HL Deb 23 January 1996 vol 568 cc968-82

7.40 p.m.

Lord Lucas rose to move, That the draft order laid before the House on 12th December be approved [4th Report from the Joint Committee].

The noble Lord said: My Lords, several noble Lords have told me that they wish to speak to this Motion. They, and I suspect all those other noble Lords who have chosen to remain in the Chamber, know well what this order is about. Many will have read the report of the debate on this order in another place. I will therefore keep my opening speech short so that I may have the maximum time to reply to points raised by other noble Lords without trespassing on the time of those who will wish to continue the Committee stage in an hour or so.

The draft order in effect specifies 1st July 1997 as the date when the potato marketing scheme will be revoked. The Agriculture Act 1993 gave Ministers power (subject to affirmative resolution) to revoke the potato marketing scheme. After due consideration Ministers, and indeed your Lordships' own Select Committee, concluded that (even in the absence of an EC potato regime) Britain should not continue to impose unilateral market controls.

In announcing the intention to revoke the scheme, the Government recognised the need for the industry to have time to adapt to the conditions of the free market. The scheme was therefore allowed to continue in modified form for three years, the modifications being based on suggestions made by the Potato Marketing Board and the National Farmers Union. The industry has made very good use of the intervening period. All the modifications were speedily introduced and so much progress has been made towards the free market that the board has already decided that it will not operate quota controls this year.

Section 27(1) of the 1993 Act requires the Potato Marketing Board to apply to the agriculture Ministers for approval of a scheme to transfer its property, rights and liabilities to a successor body or bodies, unless growers in a poll tell it not to. Not only has the industry agreed on the necessity of a levy-funded successor body but also all sectors of the industry have reached consensus on the form which such a body should take. I am not in a position to comment today on the details of what the industry is proposing since they have yet to be published and they must be agreed with growers before being presented for ministerial approval. But the very fact that such a consensus exists is another testimony to the progressive attitude of our industry.

This order is but a milestone on a journey begun some three years ago, with a year and a half yet to travel. The journey has been without incident so far; the rest of the road has been well mapped and holds no terrors for us or, we believe, for the industry. I therefore commend this order to the House and look forward to listening to what other noble Lords have to say. I beg to move.

Moved, That the draft order laid before the House on 12th December be approved [4th Report from the Joint Committee].—(Lord Lucas.)

7.43 p.m.

Lord Stanley of Alderney

My Lords, I must declare an interest in that I have been a potato producer for a little over 41 years. The trouble with this order is that it leaves too many issues unresolved. The unresolved issues are: first, what action will the Government take to secure common rules of competition in the European potato market? Secondly, what measures will the Government take to ensure that the United Kingdom potato producers can compete on level terms with their European competitors after June 1997, bearing in mind that there is no chance whatever of a lightweight regime as the United Kingdom is in a minority of one? Thirdly, will the Government undertake an investigation into the state of competition of the European potato market, including information on all member state aids? I ask my noble friend to give an undertaking on those lines with a promise that the results will be made in a Statement to the House, supported by a written report, before 30th June 1997.

The most worrying of those issues is the likelihood of United Kingdom producers facing subsidised European potatoes. Your Lordships may remember the disastrous 1992 season when many United Kingdom potato producers went bankrupt due in part to the fact that other European countries supported their producers. For instance, France supported its producers to the tune of 140 million francs and Italy to the tune of £12 million. Other countries, including Portugal and Spain, did likewise.

