§ Considered in Committee under Standing Order No. 71A.
§ [Mr. DUNNICO in the Chair.]
§
Motion made, and Question proposed,
That it is expedient—
§ The MINISTER of AGRICULTURE (Dr. Addison)The Committee will remember that some weeks ago an arrangement was entered into by me, on behalf of the Government, as to the price to be paid to growers of sugar-beet in the season 1931–32. Under the ordinary procedure the beet grown this summer will be dealt with in the factories in October or thereabouts, finishing early in the new year. The matter before us concerns the prices to be paid in respect of the sugar extracted from the beet picked in the forthcoming season. Up to the present time and for the past three years the subsidy paid on sugar extracted from home-grown beet was 13s. per cwt., but the beet-sugar subsidy dropped this year to 6s. 6d., or half the usual sum, and remains at that figure for the remaining three years of the continuance of the Act.
It so happens that this great drop in the subsidy has coincided with an unprecedented low price of sugar. The average price before the War was round about 11s. per cwt., but for some time past it has been about 6s. 6d. or even lower than that. The coincidence of the low price of sugar placed the factories in this critical position, that between the low price of sugar and the drop in the subsidy manufacturers were suffering to the extent of 12s. or 13s. per cwt. The price that will be paid to the growers of beet is determined by the amount of sugar extracted, and the price obtained 1371 for it. Last year the growers obtained various prices more or less round about 458. or up to 50s. The arrangement is that the farmers contract to receive so much per ton for beet delivered to the factories, and the price varies according to the amount of sugar extracted from the beet. The extraction varies from 15½ to 17½ per cent., so that the price to the growers is based upon a 15½ per cent. scale, or about 2s. 6d. per ton for each one per cent.; that would be 2s. 6d. more for 16½ per cent. and an additional 2s. 6d. for every one per cent.
It was felt that if we continued this arrangement as far as we could it would be advisable, because beet-sugar provides a good deal of employment, and in the present depressed condition of agriculture it so happens that in the eastern counties, in the beet-growing areas, beet-growing has been the standby of the farmers. But for the beet crop last year those farmers would have been very much worse off. I hesitate to say what the condition of unemployment would have been but for this industry.
There were 300,000 acres of beet under cultivation last year and with all these uncertainties prevailing no contracts were being entered into. From the point of view of the maintenance of the industry, the Government felt it necessary to do their best to secure a better arrangement instead of leaving it to negotiations between the parties concerned. The Government entered into negotiations with the industry, and very difficult they proved to be. The result was that it was finally arranged that, on certain conditions, certain allowances should be made for this year in addition to the reduced subsidy. The subsidy dropped this year from 13s. to 6s. 6d., and in order to mitigate that great drop these proposals are submitted to the House.
The arrangement which the Government has entered into provides that the factories are to make no profit, and nothing is to be allowed for reserves or depreciation, until the figure has been paid to the grower which I shall describe in a moment. The accounts of the factories, while of course they will be confidential to ourselves, and will be examined by our accountants, will be fully revealed to the officers of the Ministry. Therefore, it is within our 1372 power to see that the arrangement is faithfully carried out. I quite realise that the arrangement which we have made, and which I will describe, may be criticised, and no doubt the right hon. Gentleman the Member for Darwen (Sir H. Samuel) will criticise it. Nevertheless, it is my business to make the best of a difficult situation. The Act dealing with subsidies was passed some years ago, and we suddenly found ourselves in the position of having to face an unprecedented price of sugar. I am trying to save the situation. That is my only justification for these proposals.
The arrangement entered into is this. We offer an additional 1s. 3d. per cwt. for sugar extracted under certain conditions over and above the 6s. 6d. per cwt. This is subject to the condition as to no profit and no reserves, and we have fixed the price of sugar so far as we could on a basis in regard to which there can be no manipulation against us. The arrangement is rather technical, but it is a price fixed for a certain percentage of raw sugar in certain degrees of polarisation which can be obtained. The present price is 6s. 6d. per cwt., and, with the addition of 1s. 3d., the maximum figure allowed will be 7s. 9d. If sugar remains at 6s. 6d., the whole of the 1s. 3d. will be payable. For every 1d. that sugar rises above 6s. 6d., 1d. comes off the 1s. 3d., and so on, 50 that if, when the time arrives, the price of sugar is above that figure, the factories will not receive, pro tanto, the full amount arranged for. If sugar remains where it is, the factories will receive an additional 1s. 3d. It was felt, however, that we must arrange that the farmers could be sure that their offers would be accepted, so that it was a part of the undertaking that the factories must accept the acreage offered. Then, in order to ensure that there should be a fixed arrangement, a certain tonnage of beet was taken as applying to each group of factories, representing roughly about 1,000,000 tons; it is taken as 300,000 cwts. of sugar per factory, and we do not pay beyond that figure for each factory. It was further arranged that if, during the remainder of the subsidy period, the price of sugar rises, we secure repayment of this additional 1s. 3d. which has been advanced.
The repayment scheme is as follows. If, after this year, the price of sugar is 1373 more than 7s. 9d., plus an allowance for depreciation and reserves which have not been allowed for this year, then repayment begins 1d. by 1d. until the 1s. 3d. advanced is all returned. The additional allowance which has been made for the remaining two years of the subsidy period is 9 per cent. of the written-down value of the factory at the 31st March. The reason for taking that figure is this: Some factories, as the Committee will be aware, have been much more prosperous than others, and have been doing very well indeed under the subsidy paid by the British taxpayer; and this arrangement provides that, where a factory has made these profits, provided that the cost has been written down, it will by that amount receive a smaller premium. That is to say, a factory which has not-had the opportunity to write down its costs will receive more than one which has made greater profits and has written down its costs. That is why the basis is the written-down price on the 31st March, and that governs the -future repayment in the event of the price of sugar rising during the last two years of the period above 7s. 9d. It may well be that we shall get all the 1s. 3d. back: that remains to be seen, according to the price of sugar; but I may say that it is estimated that the total additional cost, supposing that the whole of the 1s. 3d. is paid, will be about £225,000.
§ Sir HERBERT SAMUELFor how many years?
