HC Deb 10 August 1920 vol 133 cc355-65

(1) Subject to the provisions of this Act, His Majesty may by Order in Council prohibit the export from the United Kingdom of any of the fertilisers specified in the Schedule to this Act.

(2) An Order under this Section—

  1. (a) may provide for the issue by such Government Department as may be prescribed by the Order of licences for the export of articles to which the Order relates; and
  2. (b) may authorise any such licence to be issued subject to such conditions as may be specified in the licence, and may contain provisions imposing penalties for any breach of, or failure to comply with, any such conditions.

(3) Any Order made under this Section may be revoked or varied by a subsequent Order so made.

(4) This Section shall have effect as though it were included in the Customs Consolidation Act, 1876, and the provisions of that Act, and of any Act amending or extending that Act, shall apply accordingly, and if any articles prohibited to be exported by virtue of this Act are exported from the United Kingdom in contravention of an Order made under this Section, or are brought to any quay or other place to be shipped for the purpose of being so exported, or are water-borne to be so exported, the exporter or his agent shall be liable to the same penalty as that to which a person is liable under Section one hundred and eighty-six of that Act for illegally importing prohibited goods.


I beg to move, at the end of Sub-section (4), to add the words Provided always that the quantity of sulphate of ammonia reserved for use in this country shall, in the case of each manufacturer, be equal in proportion to the quantity so reserved by any other manufacturer, and that, on application, any manufacturer shall be licensed to export the proportion of sulphate of ammonia not so reserved. My sole object is to give protection to individual firms who wish to remain out of this ring which will be forced on the producers of sulphate of ammonia if the Bill as printed is passed. There are producers of something like 60,000 tons of sulphate of ammonia who wish to remain outside the ring, and I think the House realises, and people who have been trading during the period of control realise, that we wish to get back to normal conditions. The producers of this large quantity of sulphate of ammonia are anxious to be allowed to trade with their proportion overseas without restriction and without sending it to the Equalisation Committee and giving away their private secrets to trade competitors on that committee. If this Amendment is accepted, it will create no further work in the right hon. Gentleman's Department. It will mean that people producing the sulphate and who have not only given the quantity required by the Government for consumption in this country, but have exceeded the quantity, will be enabled to export this 14 per cent. or 15 per cent. under licence without giving away trade secrets. I formally move the Amendment and trust that the Minister will be able to accept it.


I cannot possibly accept this Amendment. I think there is a complete misunderstanding. It is quite true that the principle suggested that the export trade should be divided equally among the different firms according to their output is found very fair, but really the fair part of that proposal is arrived at by the present scheme under which the Equalisation Committee, which represents no less than 90 per cent. of the output, arranges for all the orders at home and also for the surplus being exported abroad and divides the profits of the export among all the firms contained in the Equalisation Scheme in accordance with their production. That is the fact. My hon. and gallant Friend says there is something like 60,000 tons of sulphate made by firms who have not come into the Equalisation Scheme. My hon. Friend is really quite wrong. There are 499 firms. Of those no loss than 444 have come into the arrangement and the 55 that stand outside only produce among them 17,000 tons. Of this 17,000 tons one firm, namely, the South Metropolitan Gas Company, produced 15,000 tons, and it is simply because this one firm have not come in with the others this Amendment is moved. The South Metropolitan Gas Company. I quite agree, are a good firm and make a high class of sulphate of ammonia, but they have not chosen to come into the Equalisation Scheme, and last year, at a time when every ounce of nitrogen was really required for fertilising the soil here and for export, which would be valuable for the purpose of helping our exchanges, they actually preferred to hoard five or six thousand tons and not use it at all. I cannot be a party to making an exception for the sake of a company simply because they did not chose for their own private reasons, whether they be good, bad, or indifferent, to come into a scheme to which 90 per cent. of the output has come in. In addition, if I adopted this proposal it would be absolutely unworkable. There are 499 firms and some of them produce very small quantities—not more than ten tons a year. If each firm is to have a licence to export a certain proportion of their production what would be the result? We should have little parcels of a few hundred weight exported by this or that firm, and the present system whereby exports take place in bulk, saving shipping and expenses generally, would be destroyed. The scheme proposed by my hon. Friend, apart from every other consideration, would simply wreck the whole Bill and make it unworkable. I would like to point out one other thing. The trade have behaved magnificently, apart from the instance I have mentioned. They undertook the whole responsibility of supplying a whole market and arranging for exports. They did it on a perfectly clear basis. They saved the Government the whole cost of administration, and if we were to adopt the plan suggested by my hon. Friend, instead of that duty being undertaken by the trade themselves, we should be obliged in the Ministry to set up a special Department at considerable cost to the taxpayer. Therefore, because this is merely moved, as I believe, in the interest of one firm, because also it would make the whole scheme unworkable, I cannot possibly accept this Amendment.


