HC Deb 31 July 1931 vol 255 cc2661-82
Sir HERBERT SAMUEL

I do not desire to raise any large question of national policy on this Bill, but one particular point; but it is one of much more than merely departmental importance. Included in the Schedule to this Bill is an amount of £2,375,000 for a subsidy on sugar and molasses extracted from beet grown in Great Britain, including a supplementary sum of £225,000. It must not be supposed that these are the only amounts which the House is called upon to provide in respect of this industry in the course of this year. There has already been a Consolidated Fund Bill giving certain amounts on account, and there is, in addition, a very large rebate of the taxation imposed upon sugar in general in respect of sugar produced in this country. That abatement amounts to no less than 5s. 10d. on every hundredweight. While foreign sugar has to pay 11s. 8d., British sugar and Empire sugar pay 5s. 10d., and in the current year that amount of benefit given to the industry is equivalent to a total of £2,670,000. On every hundredweight of sugar the State therefore provides in subsidy at the present time 6s. 6d. and in rebate 5s. 10d., a total of 12s. 4d. The value of sugar last year, apart from the duty, was only 12s. per cwt., and State assistance to the extent of 12s. 4d. to secure the production of a commodity worth 12s. is somewhat extravagant. This year the Minister of Agriculture has come to Parliament for a sum over and above that which we covenanted to give to this industry under the Sugar Beet Act a few years ago, which is estimated to cost £225,000.

I have a great respect for the work of the right hon. Gentleman as Minister of Agriculture. He is, I think, by common consent, a most active and successful Minister, and he has rendered great services to the industry and to the State, but there is this one blemish upon his escutcheon, and I feel I must draw attention to it. The industry came to him in the course of this year and said that owing to the low price of sugar they were unable to offer a remunerative price to the farmers and must apply to the State for even more assistance than they had received hitherto. Although Parliament has already provided £30,000,000 for this industry—up to the end of this year—with a prospect of a further sum which may amount to £6,000,000, £8,000,000 or £10,000,000, according to the amount of sugar produced during the remainder of the subsidy, the right hon. Gentleman's heart was touched, and he acceded to their request.

One can imagine what had happened prior to the deputation being received. The National Farmers' Union, on behalf of the producers, and the manufacturers' association, on behalf of the companies, probably met round a table, as they have done every year, to decide what should be the price paid to the farmers for then-sugar beet, and found they could not come to terms. The manufacturers offered so much, the farmers said they could not accept less than had been paid, and there was a deadlock. Whereupon, I imagine, some bright spirit present at the table had an ingenious idea, and said "As we cannot come to terms on this question let us go to the Government and ask that the taxpayer should make up the difference." I can imagine someone at the table saying, "Oh, but there is no chance that the Government will give us more than we are getting already. We are already having £30,000,000 and, after all, there is a Labour Government in power. Are they likely to accede to this request?" Someone else would probably reply "Well, there can be no harm in asking. The worst that can happen is that we are refused." So the deputation went to the right hon. Gentleman, and after hearing their case he determined to represent it to the Chancellor of the Exchequer.

I can imagine the Chancellor of the Exchequer putting the question which Chancellors of the Exchequer always put in the circumstances "How much will it cost?" No doubt the right hon. Gentle- man answered "Well, it may be £200,000, or £300,000, but there is a chance that if the price of sugar rises we may be able to arrange that some of it shall be returned; in any case it will not go to the companies, it will go to the growers, and, after all, we have done very little indeed—"

The MINISTER of AGRICULTURE (Dr. Addison)

Hear, hear!

Sir H. SAMUEL

Apparently this is exactly the conversation which took place. I note that I have the assent of the right hon. Gentleman.

Dr. ADDISON

You said it goes to the growers, and that is perfectly correct.

Sir H. SAMUEL

It saves the companies from the necessity of paying a remunerative price to the growers for the sugar beet which they need for their industry. He will have said that to the Chancellor of the Exchequer, and he will have said further, "After all, we have done very little so far for the arable farmers. We are being pressed to subsidise or to assist wheat, which would cost ever so much more. This £200,000 or £300,000 will sweeten things in the agricultural industry, and I hope I may have your assent." Then the Chancellor of the Exchequer probably said, "But what will the House of Commons say?" and the Minister of Agriculture was in a position to reply "Oh, the Conservatives will vote for it as a matter of course, and our own party will probably not oppose it if we propose it to the House; and as for the Liberals, there are at all events three of four Members representing agricultural constituencies in the Eastern counties who would not be very keen in opposition to it, and no doubt it will easily go through the House of Commons, possibly without discussion." So the Chancellor of the Exchequer gave his assent, the Cabinet did not demur, it was brought before the House of Commons in a Supplementary Estimate, and through it went. And now in the Appropriation Bill we are asked to confirm and appropriate that sum.

