CIVIL ESTIMATE'S, EXCESSES, 1930. (Hansard, 26 February 1932)

§ The FINANCIAL SECRETARY to the TREASURY (Major Elliot)
This Excess Vote differs from a Supplementary Estimate, as excesses represent money already expended, while Supplementary Estimates represent money for which authority is sought. It may seem inadvisable that money should be expended by a Department in advance of authority granted by the House of Commons, but the Committee will see that both these accounts have been carefully gone into by the Select Committee on Public Accounts and that Committee has been able to examine these accounts in greater details than would be possible in a Committee of the whole House. The Committee on Public Accounts has expressed itself as entirely satisfied with the explanation given of these excesses. In the case of the beet sugar subsidy the excess is due to the fact that the output of the factories was rather larger than had been anticipated and extra money had to be found for those factories in accordance with the Statute. In the case of the excess in respect of public buildings overseas, it is impossible to estimate with minute accuracy the commitments which may arise in connection with the public buildings which have to be maintained or constructed in many different parts of the world. It was thought undesir- 722 able to have a further Supplementary Estimate during the currency of the year, although we knew that a further demand was coming along. We thought it would be a pity to waste the time of the House of Commons by a Supplementary Estimate since, even there, we could not form an exact estimate of the amount required. We decided to go ahead and deal with the expenditure, which was incurred according to statute, and then explain the matter to the Public Accounts Committee and to the House of Commons.

§ Mr. DAVID GRENFELL
We had expected a more detailed explanation from the Financial Secretary of these accounts. While we agree that the sum in respect of the beet sugar subsidy has to be given in consequence of a larger output, we have a right to ask why the Estimates were exceeded and why the Government were not able to foresee the payments which would be required under this heading which seems to be such a simple matter. This is a new House of Commons. It is not the same House as that which dealt with this matter originally and there are many Members here who know little about the history of this subsidy. Apart from the actual sum involved Members in all parts of the Committee will be interested to know why this additional money is required and why it is necessary that these additional Estimates should be introduced. This subsidy was discussed in the House of Commons last July and predictions regarding it were then made by certain hon. Members, some of whom are present to-day. The Home Secretary on that occasion said a great deal which ought to be made known to the Members of this Committee to assist them in their examination of this Vote.
I do not think it is good enough for the right hon. and gallant Gentleman merely to say that these accounts have been submitted to the Public Accounts Committee. The House of Commons is the body which ought to have final authority in these matters. I have taken the trouble of looking through the report of the Board of Agriculture on this subject of beet sugar and I find there a great deal of technical information. The essential facts connected with this subsidy are related in detail and I think hon. Members on this occasion are entitled to 723 know of the enormous sum which has been spent in the last seven years in the payment of subsidies to growers of sugar in this country under the British Sugar Industry (Assistance) Act. The Treasury has already paid more than £30,000,000 and the quantity of sugar produced has been about 2,000,000 tons. That is to say about 10 per cent. of the consumption of this country has been produced at home at an expense to the public of over £30,000,000. The rate of subsidy began at 19s. Gal. a, cwt. and then came down to 13s. a cwt. and finally to 6s. 6d. a cwt. In July last there was a demand for an additional 1s. 3d. a cwt. making a total of 7s. 9d. per cwt.

§ The CHAIRMAN
I must remind the hon. Member that the Debate on this Excess Vote is strictly limited. He cannot go into the question of the subsidy generally. He must confine his remarks entirely to the items in respect of which the additional money included in the Excess Vote is asked for, and he cannot deal with the general application of the subsidy.

§ Mr. GRENFELL
I thought, Sir Dennis, that you would allow me by way of introduction to mention these matters and that you would allow to Members of the Committee the privilege of knowing something about the background of this question.

§ The CHAIRMAN
I cannot allow it on this occasion. If I allowed the hon. Member to raise these questions I could not allow the Financial Secretary to reply. Therefore, it- would be a waste of time for the hon. Member to ask for information on these points.

§ Major ELLIOT
May I point out that these are Labour Government estimates and anticipations on which we are working. Those estimates were not entirely accurate and it is the reason for the inaccuracy that we have to explain and not the principle underlying any of these Votes. It is the Labour Government's estimates which were inaccurate.

§ Mr. GRENFELL
I am not asking for an absolution for the late Labour Government from this Committee. It must be remembered that those who were then responsible for Labour policy are now in the Government of the day.

