Beef and Veal Regime

– in the House of Commons at 10:49 pm on 18th January 1989.

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Photo of Mr Christopher Gill Mr Christopher Gill , Ludlow 10:49 pm, 18th January 1989

There is much to be said about the European Community beef regime, but little of it is complimentary. Over the past 15 years we have seen tremendous changes in the method of supporting our beef industry—from the original fat stock guarantee scheme which supported the producer at the expense of the taxpayer, to the benefit of the consumer, to a regime which today has failed to support the producer adequately, has been of doubtful benefit to the consumer and has cost the taxpayer dear.

The question about intervention is whether we can justify continuing, even at a reduced rate, a system that has failed in its stated purpose. That is not only my view. It is the view of the Commission as stated in the explanatory memorandum issued in connection with the debate. The memorandum states: Experience during this period has shown that intervention, even at lower prices, is still a costly and inefficient instrument lacking the power to affect prices to any substantial extent. The system palpably cannot be policed adequately. We have only to consider the European Court of Auditors report, volume 31, page 70, paragraph 4.34, to see evidence of that.

The present system is not intelligible and little wonder. The estimates of the number of people who actually understand the European beef regime vary from six to 20 people. Those estimates can include precious few beef producers, meat traders, civil servants or politicians. The prime reason for the failure of intervention is, as my right hon. Friend the Minister of Agriculture, Fisheries and Food has already said, because it ignores the customer and at the same time defies market forces.

Production has progressively and increasingly been targeted at the seasonal price scales and intervention stores and not at the consumer. Without doubt that has been to the long-term detriment of the industry and to the disadvantage of housewives, unless housewives happen to be in a third country. The purpose of producing food must be to feed mouths. It would be folly to do otherwise.

There are difficulties in controlling or policing intervention effectively. Increasingly the trade in beef today is in boneless boxed form and not carcase form. It is physically impossible to inspect all the boxes of beef in intervention stores. It is even impossible to inspect a reasonable percentage of them. When beef is in that form in a coldstore—frozen, boxed and boneless—it is practically impossible even for experts to identify it. That gives rise to some of the scandals and abuses that we can all read about in the report of the European Court of Auditors. We must accept that inspectors have a limited ability to recognise the kind of meat that they are invited to inspect.

There is also a presumption that all the inspectors in the intervention process are honest and doing what they should. The whole system is wide open to fraud and abuse but the abuses are not necessarily the fault of individuals. I submit that they are a fault of the system. Sad to say, the abusers are not necessarily working in the production, slaughtering or processing of the product; they can be third parties. Unfortunately, those third parties bring the whole trade into disrepute. It is extraordinary that people who cannot tell wheat from barley trade in and make windfall profits from intervention stocks.

It is regrettable that, for a variety of reasons, the system is so unintelligible. It is difficult for a bona fide farmer producing beef to understand why the intervention stores take the best beef off our market and spend money storing it in cold store. It comes out of cold store not as the first-quality beef that went in. but as a second-rate article which is inevitably disposed of at knock-down prices. All that is an admission that the system fails in its primary purpose. The fact that it is not understood means that it is least helpful to those who most need help. The system was intended to help the smaller farmer and prop up the beef producer, but the benefits under intervention often do not go to those people.

Intervention is discredited. The proposed head age payments are causing immense dissension and disagreement for understandable reasons, many of which have been mentioned. Not least is the fact that 35 per cent. of our beef comes from heifers. My suggestion and recommendation is that we should make every effort to concentrate our support for the beef industry on the suckler cow.

The hon. Member for East Lothian (Mr. Home Robertson) spoke about the current net level of support. If that could be targeted on the suckler cow rather than to intervention or to headage payments it would produce a desirable situation in the United Kingdom beef industry. Suckler cow premiums directly benefit primary producers. An improvement on the present system would be for the support to be directed to the primary producer. Any support to the primary producer must perforce benefit the rural economy. That is another advantage in targeting the suckler cow as the vehicle for our support mechanism. The suckler cow keeps active and working people and families in the countryside. It is an extensive form of farming, and that is significant in these times of surpluses.

The hon. Member for East Lothian pointed out that beef was a useful, healthy and thoroughly satisfactory food. Beef produced from the suckler herds is probably the most natural food obtainable in the market place today. The suckler cow is ecologically acceptable, and 72 per cent. of the United Kingdom suckler herd is in the less-favoured areas.

