should have altered the wording.

As I understand it, the amendment as drafted would allow the four biggest dairy companies—Unigate, and so on—to buy the central assets. Is that the intention of the amendment?

As has been mentioned in the past, there is confusion also as regards central testing. We know that central testing was financed from producers' money—the co-responsibility levy. The funds were distributed among all the member states on the basis of acquis. All the member states in the Community were eligible to receive funds to improve testing facilities. We know that the central testing facilities run by both the MMB and the private dairy companies received funds. Therefore, I do not believe that the argument stands up for moving central testing.

As regards this amendment, a relevant consideration is that the marketing boards must understand that they will emerge from a monopoly culture. In my view and in the view of others there have been—I put it at its politest—some examples of heavy handedness in some activities which arises from the background that there has been for the past 60 years. We know that in the future operations must be conducted rather differently. I believe that the amendment would weaken the successor bodies, although I am sure that that is not the intention. If the amendment were accepted, it would promote uncertainty. There would be chaos in what is already a rather uncertain situation. If pressed, I should have to advise my colleagues to vote against the amendment.

Earl Howe

My Lords, a very similar amendment was tabled in Committee by my noble friend. On that occasion I was much indebted to the noble Lord, Lord Carter, for rehearsing many of the arguments against acceptance of an amendment along these lines, and I am grateful to him again today.

The noble Lord, Lord Mackie, went so far as to describe it as a wrecking amendment. I am not wont myself to employ extreme language, but it is certain that this amendment strikes at the heart of the Bill both structurally and in terms of the desired end. It is structurally hostile because the Bill is based on the premise that it is for the boards to propose how their assets should be dealt with under a reorganisation scheme. That is also the foundation of the Government's policy. Quite what would happen procedurally if my noble friend's amendment were accepted is unclear. No indication is given as to what my noble friend would expect Ministers to do in the event of an application being received from a third party, but it is clear that it would then be for Ministers rather than the boards to propose the future shape of the industry. That, I repeat, is wholly contrary to the Government's approach.

The amendment is also hostile in practical terms because to strip the boards' proposed successor bodies of those assets which my noble friend apparently regards as having some special status—the so-called "central industry assets"—would in practice under-mine the basis for a viable successor to be set up. As I have said before, the Government do not consider it reasonable to adopt the approach advocated by the Dairy Trade Federation of selling off all the boards' assets and leaving producers to sink or swim. They believe that those producers who wish to should have the chance to join a collective marketing organisation.

My noble friend asked me to explain why I said what I said on an earlier occasion. I can only repeat that the Government do not accept that there is something special about certain types of MMB assets which means that they must of necessity remain in common or independent ownership. A successor co-operative will need to be able to test the quality of its supplying producers' milk, and there is no fundamental reason why it should not operate farm services. I should add that Ministers will need to take a view on whether it is reasonable that such assets should in an individual case pass to a successor body when a scheme is submitted to them. But I say again that I do not see that there is any objection of principle to what the MMB has indicated that it wishes to do.

I believe that the Government's approach commands the support of the majority of noble Lords. I hope that my noble friend will be persuaded to withdraw the amendment.

Lord Mottistone

My Lords, again, I thank my noble friend for a full reply. The noble Lord, Lord Carter, asked me whether it is intended that just a few people should have an opportunity to purchase the MMB's assets. That was not the intention.

Lord Carter

My Lords, perhaps I may clarify the point. I wish to know whether the noble Lord objects to any of the larger companies bidding for some of the assets.

Lord Mottistone

My Lords, the underlying feeling behind the amendment—and perhaps other events have overtaken it—is anxiety that one monopoly situation will be replaced by another. The idea is that that should not be the case because on the whole the processors and other purchasers do not like dealing with monopolies because, as the noble Lord, Lord Carter, said, they can sometimes adopt a rather heavy-handed attitude which people in monopoly situations are prone to do. That is what is behind the amendment, and that is what I say to the Minister who says that it is a major wrecking amendment. I do not wish to wreck the Bill in that sense.

I should say also to my noble friend that I was not inspired to table the amendment by the Dairy Trade Federation. That federation had nothing to do with it at all. The Food and Drink Federation has a wider range of interests. We shall now have to see what happens. I agree with the noble Lord, Lord Gallacher, that the article in today's Times is relevant to the matter we are discussing. We may find that it is realised that monopoly situations are disliked and they will not be encouraged to continue. With that in mind, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

3.30 p.m.

Clause 22 [Activation of Part II]:

Lord Carter moved Amendment No. 3: Page 12, line 42, at end insert: ("(1A) If the Ministers certify that they are of the opinion that it is necessary that the Potato Marketing Scheme should be brought to an end because its continued existence is inconsistent with a regulation of the Council of the European Community, section 53(4) of this Act shall apply as if the references therein to sections of this Act include a reference to this section. (1B) No order shall be made under this section prior to any decision that may be made by the Council of the European Community to introduce a regulation on the establishment of a common organisation of the market in potatoes, unless in the opinion of the Ministers such an order is necessary or in the public interest.").

The noble Lord said: My Lords in moving Amendment No. 3 I wish to speak also to Amendments Nos. 4 and 11. This group of amendments is intended to clarify the situation regarding the regulation-making powers which are proposed in the Bill and which are related to the possible demise of the potato marketing scheme. The amendment corresponds to the discussions we had in Committee and on Report on this matter. As I said, it is intended to clarify what I believe are the intentions of the Government and what are certainly the intentions of everyone who spoke on the subject at previous stages of the Bill.

The Government have stated that if they propose to revoke the potato marketing scheme off their own bat, as it were, under the terms of Clause 22—that is, if it appears to Ministers that that is necessary or expedient, and they intend to do that but not as a result of the introduction of the EC potato regime —the process would then proceed by affirmative resolution. If, on the other hand, the Government are required to wind up the scheme as a result of the introduction of an EC potato regime, the process will proceed by negative resolution. That is the understanding we have with the Minister. We had an interesting exchange on Report, at col. 1098 of the Official Report. I asked the Minister what would happen if Parliament were to annul the negative resolution which the Government were required to proceed with as a result of an EC regulation. His comments were interesting. He said: There would be a legal contradiction, but my understanding is—I stand to be corrected on this and, if so, I shall write to the noble Lord"— the Minister has not written to me, so I presume his understanding was correct— that EC law would prevail in any case. It would be obligatory for us to implement the EC law. In practice Parliament has little locus in that matter".—[Official Report, 25/1/93; col. 1098.] I am sure that if my noble friends Lord Bruce of Donington and Lord Stoddart were in their places they would have something to say about the lack of parliamentary control in that matter. It seems to be an example of pre-Maastricht impotence. If that is the case before Maastricht, I cannot help wondering what the situation will be like afterwards.

As I said, this group of amendments is intended to spell out the Government's intentions. It is inconceivable that the Government would wish to revoke the potato marketing scheme before we know the details of the EC potato regime. The Minister also stated, at col. 1098 on 25th January: We have no current plans to abolish the scheme as a matter of government policy… We may reach a view in due course but I think it is more likely that an EC regime will intervene in the meantime". The noble Earl added: My advice is that following the December Agriculture Council meeting we are 95 per cent. of the way towards achieving an EC regime and approval of those proposals is virtually a formality". If that is the case, it is inconceivable that the Government would wish to revoke the potato marketing scheme in advance of knowing the outcome of the negotiations and the details of the EC potato regime. As the proposed new subsection (1B) requires, there is certainly no harm in waiting to see what emerges from Brussels. That view was confirmed by the comments of the Minister of State, Mr. Curry, in oral Answers to Questions, at col. 1132 of the Commons Hansard on 28th January, when he stated: Our overwhelming priority is to settle the uncertainty which follows upon the proposals, so that we all know exactly where we stand".—[Official Report, Commons, 28/1/93; col. 1132.] I am sure we are all agreed on that.

I am sure too that the Minister will not object to my next point. There has been confusion because the Minister of Agriculture, Mr. Gummer, has expressed a certain amount of scepticism about the present arrangements. As we discussed on Report, it is clear that the Government are not seeking derogation or to plead subsidiarity in considering the EC potato regime. For all those reasons, we assume that the Government intend to await the outcome of the negotiations on the potato regime before they move, if they wish to, to revoke the scheme. The proposed new subsection (1B) spells that out. We have fallen over backwards in our drafting of the amendment to accommodate the Government. In the almost inconceivable situation that the Government wish to revoke the scheme before we know the outcome of the negotiations in Europe, we have allowed a let-out in the proposed new subsection (1B) which states, unless in the opinion of the Ministers such an order is necessary or in the public interest". We have not used the word "expedient" that appears in the Bill. We have stated that in the very unlikely situation that Ministers might wish to take such a step, perhaps because it was taking a long time for a decision to be reached on the European regime, there is the fall-back provision in the form of the words at the end of the proposed new subsection (1B), that is, unless in the opinion of the Ministers such an order is necessary or in the public interest". As I said, we have fallen over backwards in our drafting to accommodate the Government on this issue. The Minister has said that there are no current plans to abolish the scheme as a matter of government policy. What does the Minister mean by the word "current"? According to the Oxford Dictionary the word is defined as: The tendency or drift of the common opinion, practice, etc. of a body of persons". There is a recent example. Only last Monday the current government policy was not to reduce interest rates, but the policy had certainly drifted by Thursday. These amendments are designed to deal with the possibility that the Government might drift into the opinion that the marketing scheme should be wound up in advance of the introduction of an EC potato regime. The proposed new subsection (1B) would require the Government to present good reasons to Parliament as to why they should not do so. I am sure the Minister will understand that if that were the Government's intention it would produce enormous uncertainty in an already uncertain situation. As I said, if the Government felt the considerations in Brussels were taking far too long—however, that does not accord with the Minister's words about the matter being 95 per cent. certain—they would still have the let-out provision at the end of the proposed new subsection (1B).

I agree that the drafting of the amendment may not be perfect. I hope that the Minister can accept the principle of the amendment. There is plenty of time to amend the wording in another place if the Government wish to do so. I urge the Minister to accept the principle of the amendment because the House and the Government have accepted that principle throughout our deliberations.

It is clear from the proposed new subsection (1A) that the regulations should proceed by means of a negative resolution as a result of a regulation from the Community. The proposed new subsection (1B) controls the situation between the passing of this Bill and the emergence of a potato regime. It merely affirms what the Government have already said about their intentions. If the Government are not required by the Community to produce a regulation and they decide to revoke the scheme, they would do so by way of affirmative resolution. As I said, the drafting of the amendment may not be perfect but I believe the principle is entirely clear. I beg to move.

Lord Stanley of Alderley

My Lords, I added my name to this amendment for the reasons so well stated by the noble Lord, Lord Carter. It would be stupid to do away with the Potato Marketing Board while the European Community is discussing what kind of regime it wants, if it has one at all. It could well be that we would have to bring in yet another scheme and organisation. That would further disrupt the market.

I make no apology whatever for the amendment and indeed the two following amendments to Clauses 24 and 25 appearing on Third Reading. During the passage of the Bill my noble friend Lord Howe has made great efforts to explain what is in the Government's mind on the matter. He has made many clarifying statements for which I am most grateful. For instance, at Report stage (at col. 1096 of Hansard for 25th January) he said that: The word 'expedient' should not be taken as a convenient means for the Government to do what they like regardless of the industry's views". However, as we all know, my noble friend may not hold the post which he now holds for ever. I hope that he will go further. It is obvious that we cannot tie him to what he said and what is recorded in Hansard, despite a recent ruling last spring by the Law Lords that remarks by Government Ministers reported in Hansard can be relevant. I believe that the important word is "can" but no doubt the noble and learned Lord, Lord Simon of Glaisdale, would be able to comment more fully on that point. Therefore, I believe that it is vital that my noble friend's assurances are put on the face of the Bill. That is what the amendment seeks to do.

Baroness Carnegy of Lour

My Lords, during the passage of the Bill the Government have moved a long way on this clause. As the noble Lord, Lord Carter, said—although I do not think that he gave due credit to my noble friend for those concessions—they have conceded that a decision on an order bringing the potato marketing scheme to an end will be brought under the control of Parliament and fully discussed in both Houses under the affirmative resolution procedure except in the specific circumstance of the order being inconsistent with a European Community regulation. I am sure that the Government are right to make those important concessions.

Farmers who can manage with difficulty under the present potato marketing scheme are extremely anxious that any move into the unknown should be carefully and properly examined in Parliament before it is accepted or rejected. I was glad to receive a letter from the National Farmers Union welcoming the Government's concessions.

The Bill now allows both parliamentary procedures to be used. There is just one element missing—a precise definition of the circumstances in which the negative rather than the affirmative procedure will be used. I put down an amendment at Report stage which tried to address that problem. I suggested that the public interest test would be appropriate. I gave reasons why that was the case following the previous exchanges with my noble friend on the same subject in Committee. The Minister replied, amplifying what he had said previously. I am bound to say that his arguments are persuasive. I have consulted various people on the subject and I accept the argument that the public interest test is not adequate in this context. I did, however, say that I thought that the matter should not rest there and that the Government should continue their search for a satisfactory way of putting their verbal assurances on to the face of the Bill. I suggested that the Government might bring forward their own amendment on Third Reading in this House or when the Bill proceeds to the other place. My noble friend has not tabled an amendment this afternoon. Can I take it that the search is still on? Will the Government be open to further suggestions that may be made to them on this matter in another place?