May I, in a word, back up what the Minister in charge of the Bill has said? I was Chairman of the Fertilisers Committee, during part of the War, and I know it is perfectly true what he has just said, that you could not carry out this organisation without a considerable staff, and, of course, the accompanying formalities and expense of bureaucracy and all that sort of thing. I know exactly how specious this Amendment is, and how difficult it would be to enforce it in practice. I know the Government would be bombarded by claims of the makers that their storage room was chockablock, and that they must have licences to export, and so on. I know of the chances of working unfairly as between the small maker and the large maker, and the thing would be worked, of course, to the advantage of large companies After all, under the equalisation scheme, although they actually use all their output at home, the small makers get some share of the higher prices which are made for the general proportion of the output that is sent abroad. It would really not be possible under the Amendment for small makers in inland places actually to export any of their produce without a very great amount of unnecessary clerical work and a great deal of use of transport. The effect would be that the small inland maker in rural districts would get no exports, and therefore would come off very much second best compared with the powerful companies. I only want to speak from real practical experience as to the difficulty of managing these things in any other way except by an Equalisation Committee, and I think it my duty to support the Minister in charge of the Bill.

Captain LOSEBY

I want to ask the right hon. Gentleman precisely what he docs propose to do on the lines of this Amendment. Do I understand him to say in effect that if any firm for any reason, whether that reason is good or bad, is unable to come into this Equalisation Committee, it will not be able to take licences to export at all? If the right hon. Gentleman will give us the assurance that he is going to make some attempt to meet what, I believe, to be the very real fears, of some of these firms that cannot come into this Equalisation Committee, then I for one would not wish to see this Amendment pressed, but I am sure the right hon. Gentleman realises that some of these firms—again, I say, rightly or wrongly—are genuinely afraid of a ring in this particular trade. They believe that this Equalisation Committee will have the effect of producing that ring. They are quite unable to come in because they think, rightly or wrongly, that it will be necessary for them to reveal trade secrets, and they have other fears. But it does appear to me completely wrong to put into the hands of the Government this power that by Order in Council, they can practically issue an edict saying, "You shall, and must, for our convenience"—because that is what it amounts to—" come inside this ring, or else we shall give you no facilities whatever for your export trade." It is rather hard, and I do press the right hon. Gentleman to tell us how he proposes to meet the difficulties of these particular people.


I am very sorry the Minister in charge should find himself unable to make some concession along the lines of this Amendment. Those who have put it forward are not at all against the principle of the Bill. They are quite prepared to see that the home supplies are conserved, and that nothing is allowed to go outside the country until the home market has been fully supplied. The Minister suggests that he cannot accept this Amendment because the vast majority of makers do not want it and are prepared to come into this ring, or whatever it may be called. That is really no argument at all. If a small minority objects to it, the mere fact that they are in a minority should not tell at all. Their case seems to me to be a very good one.

The South Metropolitan Gas Company has been referred to as being one maker which has taken the lead in objecting. It has been suggested that they have hoarded and that they are out to make money. My information is that in the last three and a half years they have sold in the home market something like 90 per cent. or over of their make. That does not suggest that they are going to evade their responsibility in this matter. The objection they have to-day seems to me to be quite a good one. They have made it quite clear. I cannot help thinking that if we set up an Equalisation Committee—call it what you will—at the present time, it is bound to develop into something in the nature of a ring or combine. That ring or combine will continue to exist after this Bill has gone. They must fix prices to some extent while this arrangement is going on. They will continue to fix prices after the Bill has ceased to operate, and the agricultural community at home will become a prey to such a combine. Also, I think it is quite a fair objection that these makers make, that they have to go to a ring or Committee of this kind and ask their permission for export licences, and they are bound to show to this Committee, which will be entirely made up of trade competitors of their own, all their foreign markets, all the firms with whom they have been trading in foreign countries, and give away all their trade and market secrets, and do themselves a great deal of harm as a result. It is, I say, quite a fair objection that they take in this matter.