United Kingdom potato producers are among the most efficient in the European Union and we are more than prepared to hold our own. However, we cannot survive against subsidised produce and producers. The answer to the problem would be a lightweight regime, which was mentioned during the passing of the 1993 Act, making state aids illegal or requiring any help to be given equally between member states. Subsidising one against the other is totally unacceptable, which is what has and what will happen in a surplus year. I hope that my noble friend has sympathy for such a view—I believe that he has—but I am afraid that the Government's record sadly lacks commitment and results. For instance, my right honourable friend Mr. John Gummer said in Standing Committee F on 4th May 1993: I am merely saying that, without the very likely European regime, if it became clear that Britain was shooting itself in the foot by continuing the current potato marketing regime, no sensible Government would stand aside and say, 'Let the Dutch take it over. Let the French subsidise their industry into defeating ours'. In those circumstances, we would take measures, which would have to be approved by affirmative resolution, to replace the current potato marketing scheme with those elements that benefit us in the quest for export and import substitution and remove those elements that disadvantage us". Those are strong words and I wonder whether my noble friend will stand by them. Will he explain why when in 1993 my right honourable friend Mr. John Gummer referred to "the very likely European regime" there is still no sign of one? I must remind your Lordships that we are now in 1996. Moreover, I must also remind your Lordships that in a similar vein my noble friend Lord Howe said during the passage of the Agriculture Bill: we are 95 per cent. of the way towards achieving an EC regime and approval of these proposals is virtually a formality".— [Official Report, 25/1/93; col. 1098.] We all make mistakes—I am told that very occasionally I do—hut it is now 1996 and we are approaching 1997. We are three years on from those assurances and in my opinion there is no possibility whatever of a lightweight scheme. That was pointed out by the noble Lord, Lord Carter, the noble and learned Lord, Lord Simon, and the noble Earl, Lord Perth.

All that I can ask is that the Government honour the assurances of my right honourable friend Mr. John Gummer to protect the United Kingdom potato producers if needs be by taking a similarly courageous line as my noble friend Lord Lucas took last week over Emtryll by either disregarding European Union rules and blocking imports or by giving equal support to our producers.

7.48 p.m.

The Earl of Perth

My Lords, I too must declare an interest either as a grower of small potatoes or a small grower of potatoes, whichever one wishes. I grow some seed potatoes. I do not wish to comment on the order, which was debated for one-and-a-half hours in the Commons. That was a good debate. Furthermore, we have heard from the noble Lord, Lord Stanley of Alderney, tonight. I am behind him on the great importance of our competing on a level basis with the rest of Europe. It is essential that in one way or another that should be the case. I know that the Government are trying but I should like to see them try a little harder. The suggestion was the lightweight regime: that is a good thought.

My purpose in rising to speak tonight concerns a much more mundane issue, which is the issue of brown rot. It will be known to those of your Lordships who are interested in potatoes. I can give you the Latin name but it is very difficult to pronounce and I do not think it would add to our debate. I am sure all your Lordships will know that this is an infectious and very serious disease. It has spread widely—I do not want to exaggerate—in Holland, from which we get a considerable amount of seed. The disease has also found its way to France, Italy and Egypt. I believe there has even been one case in England—and I stress the word "England".

The Dutch themselves are very conscious of this disease and they have initiated a scheme of control—that is, a scheme of inspection. But what does the. inspection allow? It means that 220 tubers are inspected out of something like 140,000. I am not very good at arithmetic, but I want to make the point that the inspection is minimal because it is such a small proportion of the whole.

We get a similar inspection—I do not mean similar as regards an exact 220 tubers out of up to 25 tonnes, but that the English authorities are also inspecting. I think I am right in saying that the disease has already come to England, but of course I speak for Scotland. Above all, our whole success lies in our success as growers of seed potatoes. If our seed potatoes become infected, the outlook for Scotland is really a disaster. Therefore my purpose in speaking tonight is to raise this issue. We feel so strongly about it in Scotland that there has already been a voluntary scheme among producers to ensure that what is imported to Scotland is good stuff. However, the system is voluntary and the real issue I want to address tonight is whether the Government could revert to a practice which was common only two years ago. I am sure it is allowed under the rules of the European Union: namely, that they again announce that we have protected region status.