When the industry came to the right hon. Gentleman did he ask them, "Why is it that British growers of sugar-beet should receive, as they have received, twice as much per ton for their beet as the Continental growers receive, although"—he could have quoted from the report that has been published by the Ministry of Agriculture itself—"the costs of cultivation in Great Britain are roughly the same as the costs of cultivation on the Continent?" Why should they receive twice as much as their Continental competitors? Did the right hon. Gentleman ask them how it comes about that the amount of the sugar produced per acre on the Continent is half as much again as the sugar produced per acre in this country. The amount of sugar produced on the Continent is 3,602 lbs. per acre while in this country the total is 2,493. Did the President of the Board of Agriculture ask them why farmers have been growing beet in this country at a distance from the factories which is on the average double the distance on the Continent? That is a most important consideration for a bulky crop of this character, because it means that the cost of transport is nearly three times as much here as it is on the Continent. Did the right hon. Gentleman ask them how it comes about that the cost of manufacture in this country is half as high again as the cost of manufacture in the beet-sugar factories on the Continent? The cost is 6s. 7d. per cwt. of sugar here and 4s. 3d. per cwt. for the same process on the Continent. Of course, it does not matter, because the British taxpayer has to make it good.

I wonder whether the right hon. Gentleman put these questions and what replies he received before coming to Parliament asking for another £200,000. Of course, the right hon. Gentleman would be told that without this employment the agricultural districts would be very much affected. We have had some remarkable figures given of the amount of employment that is being provided in this industry, remarkable not only in extent but also in the very distant relation which they bear to the actual facts. We have been told that 40,000 persons are employed in this industry as a consequence of the subsidy which has been given, and the impression is conveyed that those 40,000 are whole-time workers'. May I point out that this 40,000 is simply the figure which includes farmers, workers on smallholdings, and labourers who may have some connection with beet growing. If a smallholder has a patch under beet, or if a farmer has a single field or a few acres devoted to the cultivation of beet, they are all included in the 40,000. Furthermore, most of this estimate of the employment devoted to beet-sugar on the farms is additional employment, and, if the beet crop was not grown, another crop would be grown. This point is shown quite clearly by the statistics.

Mr. SPEAKER

The right hon. Gentleman seems to be going into the whole question of the production of beet sugar, and he is only entitled to deal with the extra sum of money which is now being asked for.

Sir H. SAMUEL

That is precisely my point. The Minister of Agriculture has been persuaded to come to Parliament for this extra sum precisely for the reason that it must be given to the farmers in order to keep these people in employment. That is the whole of the right hon. Gentleman's case, and probably when he replies he will say that if he had refused, or Parliament had refused, to adopt this proposition a large number of persons would be thrown out of work. I feel sure that that is the point upon which the right hon. Gentleman will base his case, and, in criticising him, I submit that I am entitled to show that the amount of employment given by this industry has been enormously exaggerated, and, as a matter of fact, you cannot credit the subsidy with all the employment given, because, if the subsidy was not given, the farmers would revert to the cultivation of other crops which they had previously grown, and consequently the amount of unemployment caused would be very much less. I do not wish to pursue that point, and I will conclude it by saying that as the statistics for sugar-beet cultivation in relation to employment have gone up, the statistics of the acreage under other roots and potato crops have gone down, not in the same proportion, but very considerably. Furthermore, the report states that a very large number of farmers, especially small farmers, are able to produce a sugar-beet crop without increasing the number of hands they employed previously, and they do this with their regular staff. I have made a calculation giving the utmost credit to the industry for employment. Assuming that the people in the factories would be out of work, and assuming half the people employed on the farms would be out of work without this subsidy, the cost works out at 25s. per man employed for every day those men are set to work. So much with regard to employment.