§ Dr. ADDISONThat is for this year only. Of course, if the price of sugar rises, that sum will be repaid, as I have already explained. If we advance the whole of the 1s. 3d. and never get any of it back, the total amount would be £225,000.
§ Sir H. SAMUELIf the price does not rise, shall we be asked to repeat this next year?
§ Dr. ADDISONI am afraid I cannot answer officially as to next year; I am dealing with the present disastrous emergency. The right hon. Gentleman is in as good a position to answer that question as I am. I come now to a rather disappointing feature of this arrangement. There are 17 factories, and I had hoped that they would—and, indeed, it looked at one time as though they would—all participate in the arrangement; but 1374 a certain group of factories, and one other, decided to stand out. That is the Anglo-Dutch group of factories, which operates, in the main, in East Anglia, and I am sorry to say that that sis the district where it was of the greatest possible importance that, if possible, this arrangement should have applied. Those factories, too, are the ones which, generally speaking, have done the best; they have, in fact, made enormous profits; and I told them, with all the frankness with which I am speaking now, and, indeed, with even greater frankness, that in my opinion this group of factories, seeing how well they had done, might have been well able to incur the same risks which the other factories have undertaken. They refused to do it, and I have no power to interfere in the matter. Anyhow, the result of this arrangement is, as regards the factories that have accepted—12 out of the 17—that they have now entered into an arrangement with the growers under which the growers will get 36s. per ton for beet grown which has a 15½ per cent. extraction of sugar, rising by half-a-crown for each 1 per cent., so that, if the beet grower produces beet with 17½ per cent. of sugar, he will get 43s. a ton.
§ Viscount WOLMERMay I ask why the Memorandum states that the factories have made contracts with the beet growers on the basis of 37s. 6d.?
§ Dr. ADDISONI thank the noble Lord. I sat up late last night to read these papers over, in view of to-day, and I recognised that that was a mistake; it should be 38s.
§ Sir DENNIS HERBERTThe White Paper says that, the number of factories that have accepted is 12 out of 18.
§ Dr. ADDISONThere were five Anglo-Dutch, and, as I said, one other; that makes the eighteen. The figure should be 38s., which is the basic, price for 15½ pet-cent. beet, and it rises by half-a-crown for each one per cent. I may say that a very large proportion is 7½ per cent. or thereabouts, so that I think we may fairly anticipate that a large number of growers—indeed the majority—will get 43s. per ton. These 12 factories have-already contracted with the growers for an acreage not quite as big as that of last year, but still not far short of what they contracted for last year. The other group of factories, which have not 1375 seen their way to make this offer to the growers, have made an offer contingent upon the price of sugar, in which, I may say, the whole gamble appears to be on the grower and not on the factories. These growers, apparently, may expect to receive 33s., or more if sugar rises, but at all events in that area this group of factories will obtain a much lower acreage than they did last year. I have not the precise figure, but I think it is not very much more than half—perhaps 60 per cent.; but the other group of factories have obtained contracts for about 150,000 or 160,000 acres already.
I am quite sure that, had it not been for this arrangement, we should have been confronted, in addition to our other agricultural problems, with a vast acreage of arable land practically going out of cultivation this year, and, seeing that we have secured the maintenance in cultivation, which gives a large amount of employment, a lot of it in the winter season when employment is slack, of well over 200,000 acres at a cost of the maximum figure I have mentioned, or perhaps less if all goes well, I think that, notwithstanding certain objections which hon. Members may entertain to the Beet Sugar Subsidy Act itself, we have obtained a very excellent result, which will be of immense help to our arable areas, at a very small public cost. It was really in the present circumstances almost too much to expect that this sudden halving of the subsidy could take place without some assistance to modify the fall. We have obtained 230,000 acres of land this year by this arrangement, and the result amply justifies the proposal.
§ Viscount WOLMERI should like, in the first place, to thank the Minister for his very lucid statement, and, secondly, to associate myself entirely with everything that he has said. I am delighted that the Government have taken this step to help the sugar-beet growers. If I may say so without disrespect or offence to the right hon. Gentleman—I know that he has tried hard in many directions—it is the solitary piece of important direct assistance that he has been able to give to the agricultural community. He has been able to achieve it by following the example of the Conservative party in carrying out their policy still further, and on that I congratulate him.
§ Viscount WOLMERIf we can get agriculture removed from party politics, it will be for the benefit of everyone. There are a number of questions that I wanted to ask the right hon. Gentleman, but I think he has answered every one of them in his statement. Of course, 230,000 acres represents a considerable drop from what the acreage was last year, when it was in the neighbourhood of 300,000, but still it might have been very much worse, and it would have been very much worse, without the action that has been taken in this Financial Resolution and the Bill which will follow. No doubt, the right hon. Gentleman the Member for Darwen (Sir H. Samuel) will favour us with his observations. He has been consistently opposed to this policy and I hope he will tell the Committee exactly what the policy of the Liberal party in regard to the beet-sugar crop is. Does the Liberal party desire to see this crop go out of cultivation altogether? If they do, I hope they will say so, and will also take steps to inform all Liberal candidates in East Anglia of the fact.
The DEPUTY-CHAIRMANIn order to avoid any complications, I must make it quite clear that the policy of the original Act cannot be discussed on this Money Resolution. The question is only whether this advance shall be made upon that policy and not the policy itself.
§ Viscount WOLMERSurely we are entitled to ask, if hon. Members are going to oppose the Resolution, what alternative they have to put in its place. As far as I am aware, unless a measure in this direction is taken, there is no alternative to meet the situation. There are at present no other means of maintaining any appreciable acreage of sugar beet. It is not merely the sugar-beet crop that would suffer if this acreage was allowed to collapse. Undoubtedly, the potato growers would be equally heavily hit, because the inevitable result of a huge acreage suddenly going out of sugar beet would be a great increase in the acreage under potatoes, and we should get again a potato glut such as we had 15 months ago. Therefore, the amount of damage done to agriculture would extend to a number of other crops as well as sugar beet and would be very much greater than the mere cessation of the sugar-beet industry. 1377 If one reflects on the amount of unemployment that would be caused, not only in the sugar-beet industry and in the factories that manufacture beet, but also in the other branches of agriculture, the sum of £235,000 is a very small part of the loss that the community would suffer if this Measure was not passed. Therefore, I can assure the right hon. Gentleman, on behalf of my Friends on this side of the Committee, that we shall give the Measure our cordial support.
