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Orders of the Day — Agriculture (Calf Subsidies)

– in the House of Commons at 12:00 am on 13th March 1968.

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10.24 p.m.

Photo of Mr Norman Buchan Mr Norman Buchan , Renfrewshire West

I beg to move, That the Calf Subsidies (United Kingdom) Scheme 1968, a draft of which was laid before this Howe on 4th March, be approved.

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

It has been suggested that we should also discuss the second Motion— That the Calf Subsidies (Supervision and Enforcement) Order 1968, a copy of which was laid before this House on 4th March, be approved. It is a matter for the House and not for me. I understand, however, that it has the approval of both sides of the House. So be it.

Photo of Mr Norman Buchan Mr Norman Buchan , Renfrewshire West

The scheme falls into two parts. Part I provides for the payment of subsidy on live calves born during the three-year period up to and including 29th October, 1970, and Part II provides for payment on carcases of home-bred cattle which have not earned subsidy as calves but which are of a standard eligible for fatstock guarantee payments and which are certified during the three-year period 1st April, 1968, to 31st March, 1971. These two ways of claiming subsidy will be better recognised in the farming world as "Stage A" and "Stage B". Three years is the maximum permissible duration for a scheme under the Agriculture (Calf Subsidies) Act, 1952, but schemes can, of course, be amended, if necessary by a variation scheme within the three years.

So far as Stage A of the scheme is concerned, this continues the provisions contained in earlier schemes for paying subsidy on live steers and heifers of suitable beef potential other than heifers of the four main dairy breeds. These provisions differ from those in earlier schemes in only two respects.

First the scheme no longer contains provision for the marking of certified calves. This is now provided for in the new Supervision and Enforcement Order.

Secondly, my right hon. Friends have taken the opportunity to provide for pay- ment on calves which are over the specified age limit at the time of certification where the reason for the delay in inspection and certification was to avoid the risk of spreading or introducing animal disease. This is a sensible provision which will do much to remove anxiety from the minds of farmers in foot and mouth infected areas at times when, quite properly, a temporary stop has to be put on farm visits by Ministry officials. In these circumstances, so long as they put their application in at the normal time, farmers will not lose their money if, when the animal is eventually inspected, it is found to have already shot its incisor teeth. The House will be glad to know that similar arrangements have been operating on an exceptional basis over the last few months.

Part II of the scheme is entirely new. This is the first statutory scheme providing for the alternative method of claiming calf subsidy payments on approved carcases although, as hon. Members will know, payments under the authority of the Appropriation Act have been made, under arrangements similar to those provided for in the draft scheme, since September, 1965, pending the necessary legislative authority contained in the Agriculture Act, 1967. The extended arrangements were introduced principally to enable subsidy to be paid on heifers of dairy breed which are fattened for beef. This class of animals was formerly excluded from subsidy because of the risk that they might, after receiving subsidy, be used for dairying rather than beef. This problem has been overcome by providing for payment on the hook. This widening of the scope of the scheme and its recognition of the value of the properly finished dairy heifer as a meat producing animal has been generally welcomed.

Experience of the Stage B scheme so far has shown that the majority of presentations at this stage are indeed dairy heifers. This was what we expected. Another benefit is that animals which just fail to qualify for subsidy as calves now get a second chance to earn subsidy.

I now come to the Order providing for the policing of the subsidy payment, the Calf Subsidies (Supervision and Enforcement) Order, 1968. We already had provision for Stage A, of course, but Stage B is administered jointly with the Fatstock Guarantee Scheme and this has called for some inevitable extension of the measures for ensuring that subsidy is paid in proper cases only.

Before describing the provisions of the order now before the House, I think I should remind hon. Members that sums upward of £28 million are paid out annually in calf subsidies. I think it important to mention this, because I am sure that this will make clear to the House the need for these safeguards.

Briefly, the Order makes it an offence to seek double payment of subsidy and provides for the marking of certified calves and carcases in such a way that an attempt to obtain a second subsidy payment would be detected. An identical provision for the marking of calves has always appeared in earlier Calf Subsidy Schemes. In support of these marking provisions, the Order also provides authority to seize the ears of carcases in cases where these constitute vital evidence which may be needed for prosecutions.