§ Major ELLIOT
Not agricultural policy.

§ Mr. GRENFELL
They were responsible for the financial policy and this is a matter of finance. We have a right, I submit, to know why these additional amounts are required and how long these demands are to continue. [HON. MEMBERS: "No!"] Then what are we entitled to know? If these Votes are passed a large number of Members who are here this morning must go away with questions unanswered and I think their apprehensions regarding this matter ought to be satisfied.

§ The CHAIRMAN
I have looked into this question very carefully. It is quite true that the mere mention of the beet-sugar subsidy raises a large number of questions, but it does not entitle the hon. Member to debate the whole question, and on this excess Vote I am afraid it really amounts to this: Perhaps the hon. Member may be more ingenious over it than I could be, but I find it rather difficult to think of any thing for which the hon. Member could ask under this Vote except what is stated in the White Paper that he has in his hand.

§ Mr. GRENFELL
I must disclaim any ingenuity in the matter, but I should like to be allowed to go on asking a few questions on the 'White Paper, which says that the excess is due to under-estimates by the factories of their outputs and subsidy requirements. The reason for the under-estimates was that the late-harvested beets were of a higher quality than had been anticipated. Moreover, the 1030–31 manufacturing season was exceptionally prolonged and the factories had insufficient experience to gauge accurately the sugar-content of beets held over for working in January and later. The Ministry of Agriculture and Fisheries did not become aware of these facts in time to permit of an amendment of the amount of the Supplementary Estimate. A great many questions arise on that. Why cannot the factories say what their probable output will be? Why has their estimate been so faulty that it requires an excess allowance fr0om this House? The reason for the under-estimate is stated to be that the beet- was of a higher quality than was anticipated, hut I think we should be told that when sugar beet contains 15½per cent, of sugar, the rate of payment has to be so much. For every one per cent. increase in the sugar content, an additional payment has to 725 be made. Why does not the right hon. and gallant Gentleman give us this explanation? The Committee is thirsting for information, and the country is very anxious to know. We should be quite satisfied if this was due entirely to an increase in the sugar content, because it would show that our cultivation methods are improving and that—

§ Major ELLIOT
I can give the Committee that assurance, that it is due to an increase in the sugar content, requiring a larger subsidy.

§ Mr. GRENFELL
If the right hon. and gallant Gentleman would give the Committee that information as nearly as he can, as to the quantities and the increase in the sugar content which is responsible for this excess expenditure, I think I could give him my thanks and that the Committee generally would be very grateful to him.

§ Major ELLIOT
I think I can do that in a word. It was considered that the store of beets would have deteriorated, but they did not deteriorate as much as was expected. Therefore, the sugar did not perish as much, and there was a higher sugar content when the beets were manufactured; and so we are asking for a larger Vote on that account.

§ Sir GODFREY COLLINS
The Committee is grateful to the Financial Secretary to the Treasury for the information that he has supplied. There are not many precedents for a debate on excess Votes, but unfortunately there are many precedents for a beet sugar subsidy. I intended to make some comments on the lines suggested by you, Sir Dennis, referring to the particular words in the White Paper. The excess asked for is only a small sum of £22,900 odd, but I may remind you that already £6,000,000 has been voted for the year ending 31st March, and in all these estimates the Ministry of Agriculture have always underestimated their requirements.

§ Major ELLIOT
I take the responsibility for that. Owing to close accounting, we at the Treasury have done our best to cut the Ministry's estimate, so that there may be no ever-estimating by the Ministry. On this occasion we cut it rather further than it should have been cut. It is not due to the Ministry's 726 under-estimating, but it is due to the. Treasury's exercising a very strong control in the matter.

§ Mr. RHYS DAVIES
Are the accounts of these firms audited, apart from the audit conducted by the Treasury Major ELLIOT: I do not think that matter will come under this Vote, but, of course, the accounts of these firms are audited, as they are commercial companies.

§ Sir G. COLLINS
I do not desire to place any responsibility on the shoulders of the Financial Secretary for this Estimate, and in any comment that I may make I am very anxious to assure the right hon. and gallant Gentleman that he has no responsibility whatsoever for this Vote.