I welcome the amendments tabled by the noble Lord, Lord Carter, to the extent that they keep the discussion going. In most respects they closely resemble my amendment on Report. However, I do not think that they are satisfactory, if only because they still apply the public interest test, and from my reading of what the Government have said previously I do not believe that that is adequate. I shall, of course, listen with interest to what the Minister has to say but shall be surprised if for that reason alone he can accept the amendment.

In my view the Government have conceded a great deal. They have to go further in another place and find a legally satisfactory way of putting their assurances on the face of the Bill. The public interest test is not satisfactory for this House to insist upon at this stage. I believe that it would not be in the interests of farmers and the public to accept the amendment for the reason I have given. I therefore hope that the noble Lord will not press his amendment or, if he does, that the House will not agree to it.

3.45 p.m.

Lord John-Mackie

My Lords, I should like to raise a practical point rather than discuss the detail of the amendment. I am sure that the noble Lord, Lord Stanley, my noble friend Lord Carter and the noble Baroness who has just spoken will agree that farmers are in a most uncertain position at present. I have met a great many farmers recently—ordinary farmers rather than NFU officials—and they are extraordinarily worried about what exactly is to happen. Therefore, the more secure the Bill is so that they know exactly what will happen the better. If the amendment will help in that respect it would be a very good thing.

We have had the Milk Marketing Board, the Potato Marketing Board and the Wool Marketing Board for many years. Farmers have liked the security that they have provided and I appeal to the Government to see that nothing is done unless farmers know what is to follow.

Lord Simon of Glaisdale

My Lords, your Lordships are being placed in an intolerable position unless the amendment is accepted. You are being asked to accept legislation by ministerial statement, not even by subordinate legislation.

As the noble Baroness explained, all along noble Lords have sought the affirmative resolution procedure, although your Lordships were prepared to accept less in the case of a scheme being introduced in consequence of an EC directive. In that case the House was content to accept that the negative resolution procedure, although a lesser parliamentary control, was appropriate. So far as there is any parliamentary control at all, the Bill establishes universal negative resolution procedure.

However, the noble Earl, who has handled the Bill so skilfully, has given an assurance. He said that the negative resolution procedure, which on the face of the Bill is universal, will be applied only in the case of pursuance of an EC directive. In all other cases the affirmative resolution procedure will be available. However, there is not a word of that on the face of the statute. The noble Lord, Lord Stanley, has already pointed out the adverse consequences.

The reason why we find ourselves in this extraordinary position of handing a Bill over to the other place in this defective condition is twofold. First, the ministry does not want parliamentary control. If it has to put up with parliamentary control it wants the minimum possible. I shall go into the recurrent excuses that have been made. The second reason is that we have been far too rushed in these final stages. In particular, your Lordships were alerted to the first of the many objections which the ministry successively raised only two working days before the Report stage. Between Report and today there has been only the minimum of the two weekends. When we read that Miss Whiplash had absconded, I expect that all noble Lords hoped that that meant a less harsh regime from the Government business managers—but that obviously will not come about.

Having had no time before Report stage, except by hurried telephone conversations, to resolve the various objections that were put up, and today with no proper opportunity to examine the final position put forward by the Ministry, which is without foundation, your Lordships find yourselves discussing the very last stage of the Bill in this House.

The issue of ministerial objection to parliamentary control is not a matter for indignation. It is perfectly natural. Those of your Lordships who have served from both sides of the baize door know perfectly well what an appalling nuisance parliamentary proceedings are to an administrator wishing to get on with the job of administration. Therefore the Bill was introduced with no parliamentary control over the important decision as to the winding up of the Potato Marketing Board. At Committee that factor aroused universal condemnation. It was quite extraordinary. From every part of the Committee, voicing opinion from every part of the kingdom, your Lordships called for the affirmative resolution procedure.

Two days before Report stage, three of your Lordships received a communication from the Ministry putting up the first objection. It was said that a negative resolution procedure would be conceded. Examination must go on to see whether the department could go further. But there was an objection. The objection was the implementation of an EC directive, which would demand immediate action. It was stated that affirmative resolution did not vouchsafe that. It was then pointed out over the telephone that that was quite wrong: that a well-attested form of the affirmative resolution procedure—indeed, the first that is listed by Erskine May—takes immediate effect.

That objection having been shot down, the Ministry then had a second thought: that despite our own Minister being on the Council of Ministers and presumably able to influence timing, and despite the fact that the Brussels bureaucracy goes on holiday during the summer, it might be necessary to implement the Brussels directive when Parliament was riot sitting in the summer. It was then pointed out—again unfortunately only by telephone because the time limit was absolutely upon us by then—that there was also no validity in that objection, because the statute could provide that the affirmative resolution could be tabled and take immediate effect notwithstanding that neither House of Parliament was sitting.

By that time the Report stage was absolutely on us. However, the Minister, no doubt having seen that every objection thus far was untenable, made the offer to which 1 have referred; namely, that although the Bill provides only for the negative resolution procedure, nevertheless he would give an assurance that, that procedure would be used only in the case of an EC directive; in all the other cases the affirmative resolution procedure would be available. That is how we ended the Report stage and evidently how we enter Third Reading.

The final objection—which was expressed by letter, and verbally to the noble Lord, Lord Stanley—was that the legal advice was that it would be inadvisable to write the Minister's assurance onto the face of the Bill because it might then be subject to legal challenge on the meaning of the word "necessary". But again there is absolutely nothing in that point. The answer is at the very outset of new Clause 22 which was tabled by the Government themselves. That states: If it appears to the Ministers that it is necessary", and so on. That is in fact what the amendment of the noble Lord, Lord Carter, provides.

That provision cannot be challenged at the time. There would be no delay. Theoretically it could conceivably he challenged on judicial review. But anyone successfully trying to challenge that provision would have to show that the Ministers had behaved unreasonably in tabling their regulations. I know that noble Lords on the Opposition Benches hold firmly to the conviction that everything any Minister in this Government does is unreasonable. However, the generality of opinion does not go that far; and I have no hesitation in saying that the last objection put up by the Ministry has absolutely no legal foundation. That matter could have been resolved in a half hour's discussion if there had been time. However, we have been hustled on to this Third Reading. I state again that there is no foundation in that latest objection.

Why should we not accept the assurance of the noble Earl? The noble Lord, Lord Stanley, has already given a reason. But there are other reasons too. A department can go back on an assurance. Departments have gone back on assurances. Your Lordships will remember the recent occasion of the resignation of the noble Lord, Lord Trefgarne. He gave an assurance to your Lordships' House that was not honoured by his department and he promptly and honourably resigned. Nevertheless, the dishonour of his assurance continued.

Another example was finalised in the last Session. That was the concession made reluctantly in the Education Reform Act 1988. Notwithstanding that concession and an amendment that was moved in pursuance of it, the Department of Education brought proceedings in the High Court and put forward an argument in support of them which, if accepted, would have driven a cart and horses through the amendment that had been made reluctantly and the assurances that had been given. Fortunately, that argument did not succeed, but it was not for want of trying.

The third example to show that these are not isolated instances comes from a recent case that has been determined by your Lordships sitting judicially. It arose out of an assurance given in 1976 by the Financial Secretary to the Treasury that the statutory provision in question would not cover a certain matter. Nevertheless, the Inland Revenue—and one sees its reasons, because to some extent fiscal equity prompted it—notwithstanding that assurance, raised assessments which were completely counter to what the Financial Secretary had said.

We dare not substitute ministerial assertions or assurances for parliamentary enactment. It is utterly wrong that we should be asked to pass a measure in this form. The amendment of the noble Lord, Lord Carter, meets the point completely. He has been reasonable. He said he would be content if the noble Earl would accept it in substance and principle and play with the wording how he chooses. At Report stage the amendment by the noble Baroness, Lady Carnegy, also met the point quite satisfactorily and could perfectly well have been accepted. A ministerial assurance is no substitute for either of the amendments. It is no substitute for a parliamentary enactment. So I hope your Lordships will accept this amendment.

4 p.m.

Lord Renton

My Lords, I take the liberty of addressing your Lordships not as a lawyer following the noble and learned Lord but as one who for a third of this century represented one of the largest farming constituencies in the country which, if I may so, grew some of the best main crop potatoes. It was brought to my attention time and again by farmers that there were two things that they wished most. One was certainty as to the conditions under which they were to farm in the future, preferably with plenty of notice being given. The other was that if a change were to be made in those conditions, they should have the opportunity of expressing their views about the changes.

As concerns those two matters, the Bill needs perhaps a little strengthening on the subject of consultation. My noble friend Lord Stanley of Alderley has made an attempt and touched on it today. On the matter of certainty, the Bill is frankly defective. The practical position which the Bill envisages and creates is that the present potato marketing scheme could be done away with, the Potato Marketing Board abolished and no other scheme and no successor board put in their place before anything has been agreed to replace our scheme within the common agricultural policy. That, I suggest to your Lordships, is the uncertainty which we should try to remove. It does not need a lawyer to say to your Lordships that when legislating we should try to create certainty of Parliament's intention and not create a vacuum, which is what we are doing on this occasion. That is principally what I wish to say.

The question of whether this group of amendments deals with matters adequately from the technical point of view is one which the Government must consider in the light of their legal advice. But from rather long experience of both Houses I must say that one cannot always rely upon the legal advice given to the Government. The noble and learned Lord, Lord Simon, has pointed out various matters about which we should be careful.

As to whether we should rely—because that is the suggestion—upon the recent decision of the House of Lords Judicial Committee that Hansard may be relied upon, I utter this warning. The committee said that Hansard should be relied upon when there was uncertainty. I do not believe that it went so far as to say—which is what would happen with the Bill—that it can also be relied upon to fill gaps in legislation. I am sure that that is not what the noble and learned Lords intended.

In any event, we all know from experience that Ministers have to change their minds during the course of a Bill, and sometimes have to correct themselves, as did my noble friend Lord Howe honourably at Report stage, correcting something he had said at Committee stage. If that happens, let us not rely upon Hansard. Let us try to get the Bill right. Fortunately, although this is the last opportunity that we shall have in your Lordships' House to do that, the Bill has to go through another place and those defects or uncertainties will no doubt be noticed and discussed.

However, surely it would be much better if we could try to get it right today. I should have thought that the amendments moved by the noble Lord, Lord Carter, and supported by my noble friend Lord Stanley of Alderley are ones that the Government could well accept, even if they need to adjust them slightly for technical reasons at a later stage.

Baroness Carnegy of Lour

My Lords, before my noble friend sits down and, with the leave of the House, I agree with all that he said, but I wonder whether he heard my comments over my anxiety that the public interest test should still be contained in the amendments. Does he really think, contrary to what the Government have so far said, that the public interest test is adequate in this case and that therefore we can accept the amendments? That is where my doubt lies. Can he comment on that?

Lord Renton

My Lords, I should have thought that it was desirable on many occasions that we should make specific reference to the public interest, but it is not necessary to do that if the same purpose is achieved by other means. It seems to me that the amendments achieve that purpose and, therefore, with deep respect to my noble friend, whose speech very much impressed me, I believe that we can overemphasise the public interest in the matter.

Baroness O'Cathain

My Lords, I have thought long and hard about the whole issue of potato marketing since the Second Reading of this Bill in November. My reaction to the part of the Bill dealing with potatoes at Second Reading was that I welcomed the measure to free up the market for potatoes, to see the end of the so-called managed market. I have to say that when I made that statement I little knew what uproar I was about to unleash, and since then I have been subjected to intense lobbying by two sides of the industry, the producers in the form of the Potato Marketing Board and the customers in the form of processors—both the trade association and individual processing companies. Noble Lords will note that I have not been lobbied by consumers or by those who are closest to the consumers—namely, the retailers.

I shall return to this point as I believe that the role of the retailers is just as important as that of the producers and the processors in the marketing of potatoes, and it is marketing that we are dealing with. Without an efficient, effective marketing and merchandising retail distribution system there would be little future for United Kingdom potatoes.

The two main problems in agricultural marketing in this country are the inability to produce what the consumer actually wants, and the propensity to import what we can and could easily produce here. I drew attention to the import problem at Second Reading at col. 830 of Hansard of 23rd November. Subsequently it was pointed out that there had been a huge improvement in the trade gap in potatoes, and I was grateful to the Potato Marketing Board for giving me that information. Imports had been significantly reduced, and I referred to that at the Report stage. However, the picture is really not what it seems. There is confusion concerning the statistics for imports.

The Potato Marketing Board quotes an import figure of some 88,000 tonnes, down from 374,000 tonnes in 1989, which is commendable. However, the processors tell me that, in addition to the 88,000 tonnes imported, some 540,000 tonnes (raw equivalent) of potatoes are imported, and they maintain that that is because of the "managed market". It seems that the Potato Marketing Board does not regard a potato as being a potato if it is peeled, chipped, frozen, converted into hash browns or potato powder and flakes used in instant mashed potatoes.

Suffice it to say, I feel that there is merit in the processors' argument that the continued operation of what they say is a managed market is not in the best interests of the United Kingdom balance of trade, nor of the consumer, let alone in the long-term interests of the producers.

The noble Lord, Lord Renton, made a strong plea for certainty for farmers. Certainty is a commodity that is not present in any economic or commercial activity. None of us can have certainty. We must try to ensure a viable future for our activities, no matter what area we operate in, and put the consumer first. I fear that the consumer is not being put first in the marketing of potatoes in this country. The Minister has told us that he is still consulting on the best way forward. He will continue to consult unless forced into a different line of action by the European Community. There are no current plans to abolish the potato marketing system unless an EC regime intervenes. In those circumstances, I feel I must support the Minister and oppose the amendment.

