CLASS VI.

HC Deb 14 December 1927 vol 211 cc2411-68

BEET SUGAR SUBSIDY, GREAT BRITAIN.

Motion made, and Question proposed, That a Supplementary sum, not exceeding £900,000, be granted to His Majesty, to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1928, for a Subsidy on Sugar and Molasses manufactured from Beet grown in Great Britain.

The MINISTER of AGRICULTURE (Mr. Guinness)

According to the ruling which was given last year I should be out of order in arguing the case for a sugar subsidy or in detailing to the Committee the particular value and effect which this subsidy has had on arable cultivation. At the same time the Committee will no doubt expect an explanation of the increased production for which it will be necessary to provide a supplementary vote, the principle of which was accepted on the main Estimate. The increased sum is made necessary by the great development of sugar-beet cultivation in this country, which will enable the factories, according to the present estimate, to claim the payment of a subsidy on 239,000 tons of sugar and 69,000 tons of molasses during the current season.

Mr. MacLAREN

Does that include any from last year?

Mr. GUINNESS

Very little. I have not the exact figure. The Estimate which we present early in the year cannot possibly be accurate in this matter because we have to deal with three unknown quantities—the acreage on which sugar-beet will be grown, the yield per acre of the roots, and the sugar content of the roots which are produced. We have to decide the figure of the Estimate within the month of January, long before the crop has been grown. Last January, on the data which had been sent in by the factories, the maximum acreage in the south was 209,000, and that included a provision for two factories which were in contemplation, but which at that time, according to the information then in our possession, were not certain to be erected. In January, last year, the very favourable result of the 1926 sugar harvest was not known. That harvest produced nearly an extra yield of one ton per acre over the result of the previous year. The average yield per acre was 8.63 tons of beet, as against 7.67 tons for the previous season.

In the same way we had no information as to the great increase in sugar content, and that percentage reached 17.31 as against 16.36 per cent. for 1925–26. These improvements in yield and sugar content meant that the factory output for last season, expressed in terms of commercial sugar, reached 2,656 lbs. per acre as against 2,063 lbs. per acre for the previous season. In other words, there was an increase last season over the preceding season of nearly one third in the result, expressed in commercial sugar. The very satisfactory result to the growers and to the factories which was revealed in the final figures last year resulted in the erection not of two more factories, as we expected in January last year, but of four. It resulted in four of the existing factories doubling their plant and two other factories embarking on very large increases. In the current season contracts were signed for 222,500 acres of beet, but what was actually grown was nearly 230,000 acres, as a good many farmers grew beet without signing any contract.

Mr. MacLAREN

Farmers grew beet without a contract?

Mr. GUINNESS

A certain number of them grew beet without making contracts with the factories, knowing that some of the factories would be short of the maximum amount with which they could deal and would be glad to take supplies wherever they could get them. The Committee ought to realise the very large difference in the estimate which is caused by a comparatively small variation in the acreage yield and sugar content. If you take the present acreage, 230,000 in round figures, and assume 8½ tons to the acre, then an increase of 1 per cent. in the sugar extraction involves an extra subsidy of £380,000.

Mr. HARDIE

Shame!

Mr. GUINNESS

If you take the other side of the problem, one half ton per acre increase in the yield means an increased demand on the Treasury, in the form of subsidy, of £335,000 last year. We had not one half a ton increase in the yield, but a one ton increase. We are still only half way through the season and it is impossible to foretell the final figure which the subsidy will reach. We can merely take the estimate of the factories, and these estimates fluctuate very considerably during the course of a few weeks. On 15th October the factories estimated that they would produce 210,000 cwts. more sugar than they estimated would be probable less than a month later, and as the expectations of the factories seem to be decreasing at the moment, I think it is quite certain that the £900,000, which we have provided in the Supplementary Estimate, is an outside figure and will prove to be more than what will be required. Undoubtedly, it is unsatisfactory to the Committee not to be able to tell in advance exactly what liability will have to be faced, but that is inevitable in connection with a subsidy such as that provided in the British Sugar (Subsidy) Act. In voting this large sum of £900,000, which will bring this subsidy up to £5,400,000 for the full season, the Committee can console itself because it is enabling a new and valuable industry to become firmly established and is giving financial relief to those arable districts which are most hit by the present agricultural depression.

Mr. WILLIAM GRAHAM

I beg to move, to reduce the Vote by £5.

The right hon. Gentleman in his introductory words indicated that on a review of the Supplementary Estimate it was difficult, if not impossible, under the rules of the House, to explore the whole field of the subsidy. With that, of course, we on this side must agree. But in moving this reduction I trust we shall be in order in pressing for an inquiry into two or three points of importance which are raised very sharply by this Supplementary Estimate. I suggest that that course is justified by a good deal of the criticism which has emerged in recent months, and so far justified also by the White Paper— dealing with the nine or eleven factories —which I gather the right hon. Gentleman himself submitted to the House some weeks ago. The first point to which I would direct attention, in asking for this inquiry, is the conditions of labour in the factories to which this Supplementary amount, among others, applies. There is undeniable criticism regarding both the hours of work, the remuneration, and the recent refusals of the Minister of Agriculture to accede to investigation of or intervention in this problem. Information which has been lodged by several of the sugar beet factories in different parts of the country makes it perfectly plain that they are working shifts of 12 hours, that some quite young people in the factories are engaged for as much as 18 hours; and while we recognise that this is a short period industry, those conditions can hardly be defended any more than the remuneration which in many cases is offered.

I submit that before we proceed to vote any additional sum for the subsidy a problem of that kind deserves investigation. Accordingly we make that a part of the kind of inquiry which we recommend in moving this reduction. If I may I will refer for one moment to the general question. I wish to make it plain that there were certain hon. Members on this side of the Committee who never approved of this scheme; but the majority of our Members did approve of it, subject to the reservation that should be exercised by every hon. Member, that if circumstances developed in such a way as to indicate financial difficulty, that would be at any time proper material for review. That is the case which I am putting on this and other points to night. In the second place there cannot be any doubt at all that inquiry is urgently required into the general finance of the scheme. We must undertake that inquiry before the additional £900,000 is voted. During recent weeks the Minister of Agriculture issued a return covering 11 factories engaged in beet sugar manufacture, and that return indicates that of the 11, nine had a period of quite considerable prosperity. The aggregate profits in these cases appeared to amount in round figures to £425,000 or £450,000. It becomes a very important question for the taxpayers of this country, even assuming that there is a general desire to help this industry, whether a subsidy on such a scale is required if profits of that kind are to be earned by the factories. If the problem before us is one of encouragement of a new industry during its time of initial progress, is it true to suggest that we are going beyond that and with the assistance of the subsidy putting profits into the pockets of a comparatively limited number of people, which was certainly not the original intention of the promoters of this scheme? That is one consideration in pressing for inquiry. But of course there are many others.

We know that the subsidy was divided into three periods, the first covering the period of four years up to 1927–28; the next covering the three years succeeding —in other words we are now beginning the diminution of the subsidy—and the last period covering the final three of the 10 years. During that time the subsidy falls progressively from 19s. 6d. to 13s. and then to 6s. 6d. A very important question is arising as to whether these factories will be able to continue, with the fall of the subsidy, upon which period we are now beginning to enter, because just at the moment of this Supplementary Estimate we are, so to speak, at the turning point, at the beginning of the subsidy decline. Of course, if a broad view is taken of these beet-sugar factories, the argument would be, first of all, that they have done very well indeed; secondly, that they may be trusted to drive a good bargain with the farmers; and, thirdly, that if they had handled their finance aright they should have been able to build up such reserves and to make such other provision as will enable them with success to meet the declining period of the subsidy contribution. But against that there is the analysis of the Agriculture Institute at Oxford, and of certain other authorities, which many of us regard as of great importance as bearing on this special Vote of £900,000. That analysis suggests that it might be better if the larger part of the experience in building up this new industry had taken place when the subsidy was at its full height, and that that experience should have been acquired under those conditions, even if the subsidy later were more drastically or speedily reduced than is contemplated in the present scheme. That analysis goes on to point out that, so far from that being the case, the bulk of the experience is taken to fall probably now or in the second subsidy period when the decline is taking place, and that as far as future entrants to the field are concerned, their position presumably will be even more difficult when they are confronted not merely with the 13s. of the second period but the 6s. 6d. of the third.

What is the practical issue arising from all this analysis so far as the taxpayers of Great Britain are concerned? The idea was to stimulate a new industry which was to have an important influence on agriculture and to provide an alternative occupation in the agricultural areas. But at every stage of a subsidy of this kind—which up to the present has cost the taxpayers more than £10,000,000—there is a call for drastic inquiry, and if there is the slightest ground for suggesting that these factories will not be able to continue, when the subsidy is reduced, then quite plainly that is a matter which we must take into account not only on the main Estimate but on every Supplementary Estimate. Even at this time a claim is being staked out in certain quarters for the maintenance of the subsidy, and that is an issue which we must face, whether we are in favour of the scheme, or critical of it, or altogether against it. During the past few months in the "Sugar Manual," which is, I think, a representative publication in this matter, there has appeared an analysis of the position of a typical beet-sugar factory, turning out about 10,000 tons of beet sugar per annum, in the first, second and third subsidy periods. They envisage a capital of from £400,000 to £500,000, subject to fair conditions which would be generally accepted as a reasonable statement of the position of one of these factories.

The analysis shows that on that basis, and with that output, in the first subsidy period—that is taking 54s. to the grower—it ought to be possible to make a profit of about £147,000. In the second subsidy period, taking the new agreed rate at 46s., they estimate that that profit would fall to about £114,000, and, in the third period, that it would fall to £109,000. Finally, assuming the subsidy to be removed altogether—which is a consideration we must always have in our minds, because that is the broad plan of the scheme—they indicate that, making allowance for a greater efficiency on the part of the farmers in the cultivation of this crop, and for its offer at a much lower rate than is now or will be in force, that profit would fall to about £56,000. The Committee may say that even on that basis, which presumably is a fair test, the situation is perfectly safe; but that is not the view taken by other critics of this scheme, and particularly by that section of opinion which is now staking out a claim either for the maintenance of the subsidy or for an easier scale of modification. So in the light of all these facts in regard to what I will call the general finance of the operation of beet-sugar cultivation in Great Britain, I think a case has been established for an inquiry before a Supplementary Estimate is passed. In other words, what I have said covers the two points—first, the labour conditions applied to this form of cultivation, and the question of whether the workers on the land are getting any show at all in this case; and, second, the broad general question of the finance of the beet-sugar factories and the position of the subsidy at the end of the period.

That leaves only one other ground which I propose to notice in asking for this inquiry. That ground is the undeniable plight of the sugar refineries. I recognise that in a Supplementary Estimate, the whole broad problem cannot be surveyed, but during recent times, and certainly in the period that will be covered by this additional contribution the position of the refineries has become very much worse. Not so long ago, in Greenock there were 18 sugar refineries. There are now five, and of those, four are practically closed. Only one sugar refining factory in that important centre of the industry is in operation. Sugar refineries have been closed in other parts of the country, and, within recent times, a substantial difficulty has overtaken one of the largest firms—Messrs. Tate and Lyle—although, so far, that difficulty has been temporarily relieved. Is it unfair to suggest to the Government that, whatever view be taken of the proposals of the refiners for a remedy, they undoubtedly demand and require investigation of their position at the present time? Within recent weeks, the Corporation of Greenock, the refiners and others, have joined in an appeal to the Government for an inquiry, and, up to the present time, to the best of my knowledge, no favourable response has been made to that request.

We know that a section of the refiners are probably out for complete protection against the importation of what they call dumped Continental sugar at low prices. Another section do not go so far. They are content to say that we should alter the incidence of the Imperial Preference, and some of them couple with that a demand that we should disentangle the refining process at these beet-sugar factories from the other processes of beet cultivation and sugar manufacture. In other words, as I understand it, they would confine it to the raw material. In any case, they point out that when the subsidy is taken into account, and the contribution for molasses, together with the allowance in respect of the present scale of Imperial Preference, we are giving about 26s., and more, per cwt. Looking at the returns of these factories as included in the recent White Paper, it is fair to say that there is as much subsidy as sugar, because it runs to more than £1 per cwt. In other words, the subsidy is the larger part of the show on a cwt. basis in certain oases. If that be the argument of the refiners, and if these refiners are contending that they are penalised to some extent—that is as far as we can push the argument—by the beet-sugar subsidy, then, surely, it is a reasonable thing to aceede to their request for an inquiry.

Many of us on this side of the Committee are not prepared to go further than to say that beet-sugar cultivation is only a part, and not a large part, of the refiners' problem. In my view, by far the larger part of the refiners' problem is the dumping of Continental sugar at rates with which they find it difficult to compete, and in terms of a policy on the part of Czechoslovakia and other countries, of offering sugar here at a lower rate, and actually restricting supplies in order to keep up the price in their domestic market. Be that as it may, there is an undeniable case for an inquiry when we have regard to the plight which has overtaken Greenock and other centres. It is unfortunate, as regards Greenock, that this depression has coincided with a great dislocation in the shipbuilding and engineering trades. That is only an additional reason for making the fullest inquiry. In summary, I suggest that there are three points, namely, labour conditions, the general finance of beet-sugar cultivation, and the plight of the refineries, which constitute ample ground for this investigation. I shall be amazed if the Government take the extraordinary line of refusing what appears to be a very fair and reasonable request.