The other provisions of the Order are similar to those contained in the Fat-stock (Protection of Guarantees) Order, 1958, for supporting the arrangements for deficiency payments on fatstock with which, as I have said, Stage B of the calf subsidy is closely linked. In particular, the new Order gives the right to inspect records in any investigation connected with calf subsidies. No new burden of record keeping is imposed by the Order; those concerned will simply be required to produce for inspection such records as they already maintain for other purposes.

In addition to the requirements as to records, the Order contains powers of entry for authorised officers at all reasonable times. There is one particular point here to which I think that I should draw the attention of the House. This is the power extended to authorised officers of the Meat and Livestock Commission in Great Britain. Hon. Members will recall our discussions on this matter in Standing Committee on the Agriculture Bill and that my right hon. Friend gave an undertaking that the exercise of such powers by an officer of the Commission would be strictly limited to those occasions when it was necessary for him to accompany the Minister's own authorised officers. The Order prescribes accordingly.

The powers taken by this Order are, in our view, necessary to safeguard public money and I feel quite sure that the House would wish to see that there are proper safeguards of this nature.

I have just made reference to the Meat and Livestock Commission. Hon. Members will have seen that both the scheme and the Order authorise Ministers to delegate certain functions to the Commission. This power is confined to the certification functions at Stage B and their policing and is taken now in readiness for the time when the Commission will take over the day-to-day administration of the Fatstock Guarantee Scheme and the Calf Subsidy at Stage B. Arrangements for this are now being made and will be announced in due course.

Calf subsidies have been paid for many years. They are accepted as a valuable method of assistance to our beef industry, and have the particular merit of enabling subsidy to be injected relatively early in the production chain. Over the years, there has been a significant increase in the proportion of calves retained for beef. The calf subsidy has clearly served to encourage such retention. To this long-standing method of support, we have added an extra widening of its scope. We believe that this subsidy continues to have an important part to play in our system of support for this vital section of the farming industry.

10.33 p.m.

Photo of Mr James Stodart Mr James Stodart , Edinburgh West

Much of this is an old friend. We should remember that the purpose of the calf subsidy is to get more calves, which is a proper thing to say, since, in the first few years since 1960, the increase in calves certified—I have these figures from an answer given on 19th June last year to my hon. Friend the Member for Westmorland (Mr. Jopling)—was 8 per cent. in 1962–63, which steadied down to 6 per cent. in 1964–65 and 1965–66. Alas, the estimate for 1967–68 is that it has come back to 4 per cent., and the Government should not be complacent about this situation.

This is a successor to the scheme which ran from 30th October, 1964, to 29th October last year. Part I is on fairly well-established and recognisable lines, much of it pretty well the original 1952 legislation. The hon. Member referred to paragraph 6(2), the latitude allowed in inspection dates when there is risk of animal disease. In the light of the subject we discussed earlier, that is obviously a move in the right direction. One might rightly pay tribute to it. It was the suggestion made in the debate on 7th May, 1964, on a similar Order by my hon. Friend the Member for Richmond, Yorks (Mr. Kitson). I am glad that, nearly four years later, the mills of God have at last ground to fruition.

The minimum age for certifying was taken out in the 1964 Scheme. It was then announced that calves under eight months, other than hill calves, should not be inspected. Although the minimum age was moved, there would not be an inspection of calves under that age. What has been the practice? We asked, what was the point of removing the minimum age if the practice was not to be changed? Has a good degree of flexibility resulted? If not, our inquiries about removing the statutory minimum would appear to have been valueless.

Part II of the Calf Subsidies Scheme was, I think, conceived in the 1965 Price Review. More recently it stemmed from Section 10 of the 1967 Act. What is meant by the words in paragraph 10, "approximately equivalent"? This is the payment to be made and it is to be approximately equivalent on the average to the rates of subsidy which would have been payable under Part I". Why is it not precisely the same rate as the calf subsidy itself?

In paragraph 11 it is quite clear that any Ministerial functions which are conferred under Part II of the Scheme may be delegated to the Meat and Livestock Commission. I am sure that I heard the hon. Gentleman remark that this applies to certification only. If I read it aright, any powers under Part II surely include payment of subsidy, which is referred to in paragraph 8, because that is in Part II. It clearly excludes payment under paragraph 4, which is in Part I, but I should have thought that it applied not only to certification but brings in payment under paragraph 8.

