DEFENCE OF THE REALM (FOOD PROFITS) BILL. (Hansard, 24 April 1918)

§ The PARLIAMENTARY SECRETARY to the MINISTRY of FOOD (Mr. Clynes)
I beg to move, "That the Bill be now read a second time."
It is clear from the face of the Bill that it has one and only one object, which is to impose penalties upon profiteers which 1077 cannot be imposed under the provisions of the Defence of the Realm Act and the Regulations made under that Act. The public indignation manifested in regard to some few cases of illicit profit making is mainly our justification for seeking this further power. The fixing of food prices has been accepted as a necessary war measure, and those prices have been justified by the great advantages which have been conferred upon the public of the country. The law breaker in respect to food under war conditions must be regarded by us as one who is not only violating the law in a technical sense, but as one who is giving substantial assistance to the enemy with whom we are at war. We look to this Bill in its general effect, regarding certain of the large traders, to be an effective deterrent against some of the offences which have already been committed. It is a matter of very great pleasure to us that we are able to say that our countrymen generally in their trade relations have acted up to a standard of honesty and of good conduct, and in introducing this Bill there is no imputation to be made against the general character and trade conduct of that large community supplying and distributing foods in different parts of the country. The object of the measure is to deal with the exceptions. The exceptions in themselves are rather serious, and we have found, unless some such authority as this is placed at the disposal of the Ministry of Food, that it will be possible for men to make immense sums of money by wrongdoing without it being in any way possible for the Ministry of Food to recover that money or to impose any salutary or sufficient penalty upon those who violate the law.
I may mention that during the course of this year there have been up to now some 7,000 odd prosecutions undertaken by the Ministry of Food. These prosecutions have been for profiteering reasons, and in more than 6,600 of those cases convictions have been secured. This Bill is not intended to deal with the ordinary small trade instance of profiteering, but rather with the more serious and larger cases. For instance, there may be a very large wholesale dealer doing business in any one of the many articles of food with which we are concerned. He may have many agents or salesmen. He may have representatives in different parts of the country all able to commit a serious offence, and when all the offences are put together it may mean 1078 that a very large sum has been exacted from the consuming public through the means of excess profits. The fines which at present can be imposed by any Court of law must not exceed £100. There have been cases where excess profits have been made to the extent of several thousands of pounds. It is now the view of the Ministry of Food that it is not sufficient to impose a fine even up to £100. It is not sufficient even to imprison a man to the extent of six months, as is possible under the existing law. It is, in our judgment, necessary to go further, and take from the wrongdoer not merely all that he has been able to make in the way of illicit profits, but double the amount which he has been able to secure by his evasions of the law. Plainly, then, this Bill provides power to enable the Food Ministry not only to imprison, and not only to fine, but also to make the offender a debtor to the Crown to the extent of double the amount of the illicit gains which he has been able to secure. Without labouring the point, I would urge upon the House the necessity of giving us this power to deal with these serious though exceptional cases, in order to meet public opinion, and in order to act as an effective deterrent upon those who up till now have been able to break the law and have been able easily to pay the money penalties out of the enormous profits which they have derived.