During the War, I can quite understand, there was much greater need for some regulation of this kind than there is at the present time, because we not only wanted to conserve our home supplies, but we wanted also to see that any supplies sent overseas were not sent to enemy countries. The necessity for any regulation of that kind has gone. There seems no reason why the makers who are allowed to export—each individual maker—should not be allowed to export whatever they like. It seems to me, therefore, that it is quite a reasonable demand they make: that each individual maker of this country should be asked to set aside from his own manufacture the proportion that is required for the home market, and be allowed to do whatever he likes with what he sends abroad. That is to say, if the total make at home is 400,000 and the total required to meet the needs of the home market is 300,000, each maker should be enabled to export one-fourth of his manufacture and be allowed to send it wherever he likes so that his trade will not be interfered with, and when all these restrictions pass away he will get a return for the work he puts into it now. If this Amendment is pressed to a Division I shall support it, and I hope the Government will announce some concession.


I do not think that these minority firms will have to give away their trade secrets. If the hon. Member who just spoken knew more about trade, he would know that whether in a minority or a majority they are all chasing the same customers. As an old commercial traveller I can speak with some experience on this point. I always knew what my competitors were doing, otherwise I should not have been able to keep my job. I think the necessity is past and gone for making a corporation a close ring, and this requires an answer from the Government. Unless the answer is satisfactory I shall vote against the Government scheme.


I desire to have some reason given for keeping this wartime restriction, because there is no need for it. They have to go before an Equalisation Committee, and if the Government cannot accept this Equalisation Amendment, then they must be contemplating some of the mischief which has been pointed out. The Amendment is reasonable, and it does not make it necessary for these people to put themselves into the hands of any Committee. We want to get out of the grip of these Committees and control of all kinds, and this is an attempt to renew that system. The Amendment will minimise these evils, and for these reasons I hope the Government will accept it.


I am going to sup port this Amendment on the ground of opposition to anything in the nature of a monopoly. For some considerable time I have had a good deal of experience with the control of certain articles produced in this country, namely, hides. During the War the hide business was under the control of the Ministry of Munitions, and very proper restrictions were placed on the exportation of hides, which could only be exported by a special licence. Tanned leather all the while was allowed to be exported and had a world-wide market. The position during the first six months of this year has been that whilst the tanners have bought their hides in an absolutely closed market to everybody but themselves, they have had the great advantage of exporting their tanned. leather to every part of the world where they could find a market for it. The consequences were that during the first six months of this year the export of tanned leather was four times what it was in the corresponding months of 1919, yet to-day, in spite of the very great world-wide trade in tanned leather, they still have an absolute monopoly of the purchase of raw hides in this country, and the producers of raw hides, whether they be wholesale or retail meat purveyors, have no market to which they can send their hides except those in which they are at the mercy of these men. I am afraid the same thing will happen in regard to the product which is dealt with in this Amendment, and that is why it has my support. I think the day has come to get rid of the grip of Government control, and to allow things to have a free market.


I think the Debate has proceeded under a complete misapprehension. There is no idea of creating rings or unduly prolonging control. For two years firms producing 90 per cent. of the output have agreed to a certain price for the home market. The price is high; it might be very much higher. At the same time they have agreed that the surplus shall be exported, and that the profit on that export shall be divided amongst the firms which have come into the scheme, in proportion to their output. No fairer arrangement could be made. The whole system will merely last as long as the export is controlled. The Bill is a temporary Bill, and the arrangement I have referred to will come to an end as soon as the Bill itself comes to an end. We have not the slightest desire to create rings or to extend control. All that is asked is that for the time being this process shall be carried out. Practically the whole trade is agreed. The hon. Member asked what would happen to the firms who had not come into the arrangement. There are 55 which have not done so, and the whole of them, with the exception of the South Metropolitan Gas Company, produce only 2,000 tons out of the 360,000 tons produced; they have not come in because it is not worth their while, for they never did export. My hon. Friend asked why not adopt the simple principle of saying that each firm shall export a quarter of its output? There are 499 firms, producing 360,000 tons a year. Some of them do not produce more than ten tons a year. Could anything more unbusinesslike or wasteful be conceived than that each one of the 499 firms should export a quarter of its output, whether large or small?