Help targeted on the suckler cow would positively assist the United Kingdom to capitalise on its human and natural resources. It would enable us to capitalise on the skilled stockmanship in this country and on the interest and inclination of our farmers to involve themselves in that sector of agriculture. It would enable us to take up some of the slack and absorb some of the spare capacity on our farms and in our countryside. Our climate and geography are ideally suited to the production of beef. I urge my right hon. Friend the Minister to encourage some research into the comparative advantage that Britain may have in producing beef economically, possibly more economically than it can be produced in other member states of the European Community. Some native breeds in this country are ideally suited to that type of meat production.

My hon. Friend the Member for Daventry (Mr. Boswell) would have been as heartened as I was to note that a pure-bred south Devon heifer won the award for champion carcase at the Smithfield show this year. That demonstrates that, against all comers—charolais, limousin, or any other exotic or continental breed—we have the breeds in this country economically to produce a first—class product and to give meat consumers something that they will enjoy. Encouragement of the suckler cow herd will help to rebuild the United Kingdom beef industry, help us to develop an export market in the trade, and put the roast beef of old England on the European map.

11pm

Photo of Mr Geraint Howells Mr Geraint Howells , Ceredigion and Pembroke North

On this occasion, I shall be complimentary to the Minister of Agriculture, Fisheries and Food. He deserves the support of all hon. Members. The future of the beef industry is at stake, if consumers are to have good supplies of beef in the years to come. I compliment the Minister for holding on to the beef variable premium scheme for many years. It has been a great success in this country. I wish him well in future negotiations to safeguard the interests of British beef producers.

The beef variable premium scheme came into operation in this country in 1974, the year I was first elected. From that time, I have been able to observe its development as a valuable support system for the beef industry. It has provided a floor for the market. Although it has not necessarily improved the profitability of beef production, it has resulted in much-needed stability for that sector of the industry. It has encouraged orderly marketing and ensured a steady, high-quality supply of beef for consumers in this country.

As we all know, beef production is an important section of British farming, particularly in less-favoured areas of Britain, where it forms the economic basis of a large part of rural communities. Therefore, it is the Government's duty to ensure that adequate support is available, to the benefit of producers and consumers. The right course is for the Government to argue for the retention of the beef variable premium scheme to fulfil their stated aim of negotiating an outcome that takes account of United Kingdom producers and consumers. I shall strongly back the Minister if he pursues that line.

Like Conservative Members, I have always regarded the intervention buying of beef as wasteful and unnecessary. I have often criticised it, in the House and elsewhere. I do not object to its role being diminished through the new Community regulations. The proposed premium in place of the variable premium is not adequate for the needs of British farming. The present provisions are totally unsuitable and will work directly against the interests of the British producer. If the proposals are accepted without alteration, they will lead to a total loss of confidence in the industry, particularly in less-favoured areas.

First, the rate offered is considerably less than that paid under the variable premium scheme at its maximum. Secondly, it is limited to 75 head of cattle, which restricts payment even more. Thirdly, as the United Kingdom industry produces more than 35 per cent. of its clean beef from heifers, which is a higher percentage than in any other member state, the restriction of payment to male cattle only is especially unfair. That restriction must be removed if there is any possibility of accepting the proposals at all. I urge the Minister—as I am sure he will —to try to amend the proposition, so that the figure of 75 can be increased. That would mean that every bullock that is reared on a particular farm or farms would qualify for the premium.

It is also important to ascertain whether the special premium is restricted to specialist producers who do not produce milk or dairy products. Such a restriction would operate unfairly against the many mixed farmers in the less favoured areas and should not be approved.

One provision that I can welcome is the increase in the European Community's contribution to the suckler cow premium. However, that will only be of benefit if the Government take advantage of the right to top up the premium to a reasonable and economic level.

I hope that, when the Minister goes to Europe next week, he will bear these points in mind and that the feeling expressed in the House tonight will stiffen his resolve to ensure that the beef producers of the United Kingdom do not lose as a result of the EEC proposals. I urge him to say once again to his friends in Europe—in the interests of both producers and consumers, in the short to medium term at least—that the variable premium scheme should continue unamended to provide a base to the market and a degree of stability until the period of transition in the dairy sector, which has direct implications for beef producers, is completed.