Mr. RUNCIMAN

I rise to oppose this Supplementary Estimate, not altogether on the same grounds as my right hon. Friend the Member for Central Edinburgh (Mr. W. Graham), who has just spoken, but because of the vast size to which it has grown under the present arrangement and the necessity for the curtailing of national expenditure. In the first place, the total which appears on the Estimate is not a complete statement of the liability of the State; it is not a complete statement of what it has cost the Exchequer during the last year. To begin with, the calculation has added to it a footnote, which declares that: The Excise Duty at existing rates on sugar and molasses manufactured from beet grown in Great Britain is estimated to yield in 1927 £1,800,000. For the purpose of making this Estimate palatable to the House, that amount is deducted from the total amount of £5,400,000, so as to reach a total of a little over £3,500,000. That leaves out of account altogether the fact that, if there had been no subsidy, if we were feeding now on sugar imported from abroad and passing through British refineries, the extra amount of revenue which would have come to the State would have amounted to another £1,000,000. That has been lost under this scheme, so that actually the cost that we are now reaching is not a matter of £5,400,000; under the revised Estimate it is £5,400,000, not minus the amount of the Excise Duty, but plus the amount of the difference between the Excise Duty and the Customs Duty. In other words, the amount that we are now being asked to vote is not £5,400,000 in total, but it is a total which comes to £6,500,000.

The right hon. Gentleman is not buttressed by the Financial Secretary to the Treasury, and I am not at all surprised that the Treasury is shy of this Vote. It is one of the most expensive experiments that has been made since the present Government came into office. Already, we have spent £10,000,000 over it, with an addition of £2,000,000 lost by the Exchequer through the absence of Customs Duty, and the Minister himself has said—I am not sure that he was not even proud of it—that before we have done with this it is going to cost us £20,000,000. He would have been more accurate if he had said £20,000,000 plus £4,000,000 lost in Customs revenue—in other words, £24,000,000 for the 10 years scheme. These figures are really staggering. It is no use shutting our eyes to the fact that we cannot afford to pay subsidies on this scale, and, what is more than that, we cannot afford to pay them in this way.

The extra amount that we are asked to vote to-night of £900,000, plus whatever is lost by the Treasury, bringing us up to a very high total, is explained away by the Minister because of the difficulty which he had in estimating at the beginning of the season what would be the sugar content. Nobody knows what the sugar content will be. That is in the hands of God. If we have a very sunny summer, it is more than likely that the sugar content will be high; if we have a bad summer, the sugar content will be lower. We do not know what the yield may be; it depends entirely on the skill of our agriculturists. Whether or not they are able to produce a large yield depends largely on their method of manuring, which is not altogether the same in this country as it is in Germany and Holland. But one thing we can be sure of, and that is that the amount which passes through the factories is likely to go up from year to year as long as the subsidy remains at its present scale. When we go on the decline, I think there will be a smaller number of farmers ready to supply beet for the factories, and then there may be a crisis in the sugar beet industry.

Why should there be reluctance on their part to grow? The original reason given for the subsidy was that it was to aid agriculture; it was to open out a new branch of agriculture; it was to establish in this country a new industry which would enable our tillage farmers once more to establish themselves in a state of prosperity. How far has it done that? The right hon. Gentleman has heard from many farming associations, as I am sure he has heard from many individual farmers, that they are not satisfied with the factories making a profit of about £17 per ton of sugar, whereas they, the farmers, cannot make more than £4 to £5 per ton out of it. The distribution as between the factories and the farmers, they think, is unfair, and I heartily agree with them, for, if the benefit to agriculture was the reason for starting this subsidy, it is very easily shown, by calculations which can be checked by the Minister himself, that the lion's share of this subsidy is going to the factory owners and not to the farmers. Benefits, of course, have accrued to the farmers under it, quite naturally; of course they would. If you give a subsidy to a trade, naturally it benefits by it, and there are many farmers who believe that the subsidy should go on for ever. What they dislike about it is its declining scale, but there is no Minister who would think of coming down to this House and binding the Exchequer for ever to a subsidy of these enormous dimensions.

When we make a survey of the size of the subsidy, we begin to be able to get the material on which to form a judgment. In the first year, it was not very easy to see how far the thing was likely to go, but we can see now, with this Supplementary Estimate before us, what it is going to cost us, more or less. It is quite clear that under the scheme the factories, which are doing so well on the whole —there are only about two of them that did not make ends meet last year, and some of them made very much larger profits than they showed in their balance-sheets—are in the happy position of receiving their raw material free. That is what it amounts to—actually getting their raw material free.

Mr. GUINNESS

Will the right hon. Gentleman develop his argument about profits being larger than shown in the balance-sheets?

Mr. RUNCIMAN

Everybody who has drawn up a balance-sheet knows that you must have a good many secret reserves for contingencies, that you must have money to carry over in the following year. Any chartered accountant who has had anything to do with company concerns knows that; it is common form and quite justifiable. But do not let us deceive ourselves by imagining that the published profits which came out in the White Paper were the gross profits of these factories. They are not; they are the net profits; they are what, in the judgment of the directors, they think it wise and prudent to publish, and nothing more, and the right hon. Gentleman will agree with me that it is natural that they should have a good deal up their sleeves. They will go on doing that so long as the factories remain under the subsidy scheme, and I say, without any possibility of contradiction, that every one of these well-managed factories will repay the whole of their capital and leave a handsome profit over the 10 years' period. Indeed, if they do not do that, there is a danger of us losing some of the £2,200,000 capital which we have advanced, particularly to the Scottish factories.

Let me put to the Committee the size of the subsidy in various forms. I was saying, when the right hon. Gentleman, quite fairly, interrupted me, that the factories get their raw material free. What does that amount to? The subsidy comes to over £3 per ton of the beet which they receive; that is practically what it is equivalent to, for I think it is fair to say that the yield has been working out at something like 7.18 tons of beet for one ton of sugar produced. That would, therefore, make the amount which they receive per ton of the beet, the raw material, about £3. But now they buy from the farmer. Do they pay him £3 per ton? Not at all. They are paying him a great deal less than that. In other words, the factories are receiving their raw material absolutely as a gift from the State. You do not need to be either a Dutchman or a Scotsman to make a profit out of an industry of that sort.

Let us measure it in terms of acreage. This subsidy up to the level which it has now reached in the Supplementary Vote, actually works out, if you leave out of account the Customs revenue, on the basis of £23 per acre under cultivation. The farmer does not get it. The extra amount to be added for revenue lost brings it up to £28. That is; roughly the value of the freehold of farm land in this country. That is another way of showing to what enormous dimensions this subsidy has grown. The Minister, if he is going to justify going on on this scale, must, of course, believe that it has added to the employment of people in factories and on the land. It is very difficult to get out of him any estimate as to the extra number of persons employed on the land. His colleague from Scotland, with greater ingenuity in the answering of questions, produced yesterday a new formula. He says that the extra employment which has been given under this subsidy works out at one man for one and a-half weeks extra per acre. What on earth does that mean? I have been thinking of a great many ways of working it out, and the only sensible way is this. If you take a unit of 34 acres of beet and multiply one man by one and a-half weeks by 34 acres, it means that you might be employing one extra man for 52 weeks in the year. Is that what the right hon. Gentleman means? He said it is an estimate, and perhaps I had better leave it at that. I am increasingly distressed over the returns the Minister has produced of employment on the land. This subsidy is not checking the diminution in the employment of persons on the land. It is obvious to anybody who knows anything about farming that beet-growing must of necessity employ more men than the growing of some other crops, but not all. There are some crops in the southwest of England which employ more men than the growing of beet. There are others grown elsewhere that do not employ so much labour. I do not suppose, for instance, that we should want so much labour for the growing of turnips. But what is the figure?

9.0 p.m.

One of the reasons given for the subsidy was the employment that was going to be given. I will make a rough shot, if the Minister will not think me presumptuous. I say that on the total acreage this year it has not led to the employment of more than 7,000 people extra, and that for only a very short period of the farming year. Now, in addition to that, there have been 8,400 men employed in the factories for three months in the year. Let us measure the subsidy in terms of unemployment pay. Suppose we had had from the Exchequer to pay these men in lieu of giving them work, could we have done it on this generous scale without being open to criticism? Suppose my right hon. Friend who has just spoken, had come to the House when he was in power, and had said, "I believe in doing all that I can for the unemployed, and I have discovered a way of doing it on a generous scale. I am going to have 15,000 more men employed and under my scheme they will cost, for three months' employment, £380 each." Multiply that by four, and we get a nice little sum for the right hon. Gentleman with his great facility in mental arithmetic. That scale would have been regarded as an outrage, but that is what the right hon. Gentleman the Minister of Agriculture is doing. What does it work out at? If you allow for the £1,100,000 lost in revenue—and you must allow for that, because it is an inherent part of the scheme—you will find that for the 8,400 men in the factories—a rough but a very generous estimate—and the 7,000 extra men employed in the beet fields, the cost works out for three months at £380 odd each. In other words, well over £1,000 for the year. They are the most expensive unemployed the country has ever had to support, and that is the only justification the right hon. Gentleman can have for putting through this scheme.

The right hon. Gentleman will now be able to supply a perfectly adequate explanation, and he will say that these are the most deserving of all the unemployed, and are well worth £380 each for three months. But we are bound to look at this question from a different point of view. Is this good expenditure of national money? The last illustration I give of the extent to which we are throwing away this money with both hands, without getting an adequate return, is to be found purely from the point of view of the nation, not of the farmers whom a subsidy can benefit, although they are not getting their fair share of it, not from the point of view of the factory owners, who are doing well out of it and sometimes upon our capital; but from the general point of view, it would actually pay us to use this money to buy our sugar in Rotterdam, to ship it across from Rotterdam, distribute it in this country free of cost, give every one of these men who would be thrown out of work £3 a week for the period they were out of work, and then there would be £1,500,000 left for the right hon. Gentleman to distribute among the farmers of the country. I have only one remark to make in conclusion. If that is the way we are going to squander our national money, no wonder the Chancellor is embarrassed. This is the worst example I have ever seen of crazy finance.

Mr. JOHNSTON

I should like in a few words to reinforce the plea so eloquently made by my right hon. Friend the Member for Central Edinburgh (Mr. W. Graham) for inquiring into the financing of this scheme. I was one of the few who was constrained on the Third Reading of the Subsidy Bill to vote against it. I voted against it, not because I was against the development of the beet sugar industry in this country, nor because I was against the stimulation of an alternative crop in agriculture, nor because I was opposed in principle to a subsidy for a munificent social good, but because I believed that this was going to be an extraordinarily wasteful and uneconomic way of applying a subsidy. In principle, we are all agreed about the necessity of the subsidy on certain things. We are agreed, for example, about the necessity for a subsidy on housing. [Interruption.] Most of us are, and I think there are very few hon. Members who would go into the Division Lobby to stop the housing subsidy. But be that as it may; we cannot argue now the merits of either the housing subsidy or the sugar beet subsidy, but we can ask the Government to institute an inquiry into the methods by which this subsidy is applied. The last speaker, in referring to the published accounts of these beet sugar factories— published by the right hon. Gentleman— said they did not disclose everything. I go further, and I say that in that White Paper we have no two accounts drawn up on the same basis. Some include a profit-and-loss account and others do not, and they are drawn up in different way, so that it is almost impossible to deduce common figures from them.

I have here the reports of the last annual meeting of three of these companies, held in June of this year. At the third annual meeting of the English Beet Sugar Corporation the chairman reported —I do not find this in the White Paper —that after providing for all charges, including depreciation and Income Tax, there was a balance of £246,168, of which £156,000 had been appropriated to general reserve. He proceeded to say that from the balance they were able to pay 20 per cent. to their shareholders, preference and ordinary, free of tax. This was the third annual meeting of this concern, and already they have 60 per cent. of their issued share capital in a reserve fund. They have already depreciated the original cost of their buildings and their plant by 30 per cent., and they are able to pay 20 per cent. to their shareholders free of Income Tax. In the case of the Ely beet sugar factory, again we find extraordinary profits. They made a profit of £307,000, compared with £83,000 in 1925. After debenture interest, depreciation and Income Tax had been allowed for, and £60,000 placed to general reserve, they were pleased to pay a tax free dividend of 12½ per cent. It is a most extraordinary story. The debentures are actually paid off in full, and a bank loan of £165,000 shown in the liabilities is wiped out. The Ipswich beet sugar factory paid 12½ per cent. free of tax. After three years of existence, it has already reserves equal to 23 per cent. of its issued capital, and has allowed 20 per cent. for depreciation. One daily paper with whose opinions I am sure the right hon. Gentleman does not quarrel, the "Daily Telegraph," has made a reference to the gentleman who is the dominating figure in the three concerns which I have just mentioned. He seems to be the biggest figure in the sugar industry on the Continent at the moment, and he has come over here and has succeeded in securing the largest proportion of the British beet-sugar subsidy. I refer to Mr. Van Rossum, who is thus described in the "Daily Telegraph" under the heading "A Dutch Financier": Mr. Van Rossum has four factories, Kelham, Cantley, Ely and Ipswich, parcelling out some of the best land in the country. It was estimated that in October, 1925, these four factories would produce 40,000 tons, and as the cost of manufacture is £25 a ton and the net effective price with subsidy, is £42, the profit per ton is' on a conservative estimate, £17 per ton. That is to say, Mr. Van Rossum stands to make £680,000 per annum. [An HON. MEMBER: "Britain for the British!"] I say nothing about Mr. Van Rossum as a business man. He is a very smart business man. I happened to have an interview with him some time ago about jute bags. Before this subsidy was granted, the city which I represent was manufacturing jute bags for sugar for the British refineries. Now, if you please, these jute bags for Mr. Van Rossum and these other gentlemen are not being purchased in this country. That subsidy is not stimulating that British trade. The right hon. Gentleman informed me, in answer to a question, that a considerable proportion of these bags had this year been provided in this country. I failed to trace the order in this country, and I have a letter from Mr. Van Rossum in my possession stating that after inquiry—after I had induced him to make inquiry—he discovered that although he had given the order to a firm in London—a firm called Firmin and Son—Firmins had ordered the bags from Belgium. The right hon. Gentleman gets up at that Box and says that orders have been placed in this country. It is perfectly true they have been placed with a firm in Leaden-hall Street, but no British labour is engaged in the manufacture of the bags. I go further, and I say that nearly one half of the capital in this new British industry is foreign capital.

