HC Deb 18 July 1939 vol 350 cc311-25

The following Amendments stood upon the Order Paper in the name of Mr. ALEXANDER:

In page 21, line 16, after "payments," insert (not exceeding nine hundred thousand pounds in any year).

In page 22, line 8, at end, insert: Provided that the average market price shall be ascertained at dead meat centres.

9.19 p.m.

Mr. Alexander

I should like to ask the advice of the Chair as to the course of the discussion. It has been suggested to me that probably the first of these two Amendments may be called, and it is my view that the objective of the two Amendments is very much the same, and it would satisfy the Opposition if we had a general discussion upon our objective on the first Amendment and were then permitted to divide on both of them.

Mr. Deputy-Speaker (Sir Dennis Herbert)

I am afraid that I cannot help the right hon. Gentleman very much. This is a matter upon which Mr. Speaker has given instructions, and the instructions were that he has selected the first of the Amendments and not the second. I am afraid that I cannot go beyond that.

Mr. Alexander

I know that the selection of Amendments rests with the Chair, and that we have no redress, but the Amendment to provide that the average market price is to be ascertained at dead meat centres is of fundamental importance, and although it is argued by some people that it is not within the terms of the Money Resolution, I should like to put it on record that it is stated that the subsidy shall be an amount per pound of the standard weight as determined by' this Bill and it is for us, before the Bill leaves the House, to determine what the standard weight should be, and whether it should be arrived at by live weight or at dead meat centres. Therefore, I do not understand how it should be ruled out as not being within the terms of the Money Resolution.

Mr. Deputy-Speaker

I did not say that it was ruled out. I said that my instructions from Mr. Speaker were that he had not selected it.

Mr. Alexander

I beg to move, in page 21, line 16, after "payments" to insert: (not exceeding nine hundred thousand pounds in any year). The decision which has been given puts the House in a rather difficult position, I submit, but I know that I have no redress, because Mr. Speaker selects Amendments on the Report stage of a Bill, and all that I can do is to bring the matter to the attention of the House. If Mr. Speaker returns to the Chair perhaps we may get an opportunity to argue the matter later.

As to the Amendment I am now moving, although I am moving it in a limited sense, I have in mind the fact that there is so much uncertainty about the amount of money provided by this subsidy that already different sections of farmers, and notably the Scottish section of sheep farmers, are entirely dissatisfied with the formula set out in the Bill. We have had no indication from the Government as to what figures they took as their basis when informing the House in the Financial Memorandum to the original Bill that the full cost of sheep in the first year, owing to the present bad conditions, would be £ 2,250,000, and that over the average of a number of years past the cost would be about £ 900,000 per annum. Whilst I cannot give details of drafts of schemes which I may have seen in some other capacity than that of a Member of the House of Commons, I can say that it does appear to be rather curious that the Minister could bring to the House earlier an estimate of what the cost would be, although up to that time he had not had any consultations with the Livestock Commission, who are now to be given the task of drafting for him, or advising him upon— I do not know which— the actual scheme for operating this sheep subsidy.

I can also say that I do know that the formula to be followed in the different categories of fat sheep and lambs available for subsidy has at least been changed from time to time, and there is considerable dubiety in the minds of those who are connected with the industry as to how it is exactly going to work. It seems to me, however, that we ought to know, first of all, how the £ 900,000 was arrived at. I was then going, if I had had the opportunity of moving my second Amendment, to try and get some solidity into the formula by having it put into the Act itself that the subsidy should only be paid on actual, ascertained market prices, that is, by taking the average market price at dead meat centres.