§ Sir H. SAMUELThis is not an occasion on which it would be in order to consider the whole policy of the beet-sugar subsidy, but it is an occasion on which, now that the Committee is asked to vary the original arrangement and to add a further sum beyond that originally contemplated by Parliament, it is proper to review the results of the experiment so far to see what cost has been involved and whether the results which have been attained are adequate to justify that expenditure. I propose to detain the Committee for a few minutes by an investigation on those lines. May I first express my regret that the right hon. Gentleman has not yet presented to Parliament the report on the working of the sugar-beet industry which has been, I believe, almost ready for presentation or has been completed for some little time past but which is not yet before the House. I would press him to undertake that it shall be before us prior to the debating of the Bill.
§ Dr. ADDISONIt will be out in about 10 days.
§ Sir H. SAMUELIt is a pity that we have not the whole of the information before us to-day. It would probably have facilitated our Debate. I have no doubt the right hon. Gentleman will not take the Bill before this further information is ready, particularly since it will be ready in the course of a few days. He has said that, after all, he was not responsible for this expenditure. He had to make the best of the situation as he found it. When this matter was debated a year ago, his predecessor and the Front Opposition Bench vied with one another which should be considered entitled to the credit of the beet-sugar subsidy. We have to consider not only who is entitled to the credit, but who is entitled to the debit. It is true that we have here a 1378 new industry established in England, and a great deal of energy and effort and enterprise have been shown by many people in the endeavour to found that new industry, and the community at large should be grateful for those efforts. It is also true that a certain amount of additional employment has thereby been created. All that has to be put to the credit side. If I were to tell the Committee that for every man brought into employment, the Exchequer has been finding for all these years £1 a week, they would be surprised, but I assert, and I propose to establish, that for every man brought into employment by this undertaking the State has had to find more than £1 every day, the House and the country would be still more surprised. And if I assert, as I do, and shall proceed to prove, that the cost to the Exchequer of the subsidies and other allowances is more than equal to the whole value of the sugar produced, then Parliament and the nation will have some conception of what it is that the State has been asked to undertake. Those are the propositions which I propose to establish.
First as to the amount of employment which is being provided. I put a series of questions to the right hon. Gentleman and to other Departments in order to elicit all the facts, because they were not before us in any official report. I asked how much land has been brought under cultivation for sugar-beet, and how much land in the same counties has dropped out of cultivation for other root crops? It is not fair to say that all this land under sugar-beet is land which is brought into cultivation and which would not otherwise be used. Simultaneously with the increase in the beet crop there has been a decrease in the crop of mangolds, turnips and other roots. The answer given to me was that in the counties which contained two-thirds of the total of the beet production, during the years of this experiment from 1924 to 1930, the beet area has gone up by 221,000 acres, and the other root area, excluding potatoes, has gone down by 104,000 acres—nearly by one-half. Employment in the production of other root crops is just about the same as in the production of sugar-beet. My authority for that statement is the late Colonel Sapwell, who was a leading agriculturist in the Eastern counties. 1379 He made a statement that, taking into account that a much larger tonnage is produced of other crops than is produced of beet on the same acreage, the amount of employment is about the same. We therefore have an addition of about 117,000 acres in those five counties, Norfolk, Lincolnshire, Suffolk, Isle of Ely, and Yorkshire.
§ Mr. BENSONCan the right hon. Gentleman say what was cultivated on the land before sugar-beet was grown upon it? Some of it must have been put down to grass.
§ Sir H. SAMUELI do not know. Very likely a great part of the rest, or possibly the whole of the rest, may have been diverted from other kinds of arable cultivation. I want to limit myself to facts which I can establish. The fact is that, while there has been an increase of 221,000 acres in the five counties under beet, there has been a simultaneous decrease of 104,000 acres under other root crops. That is, in the counties which produced two-thirds of the beet. Therefore, we must add in respect of the rest of the country an equivalent amount. Add 50 per cent., and it makes 180,000 acres, and in Order to be quite sure that we are on the safe side, add another 10 per cent. and make it 200,000 acres. Let us assume that the beet-sugar subsidy has resulted in 200,000 acres of land being under arable cultivation which might not have been under arable cultivation otherwise. Let us also assume that all the men employed on the land would otherwise have been out of work altogether—a most extravagant assumption. If there were no beet-sugar, a large proportion of the men would certainly be employed at something else, but let us take the extreme case and assume that they would all he unemployed. How many men are concerned? I put down a question also to the right hon. Gentleman, and he told me on the 26th February that the number of workers per 1,000 acres of mainly arable land in this country was 36.6, of whom 27.9 were regular male workers. Take it at 40 men for every 1,000 acres. It would give in this cultivation 8,000 men. In addition, there are those who are employed in the factories.
The DEPUTY-CHAIRMANI do not want unduly to restrict the right hon. 1380 Gentleman, but this is really a criticism of the original policy, whereas what we have to discuss this morning is whether there shall be the extension asked for in the Money Resolution. If I allow the original policy to be criticised, it will reopen the whole question of what has already been decided by Parliament.
§ Sir H. SAMUELI mentioned the subject to the Chairman of Committees, and I understood from him that it would be quite in order to lay before the Committee the proposition that the expenditure which had been involved by the original policy was so enormously costly that the House must consider once, twice and three times before authorising any further expenditure. Any further expenditure which is incurred this year we may be asked to repeal next year, and our action to-day may involve a considerable increase in expenditure. We are now departing from the original policy, and surely Parliament is entitled, before it decides whether or not to do so, to see what the results of that policy have been.
The DEPUTY-CHAIRMANI must adhere to my Ruling, because while I am in this Chair I am responsible for the procedure. While within reasonable limits I think that the right hon. Gentleman is perfectly entitled to produce arguments against the extension, he is not entitled to discuss the whole of the original policy.
§ Sir H. SAMUELAm I not entitled to prove that the result of this policy has been to devolve upon Parliament a charge of over £1 per day per man employed?
§ 1.0 p.m.