I want to ask the Minister one final question. What does the future hold for the Meat and Livestock Commission? Will it be dismantled in the next few years?

Photo of Mr Colin Shepherd Mr Colin Shepherd , Hereford 11:08 pm, 18th January 1989

I congratulate my right hon. Friend the Minister on the way in which he introduced the subject this evening. He knows that the beef industry in my part of the world is very important. We have been brandishing names around tonight and I was disappointed not to hear the Herefordshire breed mentioned by my hon. Friend the Member for Ludlow (Mr. Gill). If he cares to travel 25 miles from his constituency, I shall show him some fine specimens. Of course, there are Herefordshire cattle in his own constituency. Beef production is an important activity in the western part of my constituency.

I am anxious that, as an outcome of the discussions on which my right hon. Friend will again embark, the United Kingdom industry should feel that it has emerged sharing an equal burden of the misery. I am not certain that the Commission has fully realised the importance of that. The Commission does not yet understand the significant difference between farm structures in this country and those in other parts of the world. It is easy, knowing that the agriculture vote in the country is lower than it is elsewhere, to try to load the difficulties on to the United Kingdom industry to the benefit of other countries in the Community.

Photo of Mr Andrew Hunter Mr Andrew Hunter , Basingstoke

I accept entirely what my hon. Friend has said. It is false to draw a ready distinction between the industry and the consumer because thriving producers are in the interest of the consumer. I invite my hon. Friend to continue his argument, but to draw attention to the cohesion of interest between producer and consumer.

Photo of Mr Colin Shepherd Mr Colin Shepherd , Hereford

I am much in agreement with my hon. Friend. We cannot have a healthy market for the consumer unless goods are produced at the right price to the benefit of the producer. That is what we must seek to achieve at all times.

Our producers will judge the success of the negotiations on whether their industry has been discriminated against in the outcome. We have heard already of the various items of discrimination that are on the table. It is important that these are trimmed, or that the arguments for them are made to hold water by those who propound them. They certainly do not hold water from the standpoint of the United Kingdom industry. I am disappointed that the Commission, and the Community as a whole, has not seen fit to learn from the lessons of the variable premium scheme and its success in encouraging the consumption of beef. I accept that the hon. Member for East Lothian (Mr. Home Robertson) had a good point when he said that our consumption of beef is lower than that of other European countries. It seems crazy that we should be throwing out a scheme that maintains a lower level of price so as to increase the price to the consumer and reduce consumption at a time when we are trying to increase consumption or reduce its production. That is inimical.

There is a finely poised structure of agriculture in the hills. My right hon. Friend the Minister has said that there are many holdings in the uplands, in less favoured areas and on marginal land where the only option is to use the grass. That means sheep or suckler cows. Unlike the Bavarians, we do not have the alternative of making BMW motor cars. We have people whose sole occupation is rearing cattle or sheep. They do not have the facility, the opportunity or the finance to make changes. We must encourage the suckler cow herds. The dairy herd is down for reasons that have been mentioned already and therefore we must encourage the continued growth of the suckler herd in the hills. I shall measure the success of the negotiations on whether the uplands are favoured on balance so as to maintain the delicate structure of the countryside.

I wish my right hon. Friend the Minister well in the negotiations. I know that he will carry both sides of the House with him as he travels. I hope that the members of the Commission and those of other Governments who read the report of the proceedings of the House this evening will understand our strength of feeling.

Photo of Eddie McGrady Eddie McGrady , South Down 11:13 pm, 18th January 1989

Like earlier contributors to the debate, I give my support to the Minister for his renewed endeavours, which he will demonstrate at next week's negotiations, to improve the terms of this package. I speak from experience, as a Northern Ireland Member, and with an understanding of how the package will affect farming in the North.

Northern Ireland farmers will be suffering double jeopardy with the abolition of the calf premium and the variable beef premium. The Northern Ireland farming industry is already suffering multiple deprivation—the milk quotas are biting deeply with tragic results for some small dairy farmers, some of whom have had this month to return milk cheques to the Milk Marketing Board because of slight over-production. The cereal producers are having to make a contribution to the financial arrangements of the cereal regime regarding over-production, even though they are net importers of cereals to Northern Ireland.

Of course, like every other area, the poultry industry in Northern Ireland, even though it was and is entirely free from pollution and disease, has suffered dramatically. Now, beef, the last residual sector in agriculture, is suffering the possible double jeopardy of the abolition of the premium and the variable beef premium.