The right hon. Gentleman was persuaded by the companies that they could not afford to pay a remunerative price this year for sugar-beet, and he asked the Anglo-Dutch Companies to enter into this scheme, but they refused to do so and preferred to make their own arrangements. The right hon. Gentleman has expressed regret that the Anglo-Dutch Companies have not come in, and, as a consequence, there is less work for our farmers. Why should not the Anglo-Dutch Companies have paid the farmers a remunerative price without further State assistance? I will give some facts taken from an answer given to me by the Minister of Agriculture in reply to a question which I addressed to him on 17th July last which show that this group has a capital of £2,006,000, and that they have already in seven years put aside for depreciation and reserve £2,460,000. They come now to the right hon. Gentleman and ask him to grant them a further sum of money on the plea that they cannot afford to pay a remunerative price, although in seven years they have replaced the whole of their capital and have a bonus of nearly £500,000. At any moment that firm could close their factories and allow them to fall down to ruin, and they would still be able to replace the whole of their original capital and go away with an additional bonus of £500,000 which they have derived from the subsidies. The English Beet Sugar Company, so-called although it is Anglo-Dutch, has 38 shareholders. That company paid 12½ per cent. dividend free of tax for the first two years, and 20 per cent. dividend tax free for the last five years, an equivalent of 26 per cent. I do not think that is bad in these hard times. The right hon. Gentleman has spoken of the "enormous profits" made by the companies, and yet they have persuaded him to grant this further sum, and he has now asked the House of Commons to vote this further subsidy on their behalf.

Dr. ADDISON

It is paid to the growers.

Sir H. SAMUEL

The factories receive a very large subsidy, and they have to buy their raw material from the farmers, and they sell the product to the public. Our concern is not to pay the difference when the farmers say they are receiving too little and the companies say they are paying too much. Companies which are making these enormous profits can well afford to pay the farmers a remunerative price, particularly when many of those farmers ought not to be cultivating beet at all, because the report says that much of the land is unsuitable and that new and inexperienced growers are coming forward who have to be nursed, and the cost of all this has to be met by subsidies of this character. That is not all. These are not the only companies which are receiving the money provided for in the Bill that is before the House to-day. Many of them are equally prosperous. Here is an extract from the speech made by Lord Weir at the meeting of some of these companies, reported in the "Times" of the 6th July of this year, in the course of which he says to one company, which appears to be a holding company: Your associated companies, the West Midland Company and the Second Anglo-Scottish Beet Sugar Company, have had a comparatively prosperous year. The West Midland Company is to pay a dividend of 10 per cent. free of tax, while the manufacturing profits of the Second Anglo-Scottish Company have risen from £66,492 last year to the satisfactory figure of £149,480. This company has 12 shareholders—the minimum number. The capital of this company, which we are now asked to assist by means of this provision, was £240,000 in ordinary shares, and the Government guaranteed 5 per cent. debentures to the extent of £865,000. Of that amount, £124,000 has been repaid, leaving £741,000 outstanding. I asked the right hon. Gentleman not long ago if he would give the House the dividends that had been declared in each of the subsidy years by the companies receiving subsidies. Surely we are entitled to know what the dividends are of these bodies which are paid by public funds. But the right hon. Gentleman answered that some of the companies were private companies, and he could not disclose the dividends; and that, as to the others, I could find the information in the balance sheets of the companies, but that the total dividends paid by them all amalgamated together were given in the report that has been issued by the Ministry of Agriculture.

This particular company is a private company; we do not know what its dividend is; but we do know that it made a profit of £149,000 last year, and that the interest on the Government debentures was £37,000, and, therefore, that there was a trading profit for the year of £110,000, which, again, is not so bad on a capital of £240,000. This is the company which comes to Parliament and says it cannot afford to pay the Scottish farmers a sum which would enable them to produce their sugar beet without a loss, and we, out of the taxpayers' pockets in this year, have to vote an additional £225,000. Taking all the companies together, the Minister tells us that they expended a capital of £8,700,000 in seven years, and they have been able to put by for depreciation, reserves, and unappropriated balances, £4,494,000. The Anglo-Dutch group has done much better than the others, but, taking them all together, they have been able to replace more than half their capital, and, in the last year for which figures are given, they declared, taken as a whole, dividends averaging 13 per cent., or 10 per cent. free of Income Tax.

The right hon. Gentleman, in his defence, says that this sum may perhaps be repaid. He has made an arrangement that, if the prices of sugar rise, this additional amount may be repaid in the future. It may be, or it may not be; it depends upon the prices of sugar. But do not let the House imagine that this sum will flow back into the Exchequer. Far from it. Money that goes out from the Exchequer very seldom comes back again. All that will happen will be that a deduction will be made from the still further payments which, under the commitments already entered into, the Exchequer has to make to these sugar companies; for the subsidies and rebates of taxation are not at an end. Before the subsidy period ends, there will be another sum of, as I have said, possibly of £6,000,000, £8,000,000, or £10,000,000, according to the amount of sugar produced, still to be paid from the public purse to these private interests, and from that sum it may be, if we are fortunate, that a deduction will be made in regard to the increased amount this year.