I want to put one or two general considerations. Sub-section (3) of this Clause says: The amount which may be paid by way of fat sheep subsidy payment in respect of any sheep shall be an amount, for each pound of the standard weight of fat sheep of the description to which the sheep belongs, equal to the amount by which the average market price for the month in which the sheep was examined for certification as aforesaid was less than the standard price for that month. I think it is fairly clear, if one takes that formula and follows it up with the details in Part I and Part II of the Second Schedule of the Bill, that the intention under that Sub-section is to have an average market price fixed by the Minister, for the purpose of the administration of the subsidy, on a report by his market reporters who attend livestock market centres. I am not, of course, arguing that where a total national flock of sheep amounting to 27,000,000 or 28,000,000 head is involved under this Bill and a very considerable proportion of them come into the market for slaughter every year, it would be possible to work the subsidy formula on the basis of an individual examination of any sheep. I think that would be almost impossible to work. But the way it is going to work, is that you will have a market report from time to time as to how many sheep in a given sale would come under the head of light weights and how many under heavy weights, and stating what would be the estimated bare carcase weight of the sheep sold at that market.

I should say, judging from opinions I have had given to me, both from English and from Scottish farmers, that there is a great difference of opinion arising from time to time as to whether the market reports— very often broadcast on the wireless news— are, in fact, a fair representation of what the prices are in the market, and as to whether they are sometimes more favourable and sometimes less favourable to the producers' point of view. Certainly I have heard the view expressed by some Scottish farmers, in connection with this subsidy, that the Minister has really either been deceived or has deceived himself tremendously about the effect of this subsidy. They grant him the perfectly good intention of having a subsidy to bring the standard price obtainable by the sheep farmer up to 10d. per pound bare carcase weight, but, in fact, when one allows for the way in which this formula is likely to be administered, most of those farmers fear that they would probably get very little more than8 ½ d. per pound for the bare carcase weight, if as much, on that formula. Therefore, the trouble with the farmers I have met is that they already regard this sheep subsidy as a pure fraud, as a thing not likely to give them any actual benefit at all.

I believe— and I am trying to state the case objectively— there are those who say, "Well if you are going to have two classes of sheep, light and heavy, there is the other side of it, that you cannot examine each sheep, you will have to put certain weights into lightweights and certain weights into heavyweights, and in the case of some of these sheep the subsidy may amount to as much as 2d. a pound, even in the same category, while with a lightweight sheep you might get the subsidy on a perfectly good fat sheep as low as a penny per pound." So fanners who have given special attention to providing the right kind of light fat sheep for the market would actually get much less for their extra work per pound than one who had not put himself out at all, because under Sub-section (3) they will get a sort of general average. That seems to me to be all wrong.

Whilst I am no lover of subsidies at all, when you come actually to begin to distribute a subsidy on livestock of this kind, it seems to me you ought to get as near as possible to the facts. Now in the case of the cattle subsidy there is the most specific provision made under the certificate of the individual examination. Of course there is a very much smaller number of beasts to be dealt with than there would be in the case of sheep, and, therefore, I recognise that it would be impossible to follow the same formula as you have in the inspection and certification of fat cattle; but in the case of sheep I am convinced myself— and that is why I felt it was so vital for the second Amendment to be called—

Mr. Deputy-Speaker

With regard to the second Amendment I have been listening very carefully to what the right hon. Gentleman has said and it may have a bearing on whether what he is going to say is relevant to this Amendment. He has just been at pains to make it very clear that the effect of his next Amendment would be to increase the subsidies by his method of arriving at the average price and that he cannot do on the Report stage. Therefore, I have to watch what he is saying now.

Mr. Alexander

I fear my words may not have given you the right impression. In fact, I quite see that you would take that view if what I have said about the Scottish farmers position was all that I had to say about it. But my case is not that it would be a general increase all round, but that we should get the actual market prices rather than estimated prices. In fact, I submit that if you adhere to the formula in Clause 21 (3), inasmuch as it is on the pure basis of estimates you may always be increasing the charge higher than it was intended to be by the House when it passed the Financial Resolution. I think we shall tend to limit very strictly the amount if we can get an actual firm market price.

Mr. Deputy-Speaker

All I have to say on that is that although it may be that in many cases this alteration would mean a reduction, it may in some cases mean an increase.

Captain Ramsay

On a point of Order. The matter that interests my hon. Friends and myself is whether or not the market report is an accurate and reliable statement. Is it out of order, therefore, to speak on an alternative method which is merely suggested as a method of greater accuracy, and not with any intention of raising the charge?