If that is accepted and could be arranged by the Government, it would give us great comfort because we have already worked out a sort of voluntary scheme. This would ensure that the Ministry of Agriculture would themselves inspect and reinforce the whole process. I ask for this because it would ensure that quarantine could be properly applied, not only in Holland and not only generally on borders, but that we can have certainty, in so far as one can have certainty, that every step will have been taken to stop what would be a disaster for Scotland; that is brown rot coming to that country. I have given the noble Lord, Lord Lucas, notice of this question and I very much hope that he will be able to announce that something along these lines would be possible.

7.55 p.m.

Baroness Carnegy of Lour

My Lords, I apologise for not having put down my name to speak. If I may, I should like to say a brief word not so much about brown rot—problem though that is—but about the order that we are discussing.

I was one of those who took an active part in the passage of the 1993 Act through this House. I am also a member of your Lordships' European Committee which has said that it considers the time has come for the Potato Marketing Scheme to come to an end. I live in Angus not very far from the noble Earl, Lord Perth, in seed potato growing country. Until 1989 I used to be a grower myself. I no longer have any financial interest to declare, but of course I am very interested in the subject, and I am very glad to see my noble friend Lord Lindsay beside my other noble friend on the Front Bench this evening.

I remember well the anxieties that were expressed, particularly by farmers and not least by seed potato growers in Scotland, about the dire effects the ending of the statutory potato marketing scheme would have on their businesses; how they needed the quota system and the intervention mechanism. They talked about the enormous problems which would occur if those regimes were brought to an end. In the event, the Bill became an Act and the industry has responded quietly, effectively and with considerable entrepreneurial skill, as I think the noble Lord, Lord Stanley, indicated.

The dire results that were foretold have not in fact come about. With the backing of the whole industry, including the growers, the Potato Marketing Board has slimmed down its membership and its staff. It has ended the intervention mechanism but set aside the quota system. In the meantime the growers have, as the noble Lord, Lord Stanley, said, had some downs and they have also had some ups, which I do not think he mentioned. They have had several good years and in fact in our part of the world we have had the best two years since 1980. As a result, there has been a good deal of investment in equipment, together with much replenishment.

The United Kingdom processors have responded to the increased investment and they have increased the proportion of the United Kingdom potatoes that they use and have decreased the amount they import. I believe that the time is right now, for the whole industry's sake, that the clock should be started ticking to begin the final year of transition to a free market. Seed potato growers in Scotland have the same anxieties as those expressed so ably by the noble Lord, Lord Stanley of Alderley. There is still no regime in Europe which will ensure that our farmers will be able to use the rather surprising phrase that they can "grow their potatoes on level playing fields". They wonder what will happen if no regime emerges and so I wonder whether the Minister could tell us what chances he thinks there are of a regime emerging. If no such regime comes, what is the likelihood of farmers in other member states being subsidised while ours are not? Is there anything to prevent it, apart from the lightweight regime which we have hoped so much it would be possible to bring about? Should that subsidy happen in other countries, what will the Government do about it? Can they help us or should we simply hope that we can compete because of our efficiency? Maybe we can but, to use a Scots phrase, "I hae my doots".

An answer to such questions would give confidence to farmers. Nevertheless, there is much progress so far towards the plans for the owner/owned body which will enable everyone to work together. They are setting themselves up for the free market. I agree that the time has come to move towards the free market, and therefore I support the adoption of the order.

8 p.m.

Baroness Robson of Kiddington

My Lords, I have listened with interest to the speeches that have been made so far. They are not, in fact, far removed from what I had intended to say. Since 1993, when the procedure was originally initiated in the Agriculture Act, it is true, as the noble Baroness said, that the Potato Marketing Board has set about sorting out its own affairs very successfully. It has been able to halve the levy which it imposes on growers. Moreover, as the. noble Baroness also said, that has resulted in over £50 million being invested in additional processing capacity and the increased use of British potatoes. But, above all, it has reduced by 24 per cent. the imports of processed products, which was one of the great problems that faced us in this country.