The hon. Member who spoke last, and another hon. Member who preceded him, referred to Lord Weir. If Mr. Van Rossum is the directing genius in England, Lord Weir is the directing genius in Scotland. He and Lord Invernairn are running two concerns. I hold in my hand a typical instance of what might be expected from Lord Weir. The Secretary of State for Scotland will not be surprised at it. Lord Weir is employing British labour in his Cupar beet-sugar factory, the Second Anglo-Scottish Beet-Sugar Corporation, Prestonhall, Cupar. Here is a notice of employment of a man. I asked the right hon. Gentleman a question about this particular case a week ago. The notice is dated 8th October this year, and says: You have been appointed to a position in our factory as operator, and so on. Your wage will be £2 18s. per week"— listen to this— per day of 12 hours, but nothing extra will be paid for overtime or Sunday work. It is stated in print; he actually prints the postcard so that there will be no mistake about it—seven days per week, 12 hours per day and nothing extra for overtime or Sunday work. When I asked the Secretary of State for Scotland a question about these and similar conditions of employment, I was blandly informed that they had had no complaints put before them. I think it is high time that we had an inquiry into all this business. This suggestion has been made by the representatives of all parties. The Liberal party have issued a pamphlet in which that suggestion is made, and even members of the Conservative party have demanded an inquiry. It is quite true that there has been no addition to the employment of labour in this country by subsidising beet sugar refining. There might have been a different result if we only subsidised raw sugar. When I listened to the strictures upon this political party because they did not take proper care as to the method by which the subsidy should be paid, I was interested to discover that the Leader of the Liberal party, speaking on the 30th July, 1924, boasted that he was the first Chancellor of the Exchequer to give differential treatment in favour of beet sugar. Consequently, we are all in it, and we are all responsible for this waste. That is why I think we should have an inquiry to stop it.

Steps should be taken to safeguard the wage standards of the people of this country. The sugar refining industry pay wages varying from £2 18s. to £3 per week, but several factories are being worked on an agricultural wage basis, and their standard of living has been reduced in consequence. The Greenock standard is now being reduced to an agricultural standard. I think we ought to have some kind of Joint Industrial Council set up to deal with this problem. It was the Scottish refiners who broke up the last Industrial Council, and they declared that they would have no truck with the working classes at all. Now the time has come when such a Joint Industrial Council should be set up, and it is the duty of the Government to see that the working classes get a square deal. If an inquiry is set up, they ought to be able to see that whatever money is given by the State it should be given in the form of debenture stock and the State should own that stock. If we are not able to have such a system of ownership of the factories with the present constitution of this House, we ought at least to insist that whatever funds the State gives should be given, not by way of grants or as a gift to private enterprise or private profiteers, but in the form of debenture stock.

One hon. Member stated that when the Liberal party advanced £100,000 in the case of one of these factories, the money was not given as a subsidy or as a grant, but that it was to be held in trust for the Treasury and was to be returnable to the Treasury out of the profits. Surely, this new semi-subsidised State industry could be recreated on a public utility basis. There ought to be some limitation of profits, and whatever profits are made over 5 per cent., which is the percentage allowed in the case of gas companies, should be returned to the Treasury. I would go further and lay down that steps ought to be taken to secure that whatever increased value accrues to the land as a result of the expenditure of State money upon it, that increased value should accrue, not to private individuals, but to the British Treasury. When Sir Richard Winfrey was speaking in this House on the effect of the Corn Production Act, he declared that, from his own personal knowledge and experience, as a result of the subsidy under that Act, rents had been raised from £40 to between £70 and £80 per acre. We know already what has been the result of these subsidies in regard to the value of agricultural land. We know of many cases where the rent of the land has been raised considerably. For all these reasons, I think the Minister should grant a full and careful inquiry in order that the interests of the taxpayers may be safeguarded as well as the interests of those engaged in the refining of sugar. We should see that the profits created in a new industry subsidised by public funds should not accrue to a few private profiteers, but should become the property of the nation.

Sir GODFREY COLLINS

I wish that the Minister of Agriculture would come with me to Greenock during the next few weeks. The right hon. Gentleman must have met many farmers during the past six months, but if he will come with me to Greenock he will find that if the Committee passes this Estimate to-night, he will be throwing men and women out of employment in Greenock. By this expenditure the right hon. Gentleman is diverting work from the natural refineries which have been built up by private enterprise, and which were of undoubted assistance to Great Britain during the War; he is closing those factories and causing to be erected these spoon-fed factories throughout the length and breadth of England and Scotland. If the right hon. Gentleman will come to Greenock with me, he will find the quayside largely deserted, and the Secretary of State for Scotland knows that I am not exaggerating. The Minister of Agriculture and the Government of which he is a member, in their desire to assist the agricultural industry, are doing a grave wrong. They are carrying out a mischievous policy, and pouring out public money by millions to those engaged in this favoured industry. Those who, like myself, have been closely connected with a great industrial area for many years, will excuse me if I speak feelingly on this subject. The men engaged in these factories are feeling, not only the full blast of competition which in the past they have faced successfully, but they are now being stabbed in the back by their own friends. When there are these factories, financed by foreigners originally, who brought over to this country cheap second-hand machinery from Holland, and by favoured interests got some £2,000,000 or £3,000,000 out of the British Treasury to finance these factories, can you wonder that men come to me in Greenock and say, "What do you do for us? I am out of work. I have been employed and my people with me in this industry for generations back. We are now out of work, not through any fault of our own, but through the deliberate policy of His Majesty's Government."

I was glad to think that the right hon. Member for Central Edinburgh (Mr. W. Graham) pleaded for inquiry this evening, but he will excuse me when I say that this Debate might never have taken place to-night if this policy was not initiated by his party and by himself some two or three years ago. I am glad, however, that he is standing tonight for an inquiry, and I hope that hon. Members on the other side will realise the situation that has been created owing to the policy initiated by my hon. Friends above the Gangway and carried into effect and passed into legislation by His Majesty's Government. It is through that policy that this wrong has been done, and that these men are unemployed. I noticed that it is stated in the "Times" this morning that the result is that from 1,200 or 1,400 men directly employed and a much larger number indirectly employed are affected. Whatever the exact figure, it is a very considerable number. These men have been thrown out of work because of the tremendous output of bounty-fed, spoonfed sugar, melted in these factories which had been financed by the British Treasury, and which is to-day displac- ing the home-refined sugar. Between October and November—that is the principal time when sugar is made—in 1926 the imports of foreign refined sugar increased by 65,000 tons, the home-refined sugar decreased by 100,000 tons, but the spoon-fed, State-subsidised factories, which the Minister of Agriculture is so proud to see erected throughout the country, increased their output by some 90,000 tons. There has been a displacement of the refined sugar from the natural refineries in Great Britain by these artificially established, State-fed, bounty-fed, spoon-fed factories which are taking the place of the natural industry in this country.

Surely, that state of affairs should not continue. I know well that the late Chancellor of the Exchequer had no intention of seeing such a thing arise, but we are faced with a situation to-night which I have not in any sense exaggerated. Not only are there the ships which are not going to the quayside at Greenock, but there are the carters who are unable to find work through these ships not going to Greenock Harbour. There are vast numbers of tradesmen out of work because of these factories being closed. There are the multitudinous people who gather round a great industry in an old town who are affected. They say to me, "Surely, if the British House of Commons understood the position in which we have been placed, they would not allow this state of affairs to continue for more than a very few weeks." We cannot stand idly by and see this wrong, this economic wrong, this moral wrong committed by the Minister of Agriculture, favouring perhaps the agricultural industry but driving these men out of this old established industry.

I cannot help thinking that, if the Committee to-night would realise that this expenditure of money is not in the public interest and that there is no real economic gain to the country through this expenditure, we should see this Vote turned down and the Government of the day forced into the same position as the Coalition Government a few years ago when they repealed the Corn Production Act. The Corn Production Act was passed at a time when fear dominated the minds of the country and when it was thought wise to encourage the growth of certain cereals. It was passed for that specific object, but time passed, the bill became high and the cost great, and, when the pressure on the British Treasury became acute, the Government of the day turned back on their path and repealed the Act. The saving was of great value to the nation. It may have been hard on certain favoured interests who had cultivated more land hoping for this large sum under the Corn Production Act. It may be hard for certain interests in this new industry if the House of Commons refuses to-night to pass this sum, but the House of Commons has a perfect right to do so. Its hands have not been bound by the past, and, if it sees fit in its wisdom to vote down this Supplementary Estimate and make the Government of the day turn their back on their past policy, it has every right to do so.

Many references have been made to the large profits made by these new factories. I have here Command Paper 110, the balance sheet of the Cantley Factory. The ordinary capital is a sum of £450,000 and the general reserve is some £300,000. In other words, during this short period of time they have put to reserve out of revealed profit two-thirds of their capital by way of general reserve. The next item is really a most interesting one—Income Tax reserve of £71,000. A simple calculation shows that an Income Tax reserve of that figure at the rate of 4s. in the £ reveals a profit of £350,000. Profits of £350,000 on an ordinary capital of £450,000! That has happened under the subsidy proposals, while, on the other hand, the old-fashioned refineries are being driven out of business. This simple and not exaggerated statement of facts will, I hope, make the Minister of Agriculture revise his Estimates in the future and repeal this Act at the very earliest opportunity.

I have spoken solely with reference to the case of Greenock, but there is a much larger case, which has been put by several hon. Members to-night. I am not anxious to repeat what has been said, but I think it is quite clear that little economic gain to the nation will result from this policy. It is displacing certain groups by other groups; we are melting sugar in some new factories rather than in old factories; and some £5,500,000 is to be given this year to these favoured industries. The course of the Government in dealing with subsidies has been rather tragic. They endeavoured to stave off the coal dispute by the outpouring of some £24,000,000. They are trying to develop a new industry here, which has already cost £10,000,000, and which will cost £24,000,000 before they have finished with it. Have we any reason to think that this is not a wild gamble—that the nation is going to get any real, lasting benefit from it? I have spoken to many who have knowledge of this subject on agricultural side which I do not profess to have, and I think it is apparent, from certain words which have been quoted by other Members, that, so far as one can humanly see, at the moment when the subsidy ends—if it will end—the farmers will not be able to grow sugar beet to compete successfully at our ports against sugar grown in the natural places of the world. [HON. MEMBERS: "Why not?"] The hon. and gallant Member for Eye (Sir G. Courthope), speaking at Stur-minster Newton on the 10th November, 1927, said: But for the subsidy, the maximum price the factory can afford to pay the farmer is 16s. per ton. In the coming year the farmers are going to receive 46s. a ton from these spoon-fed factories, and these spoon-fed factories are going to receive, by way of subsidy, 40s. a ton. In other words, 40s. of the 46s. which the farmer is going to receive this year is being received by way of subsidy, and, when the subsidy has been withdrawn, unless the farmer is to be cut down to a very unfair figure by the new factories in the country, it is quite evident that it will not be possible to grow sugar successfully here. That, however, is a matter for more inquiry than I can give to it, but hon. Members with whom I have spoken on this subject have assured me that our climate and our soil are unsuitable to compete against the natural sugar grown in distant parts of the world. I hope, therefore, that the Minister of Agriculture will look this matter in the face. I wish he would come with me and see those closed factories, and meet those unemployed people, whom he himself, by inviting the Committee this evening to pass this Estimate, is throwing out of work in Greenock and elsewhere.