Mr. Deputy-Speaker

The hon. Member in the first place seems to be putting a hypothetical question. In the second place, he is putting a question which has nothing to do with the matter we are now discussing. His question is based on the question of accuracy of reports, if I understand him rightly, and that is not a matter to be dealt with at this point.

Mr. J. Morgan

On a point of Order. If it is a fact that it is not so much the total volume of money that is required to be expended or increased as that there should be justice done to any particular area within the use of that money —

Mr. Deputy-Speaker

The hon. Gentleman's question appears to be on another point not a question of Order.

Mr. Alexander

I am sorry to prolong questions relating to the point of Order, but I am anxious to be clear about this matter. I am not speaking without a good deal of inside knowledge of what is going on about the arrangement of the formula, and that is why I am anxious to get the right point of view. I know that the formula which is to be recommended to the Minister under Subsection (3) will constitute a much higher charge than we contemplated in passing the Money Resolution; in other words, the formula which is likely to be adopted by the Ministry of Agriculture is likely to constitute a higher charge than we have yet been informed. That is why I have been asking for particulars of how this formula was arrived at when the estimates were given to the House. I want to limit the charge by putting in a ceiling figure of £ 900,000 and to move an alternative method of ascertaining it on a dead-weight basis.

Mr. Deputy-Speaker

I have already told the right hon. Gentleman that that is not in order. As to the second Amendment, I have made some observations as a result of what the right hon. Gentleman has been saying in his speech. I am pointing out that this alteration in the system of ascertaining the amount of the subsidy would be out of order on the Report stage if it were possible that in some instances it might increase the amount of the subsidy.

Mr. Alexander

I will, of cause., leave myself entirely in the hand of Mr. Speaker or of Mr. Deputy-Speaker on a point like this. All I can say is that I am convinced that what I am arguing for would not increase the charge on the average. I think it would, on the average, reduce the charge, but: if Mr. Deputy-Speaker has ruled that there may be an increased charge on any particular person, of course I must accept that Ruling.

Mr. Deputy-Speaker

That s a true statement of the position under the established procedure. If it be that there may be a reduction in the majority of cases, yet if in certain cases there might be an increase, then the Amendment is out of order on the Report stage.

Mr. Alexander

In view of your Ruling, Mr. Deputy-Speaker, I must address myself finally to my case for the limit of £ 900,000. The House has not been treated with sufficient frankness on this matter. We have been given a round figure of £ 2,250,000 and the average figure of £ 900,000. We have been forced to come right up to the Report stage without any real guidance from the Ministry as to how the scheme for basing the subsidy will work. We have had no information at all. It is quite fortuitous that I happen to know what this scheme is likely to be. It is not finally settled.

Mr. E. J. Williams

Would my right hon. Friend tell us what the scheme is?

Mr. Alexander

I am sorry, but I can not do that because the Government have not come to a final recommendation and I do not think it would be right to do so. I know enough about it —

Mr. Orr-Ewing

The right hon. Gentleman has charged the Government with lack of frankness. Do I understand from him that the scheme is in course of being framed and is not in the possession of the Minister? If the Minister is not in possession of the scheme it is hardly fair to charge him with lack of frankness in not disclosing that scheme.

Mr. Alexander

Perhaps I should not have used the word "frankness," but the House has not been given the fullest information. The position is that the House is asked to pass a Bill which imposes charges in an ordinary year, the most favourable year to the taxpayer, of between £ 5,000,000 and £ 6,000,000, and may run to £ 8,000,000 or £ 9,000,000. In addition to that is the sheep subsidy, which may cost the Government on the average £ 900,000. We have not the faintest idea how they propose to get that figure. All we know is that Clause 21 (3) does not embody a sound method of arriving at the average market price. If we could have some information from the Minister why the formula in Clause 21 (3) has been adopted, we should know where we were, but we do not know.