I would, however, like to take this opportunity to ask the Minister whether he is also likely to consult the retailers. I would remind the Minister that it was due to the activities of a supermarket chain—not the one with which I am associated, I hasten to add—that the consumer became aware of the fact that there were potatoes other than King Edwards or Reds, and that certain potatoes were better for baking than others and certain potatoes better for chipping. The retailers have helped to segment and expand the market, and I feel that the Minister would benefit from their input in this complicated issue. I would welcome the Minister's comments on this suggestion.

Lord Renton

My Lords, before the noble Baroness sits down, in considering the consumers' interest, does she think that it would be to the benefit of the consumer that the Potato Marketing Board—which incidentally does not ignore consumer interests—should be abolished and not be replaced by anything at all, or that there should perhaps be a wide time span before some other regime comes into force? Would that be in the consumers' interest?

Baroness O'Cathain

My Lords, I am not so sure about the consumers' interest. At the moment I do not think that the consumer is necessarily getting the best deal. I certainly do not think in terms of UK Limited, if one can make that comment, that we are getting the best deal through the operation of the Potato Marketing Board. At least, as has been pointed out to me—and the figures speak for themselves in terms of imports—I do not think that a free-for-all, abolishing the Potato Marketing Board without any other regime coming in, is likely to be of benefit to anybody, but I do not think that that is at issue.

4.15 p.m.

Lord Stodart of Leaston

My Lords, it is a long time since I grew potatoes. I dare say that my noble friend Lord Stanley may recall buying some seed potatoes from me some 40 or 50 years ago. However, it is not inappropriate for me to speak fairly soon after my noble friend Lord Renton. He is correct in saying that the county of Huntingdon grew, and still grows, some of the best ware potatoes that are going, supplied, as he well knows, by the best of seed potatoes from Scotland. In my day I remember sending many of them by rail to various stations in Huntingdon.

This afternoon I want briefly to follow my noble friend in the plea he made for an end to uncertainty. The noble Baroness said that to ask for certainty is to ask for far too much. I agree with her. I cannot think of any time since I started farming when I have enjoyed absolute certainty; one is up against weather factors and other things. But one can have a situation, without having certainty, in which one need not have total uncertainty. If there is one thing that is gripping the countryside and the farming community today it is the total uncertainty as to what is in the Government's mind for the future of the potato scheme.

It would seem to be a perfectly simple situation. Here my noble friend Lord Renton on Report asked a perfectly straightforward question: do the Government want to abolish the scheme? It seems an easy question to answer, but having once been a Minister I can well imagine that it is just the sort of question to which a Minister does not want to answer yes or no. In this he was voicing the doubts and the misgivings, and I am quite sure the misunderstandings, that are so widespread. In reply my noble friend said, "We have no current plans to abolish the scheme as a matter of government policy". That is the sort of answer that I very well recollect. What would have been much better—and I wonder whether it is still not possible—would have been to say, "By and large we think the scheme is a good one." The Minister properly said, "There is a strong chance"—that was as high as he put it—"that our hand may be forced by the introduction of a Community regime."

In saying the latter could he not make clear that the United Kingdom Government would much prefer to keep the scheme, or a large part of it, and that they would do their best to advocate the merits of the scheme if pressure came from Brussels?

Lord Stanley of Alderley

My Lords, perhaps my noble friend will give way for a moment. I do not like to say, but I believe that he is discussing the following two amendments rather than Amendment No. 3, which deals with a specific point moved by the noble Lord, Lord Carter.

Lord Stodart of Leaston

My Lords, if so I express my deep apologies. As I have only one more point to make, it may be better that I do so now and remain silent when it becomes relevant. On the radio yesterday morning there was an interview with the Scottish Minister arising out of a lobby that took place a week ago. The interviewer asked the Minister about the potato marketing scheme. The answer was, "The Scottish Office is keen that it should continue; we are doing our best to see that it does."

Earl Howe

My Lords, these linked amendments essentially seek to refine the new Clause 22 agreed on Report, first, by stating on the face of the Bill that an order under Clause 22 should be subject to negative resolution procedure only if Ministers were of the opinion that it was necessary for the potato marketing scheme to be brought to an end because its continued existence would be inconsistent with an EC potato regime. Secondly, Ministers could not make such an order before the Council of the European Community had decided to introduce an EC potato regime unless Ministers considered that revocation of the scheme was necessary or in the public interest.

On the first point, let me make the present position quite clear. The Agriculture Bill, as we amended it on Report, does not define the circumstances in which an order under Clause 22 will be subject to negative resolution procedure rather than affirmative resolution procedure. However, I have given repeated undertakings that the Government will have recourse to negative resolution procedure only where it is necessary for them to act pursuant to the introduction of an EC potato regime.

At Report stage I asked the House to accept those assurances, together with the government amendments, as a totality. But I also undertook to reflect on the comments made by noble Lords in our debates on the amendments tabled at that time by my noble friends Lord Stanley and Lady Carnegy.

The problem with putting my undertakings on the face of the Bill is that there could in the event be scope for argument and hence possible legal challenge as to what constitutes an obligation. That scope for argument must be minimised. The noble and learned Lord, Lord Simon, said that there was no foundation to that point. He pointed to the existing wording at the start of Clause 22. But the amendment would extend the scope or the possibility of a legal challenge to the basis of Ministers' actions.

The present wording of Clause 22 also allows Ministers to act if it is expedient so to do. Ministers will have to take a view on what an EC regulation —not a directive—obliges them to do. There may be scope for a legal challenge to that assessment. It is not desirable that action should be held up for two years while the matter is resolved in the European Court.

An EC regulation will be directly binding on the United Kingdom but the precise nature of the obligations which it might impose cannot be predicted accurately at this stage. If there were any possibility of protracted delay arising from a legal challenge to government action, or for other reasons which have been discussed at length, then the Government might have to take action under the European Communities Act. That would preclude the possibility of the Potato Marketing Board passing assets to a successor body —an objective which I believe commands the support of the House. Perhaps I may say to the noble and learned Lord, Lord Simon, and my noble friend Lord Renton, that that is the principal danger of accepting the amendments.

I should like also to comment on that part of the amendment which precludes Ministers from revoking a potato marketing scheme before the introduction of an EC potato regime unless they consider it necessary or in the public interest. That brings us back to the debate over the difference between "expedient" and "in the public interest". I have repeatedly said that Ministers would not and could not act on a whim. But should Ministers decide to revoke the scheme otherwise than in the context of an EC regime, then that decision would be subject to an affirmative resolution of both Houses. I suggest that it is at that stage that we could debate whether or not the decision is expedient or in the public interest.

The Government are consulting industry at the moment. We have genuinely not come to a view. To answer the noble Lord, Lord Carter, and my noble friend Lord Renton, that is the reason why there are no current plans by the Government to revoke the potato marketing scheme.

The Bill is purely an enabling Bill. As I have said on numerous occasions, Ministers would not take lightly any decision to revoke the scheme. In coming to such a decision any number of considerations would be taken into account, including the interests of processors and retailers—to answer the noble Baroness, Lady O'Cathain. To answer her further, we are consulting a number of retailers, including the British Retail Consortium, the Co-operative Union, the British Potato Trade Consortium and the National Federation of Fruit and Potato Trades among others.

The noble Lord, Lord Carter, asked whether what I said at Report stage was correct in regard to EC law prevailing over UK law. It was correct, which is why I did not write to him. The noble Lord also mentioned Maastricht. Maastricht makes no difference to this matter at all. EC law has primacy over UK law. Should Parliament fail to approve an order to enable the UK to come into line with its obligations, nevertheless those obligations would exist. Any rights of individuals flowing from those obligations would be upheld by the courts, including if necessary the European Court. That is why I mentioned earlier that we would want to avoid the possibility of a lengthy delay through the courts.

The noble Lord, Lord Carter, referred to the question of subsidiarity. The EC Commission proposals constitute a single market measure. There is therefore no place for subsidiarity in them. Potatoes would be produced and marketed across one inter-related marketplace. It is not surprising that the Commission's proposals exclude any provision for the continuation of national regimes.

As I explained, the Government cannot and should not be bound by the provisions of the amendments. To answer my noble friend Lady Carnegy, I am certain that the debate on these questions will continue in another place. For the time being, and for the reasons that I have spelt out at some length, I ask the noble Lord, Lord Carter, to think again about the amendment and withdraw it.

Lord Carter

My Lords, I am extremely grateful to all noble Lords who have taken part in this interesting debate. It clearly goes to the heart of the problem of uncertainty mentioned by so many of your Lordships. The fact is that the Minister has failed to answer the principal reason for bringing forward the amendments. There is great anxiety both in industry and in this House that as the Bill stands the Government can wind up the potato marketing scheme by resolution as soon as the Bill becomes law and before we know the outcome of the negotiations in Europe regarding the use of the potato regime.

We have heard the Minister's assurance—to which I shall turn later—but this is the central point. If we leave the Bill as it is and do not attempt to redraft by placing on the face of the Bill what the Government say they want to do and what we all want them to do —which is to make sure that there is not a gap between the passing of the Bill and the negotiation of the European potato regime which is filled by the Government using the affirmative resolution to wind up the potato marketing scheme—chaos and uncertainty would result.

The noble and learned Lord, Lord Simon of Glaisdale, put the point exactly. We are being asked to legislate by ministerial statement and by ministerial assurance. The noble and learned Lord gave an excellent summary of the legal position. He said that there is absolutely no legal foundation for the argument that the Minister has produced. We all know that Ministers give assurances—and of course they mean them when they give them. But as the noble and learned Lord said, we dare not accept that as enough.

Perhaps I may give an example to add to the one given by the noble and learned Lord. I was involved in the passing of the National Health Service and Community Care Act. We had an assurance from the Minister on the question of ring-fencing. We were told that the money ring-fenced for mental health would be protected. We have learnt in the past few months that that assurance has been cast aside.

We have to attempt to get on to the face of the Bill the points which we want to see. The amendments may not be perfectly drafted. I take the point made by the noble Baroness, Lady Carnegy, about the public interest. One could find alternative words. But there is a chance here for the Minister to take the amendment away and redraft it in another place if he accepts the principles of the argument. I am afraid to say that in his answer he did not seem to do so.

There is uncertainty in farming at the moment. It is a desperate situation. We should not be adding to it by accepting on the face of the Bill a clause which I am sure, if they turned their minds to it, the Government could amend. The noble Baroness, Lady O'Cathain, said that she is sure that it is not intended to abolish the potato marketing scheme before we have a regime from Europe. But that is exactly what could happen. The purpose of the amendment is to prevent that happening.

The noble Earl the Minister referred to the possibility of a legal challenge and we heard from the noble and learned Lord, Lord Simon of Glaisdale, that he does not accept that. I am sure that the Minister's heart is in the right place. But it is always the way that the Government or the department will rely on the legal argument. He said that there are no current plans. That could change tomorrow. There could be a change of circumstance and the Minister could come forward and say, "In the light of what Ministers regard as necessary, we have changed our minds and we will revoke the potato marketing scheme". They would then bring forward an affirmative resolution, which of course could only be accepted or rejected. It could not be amended.

I was prepared to take the amendments away if the Minister had been prepared to accept the principle and to amend the Bill in another place. He is determined not to do that. He is resting entirely on this legal argument which, as we have heard from noble Lords who know the law better than I do, does not stand up. For those reasons I intend to ask the opinion of the House.

4.33 p.m.

On Question, Whether the said amendment (No. 3) shall be agreed to?

Their Lordships divided: Contents, 144; Not-Contents, 136.