There is another item in the Appropriation Bill which has a bearing on this subject. Hon. Members will find, on page 24: For sundry Colonial and Middle Eastern Services under His Majesty's Secretary of State for the Colonies, including certain non-effective services and grants-in-aid, including a supplementary sum of £105,000 … £1,715,716. Those are grants to the West Indies. While the right hon. Gentleman has been persuading Parliament to give £200,000 to British sugar growers to induce them to grow more sugar for the British market, his colleague the Under-Secretary of State for the Colonies has been persuading Parliament to give £200,000 as a grant to the West Indies on account of depression in the sugar industry caused by the over-production of sugar. On the 19th February of this year, the Under-Secretary of State for the Colonies said: I have to ask the Committee to approve of a Supplementary Estimate for £400,000, the items of which Members have before them. The first item is for a grant in aid of expenses of the local administrations and of unemployment relief grants for certain West Indian Colonies. The necessity for these grants arises mainly as a consequence of the serious depression in the sugar industry."—[OFFICIAL REPORT, 19th February, 1931; col. 1483, Vol. 248.] This House has received petitions from the legislatures of Jamaica, Trinidad, Barbados and the Leeward Islands, complaining that the beet sugar subsidies which we have granted here have seriously affected their production, caused unemployment, and aggravated their depression; so we have granted this year, partly for purposes of loans and partly for out-and-out grants, nearly £200,000. The Government with one hand gives £200,000 to the British sugar growers to induce them to grow more, and with the other hand £200,000 to the West Indian sugar growers to compensate them for the consequent loss. Its right hand doth not know what its left hand doeth.

For years past, efforts have been made by the sugar-growing industry all over the world to stop excessive production of sugar. There is a glut in the world's market; production has increased by 50 per cent. since the War; and yet the right hon. Gentleman comes this year to Parliament for this sum of £225,000 to make sure that British farmers shall not revert from growing sugar beet to growing the turnips, mangolds, potatoes and other commodities which they have been producing in previous years. An agreement has been adopted by the sugar industry of the world—what is called the Chadbourne plan—to secure the restriction of sugar-growing. That is an agreement between the representatives of all the sugar producing countries to persuade their growers to grow less; and yet here today we are asked to vote money to persuade our farmers to grow more.

What is to be the attitude of the House of Commons, now and in the future, towards this policy? I had the honour, in the last two years of the War, to be the chairman of a Select Committee of this House on national expenditure. We examined very many cases of wastefulness, but never in my experience have I found any expenditure so lavish, so extravagant for its purposes, so enormous in proportion to the advantages that have been achieved, as this expenditure which we have been discussing, and which we are now asked this year to increase. What is going to be the attitude on this matter of hon. Members opposite? Their voices have seldom been raised in criticism. It is true that one hon. Member did speak in that sense the other day on the Supplementary Estimate—the hon. Member for South Shields (Mr. Ede). He spoke more in sorrow than in anger, and protested against this expenditure. But hon. Members above the Gangway, who warned us in such solemn terms of the necessity, in the present grave financial position of the country, for restricting every expenditure to the lowest possible limit—what attitude are they going to take? Only yesterday, from that bench, the right hon. Gentleman, the Member for Edgbaston (Mr. Chamberlain), in the most solemn terms declared that we must stop expenditures, however popular they may be, unless their absolute necessity can be proved. One Member only has spoken on this from those benches in criticism, the hon. Member for North Paddington (Mr. Bracken), and he spoke more in anger than in sorrow. In language more terse, more colloquial and more effective than the language that I am accustomed to use he declared this to be the greatest ramp of modern times. What are hon. Members above the Gangway going to say to-day, in the light of what was said by their spokesman yesterday, when he repeated the old truism, none the less true for that, that in this House general expressions in favour of economy are always popular but the particular application of individual economies is seldom acceptable? Will the right hon. Gentleman the Member for Sparkbrook (Mr. Amery) act upon that maxim of his colleague from Birmingham.