The argument may be that we are going to be subject to the well-known procedure of reports from the Ministry's markets reports, but from all accounts some of the market reporters are very good, some are not so good and some are very indifferent. In one or two cases I believe that the lady clerk of a land agent sends on what she believes to be the average price obtained in the particular fat-stock market for the day. That is a very un firm basis upon which to lay down formulas for assessing a subsidy of this kind. I regret that, owing to the Rules of the House, it is apparently not possible to get a direct vote upon the Amendment which I have put down, but I feel that it is too bad for the Minister to have brought the House of Commons right through to this stage without more adequate information. All I can do is to say that if, when the scheme has been submitted to the Minister and approved by him, and it comes to Parliament the same inequities are still in the scheme, I should say that those who represent the slaughtering trade and those who represent the producers should make their case to the House for an Amendment of the scheme. It is true that instead of the procedure adopted in the case of a marketing scheme which would require an, affirmative Resolution, the Minister has been careful to adopt the other procedure. The scheme to be adopted under this Clause would have to be the subject of a Prayer at Eleven o'Clock. We should not be able to move an Amendment because we should have to bring pressure to bear upon the Minister to withdraw the whole scheme.

If we cannot get satisfaction at this stage of the Bill we must warn the Minister that when the matter comes before the House we must take especial care to see that it contains a properly based scheme and that it has a proper system of getting market reports for the purposes of the subsidy. It is a great pity that the Minister, in company with so many other Ministers, should be rushing this House with important legislation, all crowded into the last few weeks, and to expect the House to sit late night after night in order to rush it through Committee, morning and afternoon. In the Bill we are being asked to agree to spending 8,000,000 or £ 9,000,000 without having had sound information how the figure has been arrived at.

9.45 p.m.

Captain Ramsay

I would like to associate myself with many of the remarks that have been made. Although I cannot subscribe to the actual Amendment on the Paper, I would point out that there is a great deal of anxiety and doubt in the countryside. I think that a great deal of doubt and anxiety has been brought about unnecessarily with regard to these schemes, and I hope that, when the Minister speaks, he will be able to reassure a great many people with whom I have been talking during the last few week-ends. With regard to the market reporters, I have little doubt that it will be found very difficult for any of them to decide what the real value of the sheep will be, and I should be very grateful if my right hon. and gallant Friend would say whether there is any real objection to the adoption of the method outlined in the second Amendment. I have spoken to people who are responsible for bringing to market many thousands of sheep, and they are very anxious that something of this kind should be brought into the Bill. I have spent a great many hours in endeavouring to arrive at some kind of conclusion as to how these people will be affected by the subsidy, but we have been quite unable to arrive with any accuracy at what they would have received last year. I submit that, knowing as we do the intentions of the Minister, and his resolve to help the sheep industry, it would be a great help in relieving the doubt, which is finding its reflection in the lamb sales, among the farming and sheep-raising community at the moment, if he would make clear to them what is really in his mind, and would reassure them that it is wrong to think that the scheme is likely to be anything but beneficial to them.

9.48 p.m.

Mr. J. Morgan

I feel that this Amendment has been put forward in such a way as to draw attention to the fact that the first effect of this sheep scheme has already been to damage the sheep industry. This industry has really been in difficulties in only one of the last four or five difficult years for agriculture. Last year is used as the justification for coming to the aid of a section of the industry which was managing very well on its own, particularly in Scotland. Apart from last year, which was a seasonal affair, the weather conditions being very unfavourable, Scotland was getting on top of the sheep position, and was supplying the market with the kind of carcases that it wanted. I doubt whether two or three years of this scheme will do anything to recover for Scotland the damage that has been done this year.

I am not arguing for or against the import regulations for mutton and lamb, but unquestionably, when the regulations with regard to mutton and iamb imports from overseas were put into operation, they had a very firming effect on the market. Immediately this scheme came in sight, and discussion arose as to the amount of subsidy that would be available, the kind of influence began to creep into market conditions which tends to send that particular section of the industry downhill. The autumn sales are in front of us, and the Minister is unable to tell us whether the scheme will be operating in the autumn or whether it will operate in October. If the sheep industry is injured this year, the repercussions will be felt for a year or two at least, even if it recovers at all. It seems a pity that any attempt should have been made to deal with the sheep industry without the whole background having been fully explored, and the interests affected taken closely into account. I doubt whether anything that the Bill can do in the next year or two can enable the industry to recover from the damage which has already been done or is in immediate prospect.