This seems to conflict with the assurance given by the hon. Member for Enfield, East (Mr. John Mackie) in Committee on the Agriculture Bill. I will quote from the Report of the sitting of that Committee on 7th July, 1966. On the first going through of the Bill, we asked for and got an assurance that the question of grading would be delegated to the Commission. The payment of subsidy would continue to be made by the Ministry, and enforcement would still remain in the hands of the Minister.

On the second run through the Bill, I put the specific question and asked for confirmation. This is what the hon. Gentleman said: First, the Commission will take over certification of individual animals and carcases at live and deadweight centres. Second, payment of subsidy will continue to be the responsibility of the Headquarters Payments Unit of the Agricultural Departments."—[OFFICIAL REPORT, Standing Committee A, 7th July, 1966; c. 123.] It seems to me, therefore, that that assurance has been departed from in the powers which are given under Part II of the Scheme, and I should be grateful if the Minister would explain why that should be so.

Now, the Enforcement Order. I find Article 7(3) somewhat difficult to understand. The Article refers to powers of entry. This also, was a matter which we debated in Standing Committee, but I should like the hon. Gentleman to explain what paragraph (3) means. To paraphrase it, as I understand it, it means that, if someone is described as an authorised person wants to take an ear off a carcase, he must be what is described as a "proper officer" in relation to allowing subsidies to be paid on carcases, or he must be what is described as "any other person authorised". The second seems to cancel out the first. A definite qualification appears first, and then the field is opened much wider.

If an authorised person wants to take away books or records, then anyone can do it so long as he has authority. We made clear in Committee that we had no objection to the delegation covered by Article 4, which deals with marking, but both Article 6 and Article 7 refer to books, to records, and, possibly, to confidential information. The hon. Gentleman will recall that in Committee we expressed our fears that such information as this might go not only to the Commission itself but down to some of the individuals involved as members of one of the Commission's committees, and they might be people involved also in competition with the person whose affairs were being investigated.

We want an assurance that there will be no departure from the assurances which were given in Committee, that strict instructions would be given that confidential information should be treated with great circumspection.

10.44 p.m.

Photo of Mr John Farr Mr John Farr , Harborough

I give a general welcome to these two Instruments, which bring up to date the calf subsidy payments by increasing the heifer calf subsidy by £1 and the steer calf subsidy by £1 also, which increases were foreshadowed in the White Paper which we received from the Minister the other day.

I welcome the Minister's decision to bring these rates of payment up to a more realistic figure, but I want to know whether he is satisfied with our existing structure, and whether the methods of support for beef are achieving the necessary results. As well as the calf subsidies we have the hill cow and beef cow and fat cattle subsidies. What the nation needs from these producers of cattle was outlined on page 9 of Part II of the National Plan.

The National Plan estimated that the home production of beef and veal might be increased by 125,000 tons by 1970. We must consider these two Orders and the Orders which are about to lapse to see whether the calf subsidies are playing the part in the overall picture which was painted in the National Plan. Many hon. Members on this side of the House regarded that target—an increase of 125,000 tons—as a very modest one. It is calculated that increased consumption alone will account for about 107,000 tons of extra production, so we shall replace only about 18,000 tons of imported meat as the target in the National Plan.

I am convinced that, given the right emphasis and perhaps a little fresh thinking by the Government and a little more thinking about where the emphasis should be placed, we can meet all our home requirements for beef with production from home sources alone long before 1970. I do not want to stray too far in that direction at the moment. I come back to the two Orders which play a part in the picture which the National Plan painted.

How far is this country along the road towards achieving the target set? My hon. Friend the Member for Rye (Mr. Bryant Godman Irvine), whom I am pleased to see here tonight, on 28th February asked the Minister of Agriculture a pertinent Question in relation to the progress made in the past two years towards the estimated target of an extra 125,000 tons. The Minister may look worried about the reply, because he gave it. It showed that in two years since the National Plan was produced the home production of beef and veal had increased only by about 15,000 tons. If these Orders are to play their part in stimulating increased beef production at home in accordance with the National Plan much better progress must be made. The target for five years was an increase of 125,000 tons, but in the first two years the Government have only got to 15,000 tons.