Mr. MacLAREN

Before the Minister resumed his seat this evening, he threw out a suggestion based on the general allegation, when this scheme was launched, that it was going to give great employment to people who were unemployed in the countryside, and to regenerate agriculture. Many of the arguments used by previous speakers were in my mind when I came here this evening. I will not repeat them, but will take the point which has been put that something has happened to regenerate agricultural employment and development as the result of this policy. I have obtained some of the figures. I notice that the regular workers in agricultural districts in England and Wales amounted in 1925 to 639,353, and casual workers to 163,985, a total of 803,338. In 1926 the regular workers in agricultural districts in England and Wales amounted to 654,361, and the casual workers to 140,538, giving a total of 794,899, which is a reduction on the figure for the previous year.

Let me take the example of a district in which this rejuvenating industry is being paid for with the taxpayers' money. I am not blaming the present Minister. He is not responsible for this, but I think he will appreciate from this Debate that he has been left an inglorious heritage to carry on his back. If we take a case like that of Norfolk, where this industry is carried on, we find that the number of people employed in agricultural areas in 1925 was 42,616, whereas in 1926 the number had dropped to 42,238. On the top of that we have the statements made in the public Press with regard to the boomerang action of this artificial policy of growing sugar in this country; we have the appalling statements of Messrs. Tate and Lyle, to which reference has been made; we have the closing down of the Greenock factories; and I would recall to the memory of the Minister of Agriculture the statement of the "Morning Post" on the 11th October, 1927, to the effect that the closing of Messrs. Tate and Lyle's factories would mean the immediate disemployment of 6,000 men, and, on the top of that, the dislocation of the industry in Greenock. In addition, as the hon. Member for Greenock (Sir G. Collins) has just said, there is the dislocation in the docks and harbours, where the sugar has hitherto been handled on importation.

It seems futile to discuss this matter here to-night. Supposing that at this moment the vote were taken, what would happen? Hon. Members on the other side who form the Economy Committee, which is harassing and brow-beating the Government, will all pour into the Lobby without having heard one of the arguments that have been used, will all take their cue at the door, and will vote without knowing what they are voting for. [Interruption.] There is a larger ratio of Labour Members present than of Members of the party opposite. We have here one of the most appalling pieces of Governmental prodigality, of outrageous pilfering of the taxpayer's pocket, on record, and we have a half-empty House. I hope the people in the country will have some idea of the evidence of enthusiasm on the part of the "economy" administrators of this country when they hear how the benches opposite have been packed to-night. I know of no robbery equal to the robbery of this policy.

Let me come to the present Minister of Agriculture. He was very apprehensive on one occasion when agriculturists were foregathering in the background to ruin the present Prime Minister and his Government, and he hurriedly went down to the Isle of Ely county branch of the Farmers' Union to give them an assurance that all was well with agriculture if they would only have patience, and what did he say? Possibly he said this out of his inexperience, out of his lack of understanding of the manœuvre he had to deal with as a full fledged Minister. He said to these rebellious farmers, Peace be still. It was curious that the Government got so little recognition of that fact for the 10 years for which the sugar beet was guaranteed would amount to as much money as the total paid on coal. I say it will amount to more with these subsidiary Votes amounting to a few more odd millions. If this goes on as it is doing, it will be more than £20,000,000. It will be in the proximity of £26,000,000. The Minister, giving an assurance to these good people, said: Do not be rebellious. Give us credit for the fact that for a period of 10 years we are going to give in the beet subsidy a subsidy which is nearly the total given to coal. By this subsidy the farmers will get 54s. a ton for their wheat, whereas in countries like Holland, where there is no subsidy, the farmers only get 30s. The factories were sharing in the subsidy and that was the reason why they were able to carry on. No pressure"— This was rather ironical and cruel— No pressure from the Farmers' Union would have induced the factories to pay these terms to the farmers unless they had had the Government behind them to pay the money. No doubt that gave them a good deal of assurance and somewhat placated their recalcitrant disposition. No doubt, when they read the Debate that has taken place to-night they will become more solid behind the ranks of right hon. Gentlemen opposite. I would commend to their patriotism some of the names of the great Britishers who are profiteering most out of this handsome subsidy. Over a third of the share capital in the factories which received the subsidy last year was owned by gentlemen from other countries— £1,280,000. Among the directors concerned were Mr. Van Rossum from the highlands of Loch Lomond, Dr. Wijnberg —I wonder where he came from; I am sure he did not sing "Rule Britannia" all his lifetime—Dr. Van Loon (Ely factory), Dr. Hirsch, Dr. Aczel and Baron Korfeld of the United Sugar Company. All these are gentlemen who are the prime participants in the division of this spoil of the taxpayers' money. Large figures elude the grasp of the ordinary man and more especially when we are talking about subsidies, so in order to bring this thing within the comprehension of the man in the street, I will put it in this way. In manufacturing a hundredweight of sugar, sufficient molasses is produced to obtain a subsidy of about 2s. 6d., in addition to 19s. 6d. subsidy for the sugar—a total of about 22s. in subsidy. A hundredweight of sugar sells at 28s., but of this price 7s. 5d. represents Excise Duty, hence the actual value of the sugar is less than the amount of the subsidy paid to the factories that produce it. In other words, they could give the sugar away for nothing and still be in pocket by what they are receiving out of the taxpayers' pocket to-day.

I will not go over the arguments which have been already used. They were in my mind when I came down here to-day. If men really believe that by this form of subsidy they are doing something for agriculture there is some excuse for them, but the man who believes you can resusitate British agriculture by robbing the taxpayer by any form of subsidy of this kind knows nothing about economics at all. I am prepared to excuse him in his ignorance of these facts if he believes what he is saying when he advocates it. I have seldom listened to a Debate in which there has been a more intimidating indictment drawn up against any Government than has been used on this side to-night. There are many men on this side who may be apprehensive if they have these facts burning in their minds. It may be said, no amount of argument can stop a contract which has once been entered into by the country backed by the taxpayers' pocket; this must run on for its 10 long years; it must finally run up to the glorious figure of over £20,000,000 and we cannot stop it. I beg to differ. I think if this House, knowing the facts behind this performance, would take this thing seriously in its hands it could do something to recast the policy before the 10 years are up. We cannot complacently contemplate £20,000,000 of the taxpayers' money being used, not to resuscitate or keep an industry on its feet but practically to inflate profits which are going into the pockets of people who could give the sugar away and still be in pocket by virtue of the subsidy. I hope if the House will not seriously take the matter in hand as the result of this Debate and the publicity which may be given to it, people in the country will take the matter in hand, and long before the 10 years are up there may be a transformation in the political impression in the country and a new Government sitting on the other side, and this contract would not be fulfilled if I had anything to do with it. I would cut it now without any compunction.

I hope from what has been said here to-night, irrespective of party, and realising the distress in the country, and also realising that in the mining areas there are people coming home, as I saw them a few days ago, after paying their back rents and current rent with 7s. 6d. —[Interruption.] You need not sneer. It is no sneering matter. If you were sitting there with the prospect of keeping five children with 7s. 6d. for your wages next week you would not sit there and sneer complacently and then walk out if you knew that millions out of the taxpayers' pocket—

Mr. HOMAN

On a point of Order. Has this anything to do with the sugar-beet subsidy?

The TEMPORARY CHAIRMAN (Mr. Charles Edwards)

I do not think the hon. Member is far wrong. It is a very common thing in this House.

Mr. MacLAREN

I am merely drawing a comparison, because when one goes down into these distressful areas and sees the condition of the working people, and then finds, I might almost say, a lethargic condition on the part of hon Members opposite, when millions out of taxpayers' pockets are being poured into a vested interest of this kind, it is time to rebel against these proposals. I am drawing the comparison to try to drive it home. It has been confessed to-night' that it is not merely one party that is involved in the sugar subsidy. Every party in the House has had something to do with this stupid policy, a policy to which I would never have assented. Therefore, if we are all in the trouble as parties, let us all, like men, face the issue. Let us have an open and frank inquiry as to the derivation of the money, the distribution of the money, and the final results to the country as a whole. The dominant argument when this proposal was put forward was that it would help agriculture and extend industry; but as I have proved from irrefutable figures from Government returns, and as has been shown by the glaring facts which have been mentioned by hon. Members who have spoken against the Supplementary Estimate, the vested interests are making a right royal fortune out of it, and it is time that we stopped it.

Mr. SHEPPERSON

I suppose that I ought to rise with some considerable amount of shame, because I have had a great deal to do with this so-called iniquitous Measure, which has been described as robbery and pilfering. I have been considerably responsible for the Measure which we are now discussing. Many years ago, in the Eastern counties, I was one of the first growers of a crop of sugar-beet, and I realised very quickly the great value of such a crop to British agriculture. Realising that value, I have in the past done and I intend in the future to do as much as possible to establish the industry firmly in this country. I recognised many years ago that the industry could not carry on in the initial stages without some help from the State, and that the advantage to the State of this industry was entirely agricultural. I realised that in order to provide a satisfactory position it was essential to get at my back the agricultural industry, and I appealed to organised agriculture many times. At first, I was turned down and was told that it was impossible for the State to give assistance to the industry in the way that I required it. But I persisted in my appeal, and eventually succeeded in getting committees set up, with the result that at first we had a remission of Excise on sugar-beet grown in this country, and eventually the subsidy.

10.0 p.m.

I probably ought to feel ashamed for having been responsible for this robbery and pilfering, but I assure the Committee that I am not ashamed. The Minister is to be congratulated on what he has done. Great help has been given to agriculture in the Eastern counties and in the rest of the country, and I am very gratified at the result and congratulate the Minister upon it. It may have been that the figure given in the subsidy was larger than was necessary. On behalf of the growers I was responsible for the application of that figure. We got nearly as much as we asked for. Had I realised that we should have got as much as we asked for we might have asked for less, but on the other hand we might have asked for more. Who is to blame? We on this side of the House are the leaders in private enterprise. We consider that the captains of industry are better able to carry on their work than the State can carry on industry, but there are hon. Members on the other side of the House who do not believe that. They believe that the State, which means themselves, can carry on industries better than they are carried on under the Capitalist system. Hon. Members on the other side of the House were in office when the subsidy was granted. They looked into the figures and decided the figures. Unfortunately for themselves, they were not in office when the Bill became law. The Minister of Agriculture in the present Government brought forward the Bill. What was he to do? The question had been decided by Members of the House of Commons who thought that they understood industry and could manage industry, and they produced a figure and the present Minister of Agriculture had no option but to accept the figure that they had put down. Had he done otherwise it would have been an insult to the industrial knowledge of hon. Members opposite.

Certain criticisms have been made to-night. We have been told that this subsidy is throwing out of work many men in Greenock and elsewhere, but I would point out that for every man in the sugar-refining industry who is thrown out of work, that man is replaced by another man employed in the beet-sugar industry. I assure hon. Members above the Gangway opposite that if there is any diminution in the employment in the refining part of the industry whether carried on at Greenock, the Isle of Ely or elsewhere, there is an increase in, British labour in another direction, and that is upon the land.

Mr. HARRIS

The figures are against you.

Mr. SHEPPERSON

Every acre of grass represents in employment something like 10s. to £1 in labour. Every acre of wheat represents in employment something like 50s. to £3. Every acre of sugar beet represents an employment figure of something like £10. Criticisms have been made that the sugar-beet industry is not financially good for the country. I will put a financial point. I recognise that I shall be criticised by the financers. I suffer somewhat considerably to-night because as a rule sitting on these benches is the hon. Member for Ilford (Sir F. Wise) who is always willing and able to give the best financial advice. The financial point I wish to make is this. It has been said that owing to the adverse balance of trade in this country we are on the road to national bankruptcy. It is admitted that our imports can only be paid for by our exports, including invisible exports. It is necessary for the financial stability of the country that the balance of trade should be in our favour. There are certain things which we must purchase, and they are the essential foodstuffs. A Noble Lord in another place assumed that it might be necessary for British agriculture to go more and more to grazing. I hope that will not be so. If I have one acre under grass, I am saving my country from having to purchase meat to the value of something like £3 to £4 imported into this country. If I plough up that acre of grass and sow it with wheat, giving me a yield of four bushels per quarter, I am saving my country the necessity of buying £3 in value. If, on the other hand, I grow one acre of sugar beet yielding 10 tons at 15 per cent. sugar, and 1¼ tons of sugar per acre at £20 per ton, that is a saving to this country of £25 worth of imported foodstuff. Therefore, I submit to the financial experts of this House that there is some value attached to the cultivation of sugar beet in this country.

In conclusion, I say that, in my opinion, it is the one thing that is giving, and has given, a definite help to British agriculture. It not only gives the farmer a profit to grow, but has necessitated such cultivation of the land that it has improved to the extent of four bushels if not more the succeeding wheat crops. The fact that £900,000 is being voted shows there has been a growth in the sugar beet industry of 40,000. This crop is doing the farmers good and the financial interests of the country good, in that it is not requiring to buy such a large import of sugar. It is also doing the agricultural labourer good. Instead of criticising the Minister, I should like to congratulate him on this great industry.