Now that a certain amount of money has been allocated for the use of the sheep industry, the attempt will no doubt be made to make the conditions in the industry, possibly in the early stages, fit into the money available. If so, it will be found that a wholly false position and outlook have been created, the Minister will see to it that the sheep industry fits into the sum of money under the scheme, if only to justify the scheme, and. there may be latitude in the early stages. How are we to suppose otherwise? We have no information upon which to go. We hear that there are to be two types of sheep, light-weights and heavy-weights, which may affect the economy of the hill farmer in the Lowlands to an. amazing extent. He was just getting on top of a very good market, but now he does not know in which category he may be. and he may be forced into a category that is different from any type that he under stands. All we know is that an at terapt is to be made to make 23 breeds of sheep, as well as several crosses, fit into these two cate- gories. What relation have they to the market outlets which certain groups of farmers from the Welsh hills and the Low lands have built up, or to the other types which people in the South of England have been buying from Scotland for finishing? The Scotsman who is anxious to get hold of some part of the subsidy may find that he is operating with sheep, that might well be classified as fat sheep, on a store price basis, because the other fellow is after the subsidy. This is all to be done for the sake of a few hundred thousand pounds a year, and the whole system of examination and certification and muddling about with sheep in live markets, with the whole industry riddled with dissatisfaction over the methods employed to ascertain the market price, to grade the sheep, clip them in the ear —

Mr. Snadden

I venture to suggest that the hon. Member's remarks are rather misleading. Actually, the grading under the sheep scheme will be quite simple. There will be the light-weight sheep and the heavy-weight sheep, with a minimum and a maximum weight. All that will be done will be that the sheep will be marked according to the grade. It will be no trouble to the farmer, as far as I can see. I am more concerned with questions of prices and so on. I do not think so much difficulty will be found in the operation of the scheme.

Mr. Morgan

I agree that there will not be much difficulty, but there will be significance in the fact that all the types of sheep are now to be merged into lightweight or heavy-weight, as the case may be. What is the object of all this?

Mr. Snadden

The object is to put a bottom into the sheep market. The sheep farmer will not make a penny more than he made before, but he will now know that he can farm properly, and that, if he meets with a relapse in prices, he will have something to sit down upon. He cannot make a profit out of the scheme.

Mr. Morgan

That is an admission. It is to put a bottom into his market, but is not going to give him anything more than he has had on the average for the last four or five years. Does it mean that he can go and ask his bank manager for an overdraft on the strength of the fact that he has a flock of sheep that he says are worth 10d. a 1b. because the Govern- ment say they are worth 10d. a lb.? If that be so, what we really need is either a long-term or a short-term credit scheme and a proper security basis for farming, and not demoralisation of a thoroughly healthy sheep industry leading the public to suppose that the sheep fanners are now getting their nose into the trough. That has already begun to demoralise a thoroughly healthy industry, which ought to have been approached from another angle, and not dealt with by this superficial system of subsidies.

9.56 p.m.

Mr. Kirkwood

As far as the sheep farmers in Scotland are concerned, they had a very successful season last year. They are most anxious at the moment to have a scheme to deal with bracken, which is gradually covering all the hillsides of Scotland. If this money, instead of being used to subsidise sheep farmers—

Mr. Speaker

That is quite outside the scope of the Amendment.

9.57 p.m.