So far so good. However, with the laying of the draft order, both the NFU and the Potato Marketing Board expect the Government to do all that they can to ensure that the industry can function in a truly free market in Europe. We would like an assurance—and it has to be an assurance—that the Government will put all their efforts into the work of preventing other EU Members from giving state aids to their producers which, at the moment, is prevalent. As everyone has said, the best way to achieve that is by the creation of a lightweight EU potato regime.

The House of Lords' Select Committee welcomed the proposal made by the European Commission to set up a regime for potatoes. That would be the only way to prevent member states from distorting the market by giving aid to their own producers. Can the Minister assure us that that is the Government's aim and that they will put all their efforts into getting agreement in Europe on a lightweight potato scheme?

Further, we would like an assurance that the Government will facilitate the setting up of a successor body to the potato marketing scheme in the form of a development council for the industry. It is essential that such a council be made accountable not only to the Minister but, above all, to members of the industry itself who, after all, are the ones who paid for the setting up of the body. It would be quite wrong for such a body not to be accountable to the whole of the industry once it has been established.

Between the period of this order being passed and coming into force, we believe that, in order to satisfy the concerns of the industry, the Minister should undertake to make a statement to the House dealing with such concerns well before the 1997 deadline. That would enable second thoughts to be had if the requests from the industry have not been fulfilled. We could then consider how we should proceed from then on. If any European producers are still able at that time to receive national support, British producers would expect nothing less.

8.4 p.m.

Lord Carter

My Lords, the House will be most grateful to the Minister for the very lucid explanation that he gave to the background of the order. I am sure that the noble Lord will have more to tell us in his reply to the debate. The order takes us back to the very interesting debates that we had while the Agriculture Act 1993 was going through the House and the other place. In fact, we know that the Bill actually started its passage in this Chamber.

The House will recall that the relevant amendments moved by myself and the noble Lord, Lord Stanley, were accepted by the House, against the wishes of the Government. However, after some tidying up of the drafting had been done, they were later accepted by the Government in another place. That is why we are having this evening's debate.

While re-reading the reports of the debates which took place both in this House and in the other place, I was struck by the foresight which was shown by Members of all parties in both Houses. However, I hasten to add that that foresight was not shared by the Government. Somehow we thought that the Government would wish to use their powers under the Act to revoke the potato marketing scheme without waiting for a European regime. That is exactly what is happening.

Your Lordships may remember that the Government's original intention was to slip in a revocation order under the negative instrument procedure. Prolonged protests—and I emphasise the words "prolonged"—by the noble and learned Lord, Lord Simon of Glaisdale, the noble Lord, Lord Stanley, myself and others did produce a change of heart by the Government. At least as a result we have, through the affirmative resolution procedure, the chance to debate the order this evening.

I have no particular wish to burden the House with quotations from the previous debates on the matter. However, it is relevant briefly to quote from the remarks made by the Minister at the time, the noble Earl, Lord Howe. In Committee, he said: Our aim will be to ensure four things: first, a level playing field across Europe for potato production; secondly, that the UK industry can meet all the needs of the market; thirdly, that the UK industry can contribute to the export drive; and, fourthly, that decisions are based clearly on the best scientific and technical knowledge available. I am, of course, unable to foresee the outcome of these discussions".—[Official Report, 10/12/92; col. 340.] Again, in Committee on the same day, the Minister said that, should Ministers decide to revoke the potato marketing scheme, other than in the light of an EC regime, they would of course consider the marketing conditions in Great Britain before certifying that the scheme should be brought to an end and would wish to ensure that the decision to bring it to an end was in the best interests of the industry as a whole. I hardly think that my noble friend"— who I believe was the noble Lord, Lord Renton— needs such a reassurance, but for the record I am happy to give it".—[Official Report, 10/12/92; col. 347.] Finally, when we debated the Select Committee's Report on the potato marketing scheme in 1993, the noble Earl, Lord Howe, said: The Government have said repeatedly that they are committed to seeing a level playing field for potato producers within Europe. That means achieving fair competition for our own producers. We are backing our own producers. We shall not see them disadvantaged in whatever regime is agreed to. We shall fight for our own producers in Brussels".—[Official Report, 17/5/93; col. 1616.] In repeating those quotations I should emphasise that I do not in any way impugn the motives or the beliefs of the noble Earl, Lord Howe, at the time. I believe that he was genuinely repeating the view of the Government, although we did not agree with them. In effect, what the Government said then can be summarised as, "You must trust us", with the argument both stated and implied that, of course, the Government would not leave the British potato grower unprotected with no European regime and. no British marketing scheme. But that is exactly what is going to happen.