I ask the Minister whether it would be possible to negotiate an extension of the variable beef premium—which was beneficial to the beef producer in Northern Ireland—from 5 March to 31 March, which would be the end of the marketing season in Northern Ireland. That would be a small but useful contribution to that industry. How important that variable beef premium is to the Northern Ireland farmer can be seen by the fact that the beef industry accounts for more than one third of agricultural products. The loss in the first year alone to our relatively small farming population would be about £18 million.

The abolition of the calf premium will cause the Northern Ireland producers to suffer a loss of between £2 million and £3 million.

It could be argued that those premiums are being replaced by the special premium, but the farming community in Northern Ireland consider that that premium, at the rate proposed, will not compensate for the losses which will be incurred by the loss of the other two premiums. The Northern Ireland farmer would ask that, not only the headage should be extended beyond the proposed 75 heads, but that the premium should be increased from 40 ecu to at least 50 ecu.

Like other hon. Members, I would ask for the scheme to be extended to the maiden heifers, because it is interesting to note that in Northern Ireland 50 per cent. of beef production is from the maiden heifer, and would be an important addition to the proposals.

We feel that the point made by the Minister about intervention will adversely affect the income of farmers in Northern Ireland to the extent of about £2·2 million—if it operates equally in all regions. The figures could be much higher if the internal European Community Market reacts to heavier supplies by accepting a lower general marketing price.

Our farmers believe that the proposal by the European Commission to reduce the trigger levels of the market price from 91 per cent. to 88 per cent. of the intervention price would rule out the possibility of Northern Ireland participating in intervention within the 200,000 tonnes limit, about which we are most concerned. We are concerned, too, about the possibility of inviting tendering for intervention purchasing. The Northern Ireland industry feels that such tendering for beef intervention would probably lead to the large monopolistic interests moving in and obliterating our rather smaller meat plants and factories, because of their larger size and greater economies.

The Northern Ireland farmer is seeking an adequate replacement to the variable beef premium, an extension of the special premium to both male and female beasts and a further increase—which I have not mentioned yet—in the suckler cow premium, which is affecting another important sector of the Northern Ireland farming economy. Northern Ireland farmers have greater transport and cereal costs than farmers in the rest of Britain because of the need to transport to and from Northern Ireland, so the margin of profit is much less than in the rest of the United Kingdom.

Our community is completely based on the agriculture of the small farmer and these movements and the depletions of income will have a considerable effect. Given our other problems, it is most important that we have a good basic farming industry and a good and stable livelihood for farmers in the rural community to sustain them and their families in their natural communities rather than that they should have to move to troubled areas.

I hope that the Minister will be encouraged by the support that he has on both sides of the House and that at the negotiating table next week a viable substitute scheme for Northern Ireland farmers and, indeed, all the farmers in the United Kingdom will be found for the replacement of the calf premium and the variable premium subsidies.

Photo of Tim Boswell Tim Boswell , Daventry 11:20 pm, 18th January 1989

The beef variable premium scheme is the linear successor to the fatstock guarantee scheme which came in on decontrol in 1954. I think that I can fairly claim to have known that man and boy, and indeed to have produced beef in many of the latter years of that intervening period.

The advantages of the beef variable premium scheme have already been extensively canvassed and in support I would add only two comments. First, the 1984 Ministry submission to the EC points out that if we had had intervention at the time the cost to the Community would have been approximately twice that of the premium scheme.

Secondly, the good National Audit Office report on the implementation of the common agricultural policy in Britain shows that there is a much lower share of expenditure on beef and veal within the United Kingdom as a proportion of the Community's expenditure—the figure is under 10 per cent.—than one might reasonably have expected from the level of production in Britain.

The premium scheme has been good for Britain and the intervention scheme will be less desirable. But the issue is how long we can hold out with our distinctive policy. In saying that, I should put on record some of the costs of the premium scheme. The first, which has not been mentioned, is that it has cost the British taxpayer some £100 million a year in Exchequer funding. The second and much more serious cost is that it has produced a special arrangement for Britain which has had to be defended at every agricultural negotiation year by year and has cost us heavily in our negotiating position on other matters.