Where are to be heard these watchdogs who are to safeguard the public purse and who on public platforms say that national economy is the greatest need of the present day and that they themselves can be trusted to be the most scrupulous guardians of the public purse? The right hon. Gentleman the Member for Bewdley (Mr. Baldwin) has declared in a public speech that not only should this experiment be continued but that measures should be adopted by the State to secure a doubling of the acreage under sugar beet. If this acreage is to cost us £30,000,000, soon to be £40,000,000, what will his double acreage cost us? The voices of these watchdogs are silent. The kennels are empty to-day. When it is a question of £20,000 as a subsidy for opera, they make the neighbourhood ring with alarmed and angry barkings, but when it is a question of £200,000 for beet sugar, on top of £30,000,000, the watchdogs are found on the side of the foxes. I hope the House of Commons will make it clear that it has had enough of these grants for this industry. If we have £30,000,000 to spare, and another £200,000, there are plenty of other industries, very depressed, not making profits and declaring dividends of 10 and 20 per cent. free of tax, which could give far more employment to the people of the country than this industry. It is a strange inverted alchemy that we are asked to practise, turning gold into sugar and then watching it slowly dissolve. Let the House of Commons make it clear that it has had enough of these demands and that it will be no use next year for the right hon. Gentleman to come forward with a similar plea but that we wish these grants, subject to existing commitments from which we cannot escape, cut down at the earliest possible moment.

12. n.

Mr. AMERY

Sugar, Mr. Speaker, is, I believe, regarded as one of the most nourishing and stimulating of all foods; and certainly it has very successfully nourished the eloquence and stimulated the statistical fancy of the right hon. Gentleman. His case began with what I regard as a complete fallacy, by attempting to object to the whole principle underlying this grant on the basis that the amount of it is wholly disproportionate to the value of the article itself. He pointed out that this added expenditure makes the total subsidy equal to more than the price of the sugar itself. That may be true but he assumes that the market price is a normal and fair price based on the cost of production. It is nothing of the kind. It is a price the result of artificial measures in other countries and far below the level of cost at which sugar could be produced under natural conditions in most parts of the world. The right hon. Gentleman, the Member for Carnarvon Boroughs (Mr. Lloyd George), whose absence we all regret, told the House not long ago, in this very connection of agricultural production, that he was opposed to dumping. In his opinion dumping was a monster which Free Trade could not be expected to carry on its back. The right hon. Gentleman the Member for Darwen (Sir H. Samuel) does not look upon it as a monster. He, like a fond mother, would welcome the infant to his breast whether it be one of saccharin or one covered with Asiatic ticks. He welcomes dumping. He is an out and out Free Trader. He asks himself no questions as to the permanent welfare of agriculture or industry. All he goes to is the price figures. On his principle, we ought to have rejected every measure that has been taken in recent years of which one condition was the direct encouragement of British production. The condition imposed in all our unemployment work, the use of British goods—that is a fallacy from his point of view.

He pointed out, what is undoubtedly the case that at this moment, that the cost of beet sugar production, both the cost of producing the beet on the land and the cost in the factory, is higher than on the Continent. The whole case for this special legislation is that experience on the Continent has shown that the beet sugar crop is one of immense value to the whole structure of agriculture. Its importance has been recognised, not in the amount of sugar produced alone or in the value of that sugar, but in the effect of sugar beet production upon the whole rotation of crops, upon the fertilisation of the soil, upon the provision of cheap foodstuffs for animals, and upon the provision of varied employment in agricultural centres. From all these points of view every great progressive country on the Continent has thought it well worth while incurring heavy initial expenditure on getting that industry started and on giving it national support afterwards. We are still in the stage of the heavy initial expenditure, and I hope the Minister will be able to show that that heavy initial expenditure is getting lower and that we are nearing the time when sugar can subsist, I will not say against dumping, but can subsist with a steady and moderate measure of protection in whatever way afforded.

The right hon. Gentleman made great play of the profits of individual companies. He laid great emphasis on the ordinary shareholding capital, rather slurring over the amount of borrowed capital; but, after all, the interest on borrowed capital, whether guaranteed or not, has to be found, and it would be very much fairer if these profits were given in relation to the total capital employed and if we had had, not the profits of individual companies, but some idea of the total amount of profit in regard to the total amount of capital invested in the whole of this industry. Personally, I believe that this industry is well worth encouraging, and that in order to encourage it you have to give good profits to the most efficient and most capable pioneers. The right hon. Gentleman went on to suggest that not only had this money been wasted in regard to the expenditure created, but that it actually caused a decrease of employment in one direction corresponding with the employment given in the other.

Sir H. SAMUEL

I did not say "corresponding."

Mr. AMERY

Not corresponding. At any rate, he drew attention to the fact that there had been a decrease in our root crops, and the inference was that they had been displaced by sugar-beet. There has been a lamentable decrease in every form of arable cultivation in this country, but I should have thought that that decrease was due, not to the fact that sugar-beet growing was more profitable, but to the fact that none of those crops were profitable. I should have thought that we could congratulate ourselves, in the present desperate plight of agriculture, that at any rate one crop is being carried on with some measure of success, and, by this success, contributing to the maintenance of other crops. It would be very interesting to consider how much arable land would go to grass altogether if those who are now growing beet as part of their crops were not in a position to grow it.