Mr. W. THORNE

I rise to support the Amendment. We have all been interested in the speech of the hon. Member for Leominster (Mr. Shepperson). The figures he gave differ from those given by the Minister of Agriculture. I think I am right in saying the Minister of Agriculture stated that the root crop per acre was something like eight tons, whereas the hon. Gentleman says it is 10 tons. We have had one or two very interesting speeches from hon. Members who sit behind me and from hon. Members in front of me, and it seems to me that a very good case has been made out for an inquiry on account of the fluctuating evidence given during the Debate. The reason I have risen is because I represent a Division, the Plaistow Division of West Ham, where we have two sugar refineries adjacent. The hon. Member for Silvertown (Mr. J. Jones) sits for the Division where the two factories are situated, and it is rather strange that since the beet sugar subsidy was introduced there has been a diminution of employment from that day to this.

It is not pleasant to read figures in a Debate of this kind, but I think it is absolutely essential in view of what has been stated by the hon. Member opposite. Tate and Lyle have two factories in West Ham, the Thames Sugar Re-finery and the Plaistow Works. At the first there were engaged in the Thames factory, 2,261 men; in 1925, 2,122; in 1926, 1,893, and in 1927, 1,649. At the Plaistow works in 1924 there were 1,564; in 1925, 1,446; in 1926, 1,467, and in 1927, 1,180 So if you take the people of the two factories in 1924 there were 3,825; in 1925, 3,568; 1926, 3,360; and 1927, 2,829, or a reduction of about 1,000 employed people. If we refer to the sugar refinery controlled by the same firm in Liverpool, we find in 1926 there were 1,460; and in 1927, 1,288, showing a reduction. The reason we think we are entitled to this inquiry is that the Minister of Agriculture has neither to-night nor at any other time, as far as I know, during the course of this Debate, made it clear how this subsidy has been divided—what amount goes to the farmers and what amount to those who control the factories, or what amount has been expended either in new machinery, in the repair of machinery, new buildings or building operations. Not only should there be an inquiry into the actual alteration from A to Z as far as the growing of the roots is concerned, but in the manufacture of the sugar, and we are also entitled to an inquiry as to the amount of sugar imported from the Continent and where such sugar has come from.

I am more than convinced, though it is unpleasant to say so, that as far as the growing of sugar beet is concerned, it is not using the sugar refineries the same as imported sugar is. But we do know —and I happen to represent a very large organisation which eaters for all kinds of general labourers—the agreements we have made with some of the beet sugar factories in regard to wages and hours. In the sugar refineries there is a good deal of difference in wages and hours. There must be between 6d. and 7d. per hour, and I think there is a good deal of difference between the hours worked. I am between the hammer and the anvil, because a very large number of the men who work in the beet sugar factories are members of my own organisation, and, on the other hand, there are men who were working in the sugar refineries who are also members of the same organisation, and you can see that the men who work in the beet sugar factories do not want to be chastised because they work at lower pay, and men in the sugar refineries want to develop their interests because they want to get more employment. They do not care to be transferred from their homes in the borough of West Ham, where they had lived for many years, in order to go and work in these sugar factories.

But the conditions laid down by some employers are very harsh. It has been brought to my notice to-night that the hon. Member for Dundee (Mr. Johnston), who no doubt intended to have mentioned it in his speech but forgot it, has received a letter from the men working in the Cupar sugar factory, which I believe is situate in some part of Scotland. A deputation from the workers in this factory went to the management in regard to the hours they were working and the rates of pay, and to the great surprise of every man they were dismissed. That is the statement I have had given to me. I do not think any hon. Member on the other side will agree that when men go in the usual way to see the management of any factory, in order to put a justifiable grievance before them, that they should he treated in this manner. During the course of the discussion something has been said as to the amount of the subsidy. I suggest that we have not had the whole of the facts. You are not only granting this sum of £900,000; you are losing revenue from the Customs. There is a difference of 4s. 3d. per cwt. between the Excise Duty and the Customs Duty, and, therefore, on every cwt. of sugar which is made in the refineries and factories here you are losing 4s. 3d., that is assuming, of course, that the sugar is imported into this country. I hope hon. Member on both sides of the House will support the Amendment. Whatever the result may he we shall be perfectly satisfied. There is no doubt that the sugar refineries are meeting with very severe competition. They are handicapped by the subsidy and also by the dumping of sugar into this country.

Major G. DAVIES

The hon. Member for Burslem (Mr. MacLaren), who I regret to see is not now in his place, in the course of a scathing indictment of the beet-sugar subsidy, said that although very few Members on this side of the House were listening to the Debate, yet, when it came to a Division, the Lobbies would be filled by those who had not even listened to the arguments. I should like to point out that even if they had listened to the arguments they would have learned nothing, because they had not the smallest bearing on the subject that is really before the Committee this evening, that is to say, whether there should or should not be a Supplementary Estimate of £900,000 in connection with the beet-sugar subsidy. One would imagine, having listened to the Debate, that we were discussing whether there should or should not be a beet-sugar subsidy, and whether it had or had not had an adverse effect on the sugar refineries in the country. But I submit that neither of those questions has the remotest connection with the matter which we are considering. The policy of the Government has been already decided by the House, and indeed was laid down by hon. Members opposite when they were fortunate enough to be in office, though not, as they say, in power.

Having decided that principle, the question for us to decide now is whether or not a Supplementary Estimate of £900,000 is or is not essential. Whether or not one agrees with a subsidy and the principle behind it, the fact remains that the test of the success of a subsidy is the ultimate amount of the subsidy that has to be found by the taxpayer. That is inevitable in any form of subsidy. The whole point is to encourage the industry subsidised, and the more the industry expands the greater the price you must pay for that encouragement. Before you, Mr. Hope, took the Chair, the Debate ranged over an extraordinarily wide expanse of country. Therefore, I feel emboldened to touch upon one or two considerations which are really connected with the matter, though I wondered at one time how closely they were connected with this Supplementary Vote. The objections that have been voiced have been three-fold. The first is that the subsidy is too big; the second is that the farmer does not get a sufficient pro- portion of it; and the third is that it incidentally damages our existing sugar refining industry. I would submit this consideration. We have another big national undertaking which is subsidised and that is the building of houses.

The CHAIRMAN (Mr. James Hope)

Of course, the amount of subsidy and the way it has worked out are proper subjects for Debate, but the general question whether the sugar beet industry should be subsidised or any other industry not subsidised is not a subject that it would be in order to discuss.

Major DAVIES

I fully agree, but the question of whether or not a subsidy is desirable has been debated for the last two hours, and it seems a little hard that one should not be allowed to some extent to deal with a question that has been discussed at such length. However, if you rule that those narrow lines must be followed, I trust that hon. Members who follow will be regulated accordingly. Without touching on the parallel of the housing subsidy, I would submit this consideration. We were faced with the desirability of establishing as soon as possible a brand new industry, primarily in the interests of agriculture, that it could not be known what that was likely to cost, but that the important thing was to get it under way at once. Hind sight is easier than fore sight. It is easy to take the view that the price paid for the subsidy was unnecessarily large to achieve that object, but it is too late to talk about that now; it has been fixed in the Act. Whether the price was too big or not, the object sought was achieved. It is really a most remarkable thing that a brand new industry of such a complicated nature, not only an agricultural industry but a manufacturing industry and a very highly specialised chemical industry, should have been established on such a large scale in so brief a time in this country. Why have we achieved that object? Because we made it sufficiently attractive to the important key part of the industry, and that was the factories, there was immediately produced the necessary capital to put up the factories.

It is all very well for the hon. Member for Burslem to sneer at the foreign names of those who put up the factories. The country as a whole should be grate- ful to them. It does not matter where the capital came from so long as the factories were erected in the minimum of time. Beyond question that result has been achieved. The price paid may, on looking backwards, be considered unnecessarily high but it could not be known at the time. It has achieved its object; it has been eminently successful, and the indication of its success is the very fact that we are being asked to vote an additional £900,000. I do not welcome any additional expenditure which will fall upon the Exchequer, but, having once laid down the policy that we were to have a subsidised industry, then I say, when that industry is so successful that it has to ask for an additional subsidy, which means additional acreage, and a production of an additional amount of sugar-beet, under the beneficent aegis of the subsidy, it is a matter not for criticism but for congratulation.

The second point relates to the contention that the farmer has not had a fair share of the subsidy. That again is a question of an agreement come to by the representatives of the two sides, the growers and the manufacturers. Each had a lever. The manufacturers were in a position to say "If you are not prepared to accept the figure we offer, it is not worth our while to put our capital into the erection of factories." The growers could say, "If you do not offer me an acceptable figure, I am not going to plant sugar beet." It seems to me, in view of the fact that the representatives of the parties agreed, that their joint point of view is a fair one. Hon. Members must bear in mind that this is a new industry. It is a gamble for everyone concerned. It has been a gamble for the Government, as we see by this Supplementary Estimate but the whole point was that unless capital could see that in the ten years it would be able to repay itself, the thing was not good enough for it. If we wanted the industry to be established we had to make it good enough for capital.

It is all very well to say that these foreign and home capitalists are getting such an enormous amount of subsidy out of the Government that they are going to pay back 20s. for every £ which they put in during the 10 years. But the industry itself will gain this advantage. At the end of 10 years, if all the capital has been repaid—by virtue, very largely, I agree, of the subsidy—and if the industry has been successful, then when we have to face the time when the sheltering umbrella of the subsidy is withdrawn, the factories which have been established will be in a position to operate with the minimum of overhead charges. It will have been possible for them to write off their bonded indebtedness, and their liens. If it were not for that fact, I for one would see no hope of the continuation of this industry at the end of the subsidy period. On the present outlook it seems to me that after 10 years of experience on the part of the farmers and the labourers, and those employed in the factories, it is at least to be hoped that we shall find this new industry so well established and financially so sound, that it will be in a position to offer farmers and growers better prices than would have been possible otherwise. There is a third point, and that is the question of the effect on existing industries. It seems to me that is very far afield from the question of whether or not we ought to vote this Supplementary Estimate. When the sugar-beet subsidy was established the question at issue was the question of agriculture and the growing of home-grown crop.

The CHAIRMAN

The hon. and gallant Member seems now to be going into a question of policy and the effect on other industries.

Major DAVIES

I entirely agree, but 50 per cent. of the previous two hours' discussion has been taken up with the question of the effect on our sugar-refining industry. However, having been ruled out of order I do not propose to pursue that point. I will conclude by re-echoing what has been said, that the very fact of this Estimate being brought forward is the measure of the success of the policy of subsidising the sugar-beet industry, and although it is regrettable that additional cost should fall upon the Exchequer, it is a matter for congratulation to the Minister of Agriculture and to the agricultural industry.

Mr. A. V. ALEXANDER

May I say, at the outset, that your predecessor in the Chair, Mr. Hope, when this Debate opened, allowed a fairly wide scope to the Debate for a reason which the hon. and gallant Member for Yeovil (Major G. Davies) did not seem to appreciate. If he had been here to hear the opening statement of my right hon. Friend the Member for Central Edinburgh (Mr. W. Graham), he would have heard my right hon. Friend move to decrease the Vote for the specific purpose of demanding from the Government an inquiry into the effect of the operation of the subsidy. It was because of the reasons then adduced by my right hon. Friend that the Debate was allowed to be rather wider than would usually have been allowed on a Supplementary Estimate, and I submit, with respect, that, having regard to the nature of the request made to the Government to-night for a general inquiry into the working of the financial scheme in respect of which this Vote is required, it is essential that we should state our case fully.

The CHAIRMAN

As a point of Order, the question of whether this industry should be subsidised, or whether any industry should or should not be subsidised, is a matter of original policy and would be out of order now, but it will be in order to say that a policy that works out at such large figures should, or might be, revised. The general question of a subsidy or no subsidy, however, is not in order.

Mr. ALEXANDER

That is the burden of the case of the Opposition to-night, and if the hon. and gallant Member for Yeovil had appreciated the case from the beginning, he would have understood the position better. The position in which I find myself is this, that the case brought to the Committee on this Supplementary Estimate is what I foreshadowed it would be. The hon. Member for Greenock (Sir G. Collins) cannot exempt the Liberal party from implication in this policy, for the statement of the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) in 1924 was quite explicit; it was that he was the first Chancellor of the Exchequer to subsidise the beet-sugar industry.

Sir G. COLLINS

The hon. Member will recollect that on the Third Reading of the Beet Sugar Bill the House divided with the Opposition Whips on.

Mr. ALEXANDER

But the hon. Member cannot say that all three parties are not implicated, because the right hon. Member for Carnarvon Boroughs, in 1924, stated that his party—

Sir SAMUEL ROBERTS

Has not this matter of controversy clearly to do with the original passing of the Act, and is it not, therefore, out of order?

The CHAIRMAN

I have not appreciated the argument fully enough to give a ruling.

Mr. ALEXANDER

The case I want to put is this, that if every party is implicated in the payment which we are asked to make to-night, at any rate there are some of us who have protested from the commencement against being called upon to vote this money, and I make no apology for not only supporting the request for an inquiry, but for saying that under any circumstances I could not conscientiously vote money from Parliament for this specific purpose. The hon. and gallant Member for Yeovil has said that the amount of money you are asked to vote from time to time for a subsidy depends on the success of the subsidy, and I think he is right. You never know how much you will have to pay, and there is never any safeguard for the taxpayer in the matter. The more you produce in a subsidised industry, the more you have to pay, and you never can have any final guarantee, as is now shown by this supplementary Estimate.

Mr. LAMB

There is more production.