Division No. 1
Acton, L. Cudlipp, L.
Addington, L. David, B.
Adrian, L. Devonshire, D.
Airedale, L. Donaldson of Kingsbridge, L
Allenby of Megiddo, V. Donoughue, L.
Alport, L. Dormand of Easington, L.
Archer of Sandwell, L. Eatwell, L.
Ardwick, L. Elis-Thomas, L.
Ashley of Stoke, L. Ennals, L.
Aylestone, L. Erroll, E.
Banks, L. Ewing of Kirkford, L.
Beaumont of Whitley, L. Ezra, L.
Belhaven and Stenton, L. Falkender, B.
Birk, B. Falkland, V.
Blackstone, B. Fisher of Rednal, B.
Boardman, L. Foot, L.
Boston of Faversham, L. Gallacher, L.
Bottomley, L. Galpern, L.
Boyd-Carpenter, L. Geraint, L.
Bridges, L. Gilmour of Craigmillar, L.
Brooks of Tremorfa, L. Gladwyn, L.
Bruce of Donington, L. Graham of Edmonton, L. [Teller.]
Campbell of Eskan, L.
Carmichael of Kelvingrove, L. Gregson, L.
Carter, L. Halsbury, E.
Cledwyn of Penrhos, L. Hampton, L.
Clinton-Davis, L. Hamwee, B.
Cobbold, L. Harris of Greenwich, L.
Cochrane of Cults, L. Healey, L.
Cocks of Hartcliffe, L. Henderson of Brompton, L.
Congleton, L. Hilton of Eggardon, B.
Hollis of Heigham, B. Pitt of Hampstead, L.
Hooson, L. Prys-Davies, L.
Houghton of Sowerby, L. Rea, L.
Howell, L. Redesdale, L.
Hughes, L. Renton, L.
Hutchinson of Lullington, L. Richard, L.
Hylton, L. Ritchie of Dundee, L.
Hylton-Foster, B. Robson of Kiddington, B.
Jacques, L. Rochester, L.
Jay, L. Russell, E.
Jay of Paddington, B. Saltoun of Abernethy, Ly.
Jeger, B. Sefton of Garston, L.
Jenkins of Hillhead, L. Serota, B.
Jenkins of Putney, L. Shackleton, L.
John-Mackie, L. Shannon, E.
Kilbracken, L. Sharp of Grimsdyke, L.
Kintore, E. Shepherd, L.
Kirkwood, L. Simon of Glaisdale, L.
Listowel, E. Stallard, L.
Llewelyn-Davies of Hastoe, B. Stanley of Alderley, L.
Longford, E. Stedman, B.
Lovell-Davis, L. Stodart of Leaston, L.
McCarthy, L. Stoddart of Swindon, L.
McIntosh of Haringey, L. Strabolgi, L.
McNair, L. Taylor of Blackburn, L.
Mallalieu, B. Taylor of Gryfe, L.
Mayhew, L. Tenby, V.
Merlyn-Rees, L. Tordoff, L. [Teller.]
Milner of Leeds, L. Underhill, L.
Monk Bretton, L. Varley, L.
Montgomery of Alamein, V. Wallace of Coslany, L.
Morris of Castle Morris, L. Whaddon, L.
Mowbray and Stourton, L. Wharton, B.
Mulley, L. White, B.
Nelson, E. Wigoder, L.
Nicol, B. Wilberforce, L.
Ogmore, L. Williams of Elvel, L.
Orr-Ewing, L. Williams of Mostyn, L.
Palmer, L. Wilson of Rievaulx, L.
Pearson of Rannoch, L. Winstanley, L.
Perry of Walton, L. Wise, L.
Peston, L.
Aberdare, L. Cullen of Ashbourne, L.
Addison, V. Cumberlege, B.
Alexander of Tunis, E. Dacre of Glanton, L.
Annaly, L. Davidson, V.
Archer of Weston-Super-Mare, L. Denham, L.
Denton of Wakefield, B.
Arran, E. Elibank, L.
Astor, V. Ellenborough, L.
Astor of Hever, L. Elles, B.
Auckland, L. Elton, L.
Bessborough, E. Faithfull, B.
Birdwood, L. Ferrers, E.
Blatch, B. Fraser of Carmyllie, L.
Blyth, L. Fraser of Kilmorack, L.
Borthwick, L. Gainford, L.
Brabazon of Tara, L. Gardner of Parkes, B.
Bramall, L. Geddes, L.
Bridgeman, V. Goschen, V.
Brigstocke, B. Gray of Contin, L.
Brookeborough, V. Gridley, L.
Brougham and Vaux, L. Hacking, L.
Butterworth, L. Haig, E.
Cadman, L. Hailsham of Saint Marylebone, L.
Caithness, E.
Caldecote, V. Hardinge of Penshurst, L.
Campbell of Alloway, L. Harmar-Nicholls, L.
Carnock, L. Harvington, L.
Cavendish of Furness, L. Hayhoe, L.
Cawley, L. Headfort, M.
Chalker of Wallasey, B. Hemphill, L.
Clark of Kempston, L Henley, L.
Coleraine, L. Hesketh, L. [Teller.]
Constantine of Stanmore, L. Hives, L.
Cranborne, V. Holderness, L.
Crathorne, L. HolmPatrick, L.
Crickhowell, L. Hood, V.
Hooper, B. Quinton, L.
Hothfield, L. Reay, L.
Howe, E. Rennell, L.
Huntly, M. Renwick, L.
Ironside, L. Rippon of Hexham, L.
Jenkin of Roding, L. Rodger of Earlsferry, L.
Johnston of Rockport, L. Romney, E.
Kilmarnock, L. St. Davids, V.
Knollys, V. Saint Levan, L.
Lauderdale, E. Sanderson of Bowden, L.
Leigh, L. Savile, L.
Lindsay, E. Shaughnessy, L.
Long, V. Skelmersdale, L.
Lyell, L. Stewartby, L.
Mackay of Clashfern, L. Strathclyde, L.
Macleod of Borve, B. Strathcona and Mount Royal, L.
Margadale, L.
Marlesford, L. Strathmore and Kinghorne, E. [Teller.]
Marsh, L.
Merrivale, L. Sudeley, L.
Mersey, V. Swansea, L.
Mottistone, L. Terrington, L.
Mountevans, L. Thomas of Gwydir, L.
Moyne, L. Trefgarne, L.
Munster, E. Trumpington, B.
O'Cathain, B. Ullswater, V.
Oxfuird, V. Vaux of Harrowden, L.
Park of Monmouth, B. Vivian, L.
Pender, L. Wade of Chorlton, L.
Peyton of Yeovil, L. Wakeham, L.
Plummer of St. Marylebone, L. Westbury, L.
Porritt, L. Whitelaw, V.
Prentice, L. Wynford, L.
Pym, L. Young, B.

Resolved in the affirmative, and amendment agreed to accordingly.

4.44 p.m.

Lord Carter moved Amendment No. 4: Page 13, line 2, at end insert: ("(2B) Subject to subsection (1A) above, no order shall be made under this section unless a draft of it has been laid before, and approved by a resolution of, each House of Parliament.").

The noble Lord said: My Lords, this amendment has already been spoken to. I beg to move.

On Question, amendment agreed to.

Clause 24 [Application for approval]:

Lord Stanley of Alderley moved Amendment No.5: Page 13, line 17, leave out ("may,") and insert ("shall, subject to any poll of registered producers that may be carried out under section 36 below,").

The noble Lord said: My Lords, with your Lordships' permission, in moving this amendment I shall speak also to Amendment No. 6. At Report stage I promised to study what your Lordships and my noble friend had said in reply to Amendments Nos. 39A and 39B and to try to put those thoughts into an amendment that would be acceptable. The result is the two linked amendments, Amendments Nos. 5 and 6. I hope that they remove the uncertainty felt within the industry and so strongly deplored in our debates.

The purpose of the amendments is to ensure that should the Government decide to do away with the present marketing board, they will be committed to allowing a successor body, and to suggest what role that successor body should have, subject to the provisions of Clause 36. Your Lordships will note that these amendments are slightly different from those tabled in Committee and indeed at Report stage to take account, as I said, of your Lordships' views and in particular of my noble friend's remarks, at col. 1096 of the Official Report, when he said that as regards any successor body, in the end it is for the industry to decide what it wants. Following my noble friend's remarks, it has been pointed out to me that the producers might wish to wind up the board and have its assets distributed. That could be done by having a poll under Clause 36, hence the reason for my Amendment No. 5. I very much hope that producers will not be so stupid as to do that. But I acknowledge my noble friend's point that they should be given that option.

Amendment No.6 spells out the role which any successor body might have. That appears in paragraphs (i) to (v). I should make it clear that these matters are for the Potato Marketing Board to consider when preparing a successor scheme or schemes, as detailed in paragraph (c) of my amendment whereas paragraph (d) puts a duty on the Government to consult before authorising any such scheme.

The duty under paragraph (d) of my amendment is the same as in Clause 3 of the Bill. What the Government considered necessary for milk must be even more necessary for potatoes, not least, because we have had minimal discussion on potatoes as opposed to that on milk which has been going on for a year or so.

Most of the roles suggested for any successor body were mentioned at Report, in particular by my noble friend at col. 1096 and indeed by my honourable friend Mr Curry in another place on 28th January, at col. 1133. However, I got the impression from reading that exchange that my honourable friend would prefer to scrap the potato board and to have nothing in its place. I hope that my noble friend will be able to correct my naturally suspicious and cynical thoughts.

I cannot conclude without mentioning the negotiations now going on with regard to a possible European potato regime, not least because it was discussed at Report stage. This amendment would not force our Minister to write all the roles mentioned in this amendment into a subsidiarity regime for the United Kingdom which I understand is on offer. But it would morally oblige the Government to work for such a subsidiarity clause for the United Kingdom. For the life of me I cannot see why my right honourable friend would not want to do so. It must be in Great Britain's interest to do our own thing when Brussels gives us permission to do so.

If the Government are not prepared to accept this amendment I believe that the potato industry will be forced to the conclusion that my right honourable friend wants to get rid of the United Kingdom's Potato Marketing Board and put nothing in its place despite the fact that the European Commission is offering us the ability to do so. Nothing could be so damaging to confidence, as has been said strongly by my noble friend, and that is what we are lacking in the industry at the moment. Confidence is at a very low ebb—and not only in the potato industry. Confidence is at a low ebb throughout what I am sorry to have to say remains of a once proud and efficient farming industry.

The amendment would give confidence by showing that the Government are prepared, if it is in the public interest, to put in place a creditable successor body to the Potato Marketing Board. I beg to move.

Lord Carter

My Lords, I am pleased to add my name to the amendment and to support the noble Lord, Lord Stanley of Alderley, who has expressed the position extremely well. As he said, the amendment seeks to deal with the clear situation in which the Potato Marketing Board is to be wound up (whether as a result of an EC regulation or otherwise). The amendment deals with the preparation of a transfer scheme, which is the subject of Clause 24.

Amendments Nos. 5 and 6 are intended to determine what will happen; what kind of successor body, if any, should be established; and what functions it should have. There are two scenarios. Let us suppose that the producers do not want a successor body but would prefer to distribute the assets of the Potato Marketing Board. That is one scenario. The alternative, which I think is much more likely, is that they will want a successor body and will want to have a say in the functions of that successor body.

The amendments are intended to achieve a clear statement of what I would describe as "the order of play". First, the board has to decide on the nature of the transfer scheme that it wants. The Minister has said on a number of occasions at previous stages in our consideration of the Bill that he is content that the board has contacts with producers and that it can speak for the industry. The board should then put this matter to producers in a poll. We have discussed Clause 36 a number of times previously and, as we know, it is not a mandatory poll. The board is able to decide whether to have a poll and is not constrained by the results of the poll. However, if it wishes the producers to decide on the nature of the transfer scheme, the board should put this to producers in a poll and, if the poll is satisfactory and the answer is yes, the board shall then bring forward a scheme with the functions which are set out in Amendment No. 6. So, the producers will have a chance to decide whether there should be a transfer scheme; and, if so, under Amendment No. 6, to decide what scheme it should be.

However, there is a drafting problem with Clause 36 and I think that we should have tabled a consequential amendment. I refer to Clause 36(1) (a) and (b), referring to a poll for the making of any application". that is to say, where the poll is to determine whether there should be an application in relation to a transfer scheme. Clause 36(1) continues: or (b) for the making of an application under that section in relation to a particular scheme". I believe that the word "or" at the end of paragraph (a) should be amended to "and" to avoid the necessity of holding two polls. If the Minister feels disposed to accept the amendments, perhaps he will deal with that point. It is a consequence and is necessary if we are to avoid the Potato Marketing Board having to conduct two polls—first, to see whether there should be a transfer scheme; and, secondly, to determine the nature of the scheme.

As I have said, there are two alternatives. The first is that when the situation is put to the producers, they vote no. They will then have the money, and the assets of the board will be distributed. If they vote yes, which is much more likely, the board shall then "have regard to"—we have discussed that phrase often enough at previous stages —the functions set out in Amendment No. 6.

Therefore, this group of amendments gives the maximum flexibility to the board and producers. It takes advantage of and builds on the permissive rather than the mandatory nature of Clause 36 which, as we know, deals with the producers' poll. Clause 36(2) gives the board the right to exercise its judgment about the results of the poll. Amendment No. 6 clearly states the functions which should be considered in the drafting of a transfer scheme and paragraph (d) deals with the important point about the consultation that will be necessary. I am sure that the Minister will recognise the wording of paragraph (d), which has been taken from a previous clause dealing with the milk marketing boards.

If I had to give my own preference for the successor bodies or transfer scheme that should emerge, it would be for a development council to be funded by statutory levy, with a strong producers' co-operative and perhaps a "potato mark" or a federation of co-operatives. That is the outcome that I should like to see. However, we should leave it to the producers and the board to come forward (as a result of a poll) with the kind of scheme that they want. Ministers should accept—as they did in earlier clauses relating to the milk boards—the description of the functions which is set out in Amendment No. 6. If the amendments were accepted, that would clear up the remainder of the confusion and uncertainty which exists in the industry, which has at least partly been put to rest as a result of the decision of the House on the previous amendment.

Lord Renton

My Lords, like others of your Lordships I am strongly in favour of the consultation provisions of the Bill being emphasised, and indeed tightened. I am strongly in favour of Amendment No. 6, which is a great improvement on Clause 25 although it goes into rather more detail than I often like to see in a Bill.

I am also in favour of the principle behind Amendment No. 5; but I feel obliged to mention one small drafting point. The expression "subject to" inserted where it is intended in Clause 24 would make subsection (1) read, The Board shall, subject to any poll of registered producers that may be carried out under section 36 below, at any time before the end of the period of six months beginning with the day specified by order under section 22 above, apply to the Ministers". The board should have an obligation to apply. That would fill in one of the gaps in the Bill, which would be desirable. However, I wonder whether the expression "subject to" is the correct expression there. I should have thought that the correct expression should be (and this could easily be made the subject of an amendment in the other place if the principle is agreed by your Lordships) "shall, while having regard to the result of any poll". I think that that is what my noble friend means and what the noble Lord, Lord Carter, intended. However, subject to that and because this is an important question of principle, I would vote for Amendment No. 5 in the Division Lobby if it should come to that.

Baroness Carnegy of Lour

My Lords, perhaps I may ask my noble friend Lord Stanley of Alderley about the effect of the amendment because I am not sure that I am clear about it or whether the House is clear about it. I realise that my noble friend's intention is to increase the possibilities for producers subsequent to the winding up of the board. However, as things stand at present, I am advised that under either the 1958 Act or the European Communities Act, the revocation of the potato marketing scheme would mean for producers a clear expectation that the assets would be distributed to them. That expectation —that all assets would go to the producers—exists now. The present Act does nothing to reduce that expectation. It still exists.