§ Mr. LOUGH
I beg to move to leave out the word "now," and at the end of the Question to add the words "upon this day six months."
I am glad to have had the opportunity of having heard the arguments of my hon. Friend in support of this Bill. It is the most astounding proposal for any Government to make to a decent House of Commons. There is on the back of the Bill these words, "Defence of the Realm (Food Profits) Bill." My hon. Friend has talked all the time about food profits and profiteering in which he has had a very melancholy experience but, would you believe it, there is not a word about profits in the Bill? The Bill is all about food prices, and it is an attempt on the part of gentlemen who have had a very bad experience of this sort of thing to tackle that problem, which has puzzled Governments ever since there have been Governments, of fixing the prices of commodities apart from the great laws which govern those prices. I was 1079 glad to hear my hon. Friend say, although he contradicted it afterwards, that he did not make the slightest charge against the great trades in this country of anything in the shape of profiteering. I wish I could say the same of the Ministry of Food. The disgraceful profiteering which the Ministry has carried on, the unnecessarily high prices it has fixed, the unblushing profits it gets without giving any accounts either to this House or to the people of the country, are among the most shocking experiences we have experienced in this time of War. A friend of mine, who is one of the greatest importers of frozen meat—an article of which I know nothing—told me that the Ministry of Food had taken over vast quantities at 6½d. a lb. and were charging 13d. a lb. wholesale for it, a most gigantic profit in a matter of most vital interest to the public of this country, especially the poor.
My hon. Friend said that he did not charge the great trades in this country with the offences dealt with in this Bill. He might well say that! I do not speak on behalf of any trade. The only trade with which I have close experience has made only one complaint with regard to the prices fixed in that trade—that is, they are too high. They have been made, in a sense, parties to a swindle. The Food Ministry has insisted upon a great article of consumption being spoiled. The Food Ministry has laid down the order that the lowest form of the product—I am speaking of tea—is to be mixed with the other quality. The object of all honest traders in this trade, not merely for the last year or two because they have not invented these lines to meet the severe crisis which now exists in this country—but for half a century has been to eliminate the bad article and to give the people of this country not merely in the matter of tea, but in all other articles a clean, honest and high standard of food. The Ministry of Food has the exactly opposite policy in view. I was interested to hear the hon. Gentleman the other day say with regard to cheese—he is succeeding splendidly with regard to cheese—that he wanted the bad stuff mixed with the good. He said, "I want you all to have your share of the bad food and then you may get a little of the good food at the end of the month." I think I am quoting his words accurately; at any rate I am giving the sense of them, 1080 because I do not attempt to read his speeches, although all his speeches are very interesting.
I have the greatest admiration for the hon. Gentleman. He comes forward courageously to defend the worst proposals I have ever heard made by a Government in this House. He is always courageous, and puts them forward in the name of a Ministry supposed to be composed of business men, who ought to know better, for they ought to be trained in those economic laws which my hon. Friend does not understand. Not one of the members of the Ministry, in a matter of extreme magnitude and of vital interest to the people of this country, not one of these supposed business men has ever put his name on the back of one of these bad Bills. I see we are to have another one. which has only the name of my hon. Friend on it. In this case we have the name of my hon. Friend and of a Lord of the Treasury (Mr. Parker)—I am glad the Parliamentary Secretary has someone who has the courage to back him up—and the name of the Solicitor-General, whom I suppose we shall see in Committee. The Parliamentary Secretary gave the great tradesmen in the country a clean bill of health with regard to this Bill. He said there was no case against them. I ask him to give in respect of one of the 7,000 prosecutions he mentioned any respectable house in any trade which has charged more than the price fixed by the Food Controller or the Government. I do not like to say there has not been one such case, but it has not come to my knowledge if there is, for the very good reason that the Food Controller fixes very good prices. He gives them all a very good share of the profit, and any man would be very greedy who wanted any more than the Food Controller gives him.
In the distribution of these articles, especially when you remember the bad quality they are forced to distribute by Order of the Ministry, they are almost made parties to, I think I said "swindle" before, but I do not want to use too strong language; therefore, I will say they were made parties to practices which, if the trade were left to run on the ordinary high lines on which it is run in this country, would not be permitted. Although my hon. Friend gave this clean bill of health to the great tradesmen of the country, yet a little later on he gave us an illustration of the reason for the Bill a large wholesale man who made very large profits. I do 1081 not know many such wholesale men. I do not believe the Bill is aimed at such practices at all, because such practices do not exist. The Bill is totally unnecessary for the reason that, as my hon. Friend admitted, very heavy penalties are possible at the present time. He has had no difficulty whatever about his prosecutions. He said he has had 7,000 of them, and, so far as I understand from the figures, which are very interesting, he has only failed in about 400. I noticed some very bad cases of failure in the prosecutions by the Ministry of Food—little hoarding prosecutions for a few pounds of food. when there was no law to guide the people. I was very glad to see the Ministry exposed in several cases where they started these prosecutions and had to abandon them. Here my hon. Friend comes forward with the most extraordinary Bill the House ever saw. I do not suppose that even you, Mr. Speaker, in your long experience, ever met with one like it. It is printed on a half sheet of paper with my hon. Friend's name on the back of it. Its object has no connection with profits, although that is the Title. Its object is to fix prices.
Let the House consider for a moment the dreadful experience the hon. Member has had with regard to the fixing of prices. It is the most difficult thing in the world to do We hear of Lord Rhondda doing it. Poor Lord Rhondda! I believe he is perfectly innocent of most of the proceedings attributed to him. I believe he has been ill during the last month, and I am sure the House will be sorry for it. Lord Rhondda is only a name with which to conjure. These prices are really fixed by wretched Committees which sit in the Food Control Department. These supposed business men consider the articles with which they are to deal and fix an arbitrary price They have not been able to maintain for three months the prices they have fixed. Now they come down with this Bill, after having had the dreadful experiences of the prices they have fixed, and they say, "Although we cannot fix a proper price, yet we will fix heavy penalties for anybody who breaks our prices." Who is it that breaks their prices most? The Ministry itself. My hon. Friend himself will admit that he has told us he is the buyer of butter at 4s. 6d. a lb. What price does he fix? Two shillings a lb. Nothing will induce him to vary his price of 2s., while he buys it by hundreds of tons at 4s. and 5s. I 1082 do not blame him for buying it at the high price, but I do blame him for fixing a price which is only one-half the value, and for starving and promoting scarcity in this country by such wicked methods as those which are followed. Take another case—every article is practically the same—beef. How was the famine in beef produced in, this country? Simply by fixing the wrong price. He not only fixed the price, but he gave the unhappy producer notice that the price would be reduced. I suppose it was done through one of these Committees. I do not like to associate-Lord Rhondda with it, because he is a man of good sense. In August or September the price of beef was 76s. a cwt. He said it must be put down to 60s. What was the effect? Every business man among the farmers said that in view of the high price of feeding-stuffs they could not produce beef at that price, and thereby a great scarcity was created. Two hundred and twenty thousand immature cattle were killed, and the country was deprived of many hundred tons of good meat simply because of the price that was fixed. How can they punish people for not observing principles they themselves do not observe? By January, when they had frightened all the people and created a famine, they altered the price of beef by about 20s. a cwt., raising it to 76s. I suppose that when poor Lord Rhondda fixed the price at 60s. for June he thought that it would not matter to fix a low price for June, because January is winter and June is summer. Now he has put it forward to June, 1919, as if anybody cares what price he fixes fifteen months ahead. In butter, beef, and bacon it is the same. He has fixed the price of bacon at 20s. a cwt. after creating a famine. No one can get a rasher of bacon now for breakfast. [HON MEMBERS: "Yes, we can!"] Well, I had a little this morning, but I have not had any for a fortnight. There should be no scarcity. The only reason for the scarcity of bacon or beef was the foolish prices which my hon. Friend—I really think he is responsible for a great deal of it—fixed for these articles. It only requires a few months to produce these things in abundance. He has only to give a remunerative price, and the articles will be produced. What do we find? That the Ministry of Food were not able to fix any price which would stand. They are the greatest profiteers existing in the country, and they come down here to make this House a party to it and ask that huge 1083 penalties should be enforced against anybody who breaks the funny prices they have set up. Let me look at the matter from one or two other points of view. Let us treat this great matter seriously for a moment and look at one or two objections. If we are to avoid famine in the dreadful time that is before this country, then the tricks that have been played upon the producers, about which we do not hear a word, must be brought to an end.