Sir R. Dorman-Smith

I am rather at a loss to know what I am to answer. The right hon. Gentleman has given us a lot of good market chatter. I do not think the complaint that the House has not been treated with sufficient frankness can lie. We have, under this Bill, to charge the Livestock Commission with the duty of preparing and submitting a scheme, within the framework of the Act. The right hon. Gentleman is in the fortunate position of being in the councils of the Livestock Commission. He says that they have gone a certain way. I have no knowledge of what they are doing— it would be improper if I had. But I shall have a scheme sumitted to me in the Commission's good time. The Government will have to use their judgment as to whether there are to be any modifications in the scheme, and the scheme will then be submitted to Parliament. The right hon. Gentleman has pointed out that he will have his eye on that scheme very carefully, and that if in fact it does not suit his ideas and the ideas of his party he will see that it is properly discussed. That is as it should be. I do not think there is any reason to imagine that I shall put forward a scheme which will be fantastic, but until I have seen the scheme I cannot discuss it.

Mr. Alexander

I pointed out that Sub-section (3) of Clause 21 is the basis of the formula on which you arrive at the standard price. It is all very well to leave it to the Commission, but the Minister must first have had in his mind what was going to be in Sub-section (3). How did he get an adverage of £ 900,000?

Sir R. Dorman-Smith

For a great number of years the method of getting at the average price has been to take the reports of the various markets. The accuracy of these reports has been questioned. It has been ascertained how remarkably close those estimates have been to the final figures of the Livestock Commission. The people who do these estimates depend for their living on whether they are clever at estimating or not. I think the right hon. Gentleman will agree, from his knowledge of the Livestock Commission and of the market prices as estimated, that the people who do the estimating are shown by experience to be rather good at the job. In view of the importance which the estimating and the whole of the marketing arrangements will assume, we shall naturally do what we can to get as close to uniformity as possible in this matter. I appreciate that this scheme is not going to be too easy.

Mr. Alexander

If the Minister takes that view of what I have said about prices, I hope he will examine from time to time the agricultural marketing reports, and note the difference between the average prices for the livestock markets and for the dead-weight centres. He will find extraordinary differences.

Sir R. Dorman-Smith

Dead-weight prices are for sales from wholesaler to retailer, and the others are the prices that the actual producer gets. Even in respect of dead weight, a lot is pure estimate. At Smithfield you get the reporter going round to all the dealers, asking what they are paying, averaging them all out, and then giving an estimate on the average. If you are going to trace each transaction on every one of about 10,000,000 sheep, that is going to be difficult. I suggest we should leave the matter until the scheme is put down. On the question of whether the Government will limit this to £ 900,000, I do not think he will expect me to accept that suggestion. That cuts across the basis of price insurance. We believe that if there is a collapse in prices, as there was last year, we shall have to deal with all sheep going through the market.

10.4 p.m.

Sir Archibald Sinclair

The Minister objected to the charge that he had not been frank with the House, but I cannot help thinking that he missed an opportunity in his speech of rebutting the very serious charges uttered by more than one hon. Member about the position in Scotland. I do not altogether share the opinion of the hon. Member for Doncaster (Mr. J. Morgan) about the position of the sheep farming industry in Scotland in recent years. It has been one of increasing difficulty. There was already serious anxiety among those interested in sheep farming in Scotland before this Bill was introduced. On the other hand, I cannot share the optimism of the hon. Member for West Perth (Mr. Snadden), who said that at any rate there was a bottom in the market. Figures of recent markets do not show that that confidence is shared in the industry. There is very grave anxiety, as the result of that, amongst sheep farmers.

I hope and trust and pray, because this is a vitally important industry, that the optimism expressed by the hon. Member will be justified, though I cannot say I share it. [Interruption.] The Minister has paid a well-deserved tribute to the shrewdness of these people. They know that the Bill is going through, but they are not at present showing confidence in its working, and indeed the farmers themselves have expressed the view that the basis on which these calculations are to be made is not a good basis. Surely the Minister or the Undersecretary could now say something which would give a measure of confidence to the farmers, or at any rate remove the doubts that have been expressed by organisations, by farmers all over the country and by sheep farmers in particular, and show in what respects these anxieties are misplaced and give us some grounds for confidence in the future.

Mr. Alexander

We cannot divide on the Amendment that I want to divide on, and we have no desire to take the other points separately and limit the amount in such a way that you could not fulfil the function of the Bill. In the circumstances I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.