Mr. ALEXANDER

The more production there is in this spoon-fed industry, the more you will have to pay. I do not want to repeat some of the arguments that have been put to the Committee tonight, but I do want to impress upon the Minister that we have, in my judgment, put a complete case to him for a revision of the policy of the Government which has made it necessary to have this additional Estimate. We ask that at once, in view of the period yet remaining under the Beet Sugar Subsidy Act of 1925, there should be set up a committee which should be able to inquire into the whole of the circumstances, to review the present position of the effects of the subsidy on labour, on cultivation, on research in regard to sugar content, and on working cost; the effect when the subsidy period comes to an end in five years' time; and what the general effect will be on the industry in the country as a whole. I believe that on every one of these counts we have a complete case for an inquiry. What has further unsettled me is this. We have been discussing a very-heavy expenditure in regard to the subsidy on an Estimate which is signed, as usual, by the Financial Secretary to the Treasury, and during the whole of the discussions we have never had a representative of the Treasury upon the bench, although I think in regard to this request we are making officially on behalf of the Opposition that the Treasury ought to be intensely interested.

In his opening statement to-night the Minister of Agriculture, quite rightly, told us that even this Supplementary Estimate of £900,000 is by no means the limit to which he might ask the House to go during the present financial year. So, from that point of view we are entitled to ask for an inquiry. But the main point I want to put in support of the request for an inquiry is that this was a part of the original argument against a subsidy, and it is made very imperative in view of the Estimate which is brought in. We shall have voted with this Supplementary Estimate over £10,000,000 during the period of the subsidy. When you count the paid-up capital of the whole of the factories, you will find that we have paid in the total subsidy a great deal more than twice as much as the subscribed capital, so that already the capital involved in the industry has been paid by the State more than twice. The position from the accounts submitted is that already a large part of the capital is being written off, and on the arguments used by the hon. and gallant Member for Yeovil they will be able at the end of the 10 years to say, "We have had paid to us completely the whole of our capital out of subsidies; we have had made over to us the whole of the assets, the plant, machinery and land," and yet they will be able to say, and are likely to say upon the evidence we have, that they will, even in these circumstances be unable to pay a price for sugar beet which will enable them to keep cultivation by the farmer and to maintain the factories at a reasonable profit; and then this new industry, which the Minister of Agriculture said in introducing his Supplementary Vote was firmly established, will have gone completely out of business at the end of the 10 years' period. We shall have poured down the sink more than £20,000,000 of the taxpayers' money without obtaining any real and lasting advantage for the country. I submit that is a real case. Take the evidence of one of our sugar refiners, who is also interested in the British sugar-beet industry, Sir Ernest Tate, who says: I must repeat that our opinion, continually expressed, that beet sugar factories in Great Britain could not exist without the Government subsidy is still maintained. We agree with the view expressed by one of the ablest foreign participators in the industry that it would be a bad business proposition to enter the industry at the expiry of the third subsidy period unless contracts can be made with the farmers at a considerably lower price than the agreed figure for the second period of the subsidy. —which is 46s. What does the hon. and gallant Member for Eye (Sir G. Courthope) say? I have always said that he has been disinterested in this matter, although closely connected with the sugar-beet industry. I believe he has worked conscientiously for the development of what he thought would be a good industry for the country. I make no reflection upon him. He has been talking in the country, and saying that when the subsidy comes to an end they cannot offer the farmer more than 16s. a ton, whereas they are now offering, in the second period of the subsidy, to pay 46s. a ton. On what grounds, then, can it be argued that at the end of the subsidy period, when he says they can offer only 16s. a ton, it will be an economic proposition to maintain the sugar-beet industry in this country? We shall he in the position of having subsidised foreign capital during the whole period, and those gentleman will be able to walk away with the whole of their invested capital intact, and with profits accumulated during the period, and will be able to sell what is remaining to them at any price as long as they can get out at a reasonable profit. The people who devoted their time and energy to the cultivation of this particular crop will be left high and dry, as though the industry had never started—except that they will have improved the quality of the land which has been under sugar beet; it would be wrong not to concede that particular point. My right hon. Friend has urged the necessity for an inquiry, first, on account of the labour conditions prevailing in the areas where the subsidy has been paid, secondly, on the ground that the amount is now so high that it ought to be revised, and, thirdly, because there is no guarantee that the present industry 'can be maintained at the end of the subsidy period laid down in the 1925 Act; and I wish to reinforce those reasons and to press upon the Government that they should recognise the need for a full and immediate inquiry.

Mr. J. JONES

I cannot claim to be an expert on finance or upon many of the questions affecting agriculture, because I left the countryside too soon to know much about agriculture. I think, however, we have a right to complain about the position in which the people who have hitherto been engaged in the sugar-refining industry find themselves. In this industry in Silvertown there are thousands less employed than there used to be some years ago. It is no consolation to say to these men and women who are unemployed in this industry, "It is all very nice now; we have a new industry, and if you cannot find employment making sugar at Silvertown, you can make it at Stoke Poges or some other place; and you may lay the flattering unction to your soul that while you are out of employment in Silvertown somebody else in another part of England is getting two or three months' work in the year in your trade." Up to a few years ago we had established in Silvertown decent conditions in the sugar industry. When this beet-sugar subsidy was first introduced we were led to understand from all parts of the House that it was going to be a great advantage to the worker, and that we were going to have more employment, particularly among the agricultural population. The figures which have been produced in this Debate show conclusively that there has been a decrease instead of an increase in the number of people employed in the sugar industry. At certain periods of the year, when the beet-sugar factories are busy, the farmers make a bargain with the owners of the factories that they shall not take their men away from the farms.

Sir S. ROBERTS

On a point of Order, Mr. Chairman, I would like to ask if it is in order on this Vote to discuss the conditions of labour within the sugar factories?

The CHAIRMAN

I have not yet appreciated the hon. Member's argument. If the hon. Member is speaking about the conditions of labour within the factories, that would not be in order.

Mr. BUCHANAN

Is it not a fact that earlier in the Debate hon. Members sitting on the Front Bench occupied some time discussing the conditions within the factories?

The CHAIRMAN

I cannot see that the conditions within the factories are affected by this Vote. Of course, the hon. Member may criticise the basis on which the subsidy is framed.

Mr. JONES

We have been told from many quarters that this subsidy would mean better opportunities for the workers obtaining employment and better conditions of work. I was only giving the Committee an illustration, but probably I am not so clever in evading Standing Orders as other hon. Members who seem to get round them very easily. Who has to pay for all this? It is not the people who put their money into the industry, because the Government find nearly the whole of the money. I was trying to find out when I was interrupted by the hon. and clever Gentleman opposite how it came about that the farmer was able to enter into a bargain with the owners of these factories to ensure that the men should not be taken from their employment on the land during certain seasons of the year. We find that the subsidy is now being used to cut down wages.

In the past, the people of Silvertown were able to carry on in this industry under decent conditions of employment. There the men are fairly well organised, and conditions have been fairly well established now for over half a century. You find that their trade has been largely taken from them by people subsidised by the Government. I thought Protectionists always stood for the policy of treating everybody alike, and would not injure one section of the country for the benefit of somebody else, but this is a case of For he that hath, to him shall be given; and he that hath not, from him shall be taken even that which he hath. That is how this works out. In a few years from now, supposing this industry has to stand on its own, I can see hon. Members getting up and demanding that the subsidy shall be continued. Why do they not be logical and ask for a subsidy for every industry? There is more right to have a subsidy for the Silver-town industries than there is for some of these other industries.

The CHAIRMAN

The hon. Member is now going into a matter of policy, the proper occasion for which is the main Estimate, and not this occasion.

Mr. JONES

All the things that I have said justify an inquiry. These facts show the kind of things which could be brought before such an inquiry. If you are going to talk about subsidising industry, you ought not to subsidise one industry at the expense of the rest. Nobody need be afraid of the facts—thousands of men thrown out of employment in the unsubsidised section of the same industry and not made up for by the number of extra people employed in the industry which is being subsidised. Therefore there are plenty of facts to support this reduction in the Vote.

Mrs. PHILIPSON

I trust the Supplementary Estimate will be passed. I represent a constituency where many men and women are unemployed. I am referring to those men and women engaged in seasonal employment in the salmon fishing industry I hope to see a factory established in that constituency where many of the men and women are suffering. It may mean not only work for those engaged in the fishing industry— a splendid set of men—but also for agricultural workers.

Mr. HARDIE

When the Minister made his statement to-night I felt disappointed. As one who has has sat all through the Debate on this subject, I was sorry that the Minister could not give some valid reason for asking for this additional sum. If he had been able to show a real increase in the numbers of those employed, he would have been able to meet our arguments, but it is no use leaving out the central fact of the demand for money. The object of this was to help unemployed men in this country, and if he had been able to show that he had increased the number of men employed all the year round, and could show, for instance, the number of men absorbed, and the number displaced as a consequence of that absorption, he would then have had a basis for the whole case which he is seeking to put for this Supplementary Estimate.

The hon. and gallant Member for Yeovil (Major G. Davies) said, "The more we expand, the more we have to pay." I had expected that the Minister would have anticipated a statement like that by himself pointing out that the industry was so successful, the results of the experiment had been such that, while he was asking for £900,000 to-night, in a certain number of years this industry would be standing on its own feet. But when those who are engaged in the industry tell us that we have to encourage it by increasing the expenditure, it would seem to me that the industry is not paying so far as the nation is concerned, because, if it were, there would be no need to come to the House for a Supplementary Estimate of this kind. The hon. Member for Greenock (Sir G, Collins) has given figures showing the huge profits that have been made, and it would seem to me that, instead of asking for an additional subsidy, we should, if the industry had been so successful as some claim, be looking forward to a tremendous development. This Estimate which is placed before us to-night seems to me to be more an admission that, instead of being able to establish a new industry, we are only adding to the subsidy in order to fill the pockets of a few. Unless the Minister can say how many men have been absorbed, and how many have been displaced in refining, in bag-making, and in all the ancillary trades, he cannot give a real, clear case for the voting of a sum of £900,000.

On the Second Reading of the Bill a promise was made, in answer to a question, that very close scrutiny and attention would be given to the increased land values due to the application of the subsidy. Tonight the Minister gave no attention at all to that subject. What is taking place is quite patent. The whole of the improvement in the land, no matter whether the industry goes on or whether it closes down, due to the subsidy by the Government and the addition which is being asked for to-night, has been created by the subsidy from the taxpayers to this supposed industry that has been estab- lished. Surely, if we are creating a value outside the industry, it ought to belong to the people who have given the subsidy. [Interruption.] I know, of course, that if I had been someone else there would have been a greater amount of attention, but that is not going to worry me at all. I have been used to talking at street corners and places where there were bands playing. But it shows the great amount of manners that come from so-called superior quarters opposite.

11.0 p.m.

I want to make a reference to the Scottish side of this supposed industry. In Scotland things have been happening which really require some such definite form of investigation as we are asking for to-night. Things have been taking place there since the very start which have been growing each year, because no attention has been paid to them, and this additional amount which is being asked for is simply going to increase those defects unless the Minister is prepared to give us what we ask in the way of investigation and inquiry. Foreign names have been mentioned. I am going to mention a Scotch name—Lord Weir. It would seem from what has taken place that because Lord Weir has failed and is closing down his steel house business, he expects to make it up out of this £900,000. It is a tendency that is growing that, if some people can go on getting subsidy after subsidy and getting them increased by Supplementary Estimates, there is going to be a hantle of people dipping their hands into these subsidies, and if they fail on one, they will make it up on another. I hope the Minister will give us our inquiry.

Mr. GUINNESS

The general object of the Debate on the opposite side has been in favour of an inquiry into the system of the beet sugar subsidy and the necessity for some alteration. The right hon. Gentleman the Member for Central Edinburgh (Mr. W. Graham) put forward this suggestion, as he always does, in a very temperate form, but those who followed him made it clear that they would be glad to see the present statutory contracts under which the beet sugar industry has been established either cancelled or fundamentally varied. I think that would be a very serious breach of faith, to which the Government could certainly not lend themselves. The right hon. Gentleman based his demand for an inquiry, not on the suggestion that we should terminate the arrangement, but on three points where he considered the industry was not now being worked on a satisfactory basis. He wished that the conditions of labour should be explored, and he told us that the hours worked in the factories were in many cases excessive. We have had prepared statistics of the hours worked, and they come out at an average of 9.42. It is realised that this is a seasonal occupation lasting for about 100 days, and, after eight hours, overtime is earned. There is a Fair Wage Section in the Act, and a friendly reference in respect of the Cantley factory was taken under it to the Industrial Court, with the result that a system of payment was laid down which, as I understand, has proved satisfactory to both sides.

Mr. JOHNSTON

Does the right hon. Gentleman allege that there is a Fair Wage Clause dealing with conditions of labour operating in the Scottish factories?

Mr. GUINNESS

Yes, in all factories. Under Section 3, if there is any doubt about the fairness of the conditions, an application can be made to the Minister of Labour, and the matter is referred to an Industrial Court for settlement.

The CHAIRMAN

That point has been raised by an earlier speaker. It really goes beyond the subject matter of the Debate. This is a Supplementary Estimate for £900,000, and not the full Vote for the year.

