Agriculture Act, 1957 (Section 3(1)(b))

Oral Answers to Questions — Agriculture, Fisheries and Food – in the House of Commons at 12:00 am on 11th May 1971.

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Photo of Mr Eric Deakins Mr Eric Deakins , Walthamstow West 12:00 am, 11th May 1971

asked the Minister of Agriculture, Fisheries and Food why it took his Department over 13 years to discover that it had wrongly interpreted Section 3(1)(b) of the Agriculture Act, 1957, when calculating changes in farm costs from one year to another.

Photo of Mr James Prior Mr James Prior , Lowestoft

Although I have no responsibility for what was done under previous Administrations, my understanding is that the provisions of the Act have in the past been correctly applied for cost changes generally. Feed and transport cost changes were allocated to the "guaranteed" and "non-guaranteed" sectors on the basis of fixed proportions, an arrangement that did not properly reflect later changes in standard quantities. The new method of calculation was accordingly adopted.

Photo of Mr Eric Deakins Mr Eric Deakins , Walthamstow West

Is not that a very serious state of affairs? Is not the right hon. Gentleman saying that he is right in his interpretation of the phrase relevant costs of production in Section 3(1)(b) of the 1957 Act, and that all previous Ministers of Agriculture from 1958 to 1970 were wrong in their interpretation? This is a very serious state of affairs for the House, because it affects taxpayers' money.

Photo of Mr James Prior Mr James Prior , Lowestoft

I shall not speculate on the activities of previous Administrations in this respect. The hon. Gentleman should realise that feed and transport costs were originally allocated between guaranteed products on an arbitrary basis. This was never revised, so as time went on it became increasingly incorrect.

Photo of Mr Cledwyn Hughes Mr Cledwyn Hughes , Anglesey

Is the right hon. Gentleman aware that there is a great deal of disquiet about the way in which he presented his calculations in this year's Price Review, and that he did not make clear in his statement to the House or in his White Paper that costs were£24 million less than they would have been if the previous year's methods of computation had been followed? While there may be valid legal reasons, as the right hon. Gentleman has described today and as he described to me in a letter, for making the change, why did not he say so plainly and explain the matter openly to the House and the country? The right hon. Gentleman has given credence to the belief that this method was contrived to make the Review look better than it was—namely,£3 million under-recoupment instead of£27 million under-recoupment.

Photo of Mr James Prior Mr James Prior , Lowestoft

I can understand some of the right hon. Gentleman's anguish that a Price Review introduced by me should have had a much better reception than one introduced by him. I did my utmost to save the right hon. Gentleman embarrassment although he had done his calculations wrongly.

Photo of Mr Eric Deakins Mr Eric Deakins , Walthamstow West

On a point of order. In view of the unsatisfactory nature of the reply, I beg to give notice that I shall seek to raise the matter on the Adjournment.