I concede that we are now preparing for the last rites. The scheme must go, but I am reluctant that it should. If it is to go, this is perhaps the right time, with strong market conditions in the beef market and the prospect, as dairy cow numbers reduce, of a continuing reduction in beef supplies. The issue will not be how much more beef we can produce, but how we can continue to produce what we are producing now and get it to the consumer for consumption.

What, then, do we require of my right hon. Friend the Minister in this negotiation? As has already been mentioned, our basic principle must be to ensure adequate supplies in Britain and to fight off undue discrimination. That, I fear, is a battle in which we must engage year by year in the European negotiations because of our farm structure, although, unusually in the case of beef, or certainly suckler cows, we do not have the largest units in the Community.

In relation to the special premium for all beef production, which will be the main vehicle on the departure of the variable premium, one should first recall that that is much lower—approximately £28 compared with an average under the beef variable premium of over £50.

Secondly, as has already been said, the coverage would be less because there would be a top limit on herd size and a restriction on heifers. That is the nub of the Minister's negotiating requirement, and it is important to move towards a premium paid at slaughter, which would overcome many of these problems.

I echo the points already made about the dangers of not emphasising the suckler cow sector. I warn the Minister about a sentence in his explanatory memorandum, which has a nasty ring to it: Adoption of the proposed increase in the element of the premium funded by the EAGGF would not necessarily give rise to an increase in premium payments since it could be implemented by reducing the current national contribution". That sentence has the Treasury's fingerprints all over it.

It seems reasonable to start with a base line of the current premium, which I believe to be £33–40. We should add the additional 15 ecu—another £10.66—and then consider asking the Treasury to add back a little of the £100 million being surrendered to the shortfall from what is now permissible under the premium, which I calculate as another 3 ecu—or £2—ringing about a total suckler cow premium of £46. That would be a useful contribution. It would stabilise and partially increase suckler cow numbers, and concentrate production on specialists, on high quality y and on the areas of greatest sensitivity. Above all it would secure adequate supplies of beef for the British consumer, now and in the future. I wish the Minister well in his negotiations with the Treasurey in Brussels.

11 .27 pm

Photo of Mr Ieuan Wyn Jones Mr Ieuan Wyn Jones , Ynys Môn

Two principles should guide our deliberation in this debate. I stress again—this has been stressed often in previous similar debates—the importance of livestock production to Wales and Scotland. Here I speak for my colleagues in the Scottish Nationalist party. There is a tremendous reliance in our countries on the less-favoured area schemes. Farming unions in Wales emphasise that we suffer from a lack of real opportunities for diversification, relying instead on livestock production because of difficulties of terrain and climate, as the Minister pointed out.

This is important if we are to maintain the fabric of rural society, as well as the rural economy. That fabric depends on a good and viable agriculture economy. For that we need a bottom to the market, which the variable beef premium has provided.

I must also point out the difficulties that we have suffered from the imposition of milk quotas. They have operated in such a way that large parts of Wales now have no quotas, because of the opportunities to buy and sell them. Farmers are being driven into fewer and fewer options. Livestock production is so important that the success of the Minister's negotiations will be vital to the future of our rural communities.

It has not been sufficiently stressed that if the beef variable premium is ultimately scrapped, that will be the precursor of a similar decision on the sheep premium. If one accepts that the one must go, the case for retaining the other is greatly weakened.

Another important point is that the drive for harmonisation within the Community, which the Commission proposes in these documents, should not be at the expense of our producers. They should not be disadvantaged as a result of it. We welcome the Minister's general views on intervention and the value of the beef variable premium, which must be considered alongside the Commission's proposals for the special premium, with its restrictions. Those restrictions are in the maximum headage of 75, that only male cattle are referred to, although we have heard that 35 per cent. of our clean beef comes from heifers, and that the figure proposed, at 40 ecu, is substantially lower than the maximum paid under the beef variable premium. Those have important implications for the beef sector in Scotland. as they do in parts of England and Northern Ireland.

I support the Minister's argument for the retention of a premium that supports the rural communities, and farmers in those communities, and we would welcome increased support for the suckler cow premium because many of the farmers in my constituency tell me that this is a way in which we can build up the quality of our beef herd. Many hon. Members have stressed the importance of ensuring that. Farmers are concerned at the lack of good quality calves in recent years, and they want greater support for this move. There has been a substantial drop in standards, particularly since the 1970s.