I welcome this scheme, which is part of the overall picture only. But cannot we have some new thinking from the Ministry? Is the hon. Gentleman satisfied with the reply I have just quoted? It was a deplorable confession of Government failure in stimulating beef production. The National Plan target was very modest, yet the Government are falling well behind it. It is no use trotting out these old schemes in an embellished form and hoping that they will do the trick. Fresh thought is needed.

For example, the hon. Gentleman might give careful consideration to whether more emphasis should not be placed on the end product rather than at the beginning of the production line. I beg him to give this matter serious attention and not to be satisfied to continue in the same old depressing way, which is having such disastrous results.

10.52 p.m.

Photo of Mr Alasdair Mackenzie Mr Alasdair Mackenzie , Ross and Cromarty

I, too, welcome the scheme. Cattle rearing is essentially a long-term matter. That is why most of us are disappointed that the increase of 15,000 tons is so far behind the National Plan expectations. It is evident that we must have certain incentives, and that is what the scheme provides. We are pleased to know that it is to be continued for another three years. I am sure that, at this stage, if we did not have a calf scheme as an incentive the numbers would drop very much anyway, especially on hill and upland farms.

In the subsidy rates there is a differential. The heifer calf subsidy is £9 and the steer calf subsidy is £11 5s. I cannot understand why there should be this differential, because it costs as much to winter a cow which rears a heifer calf as it does to winter a cow which rears a steer calf, and in the market we usually get more money for the steer calf because it carries more weight. I want to impress on the Minister the desirability and necessity of bringing the heifer calf figures up to the steer calf figure. This would be a further incentive. I am continually being asked why there is this differential. I attended sales last October and saw 7,000 calves passing through the rings. I could not explain to those who inquired the reason for the differential, but I promised to put it to the Minister at the earliest opportunity. That I now do.

Increasing the numbers depends on the incentives, and we appreciate what is being done, but I hope that the Minister will realise the long term nature of cattle rearing and the continued need for incentives to increase production. The hon. Members for Edinburgh, West (Mr. Stodart) and Harborough (Mr. Farr) have made relevant points and I shall not go over the ground again.

10.55 p.m.

Photo of Mr Peter Mills Mr Peter Mills , Torrington

There is no doubt that these calf subsidies do help and encourage beef production, and therefore we welcome this Order. In saying that it will be extended for a number of years the Government have brought a certain amount of confidence to the beef industry, and, my word, that is welcome these days! Having said that, I think that the Minister does not realise that these calves will have to come from the dairy herds, if we want to increase our beef supplies. Every encouragement should be given to dairy farmers to put cows from which they do not expect to get heifer calves for replacement herds—those which are not up to the standard—on to a beef bull, a Hereford, or a Devon—

Photo of Mr Peter Mills Mr Peter Mills , Torrington

I would not care to say that. I recommend the Devon or the Hereford. I am not certain about the Shorthorn. Unless we do this we shall not get the calves for our beef. I hope that the Minister will give every encouragement to do that. In the South-West we call this "punch money". "Have you got your punch money yet, master?" we are asked.

This is a most important part of the economy of many of the small farms in the South-West. It is right to give the subsidy to the producer or rearer of these calves. Often they are very difficult farms, small hill farms and family farms, and they need this money to give them the encouragement to produce the store cattle that we need. If we put it on the other end, to the fattener, then the rearer tends not to get the advantage of this. It is terribly important to see that this money goes to the rearer. It is only as it trickles through to the rearer will he be encouraged to produce the store cattle for the country and the fatteners. I am certain that this is what the Government want, and it is why they have given this encouragement and brought forward this Order again.

I am a little concerned about paragraph 6(2), which talks of the risk of animal diseases. Perhaps I am a little dumb tonight, after having sat through this long day, but what are these diseases which make it necessary to leave the punching of these cattle till later? It is not scour. Perhaps the Minister could tell us. In paragraph 6(3) there is talk about the farmer collecting the calves and having them in a suitable pen and giving assistance. Surely this is a bit pedantic? I do not know of any farmer who is not prepared to help in this way. If there is "punch money" in it, they are bound to see that they are all together and give every assistance to obtain it.