However, what the present Act does provide is an option. Through the board the producers can choose that some of the assets go to the successor board for the benefit of the industry. That provision exists now. In effect, the amendment would mean that that distribution of assets could not happen until there had been a poll. The automatic expectation is removed. There would have to be a poll and the producers would have to vote against the assets going to a successor body in order for them to get those assets direct. Does my noble friend understand what I am saying? I hope that I made myself clear. It seems to me that an impediment is being put in the way of the producers. A poll comes between them and their obtaining the assets direct. My noble friend needs to answer that point when he replies.

5 p.m.

Lord Monk Bretton

My Lords, I shall say a few words in support of the amendment spoken to by my noble friend. I shall start by emphasising the virtues of Amendment No. 6 to Clause 25 which will provide guidance for the board on the consultation it is to carry out and, under paragraph (b), the fact that Ministers must consult. It is along the lines of the provision in the Bill relating to the PMB, so I should not have thought that it was controversial. I wish to emphasise the need for consultation, as did my noble friend Lady Carnegy of Lour. There has not been enough consultation. Too many snap judgments have been made.

I was pleased to hear my noble friend the Minister say on Report that growers could largely choose what future arrangements they made to succeed the PMB. However, his right honourable friend the Minister in another place does not look as though he will help them greatly. He does not appear to be considering derogation or subsidiarity, despite the climatic differences in different parts of Europe which might cause difficulties for potato growing. I am dubious about another of the Minister's views which seems to be that we have so many natural advantages for potato growing that we should grow as many acres of potatoes as we like. That will prove to be too simplistic. It is against the trend in other crops. While the amendment does not refer to quotas, some form of supply management will need to be considered in the consultations. I understand that French and Spanish growers are thinking in terms of quotas. It would be nice to avoid them but, nevertheless, that is the way they are thinking.

The Dutch—I wish that we were in their shoes—have four growers' co-operatives. I have no doubt that they can put forward a policy and influence production levels where necessary. It puts them in a position of being able to plan logically. That approach seems to be more organised.

The problem in the UK is a noticeably large difference between wholesale and retail prices. Retail prices are disappointingly high, despite low producer prices. The four integrated co-operatives in Holland may be why Holland's potato growing is so successful. I do not believe that success for us will come through abolition of the PMB with nothing put in its place. That point must be emphasised as much as possible. I should prefer to see us go down the road the Dutch have gone, but that would take a long time to achieve.

I must end by saying, rather brutally, that I do not believe that producer-bashing is necessarily the best way to benefit consumers. Potato growing is a gamble. The danger is that we shall make that gamble too risky. If we do that, there will be no investment and growers will not continue. The abolition of the PMB without putting anything in its place will prove to be se] f-defeating.

Earl Howe

My Lords, the whole tenor and purpose of the Bill in allowing the potato industry, if it so wishes, to establish a successor body or bodies to the Potato Marketing Board is to allow the industry the maximum flexibility in what it proposes. Criteria against which any scheme will be judged are clearly laid down in Clause 25, but beyond that, it is entirely up to the board to decide on its course of action.

Amendment No. 5 flies in the face of that flexibility. It says that the board must apply for a transfer scheme, unless producers tell it in a poll not to do so. Of course, I share my noble friend's desire to see a successor body in place, but we surely cannot tie the hands of the board in that way. It is the Government's view that the industry must decide its own future. It is not for government to prescribe, as the amendment does, what that future must be. And there is another, more practical point. What would happen if a poll of producers wanted a successor scheme, but economic analysis or some other factor proved that such a scheme would not be viable? What would happen if no poll were held and it was found similarly that a scheme was impossible to evolve? This would put the board in an impossible situation. I have to say also, that that appears to be a back-door method of constraining the board to take account of the results of a poll, however unrepresentative that poll might be. That goes directly against Clause 36(2), about which we spoke at length both in Committee and on Report.

My noble friend Lord Stanley said that the Government should ensure that there is a successor body. The effect of the House voting in favour of Amendment No. 3 is to increase to some extent the chances of the Government having to proceed under the powers of the European Communities Act. As I said, the Government are favourably disposed towards the idea of a development council as a successor to the PMB; so we shall seek to avoid having to act under the European Communities Act, if at all possible. Unfortunately, I am less able to give an assurance that the board will have an opportunity to establish a successor than I was half an hour ago.

However, those considerations aside, I do not believe that it is any of our business to be laying down the law—literally—to the board. Equally, even if we did consider it our business, we could leave the boards in an impossible position if we tied their hands in the manner suggested by the amendment. The right and practical way forward is to leave the board to judge how best to proceed. That enabling approach is the right one. It is the basis of this part of the Bill. I hope that the siren voices around me will not deflect the House from that view.

I am grateful to my noble friend for his clear exposition of Amendment No. 6. I believe that I well understand the purposes behind it. First, it seeks to define various aspects of a successor scheme which are desirable, and to encourage the board to include them in a scheme.

Secondly, it obliges Ministers to consult with representatives of the industry and of consumers before approving a scheme. It is therefore intended to ensure that desirable features of the present marketing scheme are continued in a way acceptable to all involved with potatoes, whether growing them, selling them, making them into processed products or just eating them. I have no quarrel with that. It lies behind the whole thrust of the Bill. Nor do I have any quarrel with the desirable features listed in paragraph (c), with one notable exception. But I cannot for the life of me see why we need this amendment to achieve these things.

Once again, it seems to me that we are trying to place a straitjacket on the industry when the whole tenor of this Bill is to allow the industry to make its own decisions. Indeed, the amendment itself seems to acknowledge this in its opening paragraph: the Board has had regard to the desirability of proposing such arrangements as it considers would be likely". In other words, we are leaving it to the board to decide both on likelihood and desirability.

What is the amendment really achieving? It provides a list of desirable activities. Four of these —research and development, promotion, collection of statistics and providing a discussion forum—are all in the ambit of a development council. There is no argument about that. I cannot imagine that we need to prescribe them here in order for the industry to be aware of them. But, once again, it must be for the industry to decide what it wants. The first feature, however, is different: schemes for the orderly marketing of potatoes". Such schemes within a scheme seem to me to be fraught with danger. There seems to be the possibility of the re-introduction of marketing controls, which would certainly not be appropriate to a development council and would very likely be vulnerable under both domestic and Community competition law. No, my Lords, that will not do.

In sum, I do not see what this amendment contributes, and I hope that my noble friend will withdraw it.

Lord Carter

My Lords, before the noble Earl sits down and with the leave of the House, he said that a scheme might fail because it does not stand up to economic analysis. Surely, if that were the case it would be met by Clause 25(3)(a), which states that the Government must satisfy themselves that the scheme is in the public interest. Clearly, if a scheme failed an economic analysis then it would not be in the public interest. If that is the case, Clause 25 comes into play and the scheme would have to be rejected. Therefore, I believe that the Minister's argument is answered in the Bill.

Earl Howe

My Lords, I do not believe that that follows. On a face of it a scheme might appear to be in the public interest but when the sums are added up it may not be in the interests of a particular sector. However, I take the noble Lord's point.

Lord Stanley of Alderley

My Lords, I believe that my noble friend Lord Monk Bretton answered the question posed to me by my noble friend Lady Carnegy. The 1958 Act does as my noble friend Lady Carnegy suggests, hence Amendment No. 5. It gives an option. But what is the impediment or the problem in having a delay of perhaps two or three months, particularly when interest rates are alleged to be going to 3 per cent.? I cannot see that that is a great worry and it means that the whole scheme would be subject to more democratic decisions.

The Minister spoke about maximum flexibility. I am all for maximum flexibility but it seems to me that in the Government's mind that means to do nothing: flexibility not to produce any scheme at all. Amendment No. 6 in particular gives a guide to what might be in store for us.

I am not particularly worried about the thoughts or problems of the Potato Marketing Board. I am sure that it can solve its own problems. I am interested in the growers and consumers. They are looking for a guide. This amendment seeks to give them that.

My noble friend does not like orderly marketing. I am surprised that he does not like orderly marketing because I thought we all liked it. He jumps to conclusions. I give one other example of what orderly marketing might do. It might well negotiate between producers and processors about which he is so worried. He should not be worried, but I shall not go into that now.

The amendment may be technically incorrect. I take the point made by noble friend Lord Renton that Amendment No. 5 may be incorrectly drafted. However, I have been in your Lordships' House for nearly 20 years and I have sent on many amendments from here to another place and they have always been returned amended. However imperfect may be the drafting of the amendment, your Lordships may be sure that government draftsmen will have another crack at it. Sometimes they make rather a mess of it. Therefore, I have no qualms about sending the amendment on to another place. Indeed, it is your Lordships' duty to do so. This is a problem. Every noble Lord has said that he is worried and it is good for another place to hear that we are worried and that we are passing on not necessarily our anxieties but those of producers and consumers. For that reason, I must ask for the opinion of the House.

5.15 p.m.

On Question, Whether the said amendment (No. 5) shall be agreed to?

Their Lordships divided: Contents, 135; Not-Contents, 121.

Division No. 2
Acton, L. Harris of Greenwich, L.
Addington, L. Healey, L.
Adrian, L. Hertford, M.
Airedale, L. Hilton of Eggardon, B.
Alport, L. Hollis of Heigham, B.
Archer of Sandwell, L. Hooson, L.
Ardwick, L. Houghton of Sowerby, L.
Ashley of Stoke, L. Howell, L.
Aylestone, L. Hughes, L.
Banks, L. Hutchinson of Lullington, L
Beaumont of Whitley, L. Hylton-Foster, B.
Birk, B. Jay, L.
Blackstone, B. Jay of Paddington, B.
Bonham-Carter, L. Jeger, B.
Boston of Faversham, L. Jenkins of Hillhead, L.
Bottomley, L. Jenkins of Putney, L.
Boyd-Carpenter, L. John-Mackie, L.
Brooks of Tremorfa, L. Kilbracken, L.
Bruce of Donington, L. Kintore, E.
Campbell of Eskan, L. Kirkwood, L.
Carmichael of Kelvingrove, L. Lawrence, L.
Carter, L. Listowel, E.
Cledwyn of Penrhos, L. Longford, E.
Cobbold, L. Lovell-Davis, L.
Cochrane of Cults, L. McCarthy, L.
Cocks of Hartcliffe, L. McIntosh of Haringey, L.
Congleton, L. Mallalieu, B.
Craigavon, V. Mancroft, L.
Cudlipp, L. Masham of Ilton, B.
David, B. Mason of Barnsley, L.
Davies, L. Mayhew, L.
Dean of Beswick, L. Merlyn-Rees, L.
Devonshire, D. Milner of Leeds, L.
Donaldson of Kingsbridge, L. Monk Bretton, L.
Donoughue, L. Montagu of Beaulieu, L.
Dormand of Easington, L. Montgomery of Alamein, V.
Eatwell, L. Morris of Castle Morris, L.
Elis-Thomas, L. Mulley, L.
Ennals, L. Nelson, E.
Erroll, E. Nicol, B.
Ewing of Kirkford, L. Ogmore, L.
Ezra, L. Palmer, L.
Falkender, B. Pearson of Rannoch, L.
Fisher of Rednal, B. Perry of Walton, L.
Foot, L. Peston, L.
Gainsborough, E. Pitt of Hampstead, L.
Gallacher, L. Prys-Davies, L.
Galpern, L. Rea, L.
Geraint, L. Redesdale, L.
Gilmour of Craigmillar, L. Renton, L.
Gladwyn, L. Richard, L.
Glasgow, E. Ritchie of Dundee, L.
Graham of Edmonton, L. [Teller.] Robson of Kiddington, B.
Rochester, L.
Gregson, L. Russell, E.
Halsbury, E. Saltoun of Abernethy, Ly.
Hampton, L. Sefton of Garston, L.
Hamwee, B. Serota, B.
Shackleton, L. Tordoff, L.
Shannon, E. Underhill, L.
Simon of Glaisdale, L. Varley, L.
Stanley of Alderley, L. [Teller.] Wallace of Coslany, L.
Stedman, B. Wharton, B.
Stodart of Leaston, L. White, B.
Stoddart of Swindon, L. Williams of Elvel, L.
Strabolgi, L. Williams of Mostyn, L.
Taylor of Blackburn, L. Wilson of Rievaulx, L.
Teviot, L. Wise, L.
Aberdare, L. Hives, L.
Addison, V. Holderness, L.
Alexander of Tunis, E. HolmPatrick, L.
Allenby of Megiddo, V. Hooper, B.
Annaly, L. Hothfield, L.
Archer of Weston-Super-Mare, L. Howe, E.
Huntly, M.
Arran, E. Jenkin of Roding, L.
Astor, V. Johnston of Rockport, L.
Astor of Hever, L. Kimball, L.
Auckland, L. Lauderdale, E.
Bessborough, E. Leigh, L.
Blatch, B. Liverpool, E.
Blyth, L. Long, V.
Boardman, L. Lyell, L.
Borthwick, L. Mackay of Clashfern, L.
Brabazon of Tara, L. Macleod of Borve, B.
Braine of Wheatley, L. Marlesford, L.
Bridgeman, V. Marsh, L.
Brigstocke, B. Merrivale, L.
Brookeborough, V. Mersey, V.
Brougham and Vaux, L. Mottistone, L.
Cadman, L. Moyne, L.
Caithness, E. O'Cathain, B.
Caldecote, V. Orkney, E.
Campbell of Alloway, L. Orr-Ewing, L.
Carnock, L. Oxfuird, V.
Cawley, L. Park of Monmouth, B.
Chalker of Wallasey, B. Pender, L.
Clark of Kempston, L Peyton of Yeovil, L.
Coleraine, L. Plummer of St. Marylebone, L.
Cox, B. Prentice, L.
Cranborne, V. Quinton, L.
Crathorne, L. Rayleigh, L.
Crickhowell, L. Reay, L.
Cross, V. Rees, L.
Cumberlege, B. Rippon of Hexham, L.
Dacre of Glanton, L. Rodger of Earlsferry, L.
Davidson, V. Romney, E.
Denham, L. St. Davids, V.
Denton of Wakefield, B. Sanderson of Bowden, L.
Downshire, M. Skelmersdale, L.
Elibank, L. Skidelsky, L.
Ellenborough, L. Stewartby, L.
Faithfull, B. Strathclyde, L.
Ferrers, E. Strathcona and Mount Royal, L.
Flather, B.
Fraser of Carmyllie, L. Strathmore and Kinghorne, E. [Teller.]
Gardner of Parkes, B.
Gisborough, L. Sudeley, L.
Goschen, V. Swansea, L.
Gray of Contin, L. Thomas of Gwydir, L.
Gridley, L. Trumpington, B.
Hacking, L. Ullswater, V.
Haig, E. Vaux of Harrowden, L.
Hailsham of Saint Marylebone, L. Vivian, L.
Wade of Chorlton, L.
Hardinge of Penshurst, L. Wakeham, L.
Harvington, L. Whitelaw, V.
Hayhoe, L. Wynford, L.
Hemphill, L. Young, B.
Henley, L. Younger of Prestwick, L.
Hesketh, L. [Teller.]