The DEPUTY-CHAIRMANI think only in so far as to object to the present extension, but it is obvious that the right hon. Gentleman is going rather beyond that now. He is raising the whole question of policy as decided by Parliament, and to discuss the whole policy appears to be rather stretching the rights of procedure observed in this Committee.
§ Sir H. SAMUELWith all respect, what I am discussing is, what has been the result of that policy and whether Parliament is or is not well advised to engage in further expenditure upon the same lines. Unless I am allowed to complete my argument, I am afraid that I must discontinue my observations.
The DEPUTY-CHAIRMANI have already stated that in so far as the right hon. Gentleman wishes to argue that there shall be no further extension, he is entitled within limits to bring arguments in support, but I cannot allow the merits of the original question of policy to be discussed on this Vote.
§ Sir H. SAMUELI am not discussing it. I am discussing what has been the cash result on the credit side and oh the debt side of our experience hitherto, and I understand that I may complete my argument on those lines. The number of men employed in the factories has been 2,200 permanently and in addition 7,700 for a period of less than four months, which is equal to 2,500 for a period of a year. Altogether then the men employed on the land, in the factories permanently and in the factories temporarily, is 12,700 men per annum. I am stretching every point to make the number as large as possible so as to state the case as favourably to this enterprise as I can. As a matter of fact, the actual number will probably not be more than two-thirds of that because great numbers of those men, if they were not employed on sugar-beet production, would certainly be employed on some other form of agriculture. But assume that they were all out of work altogether. What has been the cost of the subsidy to date? The right hon. Gentleman told me on the 19th February of this year that from the commencement of the Act up to the 16th February the total subsidy paid was £22,115,000. That is not all, because this industry has been granted a rebate of taxation, which would otherwise have been received by the State. If this enterprise had never been embarked upon, there would have been several millions more duty on sugar which would have gone into the Exchequer and which now does not go into the Exchequer, and the industry has the advantage of that rebate. The amount to the 31st March this year was £7,039,000, and this year, the Financial Secretary to the Treasury told me, the estimated amount is £1,700,000. So you have total outgoings in one form or another from the State of £31,000,000. That is not all, because there are still three years more to run. Several millions will have to be provided until the end of this experiment, and there will also be the cost of the grant that we are asked to make to-day. 1382 Taking it at the very minimum it will be an additional £2,000,000 a year—it will certainly be more, but putting it at the very lowest it will be £2,000,000—of subsidy and rebate of tax in the next three years. That will amount to £6,000,000, making the amount £37,000,000.
That is not all, because the State has guaranteed under the Trade Facilities Act loans of £2,206,000 to this industry. Of that, according to an answer given a year ago, £489,000 had been repaid at that date and £295,000 had been written off as a dead loss. There was £1,400,000 outstanding, and possibly some of that may be lost to the State. There we have the total facts. Already spent and existing commitments, £37,000,000. That is on the debit side. In the latest year for which we have information, 1929–30, the subsidy, so I was told in an answer on the 17th November last, amounted to £4,229,000 in that year and rebate of taxation £1,709,000, making a total of £5,538,000 in a single year. If we take 13,000 men as the maximum number employed for an expenditure of just under £6,000,000—perhaps that was an exceptional year—or we will say on an expenditure of £5,000,000, it means for every roan brought into employment an expenditure of £384 in the year, or about 25s. for every working day. That is the proposition which I set out to establish and I think the facts, which I have given wholly from official sources, completely prove it.
I will put it in another way. Some 200,000 acres may have been brought into cultivation—suppose they have—at a cost of £5,000,000 per annum. That is to say, for each acre of land the State has paid £25 a year. I will put the position, finally, in another form. In answer to a question on 23rd February this year the right hon. Gentleman told me that the latest period for which complete information was available was the manufacturing campaign 1929–30, and he said that the value of the beet crop in that year was, £5,301,000. That is a year in which the subsidy and the rebate amounted to £5,900,000. The State paid £5,900,000 to get a crop worth £5,301,000. The growers received not only the value of their crop, amounting to £5,300,000, but more than an equivalent amount from the State.
§ Dr. ADDISONNot wholly the growers—
§ Sir H. SAMUELIt is not only the growers but the growers and the factory-owners. At any rate, that is what the country had to pay.
§ Sir H. SAMUELOnly a small proportion.
§ Mr. G. HARDIEA landlord's ramp.
§ Sir H. SAMUELThe conclusion is that it would have been money in pocket to the State if we had given the whole value of the sugar crop to the producers not to produce it, to sit still in idleness, not to build their factories, not to do any work, and to give them all their profits. The State would have saved £600,000 in that year. It will be said that there is some advantage gained to the community in reduction of prices through the larger production of sugar, but as the production of sugar in Great Britain is only about one per cent. of the total world production, the effect upon world prices is perfectly negligible. Much of this stream of gold poured out from the Exchequer goes undoubtedly to the factory owners. Some of them are British, but great numbers of them are of foreign nationality. It must not be assumed for a moment that the whole or the bulk of the £37,000,000 has gone or is going to the agriculturists of this country.
No doubt, in the eastern counties, the districts largely affected, this arrangement is highly popular, and I must not be assumed to be speaking for some of my hon. Friends on these benches who represent agricultural constituencies. Many of their constituents are directly concerned and, therefore, naturally the noble lord the Member for Aldershot (Viscount Wolmer) takes advantage of the position and says, "We are a democratic country. Let us give large sums of money to the voters and let us get their support." He accuses hon. Members of other parties of engaging in mass bribery for political purposes, and now taunts us with not venturing to oppose this proposal, because he knows that those who receive the financial products of this subsidy will probably very much resent any criticism of the expenditure. If in a cotton district such as I represent or in a coal district it was 1384 proposed to give £37,000,000 subsidy to the industry it would be highly popular there, but whether it is sound national finance is an entirely different matter.