It seems to labour the point. I do no know of any evidence of farmers not prepared to help in this way. I welcome the fact that the calf sudsidy can be paid on carcases, under Stage B. Some of us have been making representations on this for a long time, and this is very welcome. I believe that it is right to do this. It may be, if we look into the future, there may be overproduction of milk and farmers may tend to want perhaps to beef some of their heifer replacements instead of using them as dairy replacements. If they are the right sort, and properly fattened, they can get the subsidy.

This is a very big step forward. For perhaps the first time I am congratulating the Minister on these efforts. I must not overdo it, but I think it is fair to give praise where it is due. I welcome this and I am certain that it will help to encourage beef production.

11.0 p.m.

Photo of Sir John Gilmour Sir John Gilmour , Fife East

I think that Part I is reasonably well understood by the farming community as a whole, but I would ask the Minister whether he really feels that Part II is being used to the extent that it might be. I do not know whether he is able to tell us what amount of money is paid out under Part I and what amount is paid out under Part II. To my mind, those who are rearing beef animals are able to buy in replacements for calves which they lose from the dairy herd and then can qualify for susidy under Part I. But this is only for those who are breeding beef, and who buy replacements for calves they need. What happens to the pure diary herds, and what happens about the large quantities of animals not considered suitable for selling to beef herds for rearing and which at the moment are slaughtered—what I think are known as "bobby" calves, but anyway are slaughtered at a very young age?

I believe that too many animals are going into the markets at too young an age and too many calves are dying from being dragged from one market to another, though they could very well be preserved and reared and could qualify under Part II. I believe there is a very real need to give greater publicity to the facilities which are available under Part II. I believe Part I is very well understood, but there is a very real need of publicity for what can be available under Part II, to see that more animals which at the moment are slaughtered at a very early age are reared to a greater age to contribute to a greater supply of beef in this country. If this were done, and if the Minister could tell us how much is paid under Part I and under Part II that would be of help in underlining how much extra could be done by more people taking advantage of the facilities available under Part II.

11.2 p.m.

Photo of Mr Alick Buchanan-Smith Mr Alick Buchanan-Smith , North Angus and Mearns

Like my hon. Friend the Member for Torrington (Mr. Peter Mills) and the hon. Member for Ross and Cromarty (Mr. Alasdair Mackenzie), I welcome the scheme, particularly for the money it puts into the hands of breeders and rearers of beef cattle, particularly in the hill and upland areas, because these breeders and rearers of cattle are not in receipt of subsidies under the Fat Stock Guarantee Scheme for the end-product. This is a great encouragement to both the calf subsidy and the hill beef subsidy. This puts ready money into the hands of those in the areas where, naturally, these animals are bred. For this reason I certainly welcome the scheme and endorse what my hon. Friends have said about it.

However, I should like to raise one specific point which I do not think has been mentioned tonight, and it is this. As the Minister knows, a lot of work has been done, particularly in agricultural research stations in recent years, on the question of rearing bulls for beef. I think it has been shown scientifically that there is not the same prejudice as there was to bull beef. I do not intend to go into the experimental work, which is known to the Minister; he knows the value of the work which has been done on this; but what I would like to do is to express a certain amount of disappointment, because I would have thought that a scheme like this, by which we are starting to pay calf subsidy at the time of slaughter, would have been the opportunity to have introduced payment of subsidy on bulls which are reared for beef, because, as I say, in practice that has been shown to be a perfectly proper and reasonable way of rearing and fattening beef. I would have thought that a Scheme like this would have been an opportunity to introduce something of that sort.

I can appreciate that punching bull calves for the subsidy might be difficult, though I do not altogether understand the difficulty because, once a calf is punched, it is unlikely to be produced for bull licensing purposes later on. Certainly it ought not to be, and the inspectors could prevent it happening. If there was any difficulty, it could be overcome by introducing Stage B, where the subsidy could be paid on the carcase.

As I say, this might be an opportunity for introducing a subsidy on bulls reared for beef. It would be limited in application, but farmers and others have cooperated in the experimental work. It is a genuine development, done with the best motives, and, in terms of growth rates, it has proved successful. I would like to hear why the Minister has not felt able in this Order to give encouragement to those who are pioneering this work, not only in research but in the fattening of cattle.