Resolved in the affirmative, and amendment agreed to accordingly.

5.26 p.m.

Clause 25 [Determination of application]:

Lord Stanley of Alderley moved Amendment No. 6:

Page 13, line 40, at end insert:

("(c) that in preparing the scheme for approval the Board has had regard to the desirability of proposing such arrangements as it considers would be likely to ensure the continuation or introduction by one or more successor bodies of:

  1. (i) schemes for the orderly marketing of potatoes including market intelligence, and the identification of market opportunities,
  2. (ii) research and development,
  3. (iii) the generic promotion of potatoes,
  4. (iv) the collection of statistics on the potato industry, and
  5. (v) a forum for discussion of matters of common interest to producers, purchasers, retailers and consumers of potatoes, and

(d) that they have consulted about the principles of the scheme such persons appearing to them to be representative of the interests of producers, purchasers, retailers and consumers of potatoes as they consider appropriate.").

The noble Lord said: My Lords, this amendment is consequential. I beg to move.

On Question, amendment agreed to.

Clause 48 [Wool guarantee]:

Lord Gallacher moved Amendment No. 7: Page 23, line 19, at end insert ("() Notwithstanding the provisions of subsections (1) and (2) of section 2 of the Agriculture Act 1957, in relation to wool the guaranteed price determined for the guarantee periods beginning in the years 1993 and 1994 shall not be less than 81 per cent and 77 per cent respectively (calculated in accordance with section 2 of the said Act) of the corresponding price determined for the guarantee period beginning in the year 1992.").

The noble Lord said: My Lords, in moving Amendment No. 7 I wish to speak also to Amendments Nos. 8 and 9 with which Amendment No. 7 is grouped. Amendment No. 7 seeks a gentle phasing out of the wool guarantee with complete removal at the end of the 1994 clip year; that is to say, at 30th April 1995, rather than its sudden termination at 30th April 1993. The British Wool Marketing Board hopes for some recovery in the world market by 1995. I am advised that early in 1992 Ministry of Agriculture officials were sympathetic to the phasing out of the guarantee and at the annual wool guarantee review meeting in February officials were urged to continue technical discussions about the scheme. A general election, however, changes many things and it appears that this was one of the changes which has resulted from that election.

The amendment provides for cuts in the guarantee of 19 per cent. for the 1993 clip year and a further 5 per cent. in the 1994 clip year, leading to a guarantee of 95p per kilogram and 90p per kilogram respectively. This would reduce the guarantee cost from about £26 million to about £12.5 million in 1993–94 and to about £7.5 million in 1994–95 assuming a modest increase in market prices. Both in Committee and on Report the Minister made much of the modest nature of wool receipts as part of producers' incomes. I believe the figure of 5 per cent. was mentioned at that time. Living at or about the margin, however, can make 5 per cent. significant. We have Mr. Micawber's authority for that.

In another place the noble Earl's right honourable friend the Minister when questioned about reductions in hill livestock compensatory allowances said that hill farmers had received increases in income because of additional payments for each ewe. He said, however, that: lowland sheep farmers are facing particularly tough problems".—[Official Report, Commons, 28/1/93; col. 1137.] This amendment seeks to mitigate the position of both hill and lowland farmers. The Bill provides for continuance of the British Wool Marketing Board, and we on these Benches are grateful for that. The amendment seeks to give the board a chance to survive during abnormal market conditions and perhaps add modestly to reserves in the meantime. The smooth flow of wool to primary processors is basic to the board's continuance. The value of wool textile exports exceeds £700 million and British wool plays a large part in this.

If more wool is purchased abroad the balance of payments will be worse off as a result. Furthermore, the industry does not want to jeopardise its restructuring process which it has found particularly painful. Abnormal world stocks have built up since the 1988 decision to end the guarantee. This modest amendment aims to give farmers, the British Wool Marketing Board and primary producers a slightly longer period to adjust to a situation not of their making and to do so at modest cost. I beg to move.

5.30 p.m.

Lord Monk Bretton

My Lords, I must tell my noble friend Lord Howe that I am most unhappy about this matter. The removal of the guarantee could hardly have occurred at a worse moment because the price of wool is so low. Wool may well be dumped on the market in any kind of condition and not in an orderly manner; that is, not properly graded, and so forth. That has already happened elsewhere on the continent and chaotic conditions have arisen. It is also extremely bad news because of the possibility of damage resulting to the high reputation of British wool that has been built up over a long period thanks to the operations of the board. On the textile industry's side it is not good news at all.

As far as producers are concerned, what is so appalling is that the wool price is likely to get so low that a situation may be reached where there is no economic justification to shear at all. I suppose that in the end some may not be able to afford to shear their sheep. If so, that will have serious implications for animal welfare. Even if the situation is not as bad as that, while wool may be a very small percentage of the gross output from sheep nevertheless the margin on the production of lamb is so small that wool looms a lot larger than might otherwise be the case.

It may be that there was a decision in 1988 to do away with the wool guarantee and that it all ought to have been decided then and no alterations made. But the position now is not as foreseen; it is very bad indeed, although the general view is that it is likely to improve in a few years' time. It is a matter of tiding over the situation. It is difficult to persuade me otherwise than to take the view that it is wise to forget the 1988 decision and by this amendment phase out the guarantee over three years. That seems to me to be a very reasonable compromise.

Lord Stanley of Alderley

My Lords, I hope that when my noble friend replies he will say whether the Government have considered the knock-on effect of the immediate loss of guarantee. The Confederation of British Wool Textiles has pointed out that there may be a balance of payments and unemployment problem in its industry. I apologise to the House—I hope I will not be called out of order—in that I misled it by saying that Amendment No. 6 was consequential when I should have said that I had already spoken to it and begged to move. I hope that your Lordships will forgive me, particularly my noble friend on the Front Bench who has been so patient.

Lord Palmer

My Lords, I do not think I need to add much to what I said in support of these amendments at Report stage, except to say that if the Government do not accept them it will be a classic example of civil servants and the Government completely failing to understand the rudiments of farming. I fear it also shows how completely out of touch they are with the real world. Long-term planning is essential in farming. Many farmers will have bought sheep in September, or indeed as far back as the previous September, and based their calculations on the guaranteed price. It simply is not fair, with the stroke of a pen and at a moment's notice, to cut off the hand that feeds the nation. In view of the substantial cuts recently announced in hill livestock compensatory allowances it is hard to see a worse choice of time to bring the wool guarantee to a most abrupt end. I beg to support the amendments.

Lord Geraint

My Lords, in 1988 there was a flourishing marketing system run by the British Wool Marketing Board. A unilateral decision was then made by the British Government. Mr. John Gummer announced in the other place that the guaranteed price system would be done away with in five years' time. The Europeans were very envious of the marketing scheme in this country. They had no intention to suggest that the present scheme or the guaranteed price system should be abolished. Unfortunately, the Government made a very big mistake. I am very sorry that there is provision in the Bill to abolish the guaranteed price for wool as from 1st May of this year.

I was vice-chairman of the board for many years. Ten years ago we were very concerned about the future of that board. The present chairman, Mr. Alyn Evans, who farms in Wales, and the vice-chairman from Scotland are very concerned. The leaders of the national farmers union covering England, Wales, Scotland and Northern Ireland, farmers and politicians on both sides of this House and in the other place have over the years tried to persuade the Minister that this is the wrong approach to the marketing of wool. Unfortunately no heed has been taken as yet. I wonder whether the Minister will be wise in his winding up tonight to say that he will try to persuade his own Ministers to reinstate the guaranteed price for wool because of the very difficult circumstances under which hill farmers work today.

The cost to the Exchequer in the current year, 1992–93, is estimated at £26 million. Assuming only a small increase in market price, the amendment will reduce the cost to £15 million in 1993–94 and to £7.5 million in 1994–95. The total sum that the marketing board is asking for over the next two years is just over £22 million. As the Minister is aware, the guaranteed price for the 1992 wool clip is 117 pence per kilo. The current market price for British wool is only 64 pence per kilo. Therefore without a guaranteed price, on current market prices producer returns will be reduced by about £26 million. That reduction coincides with the recently-announced cut in HLCA payments. That will reduce incomes by about £20 million. This will be a colossal loss to the wool producers of this country and to sheep producers generally. I hope that this reasoned amendment tabled by noble Lords and my noble friends will persuade the Minister at this very late hour to change his mind. If he does not there will be only one way forward: to vote for the amendment.

Earl Howe

My Lords, I explained at Committee and at Report stages the very clear reasons why the Government have decided to terminate the wool guarantee on 30th April. This mechanism originated as part of the detailed structure of guarantees built on the Agriculture Act 1947. The first national guarantee for wool was fixed by Ministers in 1950 with the objective that it should operate as a stabilisation fund. When market prices fell below the guarantee price, the Government were to make cash advances to the wool board to cover the shortfall. When the guarantee price was above the market price the board was required to make repayments to the Government. The intention of the guarantee was therefore to stabilise producer returns from wool production at a time when this return accounted for a more significant proportion of the return from sheep production than it does today, and when other means of support were by no means as substantial as they are today. Even in the 1960s and 1970s the producer return from wool accounted for between 10 per cent. and 15 per cent. of the total return from sheep production. It now accounts for only approximately 5 per cent.

I accept that the wool guarantee has served the industry well over the past 40 years, but your Lordships do not need me to tell you that conditions in agriculture and marketing have altered very significantly over that period. A mechanism designed to meet the needs of the 1950s must be scrutinised carefully to determine whether it remains appropriate in the conditions of the 1990s. The system of agricultural guarantees which emerged from the 1947 Act has now substantially been dismantled. Its functions have largely been replaced by support for producers from other means, notably the European Community. That is the case also for wool, where the function of stabilising and supporting sheep producer incomes now rests with the substantial Community support measures operated under the common agricultural policy. The simple fact is that it can no longer be justified under those circumstances for Government to continue to operate a guarantee for wool.

I say to the noble Lord, Lord Palmer, that the Government announced their intention to discontinue the guarantee in 1988. The industry has been given more than four years notice of the measure. It is now time that the wool industry accepted financial responsibility for its own affairs.

It would not, therefore, be right to accept the amendments, which would postpone the date for termination of the guarantee by two years—from 30th April this year to 30th April 1995. I recognise that the proposal to loosen the current restrictions on the proportions by which the guarantee may be reduced from year to year would be intended to allow the guarantee to operate at a somewhat lower level, for two years after 30th April 1993.

However, as I explained in response to a very similar amendment tabled at Report stage, that misses the central reason for ending the guarantee. Its stated purpose was to stabilise producer returns from wool rather than systematically to give producers a higher price than their product will realise on the market. I have explained why this purpose of price stabilisation can no longer be justified. Under these circumstances, I stress that to accept the amendment would have the effect of increasing government expenditure by around £23 million to £33 million, which could, similarly, not be justified.

I understand very clearly the points which a number of noble Lords have made to the effect that the guarantee will come to an end at a time when the market for wool is very depressed. I also accept that this action will have a short-term impact on sheep producer incomes. However, the impact of ending the guarantee must be seen in the context of the very substantial producer support which will continue to be paid by means of the sheep annual premium and hill livestock compensatory allowances. Total payments to sheep farmers from these sources in respect of 1992 will be around £480 million.

Of that total approximately £360 million will be paid to hill sheep farmers. Even taking into account the reduction in HLCAs, sheep farmers in the less favoured areas can expect to be better off by some £60 million to £70 million. Looked at another way, the increases in ewe premium resulting from the devaluation of the green pound and the Agriculture Council decision to increase the supplement mean that hill sheep farmers will receive an increase in subsidy of at least £1.80 per ewe. This demonstrates that the Government's commitment to livestock farming in the hills remains very firm indeed.