§ Major ELLIOT
If I may interrupt, I not only take the responsibility, but I have the responsibility. The responsibility is the Treasury's responsibility. The Treasury cut the Estimate on the strict understanding, as the hon. Member knows, being closely connected with finance, that when a super-cut is made the Treasury take the responsibility for the super-cut and for presenting the Estimates which have to be made to the House as a result. We, as the Treasury, defend them, not the Department.

§ Sir G. COLLINS
I am sure that the Treasury is now the watch-dog of public finance, and we are very grateful for the assurance of the Financial Secretary. I hope that he will apply that close scrutiny, not only to the Ministry of Agriculture Vote, but to all other Votes, so that the taxpayers may in future receive some remission of taxation from that close scrutiny which he has assured us is being exercised. This Vote is due to a longer manufacturing season, and the Financial Secretary has told the Committee of some of the reasons why the manufacturing season was prolonged. May I suggest that there was another reason, namely, that these subsidised factories are now buying sugar from abroad and melting it in these factories, thus prolonging their manufacturing season?

§ Major ELLIOT
That is not the reason for the Excess Vote at all. It was not 727 in any way prolonged owing to the buying from abroad of sugar in the off season by the subsidised factories. I am afraid that it would not be in order to go closely into that matter now.

§ Sir G. COLLINS
This process of buying sugar from abroad and melting it in the summer in these factories is not general among all these factories, but it is specifically being done in some of them. However, if the Financial Secretary to the Treasury assures us that in no single instance did any of these factories prolong their manufacturing season because they had bought foreign sugar from abroad and melted the sugar in these subsidised factories, I will at once pass from that point. The next point dealt with in the White Paper is that these factories have insufficient experience to gauge accurately the sugar content of beet. One would have thought that these factories, having been in working order for many years, would have had that experience by this time. I suggest that one reason why they have not got it is that during their existence they have been making such large profits out of these subsidies that they have not bought the experience of skilled scientists to enable them to know the exact working of their business.
It is true to say that every factory or every individual who makes money readily is not very anxious to secure the services of skilled assistants, and, as it is well known that these factories have been making enormous profits out of the taxpayer ever since they have been in existence, I suggest that that. is one reason why these factories do not have sufficient skilled assistants to enable them to judge the sugar content of their raw material before the end of the financial year, 31st March, 1931. Is it not time that the Government pressed these factories to secure these skilled assistants, so that the Financial Secretary would not have to come here, as he has done this morning, and ask for further money? Already enormous sums have been poured out. The total grant for the beet sugar subsidy since it was introduced is equal to 6d. in the £ on the Income Tax. This money has not gone to the farmer; it has gone to those fortunate factories which might have been 728 able during that time to have secured skilled assistants to enable them to avoid coming to this House to-day.
There is one further point I wish to put, and I am glad to see the Minister of Agriculture in his place. The White Paper says: The Ministry of Agriculture and Fisheries did not become aware of these facts in time. The Supplementary Estimate for the year ending 31st March, 1931, was introduced on 25th February, and the Minister of Agriculture did not become aware of these facts in time. Ever since the subsidy started, the Minister has never been in time about this matter. There seems to be a spirit abroad Of extreme tenderness—tender of sugar, tender of homegrown sugar, which the Minister of Agriculture—I do not say him in particular, but his predecessors in office have shown to this very fortunate industry, and, surely, after all this time, the Minister of Agriculture should have known, before the original Supplementary Estimate was introduced, that this money might be needed. The Minister of Agriculture, we understand, may be altering the subsidy. Will he find out in time the effects of his new proposals? They are always a little late in finding out the effects of these proposals. They come to this House asking for a small sum, and then they come for a further sum. I appeal to the Government—the Government formed from all parties, with the goodwill of the House—whether they will not take a little more time themselves to consider this problem so as to avoid—

§ The CHAIRMAN
I did not want to stop the hon. Member too soon, but I certainly could not allow the Minister of Agriculture to go into the question of beet sugar policy.

§ Sir G. COLLINS
You reminded the Committee, Sir Dennis, that we must keep strictly to the words of the White Paper, and it was those words which tempted me to make the remarks that I have made. Having made my protest against this outpouring of public money to fortunate individuals, I will resume my seat.