Why should this subsidy be so heavy in order to enable our agriculturists to compete with other sugar growers? Partly because we have no tradition in the industry here—it is a new thing—and partly it may be, because of the uncertainties of our climate, the production of roots for sugar-beet is much lower than on the Continent. A report of the British Sugar-beet Society for the year 1929, the last report that I have received, states:
The weight of roots per acre, notwithstanding a very favourable season, is still disappointing, being only 8.65 tons, or just above that of 1928. Although the average is so low, many excellent crops have been grown, even up to and exceeding 20 tons per acre; and we repeat what we said last year that it is a standing reproach to any farmers contracting to grow sugar beet that they can only produce three or four tons per acre.The average is 8.56 tons. The right hon. Gentleman has told me that on the Continent of Europe the average is 10 tons. The difference, of course, has to be made up at the cost of the British taxpayer. I was; informed that in the climates where sugar cane is produced, the amount of sugar produced in Mauritius was 3.360 lbs. per acre of cultivation and in Jamaica was 2.800 lbs.
§ Mr. W. B. TAYLORCan the right hon. Gentleman say what the wage rates are there?
§ Sir H. SAMUELThat does not arise in this connection, but I have no doubt that cultivation there is much cheaper. However, I have not the facts. My point is that, owing to our climate, we have to pay enormous subsidies in order to provide for the production here of a commodity which, owing to the bounty of nature, can be produced more easily elsewhere.
The DEPUTY-CHAIRMANI want to make it perfectly clear that I have no desire to restrict legitimate discussion, but the right hon. Gentleman is really discussing the original policy. All that we are entitled to discuss to-day is an advance for a period of 12 months. While it is perfectly legitimate to use arguments to show why there should be no extension, it is most improper on the Committee stage of the Financial 1385 Resolution, to embark upon the question of the original policy as the right hon. Gentleman is doing now.
§ Sir H. SAMUELI must plead guilty that in that connection I have gone rather wide, but I wished to give an explanation of the reason why the cost of production here has to be subsidised so very heavily, with the result that we are called upon to pass the Vote that is asked for to-day. As a matter of fact, there is a world glut of sugar to-day. When the right hon. Gentleman announced this extension of policy, not long ago, the hon. Member for East Aberdeen (Mr. Boothby) put this pertinent question to him:
Does the right hon. Gentleman think that a time when there is a world glut of sugar is the most suitable time to subsidise additional sugar production?That is what we are doing here. We are paying out lavishly enormous sums of money to bribe the farmers to produce a crop of which there is a glut throughout the world, and when hon. Members above the Gangway are strongly urging upon the Government and the nation the urgent need for the most rigid economy in national expenditure. The leaders of the noble Lord who has been advocating an extension of this subsidy have said that their first duty must be to reduce national expenditure. The right hon. Member for Bewdley (Mr. S. Baldwin) has said.Let mo sum up our policy; rigorous economy and a reduction of taxation.And at the same time in regard to this question, the right hon. Gentleman, only a few months ago, said:Sugar I regard as a very important crop. It is important to have it as part of your agriculture. The sugar subsidy, or bounty, is drawing to a close, and the whole situation wants the most careful examination to see what assistance is necessary to make sugar a prominent crop in Great Britain. At present the acreage is something like 300,000. I think that acreage might be doubled. … Whether it will be better to do that by a bounty or by an arrangement of duties I cannot yet say, but by one or another it is a thing that ought to be done, and shall be done.In one breath he declares in favour of the most rigid economy and in the next advocates doubling the sugar acreage; and the Noble Lord strongly endorses that policy and advocates an extension even beyond what is now proposed. Hon. Members above the Gangway remind me 1386 of a character in one of Mr. Bernard Shaw's earlier novelswho practised the utmost economy in order to indulge in the most expensive habits.Whatever is done to-day to implement an engagement entered into by the Government, we must view with great caution an expenditure of this kind. Whenever there are subsidies those who receive the benefit sooner or later come and say: "we are sorry we cannot adhere to the original bargain; we must have something more." I wonder whether the Minister of Agriculture will be able to give an assurance on behalf of the sugar industry whom he is now befriending——
§ Dr. ADDISONThe growers and the labourers. The whole of this money is going to the growers.
§ Sir H. SAMUELWill he assure us that the original proposition will be maintained; that if a subsidy was given for a series of years the industry at the end of that time would be able to make itself self-supporting, and be in a position to compete with other countries. We shall have to wait and see, but in the meantime the facts I have given to the Committee establish quite clearly that this is involving an enormous and most lavish expenditure at the expense of the public purse.
§ Mr. W. B. TAYLORThe very interesting and instructive speech of the right hon. Member for Darwen (Sir H. Samuel) constitutes the finest condemnation of capitalism and private enterprise that we have heard for a long time, and, as he worships at that shrine, he will have to answer his own arguments. I should like to draw the attention of the Committee to the fundamental proposals involved in this Resolution, and to make one or two remarks on the existing situation in regard to the allocation of this grant. The criticism that has been rightly made has been directed against the entire absence of Government control in the allocation of the original grant. Had those responsible in the first instance had an opportunity of putting up machinery to have given the grower that fair proportion of the grant towards the production of sugar beet we should have had far less criticism from those who have, rightly, opposed the subsidy, because it has undoubtedly resulted in those who put capital into the factory side of 1387 the industry taking the cream and leaving those who have done the hard work, the farm workers and farmers, with just the skimmed milk so far as the subsidy is concerned.
The fundamental ground for the necessity of this Resolution is the fact that the bottom has fallen out of the price of sugar as it has in regard to the prices of almost every home-grown product. Far be it from me as a new Member to question the figures which the right hon. Member for Darwen, with his wide experience, so carefully presents to the Committee, but he lets me in when he refers to my friend the late Colonel Sapwell as stating that the cost of growing ordinary roots per season in East Anglia is quite as high as the cost of producing sugar-beet. My own experience as a grower does not bear out the figures to any extent. It costs from 40s. to 45s. per acre to raise sugar-beet and lift it, and I should be surprised if other root crops cost much more than from 30s. to 35s. per acre.
The wider principle is the absence of an adequate return owing to the lack of control in relation to the subsidy; and that is the point at which the grower and labourer have serious cause of complaint. The present Government, and other governments, have consented to the principle of a subsidy. I am not arguing at present for or against that principle, but, having decided on the subsidy, I suggest to the Government that the time has come when they should face up frankly to the challenge as to how far we are going to allow public money, voted for the development of agriculture in a depressed state, to filter through to the financial experts in the factories who have been able to manipulate three-quarters of the profits.