As many of us foresaw, we are revoking the scheme without the prospect of even a lightweight European regime. We are, therefore, entitled to ask the Government—and I do not apologise for repeating them—for a number of assurances. However, before I set them out, perhaps I may make a most important point. The Minister is no doubt briefed to say that, if other member states aid their producers, we will take action through the Commission to bring that to an end. If the Minister is not briefed to say so, then he jolly well should be.

Perhaps I may give your Lordships two quick examples in that connection. Perhaps the House will remember the illegal aid that the French Government gave to their pig producers. Eventually, but very slowly, that was stopped by the Commission and the French Government were fined. Another example would be the notorious Italian failure to introduce milk quotas. By the time the Commission takes action in such circumstances—even if the offending government are fined—the damage to the market through unfair competition has been done and the producers in the other member states have already suffered damage to their businesses.

We believe that the assurances that the Government are obliged to give are as follows. First—and to coin a phrase—I start with the level playing field. Just exactly how, both in terms and in detail, do the Government intend to ensure that there is free and fair competition between the European potato producers in the single market? If there truly is free and fair competition, then our growers have nothing to fear.

Will the Government, as has been suggested, undertake to report to Parliament on the overall situation before the scheme ends on the 30th June of next year? Such a report should set out exactly what is happening in other member states and the implications for the United Kingdom producers of any European regime that may be in place at that time, although that looks unlikely. If we are not able to secure that report from the Government then, through the usual channels, we shall attempt to secure a debate in this House so that the Government can be called to account.

The third, and more technical, point is that the most likely successor body to follow the PMB is the Potato Development Council, which will be set up under the Industrial Organisation and Development Act 1947. The noble Lord, Lord Stanley of Alderley, secured the amendment to the Agriculture Act 1993 in the House, supported by these Benches, which set out the powers and responsibilities of the successor body in Section 28 of the 1993 Act.

Let me state the powers and responsibilities. First, schemes for the orderly marketing of potatoes, including marketing intelligence and the identification of marketing opportunities, research and development, the generic promotion of potatoes, the collection of statistics on the potato industry and, finally, a forum for discussion of matters of common interest to producers, purchasers, retailers and consumers of potatoes.

Are the Government completely satisfied that all these proposed functions can be undertaken by the development council under the rules of the 1947 Act? Will the Government give their full weight and support to the proposal for such a development council? I understand that the Minister is unable to comment in any way on proposals which have not yet been published, but, in principle, do the Government support the idea of a potato development council as a possible successor body to the PMB? It is not unfair to ask the Government to give that assurance because they said that that was their view at the time that we passed the 1993 Act.

The order is exactly what most of us expected when we debated the 1993 Act. I am not accusing the Government of bad faith. They never said that they would not revoke the potato marketing scheme in the absence of a European regime; on the other hand, they never said they would. However, we do rely heavily now on the Government using their best endeavours to ensure that UK potato producers are not left entirely at the mercy of subsidised, unfair competition from imported potatoes, and that any successor body to the PMB serves producer interest, consumer interest and processor interest as well as the PMB served them in its existence.

Lord Stanley of Alderley

Before the noble Lord sits down and my noble friend replies, although I may have misunderstood him, the noble Lord said that the Government would be entitled to take other countries to court if there were subsidised produce coming in from other countries. Perhaps my noble friend will answer this, but I do not think we can do this unless there is a regime. Perhaps my noble friend will address that point in his reply.