§ Mr. SPEAKER
I do not think that this is an occasion for a general criticism of the policy of the Ministry of Food. This Bill merely increases the penalties which are already payable for the sale of goods at prices in excess of those allowed by the Food Controller. It is already an offence to charge a price which exceeds the price fixed. This is a proposal to add to the penalties enacted by the Defence of the Realm Regulations.

§ Mr. LOUGH
Perhaps I was digressing into too many details, and I will devote myself strictly to the terms of the Bill. As you said, Sir, there are very heavy penalties at the present time. My point is that they are quite sufficient, and that the Bill is unnecessary. The real reason for the production of the Bill is that my hon. Friend and his Committees at the Food Control Department do not trust the magistrates. The magistrates take all the circumstances into account. Instead of allowing the magistrates to look at the circumstances and impose a penalty in accordance with them, the Food Ministry want to direct the sentence that shall be passed. The Bill is very bad, cruel, and harsh from that point of view. There is no permission under the Bill. It does not contain the words "not exceeding." It says that a certain penalty must be enforced in any case. There is a great objection to that. The Bill also is retrospective. I think it is a monstrous thing. Does the hon. Gentleman intend that it shall be so?

§ Mr. CLYNES
No; it is not intended to be.

§ Mr. LOUGH
I am very glad to hear that. As it reads, however, it would be. It is most difficult to fix prices. The experience of the hon. Member has shown that. Still, I think I have said enough on that point. The Ministry itself at this moment is conniving at people getting more than their price. I would remind 1084 him of the case of the Irish cattle trade. He knows very well he is paying much more every week for the cattle he gets from Ireland. He is paying an excess price because he wants the cattle here and because he has fixed an impossibly low price. He himself is breaking his prices constantly, and it is very hard that he should try to enforce on producers of the country a standard of virtue which he himself does not live up to. I believe in this matter of the Irish cattle trade the excess price he is paying amounts to £40,000 or £50,000 weekly, because it is so necessary to get the beasts here.

§ Mr. SPEAKER
That is not really relevant to the Bill. It is for the Ministry of Food to fix the prices from time to time.

§ Mr. LOUGH
But ought he not to adhere to his own prices?

§ Mr. SPEAKER
That depends on the amount of meat or food available. It must vary from time to time.

§ Mr. LOUGH
If it is understood that the price is to be varied from time to time, I shall be satisfied. But the Minister has fixed a rigid price for everybody but himself. However, I do not want to argue that point. I have stated that he is constantly varying the price himself, and is paying a great deal more than the figures he is fixing. For the reasons I have mentioned, I hold there are very grave objections to this Bill. There will be great difficulty in working it. I would like to acknowledge what the hon. Gentleman said as to the general conduct of business men in this country. I have no sympathy at all with business men who do not observe the rule laid down by the Food Controller or any other Government Department, because those rules allow too high a profit. I have been trying, I am afraid not very successfully, to show that there are great economic laws affecting the production of food vital now to the people of this country which this Bill offends. Past experience has proved how difficult it is to fix prices, and I am afraid that the working of this Bill, if it works at all, can only have a very bad effect. There appears to be no necessity for it, seeing that the penalties already imposable are quite sufficient. I think it would be wiser for the Government to leave the matter alone and not go further with it, and that is why I beg formally to move that the Bill be now read a second time this day six months.

§ Mr. BOOTH
I only rise to ask a question. I understand now that the Bill is not to be retrospective, but the first Clause does not make that clear. In view of the proceedings we are familiar with throughout the country, will the Government on the Committee stage make it quite clear that the Bill is not retrospective?

§ Mr. CLYNES
Certainly.