I want to congratulate the Minister that in this particular Resolution he has earmarked, so far as a guarantee can earmark anything, the complete amount of this grant to the grower and the worker. An hon. Friend behind me asked a pertinent question just now: What has the labourer received out of this? I suggest that the time has come when in allocating this money Parliament should express in no uncertain way its determination that money so voted shall go to those for whom it was originally intended, that is, to 1388 those who need the help most. The farm worker has always been forgotten in this House. He has, been forgotten throughout this Parliament. It is high time that the agricultural industry received more adequate consideration. If my Liberal friends can find it in their hearts, whilst raising all the criticism they like against these proposals, to bring more money into our industry, to give a little more constructive help to those of us who are struggling to get something of a practical kind done, I am sure that they will be rendering a wider and more distinct public service than that rendered in the speech to which we have just listened.
§ Sir DOUGLAS NEWTONI am sure that we all listened with great interest to the skilfully prepared speech so eloquently delivered by the right hon. Member for Darwen (Sir H. Samuel). I would like to congratulate him on his ingenuity in putting his figures together. I must say, however, that I am quite at a loss to understand how some of his figures were arrived at. He stated that the sugar beet industry was giving employment to only some 12,000 men on the soil of this country.
§ Sir H. SAMUELAdditional employment.
§ Sir D. NEWTONAs recently as 25th February last the Minister of Agriculture stated in Debate that the sugar beet subsidy was responsible for an increase of employment affecting 40,000 growers and 30,000 casual workers. I am at a loss therefore to understand how the right hon. Member for Darwen could make the statement that only 12,000 men received any advantage as a result of this subsidy. I do not wish to follow the right hon. Gentleman further in his figures. He seemed to think in regard to any crop, which could be imported from abroad, and which when imported would pay a tax, this country loses if it is grown here and provides employment here, instead of being imported. That is an argument which I do not wish to follow.
When we hear so much criticism of this subsidy from the right hon. Member for Darwen, we are entitled to ask what scheme and what plan he has to help the depressed industry of agriculture. I think I am right in saying that the price of sugar to consumers and the subsidy given to growers in this country is less 1389 than that given to growers in any other country in which sugar-beet is grown. But when we are considering the estimates we should take into account how they compare with the estimates submitted to the House last year. Last year £6,000,000 was devoted to the encouragement of this industry. This year the total is not to be £6,000,000, but £2,150,000. That is a reduction of £3,850,000 in favour of the Treasury. In considering these figures we must also take into account the advantage which the Treasury obtains from the Excise Duty. The estimated yield of the Excise Duty as a result of the growing of this crop is, I understand, £1,500,000. When we take on the one hand the saving of £3,850,000 and add the Excise Duty of £1,500,000, we find that the Exchequer is the gainer this year by no less than £5,350,000.
But this additional grant is not in the nature of a gift. It is in the nature of a small gamble. The price of sugar may well go up, when the subsidy will not be payable. When the proposals for a subsidy were first before the House in 1924, and when every aspect of the problem was being most carefully reviewed and considered, the price of sugar was 12s. 6d. to 13s. a cwt. Now it is 6s. 4½d. a cwt., a difference of over 6s. That difference of 6s. is being made up, under these proposals, to the extent of only 1s. 3d. per cwt. In other words the industry, the growers and the factories and those associated with the industry, are somehow or other finding the remaining three-quarters of the money. That is really a striking tribute to the progress which the industry has made in the few years during which it has been established. It means that the growers have become much more efficient, in spite of the discouraging observations made by the right hon. Member for Darwen regarding the yield per acre. The right hon. Gentleman suggested that our growers were not up to their job, and did not understand how to grow beet. In spite of those disparaging reflections I maintain that our growers will prove themselves the finest farmers of beet, as they are of other things, in the whole world. It will be found that in some districts land which is devoted to the cultivation of sugar beet is not wholly suitable for the growing of that crop. That fact accounts very largely for the difference in 1390 the yield per acre in this country compared with the yield per acre in some foreign countries which are quoted against us.
It is a great tribute to the growers and factories at home that they have been able to face up to this loss, this difference of 4s. 9d., and find the money somehow out of the industry, and only come to the Government for this meagre amount of assistance. I wish that it had been possible to make a more substantial offer which would have maintained the acreage under sugar beet at the same level this year as last. Last year 348,000 acres of sugar beet were grown. The Minister has said that this year the acreage will be 225,000. That is a very considerable drop. It is to be viewed with a certain measure of alarm because it means that larger crops of potatoes will be grown, and we may find ourselves in difficulties with other crops. I wish to express my thanks to the Minister for his courage in facing up to a difficult situation, and a problem which is particularly difficult from his point of view, and to thank him for what he is doing in this respect for the industry of agriculture.
§ Sir H. SAMUELBefore the hon. Gentleman concludes his speech may I ask him whether he suggests that there are 40,000 people employed full-time, all through the year, producing beet?
§ Sir D. NEWTONIf the right hon. Gentleman reads the speech which was made by the Minister on the last occasion I think he will find that I am right in saying that he stated that there were 40,000 growers associated with this industry.
§ Sir H. SAMUELEmployed full time?
§ Sir D. NEWTONWholly or mainly employed. I do not see how people can be employed full time in the growing of sugar beet, which is a seasonal crop. They must be doing something else during the rest of the year. As I was saying, I wish to thank the Minister for what he is doing for the industry in this respect, and to point out that in helping this industry he is not only helping the growers—who consist very largely of smallholders—but he is also helping the other workers in the industry, as well as the producers of the 1391 coal which is required in the factories, and the workers in the transport services, and many other associated branches of industry.
§ Mr. MARCHI am very glad to have been here this morning and to have seen a smile on the face of the noble Lord the Member for Aldershot (Viscount Wolmer). It is the first time I have ever seen the Noble Lord smile in connection with anything which was being done for agriculture. I have known him to "go off at the deep end" on many occasions because he thought that this Government were not doing anything for agriculture, but now that he expects that agriculture, or rather someone in agriculture, will reap some benefit from the action of the Government, he smiles. But he does not say anything about what is going to happen to those who do the work of producing this sugar beet. What he says is that the grower is going to get some consideration for growing the sugar beet and, apparently, it is all right as long as the grower is to be safeguarded. That is what the subsidy means. It is to safeguard the growers against any loss on this crop but whether the labourer is going to get a living wage or not, apparently, does not concern the Noble Lord.