Many of the comments that I could make would simply be repetition of points that have already been made by hon. Members on both sides of the Chamber. However, I have one last comment. Often, after I have come to debates about diversification and have looked for other ways in which farmers can produce, they tell me when I go back to my constituency that all that we have said is academic. Because of the physical constraints resulting from weather and terrain, they cannot shift methods overnight. Our message to the Minister is that he should redouble his efforts and, with the support of both sides of the House, ensure that he gets the best possible deal for our beef producers.

Photo of David Curry David Curry , Skipton and Ripon 11:32 pm, 18th January 1989

In the uplands of Britain, the choice is between sheep, cattle and caravans, and of those, sheep and cattle are by far the more desirable. The problem in the beef regime is the system. Intervention is too available, too convenient and too profitable. The intervention store is frequently near to the abattoir, and it is too easy to put the forequarters into intervention and mark it as the hindquarters. The store is open every day of the year, and the potential for fraud arises because there is literally a raffle of product to go into the world market, and sometimes for that to go into the domestic market.

The answer to the fraud question, raised by my hon. Friend the Member for Ludlow (Mr. Gill), is not to multiply the number of inspectors but to remove the cause of the abuse of the system—the surplus and the way in which the intervention system operates. We must recognise that there is some good news around. For a start, stocks of beef are down to 425,000 tonnes, compared with 750,000 a year ago. The special export subsidy to the Comecon countries was abolished last Friday. It did its job because it got rid of 200,000 tonnes, although it was perhaps the most unpopular export that we have ever had. However, that has taken the top off the surplus. Recently, some 100,000 tonnes tendered to Comecon was rejected because the subsidy was too low, which is a good straw in the wind. The actal sales into intervention, which were running at 4,000 tonnes a week in December, were down to 700 tonnes in the first week in January, which is the lowest level for seven years. In the second half of last year, output declined, and that decline will continue this year as we see the end of the slaughterings from the spillover in the dairy sector. Those measures taken in 1986 and subsequently have had a contributory effect, and I pay tribute to my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling) for the role that he played in those difficult negotiations. That is a role that my right hon. Friend the Minister will now have to play for the next few weeks.

Beef must not become too attractive an alternative to other products, the producers of which are also feeling the economic squeeze. We must ensure that the intervention system reverts to its original purpose, which is to be a genuine safety net and not an alternative market place. The suggestions before the House are, first, the limitation of intervention to 200,000 tonnes. There are two keys there, and the first is that a target for intervention is now available to the Commission so that it will be able to open intervention, where that is necessary, for certain cuts and for a certain period. It need not be open every day of the year.

The second key, which I do not think has been mentioned so far, is the change to a system of tendering. That would also give the Commission the discretion to reject offers into intervention. That is part of the selectivity and targeting that we need if we are to have a genuine safety net. There is no point in talking about getting rid of the system because that is not a practical option and there is little point in talking in esoteric terms. I and my hon. Friend the Member for Daventry (Mr. Boswell) do not think that there is any point in singing a requiem to the variable premium. The Minister cannot defend it indefinitely. It is one of those outposts of our battlements and every time that we have to defend it we have to divert more and more troops to it. The political costs become higher and there must come a time when we draw our frontier upon more effective terrain. We must recognise that political reality.

The principle of the single premium must be acceptable in the light of the single market place, which is one of the Government's major policy thrusts. If we are genuinely concerned about eliminating fraud, we must recognise that a double system always leaves more scope for distortion than a uniform system. The problem is how to arrange it. It is unrealistic to argue that we should pay a premium on all animals without any limit. That would be prohibitively expensive and it is not a negotiable position. Spain has 1 million eligible animals, three quarters of which are in large feed lots and would cream this premium in the way that it used to cream the variable premium on sheepmeat.

The proposal before the House is for a single premium on the first 75 animals and we would find it difficult to accept that even though the bulk of our herds would be covered. The option may well be to seek a compromise that looks towards a two-tier arrangement that would cover the majority of British producers. It would not be a perfect solution, but ultimately we could live with it. It is important that it should go to the producer and it must be fraud-proof. We cannot complain about fraud in the existing system and then ask for a system that reproduces the complexity of the one that we seek to change.

I echo what some of my hon. Friends have said about the suckler premium and there is no point in repeating what they have said. I am confident that the Minister will safeguard British interests but we must remember that our interests are twofold. We are interested in making sure that we have a viable agricultural community in the uplands. That community has a special interest in this production and is under pressure from various directions. As far as possible, people in that community must have their livelihoods safeguarded.