Mr. STEPHEN

Is it not in order to refer to the part of the £900,000 that is going in subsidy to a factory, such as one in Lincolnshire, where the men are working 12 hour shifts? So much of the extra money is going to factories where men are working under improper conditions.

The CHAIRMAN

If they are not proper conditions no subsidy ought to be given to them, and the extra Vote makes no difference.

Mr. GUINNESS

I do not wish to pursue the question of wages further. I was only answering the right hon. Gentleman. If there is any grievance the redress can be obtained under Section 3. The next point made by the right hon. Gentleman was that it was doubtful whether the industry would continue after the end of the subsidy period. We are very hopeful, because already in spite of the fact that next year the price for beet is reduced owing to the drop in the subsidy, the factories have obtained more than half of the contracts for which they are asking. Farmers are improving their methods so as to get a better yield and a better sugar content, and there is one factory in contemplation on a cooperative basis which is already offered contracts for over 6,000 acres on the basis of 41s. per ton of beet delivered. [HON. MEMBERS: "Where?"] At Chichester. The third point raised was that the sugar beet subsidy as now administered inflicts an injustice upon the refiners. I think the right hon. Gentleman has to a great extent answered his own case, because he admitted that the competition of the sugar beet industry was only part of the refiners' trouble, and that their difficulties were also due to the dumping of refined sugar from foreign countries and the restricting of supplies of sugar produced in Central Europe in the home market in order to increase the supply in our market. I am far from wishing to deny that the refiners have been going through a very difficult period, but their case has been fully put before the Customs Department. It is being considered by the Chancellor of the Exchequer, and it is certainly not a case which ought to be remedied at the expense of this new sugar beet industry.

What we want in connection with the production of sugar beet in this country is confidence. There are five more factories in contemplation, and we are most anxious that they should be erected in this early period of the subsidy so that farmers should get an opportunity of producing this very valuable crop in certain arable areas which do not now enjoy that advantage. If we were to endorse the suggestion which has been put forward from the other side of the House that these contracts should be torn up; if we were to accept an inquiry, it is quite certain that these factories would not get their capital and that the sugar-beet industry would be stereotyped at its present stage of development.

Mr. MacLAREN

Does the right hon. Gentleman assert that an inquiry being held would stop the industry from developing?

Mr. GUINNESS

I think that an inquiry, held after the speeches made in criticism of the scheme and after the suggestion of the hon. Member for Greenock (Sir G. Collins) that we ought to follow the example of the Corn Production Act and repeal this Act, because we cannot afford the money, would inevitably create a great feeling of disquiet among the shareholders in these factories, and it would make certain that the five factories in contemplation would not be erected. The time for inquiry may come at the end of the period specified, but it would certainly be premature to hold it when only three of the 10 years have elapsed.

I had great sympathy with the hon. Member for Greenock in his account of the distress which exists in Greenock, but I do not agree with him in attributing this trouble to the growth of the sugar-beet industry. If be will examine the figures of annual production of refined sugar in this country he will see that it has increased as compared with the time before the War by 73,000 tons. Before the War, the United Kingdom was refining 730,000 tons of sugar a year. Last year it refined 803,000 tons. Before the War Greenock had 18 refineries at work. To-day, the hon. Member for Greenock told us that only one refinery survives. The Greenock refineries have dropped out of production, not because of the competition of this new beet sugar industry but because of internal readjustments within the sugar refining industry in this country, and that is a matter which really ought not to be considered merely in connection with the beet sugar subsidy. It is more suitable for examination in connection with the larger question put before the Treasury which is being given very careful consideration.

The right hon. Member for West Swansea (Mr. Runciman) made a very interesting speech as to the effect of the subsidy, but he was called away by an engagement and will not be able to hear the answer. But I think the House will probably have been concerned by the figures which he gave and will want to have some answer to the suggestion which he brought forward that very little extra labour is employed as a result of this subsidy. Our figures show that about 1,200 extra seasonal workers are employed on the agricultural side of production in connection with each factory which is in operation, and, in addition to that 1,200, another 500 are employed in the factory for three months in the winter. In fact, the right hon. Gentleman ignored the fact that, apart from the extra labour employed, we have to credit to the operation of the subsidy the keeping under cultivation of land in certain areas which are suffering from very serious depression and which without this cash resource would find it impossible to employ the labour they have employed in the past.

Mr. THURTLE

Would the right hon. Gentleman forgive me. He has given the figures of 1,200 men for each factory and 1,200 men on the agricultural side as well as 500 extra men. To how many factories does that figure of 1,200 apply?

Mr. GUINNESS

There are 19 factories in operation this year, and that figure is the nearest estimate we can get as to the average for each factory. But the right hon. Gentleman omitted to refer to the indirect effect of this subsidy, to the 375,000 tons of coal which is consumed by this industry.

Sir G. COLLINS

Has the right hon. Gentleman made any deduction of the amount of coal that is not being consumed in Greenock as the result of this policy?

Mr. GUINNESS

My argument is that the subsidy is not responsible for the decrease in employment in Greenock, but that it is due to a readjustment in the refinery industry. It would be quite misleading, therefore, to deduct the decreased amount of coal consumed in Greenock from the total amount of coal consumed in the industry. But apart from coal these factories use 116,000 tons of lime stone and also provide a great deal of employment in the production of subsidy requirements which the factories demand. The right hon. Gentleman also suggested that the subsidy was unfairly divided between the factories and the farmers. It is a very difficult matter to arrive at how the money goes. It depends on the yield per acre and the sugar content, and all kinds of factors which constantly vary. I felt sure that this matter would be raised this evening and I answered yesterday an unstarred Question by the hon. Member for Cambridge (Sir D. Newton), which will be found in to-day's OFFICIAL REPORT, on page 2122. There I have given to the best of my ability calculations showing the receipts of the factories under the new arrangements which have recently been arrived at between them and the Farmers' Union. The receipts will be almost equally divided between the factories and the farmers, with a small balance in favour of the farmer. I cannot hope to explain the figures to the Committee now, but I trust hon. Members who are interested will look at them. The hon. Member for Dundee (Mr. Johnston) has stated that excessive profits were being made at factories, and singled out one which has been able to pay large dividends. These large dividends are inevitable under any system of uniform payments for beet sugar. Some factories are more efficient and have been established longer and if you have a uniform system of payments you will get an unequal return on capital.

Mr. HARDIE

And you encourage inefficiency in doing so.

Mr. GUINNESS

The hon. Member will not find the National Farmers' Union agreeing with that opinion.

Mr. R. RICHARDSON

In the County of Durham where they have tried this experiment they are going to drop it because of the unfair division between factories and farmers.

Mr. GUINNESS

That sounds as if the payments to the factories are not unduly high. In answer to the suggestion of the hon. Member for Springburn (Mr. Hardie) that it encourages inefficiency, I would ask the hon. Member how otherwise the industry could be organised? If farmers find that one factory offers a few shillings more per ton than another factory, is it not obvious that they will want to send the sugar beet from a large area into the factory that is in a position to give higher prices?

Mr. HARDIE

Is not that a reason why the subsidy should be reduced? What you are doing now is to pay to the inefficient man the same as to the efficient man, whereas if you paid the inefficient man only one-half what you paid to the efficient man, you might halve your subsidy.

Mr. GUINNESS

It is not merely a matter of the inefficient man. All industries have to win their experience. Though one or two factories are now paying good dividends, many of them have had heavy losses in the first few years of their existence. I believe that the National Farmers' Union are entirely right in their opinion that the industry could not have been carried on in this country unless you had had one standard price fixed for the standard contract for a term of years. If you take the average profits you will find that they are by no means unreasonable considering the very speculative nature of a new industry of this kind. The total net profits for 14 factories for the season 1926–27 was £416,000. The total net losses amounted to £173,000, leaving a total net profit earned of £242,000, or 7½ per cent. on the issued share capital of £3,242,000.

Mr. JOHNSTON

Is that after reserves have been set aside?

Mr. GUINNESS

It is after the allocation of the necessary reserves, but that is only in accordance with prudent finance.

Mr. JOHNSTON

Would the right hon. Gentleman say what he calls a prudent reserve? Would he say, for example, that 60 per cent. of reserves, acquired in three years, was more than prudent?

Mr. GUINNESS

I certainly could not lay down any standard. Certain factories have made a generous allocation to reserve, but they are not numerous, and there are a good many of the factories which have made, as I think, an insufficient allocation to reserve. But I hope this will enable them to make a larger reserve in future in preparation for the more difficult times which they will have to face when the subsidy falls to a lower figure. The hon. Gentleman complained of the participation of Mr. Van Rossum in this industry.

Mr. W. THORNE

Who is he?

Mr. GUINNESS

I will tell the hon. Member how much we owe to Mr. Van Rossum. He was the pioneer of the sugar-beet industry in this country.

Mr. W. THORNE

How about the hon. Member for Leominster (Mr. Shepperson)?

Mr. GUINNESS

The hon. Member for Leominster told us that he was the pioneer of the growth of sugar-beet. The financial pioneer was Mr. Van Rossum, with other Dutch associates. In 1911 he put up a factory at Cantley. In the first four seasons they lost over £250,000. It was closed during the war. They reconstructed and lost a further £145,000 in 1920 and 1921. The first time they made any profit was after 10 years of discouraging results, when the State first gave them the advantage of a remission of the Excise Duty. They had no dividends on their share capital until their accumulated losses had been wiped out. Practically the whole of that capital and of other factories with which Mr. Van Rossum is associated had a Dutch origin, though in the case of the Ely and Ipswich factory blocks of shares have since been placed on the market. I cannot agree with hon. Members who suggest that it is to our disadvantage to have had the assistance of this foreign skilled experience in creating this industry, or that we should grudge the opportunity to foreign capital of giving us the advantage of creating this new industry. British capital has enjoyed many advantages in foreign countries, and our commercial development would not be what it is had foreign countries adopted a dog-in-the-manger policy such as has been suggested this evening.

Mr. MacLAREN

That is the policy of the Films Bill.

Mr. GUINNESS

The case for this subsidy is that it enables us to have an invaluable new industry in connection with British agriculture. Sugar beet is most important as a cleaning crop, in place of the root crop, which was too often grown at a loss. It gives the farmer a cash return, with no worry as to finding a market, or as to the price which he will be able to obtain when his crop has been won. It is a deep-rooted crop which compels the farmer to adopt methods of good cultivation and heavy manuring, and it rewards those methods by paying him directly, according to results. If his crop has a high sugar content it is evidence of his good methods of production. It is estimated on the Continent that a sugar-beet crop adds 10 to 15 per cent. to the yield of the following corn crop. This year is the last year of the high subsidy, and I believe that by means of this period of four years, during which this maximum subsidy has been paid, we have been able to establish this industry on a permanent foundation. It would be most unfortunate if the Committee were to show any hesitation as to carrying out the obligation into which Parliament entered when it passed the Act authorising the subsidy in 1925, or if it were to do anything by setting up a Committee of inquiry to cause a feeling of insecurity and deprive the agricultural industry of the full benefit of that policy which was adopted, I think, with the approval of all parties.

HON. MEMBERS

No.

Mr. THURTLE

The Minister said there would be great disquiet among the shareholders of the sugar beet factories if the subsidy came to an end. May I tell him there is great disquiet at present among the British taxpayers at the continuance of this tremendous subsidy to the sugar beet industry. If we have to divide our sympathy as between Mr. Van Rossum and his foreign friends, on the one hand, and the British taxpayers on the other, we come down on the side of the taxpayers every time. I hope industrialists in the Conservative party will give me a little attention, especially those who are concerned about national economy. How much value are we getting by way of increased labour from the subsidy? The Minister held out the prospect that we should get a great increase of agricultural labour and that for every 100 acres of cultivation there would be an additional 10 men employed in agriculture. I will confine myself to statements by the Minister and the Government. According to the reply to a question yesterday, for every 34 acres of beet sugar cultivated, there is one additional man employed for 12 months. If another root crop were grown, there would be one man less, so we have one increase for every 34 acres. The total acreage under cultivation is 230,000 acres, and 34 into 230,000 gives you roughly 7,000 additional men employed in agriculture. Now we will assume that these 7,000 are paid a wage of £3 per week—[An HON. MEMBER: "Thirty shillings!"]—I can afford to be generous, and to say £3 a week, or roughly £150 a year. The total expenditure, so far as agricultural labour is concerned, on that basis, is £1,092,000, and that leaves us, on the basis that the whole subsidy is now costing us £6,500,000 —a fact not disputed by the Minister— £5,408,000 to be divided among the workers in the beet factories.

According to the figures of the Board of Agriculture there are 8,400 workers employed in the sugar-beet factories for a period of three months. Another simple division sum will show that if you divide those 8,400 workers into the remaining amount of the subsidy, you get this astonishing result, that for each worker in these factories, employed for a period of three months, the State is granting a subsidy of £643. It is so grotesque as to sound fantastic. £643 at four to the year is at the rate of £2,572 a year, and these are the Ministry of Agriculture's own figures. You are therefore paying a subsidy which amounts to £2,572 a year for every man you are employing in the beet-sugar factories. If I took even the figures which the Minister gave me just now—and I do not believe they can be accurate in this sense, that I do not believe those factories have been fully working for 12 months of this year—and if I assume that they have been working for 12 months, then on his figures there are 22,800 additional agricultural workers and there are 9,500 factory workers. Even on those figures, by the same computation of £3 per week for the agricultural worker, I reach this astonishing result, that for every worker in the factories there is £327 being paid for the seasonal work of 12 weeks, which amounts to £1,308 per annum.