11.6 p.m.

Photo of Mr Michael Jopling Mr Michael Jopling , Westmorland

Like other hon. Members who have spoken, I welcome the Calf Subsidy Scheme. We have had a good and useful debate, but to a large extent it has been let down by the fact that the back benches opposite have been totally denuded during the course of it, except for a brief moment when one hon. Member whose name and constituency are completely unknown to me came in and it for about half a minute as if waiting for a bus, and then went out again. It is a pity, when we are discussing public expenditure of some £28 million, that hon. Members opposite did not see fit to be present.

Like my hon. Friend the Member for Torrington (Mr. Peter Mills), I welcome a method of supporting the rearing of beef animals in a way which gives more direct assistance to rearing areas like those which he and I represent.

It is important in beef production to get a greater degree of confidence in the industry. The figures of expenditures and forecasts in respect of calf subsidy schemes over recent years show how low confidence is. Last June, I put down a Written Question referred to earlier by my hon. Friend the Member for Edinburgh, West (Mr. Stodart). At that time, the Ministry was expecting to spend £26·7 million on calf subsidies in the year 1967–68. In the White Paper published last week dealing with the Price Review, we see that the latest estimate for 1967–68 is only £23·1 million. Be tween last June and now, the Ministry will spend £3·6 million less than it expected then. That shows what a serious loss of confidence there has been in the beef rearing industry.

A great deal has been said about the high level of calf slaughtering last year, and I would like to know to what extent it is still continuing.

In the White Paper, I notice that the estimate for next year is £28·2 million, which is an increase of £5·1 million over the estimate for last year. What justification does the Minister see for this considerable jump? In this context, what my hon. Friend the Member for Harborough (Mr. Farr) said about how it relates to the National Plan is very relevant, and I hope that the Joint Parliamentary Secretary will refer to that part of my hon. Friend's speech when he replies to the debate.

The Calf Subsidies (United Kingdom) Scheme extends for a further three years the 1965 Scheme. Can the Minister tell us the expenditure that he expects and the number of calves that he expects to receive the subsidy next year in Scotland, England and Wales respectively?

I want to ask a number of detailed questions on the first scheme. Concerning paragraph 8(a), I make the point that the carcase can be presented under Stage B at a time when the beast is qualifying for the Fatstock (Guarantee Payments) Order. As this scheme is to last for three years, it may be—possibly during that time—that the Fatstock (Guarantee Payments) Order will be superseded, because we are told that the Government are now starting conversations with the farmers' unions with a view to taking up import control. Therefore, it may be that at that time the present system of fatstock guarantees will be superseded, and we shall have a different scheme. Perhaps the Minister will say something about these conversations which we understand are starting.

Concerning paragraph 10, I was extremely puzzled, as was my hon. Friend the Member for Edinburgh, West (Mr. Stodart), by the phrase, … approximately equivalent on the average to the rates of subsidy which would have been payable under Part I of this scheme …", referring to the subsidy paid on a carcase.

This is ambiguously written. When one is talking about the average to the rates of subsidy, there is no reference to the heifer or the steer subsidy. It might be construed by somebody as meaning an average between the two rates. I am sure it does not mean that. I hope that the Minister will take the point that there is an ambiguity in the way that this reads.

Finally on the Calf Subsidies (United Kingdom) Scheme, 1968, I hope that the Minister will refer to the question raised by my hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith) about bull beef. These experiments have been progressing for four years or so. The hon. Gentleman shakes his head, but I remember applying to join an experimental scheme at that time—this was before I came into the House—for the production of bull beef. I assure the hon. Gentleman that I am correct about that.

I agree with my hon. Friend the Member for Fife, East (Sir J. Gilmour) when he said that he hoped that Stage B would get more publicity. This is very important, because a lot of farmers still do not realise that they can get subsidy at slaughter on certain dairy heifers.