§ Viscount WOLMERI protest strongly against that observation. The attitude of hon. Members on this side of the House is that the prosperity of agriculture is necessary before a living wage can be paid. The people who are suffering most from the agricultural depression are the agricultural labourers who have been turned out of work as a result of it, and for whom hon. Members opposite provide no unemployment insurance. [HON. MEMBERS: "Did you?"]
§ Mr. MARCHI am glad to know that the Noble Lord considers that it is people such as employers who have to be considered first——
§ Viscount WOLMERI never said that. Will the hon. Member please quote what I said?
§ Viscount WOLMERThe hon. Member is quoting it wrongly.
§ Mr. MARCHI suggest to the noble lord that if the labourers have not a proper living wage you cannot expect to get a return out of them. I have been a carman for many years and I know that if you do not feed a horse, he cannot work. If you do not give the agricultural labourer a proper living wage you cannot expect him to do the work. I know as much about the agricultural labourer as the noble lord does because I was born on a farm. I got off it at the earliest possible opportunity because I saw too much of it and what it meant in the case of my father and his family. But I have never forgotten that I am the son of an agricultural labourer and I am always glad to say a word for the agricultural labourer. I am more concerned with him than with the farmer. I know both of them but I know one better than the other. I am pleased to know, at any rate, that the Noble Lord agrees that something is being done in this case for agriculture, but I wish to know from the Minister whether there is any stipulation with the growers in connection with this subsidy that the men shall receive a living wage. It is very nice to know that the men have a trade board or a wages board or whatever it is called, where they meet the other side—and where they are forced to accept the amount submitted to them by the employers and by the independent members. I have yet to learn, by the way, about the position of those independent members in many instances. But if the noble lord or anyone else in this House thinks that 28 shillings to 30 shillings a week is a living wage for an agricultural labourer I suggest that he himself should have a turn at it.
The DEPUTY-CHAIRMANThe hon. Member is quite entitled to ask, in connection with this proposal, whether the workers are going to have any share in the benefit of this subsidy, but we cannot discuss the whole question of agricultural wages. I would also point out that in the original Act governing this matter, machinery is established for determining wages and the hon. Member is only entitled to criticise that, if the terms laid down in the original Act are not being complied with.
§ Mr. G. HARDIEBut is it not a tact that in the principal Act the determining of wages did not relate to men working on the land, but to men working in the factories?
§ Viscount WOLMEROn a point of Order. Is it not a fact that the wages which the men are earning on the farms are determined by wages boards which were set up by the Labour party in 1924?
§ Mr. KELLYIs it not a fact that the machinery in the original Act was for dealing with the wages of those employed in the factories and that the wages boards are not referred to in that Act?
The DEPUTY-CHAIRMANI think that is quite true. The hon. Member is entitled to raise a question as to the remuneration paid to he workers by the growers who receive this additional sum, but he must not enter into a discussion of the general question of agricultural wages.
§ Mr. MARCHI only wish to ask whether the workers who do this work for the growers can expect a living wage? We are guaranteeing the grower a certain sum for the growing of his crops. Is there a guarantee that the men who work for him are to have a minimum wage—not a maximum of course—for the work which they are doing to produce this crop? The Noble Lord joins in the discussion again to say that the wages of these men have been fixed by the wages board. What he actually said was their "earnings," but no workman ever will get what he earns. The Noble Lord would not be there if the worker got what he earned. He can only get certain wages which he is able to demand or to force. We do not know what the growers actually obtain from this subsidy. We never hear about the by-products or about the benefit to the land. Some of us know something about agricultural work and we know that there are alternate crops. We know that the grower not only gets a reasonable sum for the sugar-beet, but that, after the ground has been cleared, there is a benefit to the succeeding crop. We do not hear anything about that, but we ought to, because then we should really know what is happening.
1394 Then again, with regard to the number of men employed, the right hon. Member for Darwen (Sir H. Samuel) has given us a list of men who, according to the statistics from the office, are engaged in this industry, both inside and outside the factories, but we do not get to know what is happening, in connection with the sugar refineries, to the men displaced. I belong to an organisation that knows that by this method of working a large number of men who were previously in good work are taken out of work through this sugar beet subsidy. Not that I am against the subsidy for the agricultural workers and the employers. I know that you have to look around and see how one is interlinked with the other, and if you are going to do something to improve the conditions of one set of men, you must also look after the other set of men, which these people do not do. They know that by their method of going on they will be doing some benefit to a certain section and injury to others. These things want thoroughly looking into and dissecting, and when we dissect them and find that there is this thing going on, we shall see that it is time the Government were told to alter their tactics and to do something in another direction.
§ Mr. de ROTHSCHILDWill the Minister of Agriculture tell us what proportion of the subsidy during last year went direct to the growers and what proportion went to the factories?
§ Dr. ADDISONIt is impossible to dissect the destination of the subsidy. All that I can tell the hon. Member, in reply to his question, is what the growers received for beet last year. They received last year 46s. per ton, and the price that they will receive, after they have had additional help this year, will be 38s., or a difference of 8s. per ton. The right hon. Member for Darwen (Sir H. Samuel) gave us some very interesting figures, and I should have liked an opportunity of making some observations in regard to them, but it would not be in order now. The right hon. Gentleman necessarily had rather to confine his calculations to the strict figures, but he has thereby left out of account a number of very important considerations. For example, the beet-sugar factories give an enormous amount of employment in transport, coal production, the production of lime and 1395 machinery, and to all sorts of other ancillary and remote occupations entirely beyond those immediately employed in growing the beet. It has given a vast volume of employment, entirely apart from those employed on the land itself, and all that must not be lost sight of. At the same time you have to remember that I do not think the right hon. Gentleman would have found much comfort if he had given the House the figures of the actual wages being paid in Mauritius, where there has been a very large reduction in wages paid. I do not think he would like us to contemplate that that should be the standard which should guide our country.