These are facts based on the Minister's own statements, and I submit that they cannot be controverted. Here is my hon. Friend below the Gangway telling me that the employment of these men has

displaced men employed in factories in Silvertown and Greenock who were getting about £3 6s. a week, and the average rate of pay in the beet factories is about £2 10s., so that the subsidy of £327 is being paid, and the worker in the beet factory is getting, at the rate of £2 10s. for 12 weeks, £30. Thirty pounds is being paid out in wages, and yet there is a subsidy of £327. I submit that it is an absolute scandal that this sort of thing should be going on. If there are any Members of the Conservative party who are really interested in economy and who want to see this ramp stopped, I invite them, not to take my word for it, although my word is based upon facts I have got from the Minister of Agriculture, but to go into these facts themselves; and I feel certain that they will come to the conclusion that this is a scandalous waste of public money. My conscience is absolutely clear on this subject. When this scheme was first introduced, I seconded a Motion to reject it, and I voted against the whole scheme. I said then, and I like to think now that I start in the position of a prophet who has been confirmed, that this was a particularly audacious and nefarious attempt to plunder the public purse for the benefit of a small section. I say the statement has been absolutely justified, and I would like to see the subsidy cut off without any further delay.

Question put, "That a sum, not exceeding £899,995, be granted for the said Service."

The Committee divieded: Ayes, 101; Noes, 192.

Division No. 480.]	AYES.	[11.38 p.m.
Adamson, Rt. Hon. W. (Fife West)	Edwards, J. Hugh (Accrington)	Jones, Henry Haydn (Merioneth)
Adamson. W. M. (Staff. Cannock)	England, Colonel A.	Jones. J. J. (West Ham, Silvertown)
Alexander. A. V. (Sheffield, Hillsbro')	Gardner, J. P.	Kennedy, T.
Barr, J.	Garro-Jones, Captain G. M.	Kenworthy, Lt.-Com. Hon. Joseph M.
Batey, Joseph	Gillett, George M.	Lansbury, George
Bowerman, Rt. Hon. Charles W.	Gosling, Harry	Lawrence, Susan
Broad. F. A.	Graham, D. M. (Lanark, Hamilton)	Lindley, F. W.
Bromfield, William	Graham, Rt. Hon. Wm. (Edin., Cent.)	MacLaren, Andrew
Bromley, J	Grenfell, D. R. (Glamorgan)	Mitchell, E. Rosslyn (Paisley)
Brown, Ernest (Leith)	Griffiths, T. (Monmouth, Pontypool)	Montague, Frederick
Brown, James (Ayr and Bute)	Grundy. T. W.	Murnin, H.
Buchanan, G.	Hall, F. (York, W.R., Normanton)	Palin, John Henry
Charleton. H. C.	Hall, G. H. (Merthyr Tydvil)	Paling, W.
Clowes. S.	Hamilton, Sir R. (Orkney & Shetland)	Parkinson, John Allen (Wigan)
Cluse, W. S.	Hardie, George D	Ponsonby, Arthur
Collins, Sir Godfrey (Greenock)	Harris, Percy A.	Potts, John S.
Cowan, D. M. (Scottish Universities)	Hayday, Arthur	Richardson, R. (Houghton-le-Spring)
Crawfurd, H. E.	Hayes, John Henry	Roberts, Rt. Hon. F. O. (W. Bromwich)
Dalton, Hugh	Henderson, Right Hon. A. (Burnley)	Robinson, W. C. (Yorks, W.R., Elland)
Day, Colonel Harry	Hirst, G. H.	Saklatvala, Shapurji
Dennison, R.	Hudson, J. H. (Huddersfield).	Salter, Dr. Alfred
Duckworth John	Jenkins, W. (Glamorgan, Neath)	Scrymgeour, E.
Duncan. C.	John, William (Rhondda, West)	Sexton, James
Dunnico, H.	Johnston, Thomas (Dundee)	Shepherd, Arthur Lewis
Short, Alfred (Wednesbury)	Trevelyan, Rt. Hon. C. P.	Williams, David (Swansea, East)
Slesser, Sir Henry H.	Varley, Frank B.	Williams, Dr. J. H. (Llanelly)
Smith, Ben (Bermondsey, Rotherhithe)	Walsh, Rt. Hon. Stephen	Williams, T. (York, Don Valley)
Snell, Harry	Watson, W. M. (Dunfermline)	Wilson, C. H. (Sheffield, Attercliffe)
Stamford, T. W.	Watts-Morgan, Lt.-Col. D. (Rhondda)	Windsor, Walter
Stephen, Campbell	Wedgwood, Rt. Hon. Josiah	Wright, W.
Stewart, J. (St. Rollox)	Wellock, Wilfred	Young, Robert (Lancaster, Newton)
Sullivan, J.	Welsh, J. C.
Thorne, W. (West Ham, Plaistow)	Whitelev. W.	TELLERS FOR THE AYES.—
Thurtle, Ernest	Wiggins, William Martin	Mr. Charles Edwards and Mr. A.
Tinker, John Joseph	Williams, C. P. (Denbigh, Wrexham)	Barnes.
Townend, A. E.
NOES.
Acland-Troyte, Lieut.-Colonel	Gault, Lieut.-Col. Andrew Hamilton	Ormsby-Gore, Rt. Hon. William
Agg-Gardner, Rt. Hon. Sir James T.	Gilmour, Lt.-Col. Rt. Hon. Sir John	Pennefather, Sir John
Albery, Irving James	Glyn, Major R. G. C.	Penny, Frederick George
Alexander, E. E. (Leyton)	Goff, Sir Park	Perkins, Colonel E. K.
Alexander, Sir Wm. (Glasgow, Cent'l)	Graham, Fergus (Cumberland, N.)	Peto, Sir Basil E. (Devon, Barnstaple)
Allen, J. Sandeman (L'pool, W. Derby)	Grattan-Doyle, Sir N.	Peto, G. (Somerset, Frome)
Apsley, Lord	Grotrian, H. Brent	Philipson, Mabel
Astbury, Lieut.-Commander F. W.	Guinness, Rt. Hon. Walter E.	Power, Sir John Cecil
Atkinson, C.	Hannon, Patrick Joseph Henry	Preston, William
Balfour, George (Hampstead)	Harmsworth, Hon. E. C. (Kent)	Radford, E. A.
Balniel, Lord	Harrison, G. J. C.	Raine, Sir Walter
Barclay-Harvey, C. M.	Harvey. G. (Lambeth, Kennington)	Ramsden, E.
Beamish, Rear-Admiral T. P. H.	Haslam, Henry C.	Rawson, Sir Cooper
Bennett, A. J.	Hawke, John Anthony	Rhys, Hon. C. A. U.
Betterton, Henry B.	Headlam, Lieut.-Colonel C. M.	Richardson, Sir P. W. (Sur'y, Ch'ts'y)
Birchall, Major J. Dearman	Henderson, Capt. R.R. (Oxf'd, Henley)	Roberts, Sir Samuel (Hereford)
Blundell, F. N.	Heneage, Lieut.-Col. Arthur P.	Ruggles-Brise, Lieut.-Colonel E. A.
Boothby, R. J. G.	Hennessy, Major Sir G. R. J.	Russell, Alexander West (Tynemouth)
Bourne, Captain Robert Croft	Herbert, Dennis (Hertford, Watford)	Rye, F. G.
Bowyer, Capt. G. E. W.	Hilton, Cecil	Samuel, A. M. (Surrey, Farnham)
Boyd-Carpenter, Major Sir A. B.	Hogg, Rt. Hon. Sir D. (St. Marylebone)	Samuel, Samuel (W'dsworth, Putney)
Brassey, Sir Leonard	Holbrook, Sir Arthur Richard	Sandeman, N. Stewart
Bridgeman, Rt. Hon. William Clive	Hopkins, J. W. W.	Sanders, Sir Robert A.
Briscoe, Richard George	Hume, Sir G. H.	Sanderson, Sir Frank
Brocklebank, C. E. R.	Huntingfield, Lord	Sandon, Lord
Brown, Col. D. C. (N'th'l'd., Hexham)	Hurd, Percy A.	Sassoon, Sir Philip Albert Gustave D.
Brown, Brig.-Gen. H.C.(Berks, Newb'y)	Iliffe, Sir Edward M.	Shaw, R. G. (Yorks, W.R., Sowerby)
Caine, Gordon Hall	Jephcott, A. R.	Shepperson, E. W.
Campbell, E. T.	Jones, G. W. H. (Stoke Newington)	Simms, Dr. John M. (Co. Down)
Carver, Major W. H.	Kennedy, A. R. (Preston)	Sinclair, Col. T. (Queen's Univ., Belfast)
Cazalet, Captain Victor A.	Kidd, J. (Linlithgow)	Smith, R. W.(Aberd'n & Kinc'dine, C)
Cecil, Rt. Hon. Sir Evelyn (Aston)	Kindersley, Major Guy M.	Smith-Carington, Neville W.
Chadwick, Sir Robert Burton	King, Commodore Henry Douglas	Somerville, A. A. (Windsor)
Charteris, Brigadier-General J.	Lamb, J. Q.	Sprot, Sir Alexander
Christie, J. A.	Lane Fox, Col. Rt. Hon. George R.	Stanley, Lord (Fylde)
Clayton, G. C.	Lister, Cunliffe-, Rt. Hon, Sir Philip	Steel, Major Samuel Strang
Cobb, Sir Cyril	Long, Major Eric	Storry-Deans, R.
Cochrane, Commander Hon. A. D.	Lucas-Tooth, Sir Hugh Vere	Stott Lieut.-Colonel W. H.
Colfox, Major William Phillips	Luce, Maj.-Gen. Sir Richard Harman	streatfeild, Captain S. R.
Colman, N. C. D.	Lumley. L. R.	Stuart, Crichton-, Lord C.
Cope, Major William	Lynn, Sir R. J.	Stuart, Hon. J. (Moray and Nairn)
Couper, J. B.	Macdonald, Capt. P. D. (I. of W.)	Sugden, Sir wilfrid
Craig, Sir Ernest (Chester, Crewe)	McDonnell, Colonel Hon. Angus	Thom, Lt.-Col. J. G. (Dumbarton)
Crooke, J. Smedley (Deritend)	MacIntyre, Ian	Thompson, Luke (Sunderland)
Crookshank, Cpt. H.(Lindsey, Gainsbro)	McLean, Major A.	Thomson, Rt. Hon. Sir W. Mitchell-
Cunliffe, Sir Herbert	Macmillan, Captain H.	Tinne, J. A.
Curzon, Captain Viscount	Maitland, Sir Arthur D. Steel-	Titchfield, Major the Marquess of
Davidson, J.(Hertf'd, Hemel Hempst'd)	Makins, Brigadier-General E.	Tryon, Rt. Hon. George Clement
Davidson, Major-General Sir John H.	Manningham-Buller, Sir Mervyn	Vaughan-Morgan, Col. K. P.
Davies, Maj. Geo. F.(Somerset, Yeovil)	Margesson, Captain D.	Waddington, R.
Davies, Dr. Vernon	Marriott, Sir J. A. R.	Ward, Lt-Col. A L. (Kingston-on-Hull)
Dawson, Sir Philip	Mason, Lieut.-Col. Glyn K.	Warner, Brigadier-General W. W.
Drewe, C.	Merriman, F. B.	Watts, Dr. T.
Eden, Captain Anthony	Milne, J. S. Wardlaw-	Wells, S. R.
Edmondson, Major A. J.	Mitchell, S. (Lanark, Lanark)	Williams, Com. C. (Devon, Torquay)
Elliot, Major Walter E.	Monsell, Eyres, Com. Rt. Hon. B. M.	Wilson, Sir C. H. (Leeds, central)
Fairfax, Captain J. G.	Moore, Sir Newton J.	Wilson, R. R (Stafford, Lichfield)
Fanshawe, Captain G. D.	Morrison, H. (Wilts, Salisbury)	Wolmer, Viscount
Fielden, E. B.	Murchison, Sir Kenneth	Womersley, W. J
Finburgh, S.	Nelson, Sir Frank	Yerburgh, Major Robert D. T.
Forestier-Walker, Sir L.	Neville, Sir Reginald J.
Foxcroft, Captain C. T.	Newman, Sir R. H. S. D. L. (Exeter)
Fremantle, Lieut.-Colonel Francis E.	Nicholson, O. (Westminster)	TELLERS FOR THE NOES.—
Galbraith, J. F. W.	Oakley, T.	Colonel Gibbs and Mr. F. C.
Ganzoni, Sir John	O'Neill, Major Rt. Hon. Hugh	Thomson.
Gates, Percy	Oman, Sir Charles William C.

Original Question put, and agreed to.

Resolutions to be reported To-morrow.