That same answer applies to his appeal on behalf of Colonial sugar. If ever the right hon. Gentleman had done anything that would have helped Colonial sugar, I should have been more interested in his opinion. I see no reason whatever—and I have studied the position of the Colonial sugar industry pretty closely—to suppose that the West Indies in particular, or Mauritius, would have derived the slightest benefit if we had made no attempt to encourage the beet-sugar industry in this country. Their difficulty is the difficulty of many agricultural producers, that they cannot grow their sugar at a price comparable with the present dumping or residual world price. If British sugar-beet were not supported within these islands, it is not British Guiana or Mauritius sugar that would take its place, but the dumped sugar which is already selling in every market at a price of some pounds a ton below Colonial sugar. I say that we certainly should do more than we have done to help Colonial sugar, but the last way that I suggest that help should be given or can be given is by neglecting the interests of the British farmer and the prospects of agriculture in this country. That is all I need say with regard to the speech of the right hon. Gentleman on the merits of the sugar question.

The minister of Agriculture will no doubt reply much more fully and adequately. But the right hon. Gentleman has challenged me on the issue of economy. Undoubtedly, we are in favour of every form of economy, but above all in favour of economy on unproductive expenditure. Here at least is a form of expenditure that is directly productive. It is not the form of expenditure which I should have chosen. I should not be in place here in discussing other methods of helping the beet-sugar industry which would not involve expenditure but would bring in revenue. All that I say is that the object itself is a good one. We support it for itself, and we believe that, though we could support it on much better lines than the support given by the present Government, we are not prepared at this moment to withdraw this support.

Dr. ADDISON

I must thank the right hon. Gentleman for the very kindly references to myself, and it makes it the more regrettable that there is this blot on my escutcheon. I have been asking myself all the time when listening to the right hon. Gentleman, "I wonder what he would have done if he had been in my place?" How would he have dealt with the situation with which I was confronted? I do not know, of course. He is perhaps a better Free Trader than I; all the same I am not so bad. He is perhaps more steeped in the doctrine than I have ever been, but I have had at the back of my mind all the time the fact that, notwithstanding all his prejudices and all his past, he might have been driven into doing the same thing as I am doing.

What is the position? The position is not what it was at the time of the British Sugar (Subsidy) Act of 1925. I was not responsible for that. I agree with the statement he makes that some of these companies have made prodigious profits. They have made those profits out of the subsidies provided under that Act, and I am not responsible for that. The only point of the criticism of the right hon. Gentleman is that by some means or other I ought to have compelled the companies to pay this extra price out of their profits and not dealt with the matter in this way. That is the only point. There can be no other point in it, because I am not responsible for the arrangements that were made years before I came into office. We have simply inherited them.

But he failed to point out one or two very important collateral circumstances which, I think, would have pressed hardly upon his conscience if he had been in my place. The first is that the subsidy drops this year 6s. 6d. a cwt. and that the drop coincides with the unprecedented low price of sugar resulting from over production. Those two things happen to coincide. Those two drops, compared with pre-war prices, are about 11s. or 12s. a cwt., a sudden drop. It is true that I am not concerned with the balance sheets of the companies. I am concerned with something quite different, and, with the greatest possible respect to the right hon. Gentleman, if he had been in my place, he would have been unable to escape from those other considerations. I think that I asked the factories every one of the questions which he addressed to me and which, he said, I ought to have asked the factories. We pressed that kind of inquiry for a considerable time. What were the facts with regard to the position? The weeks, and later the months, drifted on until it became the time of the year when it had to be decided by the farmers whether or not they were going to grow beet on this land. The issue was not some transient one which entered into consideration affecting the principle of Free Trade. The point was whether the farmers were going to plough the fields for beet or not, and, if not, what were they going to do? That was the question. I had to do the best I could in the interests of agriculture in those desperate circumstances.