Turning now to the Calf Subsidies (Supervision and Enforcement) Order, 1968, I am slightly disturbed at the powers which are given in paragraph 6 to persons authorised by the Minister and persons employed by the Commission to whom there is a delegated responsibility under paragraph 8. I am particularly concerned about paragraph 6. When the hon. Gentleman the Member for Renfrew, West (Mr. Buchan) opened the debate, he referred to people who could go and look at records and books in relation to the calf scheme. Reading paragraph 6 I do not see any reference to the calf scheme. It seems that we are giving these wide powers to people to look at books, accounts and records without any reference specifically to the calf subsidies schemes. I believe that that power could be much wider than we think and much wider than the hon. Gentleman implied.

The final point on the Calf Subsidies (Supervision and Enforcement) Order concerns the Schedule where there seem to be these three systems of marking car- cases to qualify for the Stage B scheme. I do not want to be contentious about England, Wales, Scotland and Northern Ireland, but it would seem better if one could have devised a marking scheme consistent in all the countries in the United Kingdom. With all these different ways of marking and all these different permutations of marking, there is a possibility that some smart alec might think it possible to get the subsidy twice because he thinks a certifying officer may not notice a mark in a certain place because it has been put on in a different country. It is a pity that we cannot have a unified scheme in this way.

I want to turn now to a part of the scheme which worries me. I referred to it when the Parliamentary Secretary replied to the debate last June. It is the part in paragraph 5 which excludes certain heifers from the Calf Subsidy Scheme. They are the Jersey, Guernsey, Friesian and Ayrshire. The reason is that those might return to the dairy herd and might not be raised for beef. I asked why the dairy Shorthorn was not included in this category. I got the astonishing reply from the Parliamentary Secretary: The answer is that it is regarded more as a beef animal."—[OFFICIAL, REPORT, 21st June, 1967; Vol. 748, c. 1652.] It is fantastic that the Parliamentary Secretary should regard the dairy Shorthorn as more a beef animal than the Friesian. I do not understand why he says that. I today telephoned the Beef Recording Association which is well-known to everyone in the House. They told me that in their recording for beef production, 75 per cent. of animals are Friesians and only 3·5 per cent. are dairy shorthorns. The average liveweight gain is 2·4 lbs per day for the Friesians and 2 lbs per day for the dairy shorthorn. As for conversion, for every pound of liveweight gain, the Friesian consumes 5·7 lbs and the dairy shorthorn 7·2 lbs. If the figures prove nothing else, they show that the British Friesian is a considerably more important beef breed than the dairy shorthorn. I cannot understand why the Minister should have excluded the dairy Shorthorn and tried to make a case that it is more a beef breed than the others. All the facts and the experience of hon. Members will support my argument.

There have been a number of questions, and I hope that the Parliamentary Secretary will have plenty of time to reply, because he did not reply earlier about the Stratford outbreak and the question of swill. I hope he will find time to answer all the questions.

11.18 p.m.

Photo of Mr James Hoy Mr James Hoy , Edinburgh Leith

I can hardly congratulate the hon. Member for Westmorland (Mr. Jopling) on that speech. His peroration was like his opening remarks. It was not true. I did reply to the point he mentioned, but I will not go into that again tonight. If he was not listening, he cannot blame me for that.

I am grateful to my hon. Friend the Under-Secretary of State for the way in which he opened the debate. Hon. Members have raised a number of questions about subsidies and I shall do my best to reply. Calf subsidies are a well tried method of support for the beef industry. That may be a reply to the hon. Member for Harborough (Mr. Farr). While he may not like it quite so much, it will command the respect of the hon. Member for Torrington (Mr. Peter Mills). The extended arrangements for the later payments on carcases have been in operation for more than two years, during which time there has been ample opportunity to consider the views of those concerned in the industry and to iron out the minor administrative problems which invariably arise when new subsidy arrangements are introduced.

Equally, the provisions of the new Supervision and Enforcement Order follow closely those which have operated for many years now for the protection of fatstock guarantee payments and the calf subsidy Stage A. We do not take these precautions because we mistrust the farmers, although some may not behave as they should. I remember when I was a member of the Public Accounts Committee that a well known farmer from near the hon. Gentleman's area in Scotland got 110 per cent. of his costs, which did not meet with our approval. This was quite legal, but there was a loophole in the law which had to be closed.