§ Sir H. SAMUELI did not suggest that for a moment.
§ Dr. ADDISONNo, but it was indirectly related to the fact that we could maintain this price when their distresses are even possibly greater than ours. There are all sort* of other considerations affecting the policy in this country. I do not think the right hon. Gentleman quite realises that in criticising this Government he did not recognise that for the first time we have as far as possible got a watertight arrangement, an arrangement whereby the additional help goes to those who produce the goods. That has not been done before, and if that had been done before, we should not be confronted with so many criticisms now. The amount which has been put away in previous years out of profits is enormous, but under this particular proposal that is not possible. This figure is only paid when no profits are made; it is only paid when no amount is placed to reserve, even when no amount is allowed for depreciation. The whole of it, excluding these possibilities, has to be paid to the grower.
Here I would like to say, in regard to the very proper interjection from below the Gangway in regard to wages in East Anglia, that I did my best, but, owing to the action of a group of companies that would not accept these terms, it is the counties of East Anglia which are suffering most and not receiving benefit from the scheme. The Anglo-Dutch group of factories derives its supply from those counties, and they are not making use of this arrangement and are not paying the enhanced price to the grower. That only exaggerates the seriousness of their refusal to make use of this arrangement. 1396 They can well afford it from their enormous accumulations of the previous years. I think this arrangement, whatever may be the criticism of the scheme itself, has not been subjected to any hostile criticism and that it is an arrangement which secures the maintenance in cultivation of a vast area of land.
There was one other feature to which the right hon. Gentleman did not refer. It is not fair to assume that the growers here in the course of six or eight years will have had the experience and efficiency of men who have been growing this crop for 40 or 50 years. It is not quite reasonable to compare the two. There has, however, been a remarkable increase in the efficiency of the growing of beet in this country and in regard to the researches which the joint Committees have made in helping to produce a seed which will give a good yield in this country. There are a number of highly technical questions connected with it, but on the whole I think they have made good progress, and the evidence of that is in what is now occurring, because the original subsidy was 19s. a cwt.
With a phenomenal drop in world prices, we had got 327,000 acres under beet. That is a striking testimony to the growers in this short period. However, so fas as this particular scheme is concerned, I think it has emerged from this discussion fairly well unscathed. I entirely share the view of my hon. friend that it is incumbent upon us to take special measures as far as we can see that the prosperity of this industry is not stopped; and that action must be linked up with safeguarding the position of the worker.
§ Dr. ADDISONSo far as the consumer is concerned, my hon. friend may be interested to know that he has got on fairly well. I will give the retail prices of sugar: Great Britain, 2½d. a lb.; Italy, 6½d.; Czechoslovakia, 4¼d.; the Netherlands, 4d.; France and Poland, 3¾d.; Germany, 3¼d.; United States, 2¾d.
§ Dr. ADDISONOf course under our national policy, as regards the absence of tariffs and so on, the consumer in this country is far better off than in any other country in Europe.
§ Sir GODFREY COLLINSI would not have risen if the Minister of Agriculture had not rather questioned some of the figures submitted by my right hon. Friend the Member for Darwen (Sir H. Samuel) in connection with employment.
§ Dr. ADDISONI did not question the figures.
§ Sir G. COLLINSI am very glad to hear that the right hon. Gentleman does not question the figures about the extra number of men employed in sugar beet cultivation. He pointed out that my right hon. Friend did not refer to the extra work and the amount of coal consumed. May I remind the right hon. Gentleman that if the home-grown sugar had not been milled in these subsidised factories, there are other factories already in existence which would have secured the work. Therefore, all that the subsidy has done has been to divert the labour from one factory to another. It is not, therefore, any extra work or wealth secured to the community as a whole. I pass from that one point. I have no desire to question or criticise the Minister on this Supplementary Estimate. I think that he has done well in making the bargain he has. I only hope that it will not be taken as a precedent for the continuation of the subsidy year by year in the future.
§ 2.0 p.m.
§ Mr. BROADI rise with great reluctance, as one of those who acquiesced in the original policy, but I think most of us on this side will agree that that policy was applied in a very wrong way, and we object to any extension of the original agreement by such a Vote as we are proposing to-day. We find that instead of the money going to improve the condition of the farm worker, it has made his condition worse than it was before. It has casualised the work to a great extent, and when these farm workers are out of work they are expressly excluded from securing any employment in the factories during the off-season. Some enthusiasm for a subsidy will be found, perhaps, on the part of the growers, but if you asked for any cheers from the farm-workers, you would be greeted with derision, because they recognise that they have not got any advantage at all. In Suffolk, the wages have been recently forced down to 28 shillings a week, and unless the factories accept the 1398 terms they will not get any of the subsidy. In the adjoining county, Norfolk, we find that the wages are 30 shillings a week, and the same in Lincolnshire. There has been no honourable carrying out of the bargain by the farmers towards their labourers in any of the counties, and while at this particular juncture, when the bottom has fallen out of the sugar market, the farmers may not be doing as well, I maintain that through the past five years they have done extremely well—not, perhaps, as well as the financiers who put their money into it—and they have had no bowels of compassion for the workers at all.
Unless the farm worker gets a better deal from the farmer, I should be strongly opposed to any kind of subsidy or dole. The farmer has had doles right and left. He has had cheap railway rates, and has been excused from all his local rating. Even the Old Age Pension Act, in the main, has simply meant a subsidy to the farmer, because he has reduced the wages of these men at 65—very often most valuable men—by the amount of the pension. And yet he comes here all the time like the daughters of the horse-leech crying, "Give, give!", and is not prepared to help those who are in an infinitely worse position than himself. I am disappointed that the Minister has not seen his way to withdraw the Vote to-day unless he got a central wages board for the farm worker, or saw that the farm worker was safeguarded and protected, as well as the farmer and financier. While we let this go on this occasion, if there is any question of an extension of this subsidy or of applying these methods to any other form of agriculture, I, for one, and I am sure many other hon. Members will give it bitterest opposition both from the point of view of the farm worker and the consumer.
§ Question put, and agreed to.
§ Resolution to be reported upon Monday next.