Lord Carter

The noble Lord is correct in saying that if the Government detect that there has been unfair competition they can ask the Commission to deal with it. I think that is correct, but I am sure that the Minister has the answer.

Lady Carnegy of Lour

Before the noble Lord, Lord Stanley, sits down, may I ask him this question: when he asked the Government whether they would support the development council which the industry plans to set up, did he mean financially? Did he mean that they would put taxpayers' money in or simply that they would give other forms of support?

Lord Carter

I suppose that we, on this side of the House, have to get used to answering questions from the Back Benches on the other side. No, I meant just the principle of a potato development council. On the point of being accountable to levy payers and not to the Government, under the terms of the development council, the council, under the rules of the 1947 Act, would be accountable to those who paid the levy.

8.15 p.m.

Lord Lucas:

My Lords, the noble Earl, Lord Perth, rather strayed from the subject at hand to that of brown rot, but since he had given good notice of his intent would, with the leave of the House, take the opportunity to discuss that disease at length at the end of my reply. I should now like to say how sad I am that the noble Lord, Lord Carter, seems to have fallen victim to it. Gordon Brown rot is a very saddening condition; it reduces what should have been a crisp and weighty speech to something which was astringent but without much substance. I am sure the whole House wishes the noble Lord a speedy recovery.

As my noble friend Lady Carnegy of Lour said, the dire prognostications of ruin if the potato marketing scheme ended have proved to be wrong. Looking back at the potato marketing scheme, it is clear that it was a burden on enterprising growers who wanted to expand; it reduced the potential for investment and employment growth in the growing and processing industries, and it cost the consumer dear in the form of higher prices. We will all be well rid of it.

Many noble Lords raised the question of the linkage of the revocation of our potato marketing scheme with agreement on the CAP regime for potatoes. The Government are well aware of the widespread concern within the industry that subsidies by other EC states will harm our potato growers. We certainly agree that such national aids are highly undesirable, which is why we have argued forcefully—and will continue to argue forcefully—that a lightweight EU regime for potatoes should be introduced as soon as possible in order to bring potatoes within the competition rules of the Treaty of Rome. The UK has consistently supported the Commission's proposals for just such a regime, but we have yet to secure the agreement of other member states and an early introduction of a CAP potato regime seems unlikely. The noble Lord, Lord Stanley of Alderley, pointed out that this is not quite what my noble friend Lord Howe said three years ago. During a report stage of the Agriculture Bill on the 25th January 1993, he said: My advice is that following the December Agricultural Council meeting we are 95 per cent. of the way towards achieving an EC regime and approval of these proposals is virtually a formality".— [Official Report, 25/1/93; col. 1098.] There was a moment last Saturday when I thought we were 95 per cent. of the way to getting a draw. I suspect that my noble friend and I both under-estimated the French; we were certainly both wrong. But the lack of a regime is no reason for delaying our own progress towards a free market.

I would make four points. First, we see much disadvantage in delaying a most worthwhile change in the UK system. The industry has been in limbo for a number of years and further delay and uncertainty can do nothing but harm. Indeed, the Potato Marketing Board itself has been pressing forward with commendable speed towards the free market, and it would be a tragedy if we were to jeopardise that process.

Secondly, the various national aids have existed for some time and have not prevented our growers from increasing their exports to continental Europe.

Thirdly, these aids have no direct effect on our growers. Indeed, both intervention and the sort of storage aids which form the bulk of these measures tend to maintain higher prices in the local market than would otherwise be the case, if anything making exports by our growers easier. One of the main reasons for bringing our scheme to an end was that by the use of intervention it did indeed keep prices high, thus sucking in imports, notably from Holland.

The noble Baroness, Lady Robson, and the noble Lords, Lord Carter and Lord Stanley of Alderley, asked whether the Government would produce a report before July 1997 as to the conditions that were then existing. I am unable to promise or offer hope of such a report, but I will draw the request to the attention of my honourable friends responsible.