At the same time, the major British thrust must be the reform of the common agricultural policy, the constraint of expenditure on agriculture. That must be observed. We cannot proclaim the general principle of constraint on such expenditure while always proclaiming a particular derogation that allows us not to conform to the same kind of constraint. That is one of the political realities that we have to bear in mind, and it is part and parcel of our negotiating position. Successive Ministers have found this to be a difficult problem.

Lamb and beef are two central livestock sectors and so far have either not been subject to reform or have been resistant to it. Those sectors have significant international implications in terms of our relationship with the United States, a subject that we are not debating. I am confident that my right hon. Friend will do what his predecessors have done—go in and bat hard while remembering that our long-term interest is a prosperous agriculture community in a Britain that feels at ease with the agriculture policy because it is operating effectively, economically and honestly.

Photo of Mr Donald Thompson Mr Donald Thompson , Calder Valley 11:39 pm, 18th January 1989

It is usual to begin winding up an agriculture debate by saying that it has been good, because they generally are. It has been both a good and clear debate, but—unusually for this House—those who have contributed to it have understood exactly what they are talking about, and I hope to carry on in that vein.

I thank the hon. Members representing four different Opposition parties for their speeches. I refer to the hon. Members for East Lothian (Mr. Home Robertson), for South Down (Mr. McGrady), for Ynys Mon (Mr. Jones), and for Ceredigion and Pembroke, North (Mr. Howells), who offered my right hon. Friend their support when he again enters negotiations in Brussels next week. I am glad that he has decided to take me along as prop. We shall manage not to sleep, but to do our best for United Kingdom beef producers.

The hon. Member for East Lothian was right to say that beef is an important product throughout the United Kingdom—from Angus in Scotland, through Hereford, and down to Wales, Devon and Cornwall. However, the hon. Gentleman allowed himself to be diverted into hormones and hygiene. Hormones are not a matter for this debate. The hon. Gentleman said that we allow hard-pressed environmental health officers to maintain standards. They were responsible for putting matters right at Truro, not wrong. They often make their way to my door, saying that they wish to continue doing the job they do after 1992, and that they can maintain their existing standards—which they say are the highest in Europe—and take them into Europe.

I do not understand the hon. Gentleman's cry yet again for grazed fallow set-aside and for a return to price fixing.However, mine is too short a winding-up speech to go down those alleys. Hon. Members have either spoken in favour of a continuation of the variable premium or referred to it with great nostalgia. I had not realised that my hon. Friend the Member for Daventry (Mr. Boswell) was so old. The hon. Member for Ynys Mon is dangerously wrong to confuse sheep and beef. They are entirely different products when it comes to variable premium. He must bear that in mind.

No good word has been spoken for intervention. The hon. Members for East Lothian and for Ceredigion and Pembroke, North and my hon. Friends the Members for Hereford (Mr. Shepherd), for Skipton and Ripon (Mr. Curry), and for Ludlow (Mr. Gill) all spoke against it. The point made was that it should be a market of last resort, and my hon. Friend the Member for Skipton and Ripon commented that a tendering system will be better and fairer than an ever-open door.

There was little support for the headage system, and many hon. Members pointed out that 35 per cent. of beef production comes from heifers. My right hon. Friend and I will certainly bear that in mind in Brussels next week. Headage is perhaps the most important of all the questions that we shall be addressing there. It is pivotal.

The suckler cow premium was mentioned for various reasons. The hon. Member for Ynys Mon talked about the rural economy, as did my hon. Friend the Member for Ludlow; my hon. Friend the Member for Hereford talked about the hills; and the hon. Member for South Down highlighted the importance of the premium. Everyone echoed my right hon. Friend's resolve to ensure that the package that emerges from Brussels after the long and hard negotiations there takes into account all parts of the United Kingdom—Northern Ireland, Wales, Scotland—

It being one and a half hours after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 14 (Exempted business).

Question agreed to.

Resolved,

That this House takes note of European Community Document No. 8903/88 + COR I on reform of the Community beef and veal regime and of the Government's intention to negotiate an outcome which takes account of United Kingdom producers and consumers and of the need to keep Common Agricultural Policy expenditure within the budgetary guideline.