I have set out clearly why we should reject the amendments. I am afraid that nothing I have heard today alters the Government's conclusion that the guarantee should be ended with effect from 30th April. Amendment No. 9, which proposes that wool already collected by the British Wool Marketing Board in the 1992 and previous clip years should continue to qualify for the guarantee provided it is sold by the board before 1st May 1997—rather than 1st May 1995 as provided for in the Bill—is merely consequential and should also be rejected.

5.45 p.m.

Lord Gallacher

My Lords, the Minister will not be surprised to hear that I am very disappointed, not merely with the detail but with the tenor of his reply. He heard speeches from all round the House, on behalf of sheep farmers, by people who know the industry better than I do and perhaps better than the Minister's brief would lead me to believe the noble Earl knows the industry. He gave us no credit whatever for the fact that at Committee stage and Report stage, and now at Third Reading, we have progressively sought to reduce what we were asking for from Government. That is the effect of the amendment which we have tabled today. For example, I pointed out in moving the amendment that if the amendment were accepted, the cost to the Exchequer of £26 million would be reduced in 1993–94 to £12.5 million and in 1994–95 to £7.5 million.

Therefore, it is wrong to create the impression that on this side of the House we are profligate, unheeding of the difficulties which the Government face—we recognise those difficulties, even though some of them are of their own making—and uncaring not merely of hill sheep farmers but also lowland sheep farmers, as I mentioned in my speech.

The noble Earl mentioned the fact that in 1988 the decision was taken to end the guarantee scheme. So it was. I pointed out in my speech that the decision came after the election, not before it, and that in February the industry was talking to the ministry in anticipation of modifying the scheme. Now we have a situation in which the Government have made their decision quite firmly and, so far as concerns this House, intend to stick by it.

The Government wish, as we wish, to see the British Wool Marketing Board continue. But now, in the abnormal trading conditions it faces, what hope has it for continuance if the phasing out proceeds in accordance with the provisions of the Bill?

Taking one thing with another, not to hold out the slightest hope of any reconsideration of the decision and to rely totally on Brussels and the HLCAs, which admittedly have been reduced, seems a somewhat negative attitude at a critical time for an important category of farmers in this country. For those reasons, and in view of the Minister's failure to respond sympathetically to a reasonable presentation of the case—which may have more to do with what has occurred earlier this afternoon—I feel that I, too, must divide the House.

5.49 p.m.

On Question, Whether the said amendment (No. 7) shall be agreed to?

Their Lordships divided: Contents, 125; Not-Contents, 133.

Division No. 3
Acton, L. John-Mackie, L.
Addington, L. Kennet, L.
Airedale, L. Kilbracken, L.
Allenby of Megiddo, V. Kintore, E.
Archer of Sandwell, L. Kirkwood, L.
Ardwick, L. Lawrence, L.
Ashley of Stoke, L. Listowel, E.
Aylestone, L. Llewelyn-Davies of Hastoe, B
Banks, L. Longford, E.
Beaumont of Whitley, L. Lovell-Davis, L.
Birk, B. Mackintosh of Haringey, L.
Blackstone, B. Mallalieu, B.
Bonham-Carter, L. Mancroft, L.
Bottomley, L. Mason of Barnsley, L.
Broadbridge, L. Mayhew, L.
Campbell of Eskan, L. Merlyn-Rees, L.
Carmichael of Kelvingrove, L. Milner of Leeds, L.
Carter, L. Mishcon, L.
Cledwyn of Penrhos, L. Monk Bretton, L.
Clinton-Davis, L. Montagu of Beaulieu, L.
Cobbold, L. Montgomery of Alamein, V.
Cochrane of Cults, L. Morris of Castle Morris, L.
Cocks of Hartcliffe, L. Mulley, L.
Congleton, L. Napier and Ettrick, L.
Craigavon, V. Nelson, E.
Cudlipp, L. Nicol, B.
David, B. Ogmore, L.
Davies, L. Palmer, L.
Dean of Beswick, L. Parry, L.
Donaldson of Kingsbridge, L. Perry of Walton, L.
Dormand of Easington, L. Peston, L.
Eatwell, L. Pitt of Hampstead, L.
Elis-Thomas, L. Prys-Davies, L.
Erroll, E. Rayleigh, L.
Ewing of Kirkford, L. Redesdale, L.
Ezra, L. Richard, L.
Falkender, B. Robson of Kiddington, B.
Fisher of Rednal, B. Rochester, L.
Foot, L. Roxburghe, D.
Gallacher, L. Russell, E.
Galpern, L. Saltoun of Abernethy, Ly.
Geraint, L. Sefton of Garston, L.
Gladwyn, L. Serota, B.
Glasgow, E. Shackleton, L.
Graham of Edmonton, L. [Teller.] Stanley of Alderley, L.
Stedman, B.
Gregson, L. Stoddart of Swindon, L.
Grey, E. Strabolgi, L.
Halsbury, E. Strafford, E.
Hampton, L. Taylor of Blackburn, L.
Hamwee, B. Taylor of Gryfe, L.
Healey, L. Thurlow, L.
Hilton of Eggardon, B. Tordoff, L. [Teller.]
Hollis of Heigham, B. Turner of Camden, B.
Hooson, L. Underhill, L.
Howell, L. Varley, L.
Hughes, L. Wharton, B.
Hutchinson of Lullington, L. White, B.
Hylton-Foster, B. Williams of Elvel, L.
Jay, L. Williams of Mostyn, L.
Jay of Paddington, B. Winstanley, L.
Jeger, B. Wise, L.
Jenkins of Putney, L. Wrenbury, L.
Aberdare, L. Boardman, L.
Annaly, L. Borthwick, L.
Archer of Weston-Super-Mare, L. Boyd-Carpenter, L.
Brabazon of Tara, L.
Arran, E. Braine of Wheatley, L.
Ashbourne, L. Brentford, V.
Astor, V. Bridgeman, V.
Astor of Hever, L. Brookeborough, V.
Auckland, L. Brougham and Vaux, L.
Beloff, L. Cadman, L.
Blatch, B. Caithness, E.
Blyth, L. Caldecote, V.
Carnegy of Lour, B. McAlpine of West Green, L.
Carnock, L. Mackay of Clashfern, L.
Cavendish of Furness, L. Macleod of Borve, B.
Chalker of Wallasey, B. Marlesford, L.
Clark of Kempston, L Marsh, L.
Coleraine, L. Merrivale, L.
Cox, B. Mersey, V.
Crickhowell, L. Mottistone, L.
Cross, V. Mountevans, L.
Cumberlege, B. O'Cathain, B.
Dacre of Glanton, L. Orr-Ewing, L.
Davidson, V. Oxfuid, V.
Denham, L. Park of Monmouth, B.
Denton of Wakefield, B. Pender, L.
Downshire, M. Peyton of Yeovil, L.
Elles, B. Plummer of St. Marylebone, L.
Elton, L. Prentice, L.
Faithfull, B. Prior, L.
Ferrers, E. Quinton, L.
Flather, B. Reay, L.
Fraser of Carmyllie, L. Rees, L.
Gardner of Parkes, B. Renton, L.
Gisborough, L. Renwick, L.
Glenarthur, L. Rippon of Hexham, L.
Goschen, V. Rodger of Earlsferry, L.
Ciray of Contin, L. Romney, E.
Gridley, L. Saint Albans, D.
Hacking, L. St. Davids, V.
Haig, E. Sanderson of Bowden, L.
Hardinge of Penshurst, L. Seccombe, B.
Harmar-Nicholls, L. Simon of Glaisdale, L.
Harvington, L. Skelmersdale, L.
Hayhoe, L. Skidelsky, L.
Hemphill, L. Stewartby, L.
Henley, L. Stodart of Leaston, L.
Hertford, M. Strathclyde, L.
Hesketh, L. [Teller.] Strathcona and Mount Royal, L.
Hives, L.
Holderness, L. Strathmore and Kinghorne, E. [Teller.]
HolmPatrick, L.
Hooper, B. Sudeley, L.
Hothfield, L. Swansea, L.
Howe, E. Thomas of Gwydir, L.
Huntly, M. Trefgarne, L.
Ironside, L. Trumpington, B.
Jeffreys, L. Ullswater, V.
Johnston of Rockport, L. Vaux of Harrowden, L.
Kimball, L. Vestey, L.
Kinnoull, E. Vivian, L.
Lauderdale, E. Wade of Chorlton, L.
Layton, L. Wakeham, L.
Leigh, L. Walker of Worcester, L.
Liverpool, E. Whitelaw, V.
Long, V. Wynford, L.
Lyell, L. Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

5.57 p.m.

[Amendments Nos. 8 and 9 not moved.]

Earl Howe moved Amendment No. 10: After Clause 49, insert the following new clause:

Annual report on matters relevant to price support

(".—(1) The Ministers shall publish an annual report on such matters relevant to price support for agricultural produce as they consider appropriate and include in the report such account as they consider appropriate of developments in agricultural policy, so far as relevant to such matters.

(2) In subsection (1) above, the reference to agricultural policy includes policy relating to agriculture and the environment.

(3) In this section— agriculture" and "agricultural" shall be construed in accordance with section 109(3) of the Agriculture Act 1947; and the Ministers" means the Minister of Agriculture, Fisheries and Food and the Secretaries of State concerned with agriculture in Scotland, Wales and Northern Ireland acting jointly.").

The noble Earl said: My Lords, in speaking to this amendment I shall speak also to Amendments Nos. 12 and 13 which are linked.

We debated at Report stage an amendment which was spoken to by the noble Lord, Lord Carter, and my noble friend Lord Norrie. This would have required Ministers to publish an annual report on the economic conditions in, and prospects for, the United Kingdom agricultural industry and the role that it plays in the environment. In responding to the debate I said that I had some doubts about the precise wording of the amendment but that I would see what I could come up with by way of a government amendment for Third Reading.

These linked amendments are designed to meet what I took to he the principal concerns expressed at Report stage. Amendment No. 10 would insert a new clause which would place a statutory requirement on Ministers to publish annually a report on such matters relevant to price support for agricultural produce as they considered appropriate. They would have to include in the report such account as they considered appropriate of developments in agricultural policy so far as relevant to such matters. The wording of the amendment is designed to ensure that it falls within the subject matter of the Bill. It can also reasonably be said to reflect the current content of Agriculture in the United Kingdom which we intend should continue to be published. The wording of the clause would not, however, preclude the Government from publishing additional material not covered by the new statutory requirement should they consider that to be desirable.

Subsection (2) of the proposed new clause is designed to meet the points raised at Report stage about the coverage by an annual report of matters relating to agriculture and the environment.

Amendment No. 12 is a consequential amendment. It includes the new clause in the list of provisions in the Bill which apply to Northern Ireland. Amendment No. 13 amends the Long Title of the Bill to reflect the proposed new clause.

I hope that these amendments will meet with the approval of the House. I beg to move.

6 p.m.

Lord Carter

My Lords, the House will be grateful to the Minister for bringing forward the amendment. It would be churlish of me to complain about it, but I am a little disappointed with the wording. It is a prime example of the, "taking one thing with another, all things being equal, on the one hand this and on the other hand that" school of parliamentary draftsmanship. If noble Lords remember, the original amendment which I withdrew was clearly to ask that Ministers, publish an annual report on the economic conditions in, and prospects for, the United Kingdom agricultural industry, and the role it plays in the environment". This amendment does not go all the way to meet that requirement. I believe that the suggestion of enabling legislation has gone to the department's head.

The amendment is linked with price support; it proposes a report, on such matters relevant to price support". We know that the CAP reforms are intended to reduce reliance on price support, to move towards world prices and for farming to be supported, in effect, by deficiency payments. For example, will the report be able to consider such things as the area aid for cereals and oilseeds? Would that be regarded as relevant under "price support"?

Another point put by the Council for the Protection of Rural England is the linking of the reference to the environment to price support. It implies that the development in agricultural policy should be taken into account when relevant to price support. Thus presumably it should be ignored when not relevant.

The new schemes under the agri-environment package in the CAP are completely separate from price support. Is it clear that the report can include such matters as the ESAs, the NSAs and all the agri-environment schemes to be introduced? Would they be ignored or could they be taken into account? I think that the Minister hinted that the Government would be able to extend the scope of the report and if he could assure the House that these matters, of which I have suggested examples, could be taken into account, we would welcome it.

I have to say to the Minister that the amendment is wishy-washy, but I suppose that it goes almost as far as the amendment that I withdrew and I am grateful to him for that.

Lord Renton

My Lords, I warmly support the amendments and cannot share the slight misgiving of the noble Lord, Lord Carter, who suggests that they do not tie Ministers down enough. The alternative to expressing the matter as it is expressed in subsection (1) would be for us to go into a mass of detail as to what should be in the reports. We legislate in too much detail for the most part anyway. I am sure that my noble friend Lord Howe is absolutely right to present the new clause in the way that it is drafted. I gladly support it.

Lord Simon of Glaisdale

My Lords, there is only one peripheral matter I wish to raise. On this occasion, I do not expect a commitment from the noble Earl, he will be glad to hear. I wish to draw attention to the provision as to the Long Title. The Long Title of a Bill can be useful when it comes to interpreting any part of the Bill, provided that it tells us its general, over-riding purpose. That used to be the practice with Long Titles.

The modern practice which this provision follows is a mere catalogue of the contents, which one can get elsewhere. The Public Bill Offices of both Houses say that they can do nothing without direction from the Procedure Committees and the draftsmen are in the hands of the Public Bill Offices. I do not expect the noble Earl to jump up and say "yes", but I ask that the matter be considered so that Long Titles may once again be of some use instead of merely giving employment to printers, papermakers, secretaries and so on.