I stand by what I said in Committee about confidentiality. I also asked for an explanation of the words "approximately equivalent" so that I could answer in simple terms. Stage B subsidy can only be approximately the same as Stage A, although we intend the rates to be generally the same on the average, because the ages of the qualifying cattle presented at Stage B may vary. It means no more or less than that we can ensure equivalence only to this extent.

The important powers to delegate to the Commission under paragraph 2 are permissive, and we intend to delegate only the duty of certification and not that of payment. The person consulting records must be directly authorised by or on behalf of the Minister, and we intend that Ministry officers should do this work. I give the same assurance of confidentiality here, except in cases of prosecution, when we would obviously have to disclose these matters.

The hon. Member for Torrington spoke about "punch money" for ears. Ears must be taken on the spot if malpractice is suspected. This must apply to Commission officers doing the certification and to anyone else authorised by the Minister, such as an inspector on his own staff. The proper officer will normally be an officer of the Commission, who is best placed to notice anything wrong, but if he suspects the need for investigation he will pass the case to the Ministry; our officers will inspect the records and go on from there.

Some thought has been given to whether the system might be altered, since some think that we should dispense with the calf subsidy and add an equivalent sum to the fatstock guarantee, but we think that the subsidy is better in that everyone, from the producer onwards, will get his share. Under the other system, the producer would get less and the man at the other end would get more. These suggestions are very difficult.

Stage B is not used as much as Stage A because any calves suitable for rearing for beef will usually be certified live, since the money is paid then, which is a great attraction. Farmers are aware of the possibility of getting it if it is on the hook. This has not been used a tremendous amount, but it is getting better known. In 1966–67 we spent approximately £24 million on the Stage A scheme and only about £700,000 or three quarters of a million on Stage B. I agree that it is one of the schemes which might be used to greater advantage.

The hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) asked about bull beef. We agreed to give a three-year trial to bull beef production. Two years have been completed and we are conducting a review of the progress made. After consultation with the agricultural organisations, we shall announce the action beyond the end of the third year approximately a year from now. If the scheme needs amendment, we shall come to the House again, but I think the hon. Member will agree that it is much better to look at it in that way.

Photo of Mr Peter Mills Mr Peter Mills , Torrington

I think the hon. Gentleman has rather forgotten the question I asked about disease.

Photo of Mr James Hoy Mr James Hoy , Edinburgh Leith

I am trying to share out the answers to questions because there are a considerable number to answer.

The hon. Member for Ross and Cromarty (Mr. Alasdair Mackenzie) asked why the heifer subsidy is lower than that for steers. He partly answered his question when he spoke of different weights. The aim of the subsidy is to encourage the retention of steers and heifers for beef production, but at the same time to distort as little as possible the way in which the market, through the setting of prices, discriminates between the different types of stock. Heifers normally fetch a lower price per head than steers. Therefore, a subsidy which gave both the same headage rate would favour heifers unduly. Nevertheless, the differential should not be too wide, particularly if we wish to encourage the retention for beef of dairy heifers which are not going to be used for milk production. We consider that the current differential is about right.

I was asked, why cannot Stage B be extended to include animals certified at liveweight centres for fatstock guarantee. Arrangements for claiming calf subsidy on the hook were to enable heifers of dairy breed to qualify for subsidy if they were used for beef production. These animals are excluded from subsidy at Stage A because of the need to ensure against payment of subsidy on heifers which are not slaughtered for beef but are used for dairying. The same problem arises at whatever stage in the animal's development it may be certified. We have considered many suggestions from representatives of the livestock auctioneers and others, but no practicable way has been found of ensuring against the risk of this happening except by requiring heifers of the dairy breeds to have been slaughtered before they can get the subsidy payment. It is realised that the same problem does not exist in the case of steers, but steers of any breed are eligible for subsidy as calves at Stage A and we would expect that the majority of farmers would continue to present their steers for certification at that stage. We have no evidence that restriction to deadweight causes producers any real difficulty, or has caused any distortion of marketing patterns between liveweight and deadweight.

I have made the case for the Order and I hope that it has the approval of the House.

Question put and agreed to.

Resolved,That the Calf Subsidies (United Kingdom) Scheme 1968, a draft of which was laid before this House on 4th March, be approved.

The Calf Subsidies (Supervision and Enforcement) Order 1968 [copy laid before the House, 4th March], approved.—[Mr. Hoy.]