What is the other circumstance? During the past year there has been a greater decline in arable cultivation than has been recorded previously in any year. The fall in arable cultivation this year is 250,000 acres. It is a desperate situation. At that time I had not the exact figures, but I know there had been a great decline in employment. Since then the figures have emerged, and show that there has been a fall in employment in agriculture of not less than 25,000 workers. If the right hon. Member for Darwen (Sir H. Samuel) had presented me in his speech with any suggestion as to how I could have made the companies pay adequate prices to the growers, I should have listened to it gladly, but it was entirely absent. I can assure him that, for weeks, almost for months, we have kept this back and have insisted upon negotia- tion between the parties, because of our reluctance to be drawn into it. It was only when it got to the last available fortnight, and we were confronted with a prospect of a vast area of land not being cultivated, that we had to step in. Proof of the efficiency of the measures of which I secured adoption will be given by me presently in figures. Let me make it clear. The right hon. Gentleman gave us figures as to the profits of these companies. I am not responsible for those.

The agreement which we are now being asked to make does not present the factories with a single sixpence. The whole of this money is conditional upon no profits being made, upon nothing being put to reserve, and nothing being contributed for depreciation. It is a very hard bargain, and, whoever may be responsible for enhancing the profits of the factories, it is not us. Not a sixpence goes in any of those directions. Every penny of it has to go to the grower. We had to do it this way, because we found that no prices could be arranged, and we had the prospect, in addition, of this desolate fall in cultivation of a large amount of land.

Sir H. SAMUEL

The position is not quite clear. In his previous speech, the Minister, when introducing the Supplementary Estimate, said that the factories were to make no profits and nothing was to be allowed for reserves or depreciation, until the figure as paid to the grower reached a certain figure. That is to say, if they paid 38s. to the grower, then they could take profits and depreciation. I understand now that it is not the case that, having received this sum, there are to be declared no profits and depreciation for the year, but only if they paid 38s. Since they have been paying 45s., the position does not seem such a very hard one.

Dr. ADDISON

So far as that money is concerned, it has all to go to the grower, but as soon as ever a company begins to make a profit, or a profit could be made, which might be theoretical, and after that price has been paid to the grower, another clause in the agreement comes into operation, which provides that profits can only be made after sugar reaches a certain price. You cannot make profits under this arrangement with sugar at its present price. It is estimated by us that no profit is made until sugar reaches 7s. 9d. per cwt. As soon as that figure is reached, repayment of this advance is to begin. The right hon. Gentleman has not quite done justice to the arrangement to that extent. In so far as the price of sugar rises above 6s. 6d. per cwt., for every penny it rises above that figure, so much is deducted from this present advance. That is to say, if the price of sugar were 7s. 9d. per cwt., lone of this money would be granted at all. It is fifteen pennies per cwt.; that is what it comes to. The fifteen pennies is the difference between as. 6d. and 7s. 9d., and for every penny rise in price an equivalent amount is deducted from the advance. If sugar reaches 7s. 9d. per cwt., nothing will be advanced.

Sir H. SAMUEL

I did mention that, if the price of sugar rises, this sum would be repaid.

Dr. ADDISON

Yes, but, if the price of sugar rises sufficiently the sum will not be paid at all. The point is, if the price of sugar rises, so far as it rises above 6s. 6d. per cwt., this advance will never be made, so that repayment will never be required. Supposing the price of sugar is 6s. 8d., it means that 2d. per cwt. will be deducted from the advance; the figure is calculated each week on the price of sugar. In common justice to me, the right hon. Gentleman should take into account this very important consideration. The money will be repaid, in so far as, not only this year, but any time during the next two years thereafter the price of sugar rises above 7s. 9d. per cwt. plus an allowance for depreciation, which ought to be made, but nothing for profits. This money has got to be repaid any time within the next two years.

Sir H. SAMUEL

Deducted from future payments?

Dr. ADDISON

Yes. I should like to show what I secured in this very ingenious arrangement, and under this hard bargain. Here is the justification for it—and I agree with all the animadversions of the right hon. Gentleman as I think the companies ought to have given the growers a decent price, but I found myself faced with the threat of the great decline in the cultivation of our arable acreage, and I had to prevent some of that. Last year the acreage grown for the group of factories who have not accepted this arrangement was 140,000 acres, and this year the acreage is 80,000. In other words, there is a reduction of 60,000 acres in the arable cultivation of the area, or 43 per cent. For the factories that have accepted the arrangement, the acreage last year was 185,000, and this year it is 152,000. In other words, the drop of acreage of the factories who had not accepted the arrangement is 43 per cent., and the drop of acreage in the factories that have, is only 18. It means that I have secured a continuance of cultivation and consequent employment in those areas, in return for something which might cost the taxpayers nothing at all. The right hon. Gentleman did not give us full credit for the employment that is provided. There is a large amount of employment created, and it is well to remember that 5,000,000 tons of coal and other material are required to be transported, thereby finding additional employment. There is also other ancillary employment to be considered. Neither did the right hon. Gentleman give us full credit for the immense value of the residual materials. He suggested that because there would be a surplus of sugar in the West Indies, I should have done nothing. If he did not mean that, I do not know what he did mean. He must have meant that. I cannot understand why he should have gone so far as to say that. Supposing there is a surplus of apples in the world. Are we to grow no apples here?