Earl Howe

My Lords, I am tempted to say to the noble Lord, Lord Carter, that if he finds the amendment wishy-washy and does not like it very much, I am quite happy to withdraw it. However, I think that would go against the spirit of these proceedings and it is certainly not what I intended to do. However, I believe that I can reassure him on the points of doubt that he raised.

It is the Government's view that one cannot consider price support without also considering the economic conditions in the industry. Similarly, the whole field of environmental protection and the environment generally is linked to price support, sometimes closely. The noble Lord mentioned in particular the ESAs; schemes of that kind could be covered, as they are at the moment, in the annual report. It also goes without saying, I hope, that area payments and all forms of support from the Community would be included within the scope of the report.

The need for price support is linked to the economic circumstances of the industry. That is why I believe that at the end of the day the report that is produced by the Government at the moment will continue in much the same form in the future.

On Question, amendment agreed to.

Clause 53 [Orders and regulations]:

Lord Carter moved Amendment No. 11: Page 26, line 38, leave out subsection (5).

The noble Lord said: My Lords, this amendment is consequential to Amendment No. 3. I beg to move.

On Question, amendment agreed to.

Clause 56 [Short title, commencement and extent]:

Earl Howe moved Amendment No. 12: Page 27, line 29, at end insert ("section (Annual report on matters relevant to price support),").

On Question, amendment agreed to.

In the Title:

Earl Howe moved Amendment No. 13: Line 5, after ("potatoes;") insert ("to provide for the publication of an annual report on matters relevant to price support;").

On Question, amendment agreed to.

An amendment (privilege) made.

6.8 p.m.

Earl Howe

My Lords, I beg to move, That the Bill do now pass. We have had a great deal of constructive debate on the provisions of the Bill. I should like to thank all noble Lords, particularly the noble Lords, Lord Carter and Lord Gallacher, for the pragmatic and open-minded manner in which the debate has been conducted. My thanks are also extended to the other noble Lords who have participated in the Bill's successive stages and whose contributions have, without exception, I believe, made our deliberations as thorough and illuminating as we would all wish them to be.

I trust that I may be forgiven for not naming all noble Lords, but in particular I wish to express my gratitude to my noble friends Lady Carnegy of Lour, Lord Stanley of Alderley, Lord Wade, Lord Mottistone and Lord Renton, the noble Lords, Lord Geraint, and Lord Mackie of Benshie, the noble Baroness, Lady O'Cathain, and the noble and learned Lord, Lord Simon of Glaisdale, who has bowled me some very accurate balls on a wicket which I have not always found to be the most comfortable.

We have spent considerable time discussing various procedural aspects of the Bill—not just the question of parliamentary procedure but whether and in what circumstances Ministers should be required to consult various parties affected by matters in the Bill.

It is probably inevitable that opinions on these procedural matters should differ according to one's position in the constitutional scheme of things. From the Government's point of view we have sought to avoid a dogmatic approach but rather to consider what is workable, and—if I dare repeat a word to which I have had much recourse over past weeks—what is "reasonable". In a number of respects we have moved quite some way away from our original position. I hope noble Lords will bear that in mind even if, in some cases, they would have wished us to go further.

The Bill is not mainly procedural but deals with a number of important matters, some of which will have far reaching consequences for the producers and other parties affected. Probably the most significant change that the Bill would bring about is the ending of the milk marketing schemes, which have, as I have previously acknowledged, served customers, producers and others well throughout most of their 60 years. The reason for ending the schemes is that they have outlived their usefulness and no longer serve the best interests of producers, consumers and others with an interest in the dairy sector.

The Bill was criticised at Second Reading for the fact that the word "consumers" appeared infrequently in the text. In so far as the Bill is concerned with improvements in agricultural marketing, which much of it is, it is directly concerned with improving the response of the agricultural industry to the needs and desires of consumers. In the milk sector the best way to do this is to replace our present monolithic and bureaucratic arrangements with a more competitive and diverse structure, allowing those in the industry the normal freedom to respond to the market.

We have had some interesting and not uncontroversial debates on potatoes. I might go so far as to say that on potatoes I have had a fair roasting! But the debate was always constructive, and noble Lords might now find it helpful if I summarise where matters stand. The Bill provides enabling powers for the potato marketing scheme to be revoked 12 months from the date specified in an order made by Ministers if they consider it necessary, or in the public interest, for the scheme to be brought to an end. Following debate, on Report we amended the Bill to provide that such an order will be subject to parliamentary procedure, and this afternoon we have amended the Bill further to put on the face of the Bill the undertakings that I gave at that time.

Should the potato marketing scheme be revoked and the Potato Marketing Board wound up - and I repeat that no such decision has been taken—the Bill will enable the Potato Marketing Board to submit a scheme to Ministers transferring some or all of its assets to one or more successor bodies if that is what registered producers wish. Again, the Bill has been amended this afternoon in such a way to make it clear that unless there is a producer poll expressing a contrary view, then the transfer scheme should be submitted to Ministers.

In this way a successor body could take over from the board such functions of importance to the industry as research and development, including the facilities at Sutton Bridge. Statistical services and market promotion would also be candidates for the successor scheme. During the passage of the Bill the other significant amendment was to provide additional flexibility for the continuation of the board's activities at Sutton Bridge. This was reassuring to the board.

I shall not recite all the changes that the Bill is intended to bring about, but say in conclusion that I am grateful to your Lordships for the welcome you have given to the Part III provisions relating to grants for marketing. The Government are convinced of the central importance of improved marketing for the future prosperity of our farming and food industry. At last month's seminar on food marketing, chaired by the Prime Minister, there was agreement that all sectors should work together to promote competitiveness at home and abroad. We intend, as soon as this Bill is passed, to consult with the industry to see how best to make use of the new powers.

Moved, That the Bill do now pass—(Earl Howe.)

6.15 p.m.

Lord Carter

My Lords, while speaking to the Question, That this Bill do now pass, I begin by thanking the Minister for the way he has taken this Bill through the House. He is to be congratulated on the co-operative and courteous way that he has steered the Bill through its various stages. From a personal point of view, I thank him and his officials for being extremely helpful at meetings outside the Chamber when we explored different aspects of the Bill. This has been extremely helpful. Speaking from this Dispatch Box, I thank my noble friend Lord Gallacher for his assistance on the Bill. My noble friend and I have worked together on agricultural matters for a number of years and it is always a pleasure to work with him. I also mention the invaluable help that we both received from Ms. Clare Cozens, our researcher, and also the organisations who have briefed us so ably and helped us with the Bill.

Like most Bills, it leaves here in a rather better state than when it arrived, and particularly after the votes today. On milk we all know that this is an enabling Bill, and the Government and the marketing boards have been given the benefit of the doubt in the sense that Parliament has been asked to trust them to come up with schemes that will benefit the producer and the consumer, and deal with the genuine fears that have been expressed by the trade regarding unfair competition. The marketing boards now have to learn to move away from what I described as the monopoly culture in which they have existed for the past 60 years. It is best to say that the jury are still out, and it is a pity that Parliament will not be able to approve the final verdict, but no doubt a way will be found to at least debate the matter when it is finally agreed.

On potatoes I am sure the Minister and the Government are now well aware of the genuine anxiety that is felt by producers about the uncertainty of an unknown EC potato regime and the fact of a depressed market. The Government's intentions are still not wholly clear, although we tried to stiffen their resolution with the amendments the House accepted earlier today. I hope and trust that the Government will listen to the various fears that have been expressed and will do their best to allay them. On the potato section of the Bill, I have had the feeling that the motto of the Government was, "Thou shalt not kill, and should not strive officiously to keep alive" so far as the Potato Marketing Board was concerned. On wool, we are disappointed that the Government were unable to accept our arguments, and I know that that disappointment will be shared outside this House by sheep farmers and particularly hill farmers.

One of the most significant clauses in the Bill is Clause 55(1), to which I referred at Second Reading, which repeals Part I of the Agriculture Act 1947. This marks a watershed in our agriculture policy. The Government and Parliament, for the reasons we know and understand, are no longer required by statute to make themselves responsible for the welfare of farmers and consumers. That is a watershed in our agriculture policy. The reasons for it are entirely understood. We know that everything is now decided in Brussels; but that clause enshrined the whole thing. I should like to repeat my thanks to the Minister. We wish the Bill well when it gets to another place.

Lord Renton

My Lords, I too pay tribute to my noble friend Lord Howe for the way he has conducted these proceedings. It is not merely the clarity of his mind and speech but the way in which he has kept his cool under stress when discussing potatoes that I am sure all your Lordships have greatly admired. I think he would acknowledge that the Bill has been improved by the efforts of noble Lords in all parts of your Lordships' House. As for the changes that we have made in regard to potatoes, about which some of us felt strongly and a majority voted against the Government, I now feel that there is no longer that vacuum that looked so dangerous and which was going to cause such uncertainty unless we had somehow attended to it.

With regard to the detail of what we have done, no doubt there are those in the department—legal advisers and even parliamentary counsel—who may think that they can improve upon it. If they can simplify it in doing so, they will be doing a great service. But should the principle be reversed in another place, it would be extremely regrettable and we would not be content to let the matter rest when it came back here. We would have to ask another place to think again.

This is a valuable and timely Bill, and my noble friend Lord Howe is entitled to take a great deal of credit for it.

Lord Simon of Glaisdale

My Lords, the final stage of a Bill generally takes place in a genial, autumnal mood in your Lordships' House. Just occasionally there is an unseasonable touch of frost. Fortunately, in this Bill the cold winds blew in your Lordships' House at an earlier stage on two amendments, particularly in the Third Reading.

My own connection with agriculture has been tangential only. Your Lordships' command of expertise, knowledge and wisdom on the subject can only cause awe in such as myself. It would be presumptuous, indeed impertinent, were I to mention all those from whom I have learned so much. However, I hope that I may take advantage of my much greater years to second the tributes that have rightly been paid to the noble Earl the Minister.

It is easy and agreeable to coast through a Bill all the provisions of which commend themselves to the House. It is a different business when one stands alone at the Dispatch Box with every single voice raised against one. The noble Earl, Lord Howe, survived triumphantly what was a real test and I second the tributes that have been paid.

It has been an extraordinary pleasure to see a Minister conduct a Bill of this kind, showing not only a great command of his brief, but also a command of the whole of the background material which is so necessary when one is replying to a debate at the Dispatch Box. I add my congratulations to the noble Earl.

Lord Wade of Chorlton

My Lords, perhaps I may state my own admiration for my noble friend the Minister. I should particularly like to thank him for the kind way in which he met certain people to whom it was helpful for him to speak, and for the great assistance he gave in putting the Bill together.

It is right to draw attention to the fact that for the past 60 years the agricultural industry of this country has been dominated by the Milk Marketing Board and the great strengths it has brought to bear over the years. So this is a special occasion. Although in one sense it is not an important Bill compared with much that has passed through the House, to what has been the heart of the country it is enormously important. It is inevitable that it will bring great changes to the countryside and to the face of Britain over the years to come. I believe that those changes will be for the better; that the Milk Marketing Board, although a wonderful institution when it first began, has seen its day and is now becoming a restriction on the marketing opportunities that are open for the milk products that we can produce in this country.

We have an opportunity, illustrated in a sense by the debate, where so many sides of the House agree on the issues —let us hope that industry will take notice of that—for all sides to work together for the benefit of all sections of the industry. Let us hope that they will pull together and act as one for the benefit of all.

It would also be right and proper to show our respect and admiration for the way in which the leaders of the Milk Marketing Board have tackled the changes. It is not easy to realise that no longer has one a place in the changing market. We have every admiration for Bob Stevens and all his team who have seen the need for change and tackled it positively and effectively. They must have gone through great strain and worry about whether or not they are making decisions which may be viewed in the future as being wrong. We can assure them from this House that their decisions are right. We have supported them and they are now going to see great strides for what is possible in the milk industry of this country.

Baroness Carnegy of Lour

My Lords, I endorse the view that the Bill has been considerably improved during its passage through your Lordships' House. Today the House made two important points, though it has been done in the end by amending the Bill in ways which I believe will inevitably need to be amended again. I hope that the important points stand, even if the amendments do not.

The fact that the Government did not prevail on two occasions this afternoon was no fault of my noble friend the Minister. He has conducted the Bill with skill and efficiency, courtesy and humour. When he has not persuaded the House, he has kept his cool and put his arguments extremely clearly so that they can be read and studied in another place as the Bill proceeds.

I should like to pay tribute to my noble friend as other noble Lords have done, and also to the noble Lords, Lord Carter and Lord Gallacher, who have been extremely open in their conduct of the Bill. They were extremely helpful to me in explaining what they were up to to enable me to more easily see what I should be up to as well. I commend them for that.

Lord Geraint

My Lords, on behalf of my noble friend Lord Mackie of Benshie I thank the Minister for the courteous and skilful way in which he has manoeuvred the Bill through the House. I may disagree with him on many issues but at this stage that is beside the point.

We are coming to a different era with regard to agriculture. For the past 50 or 60 years I and others have been dependent on deficiency payments, guaranteed prices and the boards. Tonight we are doing away with all the successful bodies that we have had for the past 50 years. We are entering a free market economy and we must all stand on our own feet within the agricultural industry. My only wish is that we will succeed under the new arrangements. Perhaps I am a little old-fashioned and the Minister is looking forward as a young man. Let us hope that he is right and that the agricultural industry will function for many years to come.

On Question, Bill passed, and sent to the Commons.