Major M. WOOD

They need not do it unless they like.


Then you are merely giving the advantage to the large firms which make for export. Our plan is a business-like and fair one, and it has been working satisfactorily for two or three years. We merely wish to continue it during the period for which it is necessary to control the exports. If this Amendment is carried, the Bill simply becomes waste paper, and it is no use proceeding with it. In that case, all I can say is that the land of this country will suffer, because fertilisers will not be applied to the soil. I hope the Committee will not divide, but if they do I must appeal to them to support us.

Lieut.-Colonel Sir A. WARREN

I desire to join in the appeal which has been made to the right hon. Gentleman on the broad principle of the removal of control. As one who is in touch with a very large body of persons engaged in small businesses, I know that they are sick to death of everlasting control, and the sooner it is removed the sooner will it make for the peace of mind of a great many people and for the general well-being. The right hon. Gentleman tells us that this has worked well during the War, and with that I have nothing to find fault. Many things worked well, or apparently well, during the War, because people were willing to sink many of their differences and conveniences, and to overlook much that had to do with their general prosperity, in their desire to win the War. Therefore what happened during the War is no fair criterion as to what should be continued after the War. It worked well during the War, and it is only to work as a temporary measure—


The hon. Member is making a Second Reading speech. We must keep to the Amendment.


I beg your pardon, Sir Edwin. The point to which I want to call the attention of the right hon. Gentleman is this: Already there has been formed a federation to control and watch over this, even after this temporary measure has ceased. Although it may be the intention of the Government and those who are urging the Government that this should be temporary, already those who are interested are entrenching themselves in the position that, whenever the temporary measure is withdrawn, they will be able to hold this trade in the hollow of their hand. I believe the feeling in this House is in the direction of giving the greatest opportunity to the trades of this country to expand in a free and unfettered way in order that they may work for the general good. Personally, although I regret it very much, I shall, if this goes to a Division, have to vote against the Government.


I hope the righthon. Gentleman will stick to his guns. If the operations referred to by the last speaker are dangerous to the community two years hence, they are far more dangerous just now, and there is no reason why they should not be put into force now rather than be delayed for two years. Here is a very clear case of a strong corporation which wants to get a bigger price by exporting this material—

Major M. WOOD



Well, what is their object? Their object is freedom in the matter, and a bigger price, I presume, is obtained at the present time for the exported material than that which is paid at home. Agriculture has a right to have the benefit, and if you do not look after your farmers, and are going to sell this stuff because you can get a bigger price outside the country, it is an act of madness, especially at the present time.

Major M. WOOD

I wish to say a word in answer to the speech to which we have just listened. I am certain it was delivered under a complete misapprehension of the facts. The minority do not in any way wish to deprive home agriculture of their full requirements. Indeed, it is part of the scheme that everyone accepts that, before a single ton goes abroad, the whole of the farmers of the country are to be satisfied. The suggestion that this is an attempt to enable farmers to send their produce overseas and deprive the home consumer of any, is a complete misrepresentation of the facts.


I want to put one point to the Minister, because I am certain what he said has entirely misled the House. The position is that the minority to which he refers say, "Will you allow us to export such a percentage as everyone it entitled to export, whether in the ring or not, and free us from any of the restrictions by going to the Equalisation Committee?" The firm to which he alluded as having hoarded this stuff have exported in 3½ years 93 per cent. of their entire output—and they are the largest producers in the country bar one—as against other people who have only sold 60 per cent. to the home consumer. It is absolutely wrong for the Minister to say they have been hoarding to that extent. The time has arrived when the bureaucracy should finish and persons who have goods to export should be entitled to export, the same as those who belong to the ring, free from restrictions and without giving trade secrets to trade competitors in the form of a ring.

Amendment negatived.

Clause ordered to stand part of the Bill.

Clause 2 (Short Title) and Schedule ordered to stand part or the Bill.

Bill reported, without Amendment; read the Third time, and passed, without Amendment.