Various noble Lords asked about the question of a level playing field for our producers. We are not in a playing field, we are in a potato field, and we must expect a few lumps and bumps.

Something which has not been mentioned is the enormous advantage which our potato producers have because they are farming in a Britain run by the Conservative Party. That gives them enormous benefits in terms of employment costs and in other aspects.

Lord Carter

It is a sign of the desperation of the Tory Party that it is going after the chip fryers' vote.

Lord Lucas

Desperation is not a characteristic of the Conservative Party.

Baroness Robson of Kiddington

My Lords, we are looking for some constructive answers from the noble Lord, not so-called amusing jokes.

Lord Lucas

My Lords, it is a constructive answer. Other nations may have to subsidise because costs imposed by governments on their producers are much higher than our costs. That is what my right honourable friend the Prime Minister means when he describes the "stakeholder economy" as back-door taxation.

Lord Stanley of Alderley

My Lords, can my noble friend say what extra costs they have?

Lord Lucas

My Lords, like every other employer in EC countries, they have all the costs imposed by their employment legislation.

Lastly, the removal of quota restrictions will make our enterprising growers more competitive and so better able to overcome the effects of aid elsewhere.

Some play was made of the words of my right honourable friend Mr. Gummer in another place when the Agriculture Act was going through that House. The quotations have been somewhat selective. If I may be allowed my own quotation from what he said I would cite the last remark that he made on the subject which, while also selective, represents the summing up of his views and the situation. He said: If there is a single market, it is barmy to run a protectionist regime when one has no protection. For that reason, I believe that those who promote the continuation of a scheme which was set up when Britain was a national market when Britain is now part of a single market that stretches as far as Sicily are wrong,"—[Official Report, Commons, Standing Committee F, 4/6/93; col. 227.] The noble Baroness, Lady Robson, raised the question of appointments to the successor body. Perhaps I may say at this stage that we support the proposals. We believe that the Potato Marketing Board and the. growers are heading in the right direction, although I do not wish to comment at this stage on the detail.

The successor body would be set up under the Industrial Organisation and Development Act 1947. That stipulates the categories of members who must be appointed to a development council. The order setting up a development council will specify the number of persons from each category to be appointed. As I understand it, the industry has already agreed on the proposed membership, which will give the growers, as the major levy payers, a majority. I therefore see no problems arising over representation.

The Act also stipulates that membership must be by ministerial appointment. There is therefore no scope for direct elections to the council. However, successive Ministers have given undertakings that recommendations by industry bodies as to membership will be taken very much into account in making appointments. Since future appointments will, following the Nolan Report, have to be approved by the Commissioner for Appointments, there is clearly no way in which it can be guaranteed that any particular nominee will be appointed.

The noble Lord, Lord Carter, raised with me the question of whether we had powers under the 1947 Act to permit the new development council, or whatever it may be, to do all that it is wished it should do. I believe that we do, but I do not wish to detain the House with the details and I shall write to the noble Lord on that subject.

Perhaps I may now turn to brown rot. Brown rot is caused by a bacterium—Pseudomonas solanacearum— which is widely distributed in tropical and warm temperate regions of the globe. It and its close cousins are responsible for a wide range of plant diseases which often pose a serious threat to crops, and may in severe cases limit an infected region's ability to grow potatoes and other vulnerable crops. Fortunately for us, northern Europe is generally too cold to allow the bacterium to flourish. However, it can nevertheless take hold (as happened in Holland last year) if growers and governments are not on their guard.