Sir H. SAMUEL

You ought not to pay large sums from the public purse to induce people to grow more apples.

Dr. ADDISON

The right hon. Gentleman was contending that because there was a surplus of sugar in the world, it was a mistake for us to make these arrangements. I cannot understand that. He might apply that argument to dozens of commodities, and it would mean that we could do nothing. If the land is suitable for growing sugar beet, why not grow it and compete in the world market? We must not fold our hands and do nothing. As a good Free Trader and an enthusiast for efficient production, I should have thought that that would have been the last thing that the right hon. Gentleman would have wished to do. I am not now dealing with the question of subsidy, but trying to ascertain what the right hon. Gentleman really meant about surplus. I am quite sure that when the facts of the case are understood, when hon. Members realise the situation with which I was confronted, and taking into account the fact that not one penny of this subsidy is to go into the pockets of the factories, whom I am not in the least concerned to defend, I think they will agree that, on the whole, in the difficult circumstances, we have made an ingenious and successful arrangement.

Major BRAITHWAITE

If any justification was needed for my intervention, it has been provided by the speech of the right hon. Gentleman. He is in the position of having the latest available figures in regard to arable cultivation, and I understand that for the last year they show an alarming decrease on the figures of last year. One of the things that the right hon. Gentleman said when he became Minister of Agriculture and one of the pledges that he has made was that the Government were going to do something to help the arable farmers. Those of us who have arable cultivation at heart thank him for what he has done this year in regard to sugar beet, but in regard to cereal agriculture he has failed lamentably to do anything at all, and I would ask him, before the House adjourns for a period of months, if he considers it fair and just to allow the farmers to go without any statement from him as to the intention of the Government in regard to that arable crop. If the right hon. Gentleman and his Department can do nothing at all, it is fair to say so and to allow those in the industry to know what their liabilities are going to be.

The price that world cereals are fetching, I refer in particular to the wheat crop, having regard to the present cost of production, means that there is going to be a definite loss this season of over £6,000,000 to agriculture. Six million pounds on one particular crop. It surely is even more important that subsidising sugar beet or helping in other ways, to assist agriculture to tackle at once in some reasonable way the problem of making this crop economic to the farmer. I would appeal to the Minister not only from the farmers' point of view but from the point of view of the agricultural workers. We have 40,000 agricultural workers out of employment in arable agricutlure. Those men are not receiving any dole. When they come out of work they go straight on to the Poor Law. And yet they are paying rates and taxes, indirect taxation which is being used by the Government to subsidise unemployment pay for factory workers in the towns, and yet we find the House prepared to adjourn without any statement of any sort from the Ministry.

It is only through agriculture, with arable agriculture as the base, that we are ever going to get back to any reasonable semblance of prosperity in Great Britain. I would ask the right hon. Gentleman what the Government meant and what the Minister meant when he made a statement after the Conference convened by the Minister in 1929. That was before he was the Minister. The Conference agreed that the key of the agricultural problem was the profitableness of cereal growing, and at a meeting on the 28th February, the Conference passed unanimously a resolution, which was subsequently published by the Ministry of Agriculture, which said: The economic condition of arable agriculture is accentuating the gravity of the unemployment problem, and, in order to avert further deterioration, there is an urgent need for an immediate pronouncement calculated to restore confidence in the industry in the meantime.

Mr. SPEAKER

Does not some announcement of that kind entail legislation?

Major BRAITHWAITE

I do not think it entails legislation. It was a statement of the Minister's intention that was needed at that time. It was a question of the Minister making a statement that this crop was going to be put on an economic basis.

Mr. SPEAKER

Would not that need legislation on the part of the Government?

Major BRAITHWAITE

I will not pursue the point if you rule that it is out of Order. I do not want to do anything which is contrary to the rules of Debate, but I do want to appeal to the Minister, before we go away, and to ask him if he can say something which would be of a reassuring nature to the agricultural community, to say it. If he has nothing to say, if the Government do not intend to do anything, it would be fairer and more just to the farmers that he should let them know so at the present time.

Question, "That the Bill be now read the Third time," put, and agreed to.

Bill read the Third time, and passed.

The remaining Orders were read, and postponed.