Without banning potato imports entirely, we cannot provide a complete assurance that the bacterium will not get into the UK. What we can give is an absolute assurance that the Government will continue to operate the best possible proportionate safeguards to protect our industry. The Government have established a screening programme, at no cost to the industry, to test all stocks of seed potatoes imported from the Netherlands. The Dutch, too, are testing all seed potatoes before export, so we have a belt and braces policy. No sampling procedure can offer a 100 per cent. detection rate. However, our combined testing protocols provide a strong safeguard which I know our growers value very highly. The Government acted quickly, in the light of the outbreaks in Holland, to require all imports of Dutch potatoes to be notified in advance so that our monitoring arrangements could be applied effectively.

What we are doing, therefore, is to act against the risk of a serious outbreak by rigorous checking of imports, by controls on potato processing waste, and by keeping a close eye on domestically produced potatoes.

As noble Lords will know, we have already seen one case of the disease, in a potato crop in 1992, and we have detected the bacterium in riverside plants of woody nightshade, which it can also infect. Our experience of the one UK outbreak so far, and of similar scattered outbreaks overseas, leads us to believe that if future outbreaks occur—for which we should and must prepare—we shall be able to deal with them effectively by quarantine arrangements for infected farms. Further discussions will be taking place in the European Community to establish common rules to apply in such cases.

The noble Earl, Lord Perth, raised in particular the case of the Scottish seed potato industry. Scotland and some other areas in the United Kingdom are already protected regions. That is an EU term which means that only high grade seed may be imported. It is not a guarantee against the importation of infected potatoes, and it offers no powers of quarantine or import prohibition. However, I can, I hope, give the noble Earl considerable comfort.

The present position in Scotland is that last year only five consignments of seed potatoes were imported from Holland. This year we have been active in discouraging imports, and no such imports have yet been made. We shall work closely with the Scottish industry, which is well aware of the dangers of brown rot, to ensure as best we can that no problem arises in future and that Scotland's reputation is preserved untarnished.

There are a whole range of crop diseases and pests that have the potential to invade the UK. We have the duty to take proportionate measures to protect ourselves against them. What those measures should be will vary from case to case and from time to time. We should not go over the top and ban imports when that is not justified. We should do to others as we expect them to do to us.

It is our judgment that the action we are taking, together with that taken by the Dutch, the EU and others, will lead to the current Dutch outbreak being kept under control. However, we shall remain constantly on the lookout for any evidence of the disease spreading and, if we find it, we shall not hesitate to introduce whatever measures are appropriate to protect our growers.

With those remarks, I commend order to the House.

The Earl of Perth

My Lords, before the noble Lord sits down, perhaps I may ask a question. Did I understand him to say that protected region status is already in operation in Scotland?

Lord Lucas

My Lords, Scotland is already a protected region. However, that does not give the protection that the noble Earl hoped for.

Lord Carter

My Lords, before the noble Lord sits down can he make an important point clear? If we take the likely scenario that by the end of next year there will not be a potato regime, did I understand him to say that if it was clearly shown that there was unfair competition. we could ask the Commission to act under the single market rules?

Lord Lucas

My Lords, I do not wish to commit the Government on such an important matter on the spur of the moment. However, it is my understanding that we cannot act. That is why we need the lightweight regime and why we are fighting for it. At the moment potatoes are neither part of the single market nor part of the common agricultural policy. Therefore, we have no basis for compelling other states to give up their subsidies.

Lord Stanley of Alderley

My Lords, I am sorry to return to the subject. However, if that is the case and, as my noble friend says, there is no chance whatever of having a lightweight regime he is in fact saying that other countries can subsidise their crops as much as they like and we can do nothing. I think that he said something about doing to others as they do themselves. Perhaps that should apply in this case.

Lord Lucas

My Lords, I hope that I said that the form of subsidies that they use have not in the past been a form which is damaging to us, because they tend to raise prices in those other countries and therefore make it, if anything, easier for us to export to them. If the situation became wildly different the Government's opinion might be different. However, that would be speculating on a matter which has no basis in the past, or, I hope, in the future.

On Question, Motion agreed to.

Lord Lucas

I beg to move that the House do now adjourn during pleasure until 8.35 p.m.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 8.30 to 8.35 p.m.]