Sir J. SANDEMAN ALLEN
I do not want to take up much time of the Committee, particularly in view of what has been said by the hon. Member for 729 Greenock (Sir G. Collins), but I regret that within the limits of your very strict ruling Sir Dennis—naturally a very proper one—we are not able to discuss more fully some of the questions which are very much disturbing the public mind. At the same time, when a matter of this importance comes before the Committee, I must say, speaking for all my colleagues on Merseyside, we are glad to know that none of this particular sum has had anything to do with the refining of raw sugar brought from abroad. That, I realise, is not a matter which can be discussed to-day, but I mention the fact that it is a great relief to many of us to know that the question will come up for full discussion, because there is a very strong feeling in the matter. With regard to the other remarks of the hon. Member who preceded me, it is a matter for satisfaction that there is a possibility of obtaining a certain amount of information within the limits of the Chairman's ruling. Personally, I feel that the explanation given as to the want of experience is quite 'beside the mark, but that is a matter which will come up for full discussion when the whole issue is raised. There is one question I would like to ask, and that is whether any part of this Vote now before the Committee goes into the pockets of the farmers, or whether it is all to remain in the pockets of the factories, because on that point there is some feeling that the farmers do not get quite a fair deal.

§ Major ELLIOT
That is easily answered. A very large portion goes into the pockets of the farmers, but this is due to the actual excess of sugar content of beet so that there has been a more favourable result to the farmers.

Sir J. SANDEMAN ALLEN
That answer is very gratifying to every one of us. I am the last man who would detain the Committee on what is a technicality. What has already been pointed out will give the greatest relief to many in realizing that these important points are well under consideration, and they will receive the very careful attention of the Minister. I am sure the public will realise more than they have done how very serious is this issue.

§ Colonel Sir JAMES REYNOLDS
In view of your -Ruling, Sir Dennis, it is, of 730 course, impossible to broaden out the general question in connection with the beet sugar subsidy, and the whole question of the activities of the refineries connected with beet sugar. I came to the House to-day hoping to have an opportunity of saying something on these matters, hut, in view of your Ruling, it is, of course, impossible for me to do so.

§ Mr. CHARLES WILLIAMS
I am one of those who believe that it is the duty of the House of Commons to look into Estimates most carefully. As far as the first part of the Vote is concerned, I think we may say that we have come out of it rather well, because it will be seen that the late-harvested beets were of a higher quality. This Vote has arisen because, not the present Minister of Agriculture, the previous Minister always underestimated the capacity of the farmers. In this particular case the farmer has produced a higher quality of sugar beet than was expected. That is an extraordinary thing in the past year, because the quality of beet sugar is always liable to be low in a wet season, and we had a particularly wet season. So that really the wet season and a higher quality of the beet than was expected is the real reason why we have to find this £22,000, and I think that in the circumstances we have come out of it with amazing good fortune. If we had had a dry season, the grossly inaccurate estimate of the predecessor of the present Minister of Agriculture might have been very much larger. In these circumstances, as one who is most critical on these occasions I think that, realising the enormity of the inaccuracy of the last Minister of Agriculture, we have come out of it very well.
The second part of the Vote, however, is serious and a matter of grave concern. A cut was to be made of £20,000 in the original Estimate; that was then reduced to £10,000, so that the hopes of the taxpayers were halved. Even that £10,000 was too much, and it was again reduced to £8,675. This means that the orginal sum has been twice reduced, and the House is entitled to some explanation. I notice that it has reference to public buildings abroad. Is the increased expenditure due to the fall in the value of the pound?

§ The FIRST COMMISSIONER of WORKS (Mr. Ormsby-Gore)
May I draw the hon. Gentleman's attention to the fact that this is entirely in connection with expenditure in the year ended 31st March, 1931.

§ Mr. WILLIAMS
I thank the right hon. Gentleman. I was trying to make excuses for him, but apparently I was not very lucky, so I shall have to fall back on the position of asking for an explanation. This is a fault which occurred in the past, and we cannot mend it now, but I should like an assurance that my right hon. Friend is looking at this matter with a greater shrewdness than we had from his predecessor, and that he will do his best to see that this sort of thing does not occur in future.

§ Mr. RHYS
I notice that the report of the Select Committee on Public Accounts states that the Committee learned that the Treasury were informed in March last year that an excess would probably be incurred. I should like to ask when the factories finally told the Treasury what their requirements would be, because it seems that for a whole year the Minister of Agriculture has known that there would be an excess requirement before the end of the last financial year. I am not endeavouring to attack the Treasury; I only want to be satisfied that they are clear that the control over these factories, as far as grants are concerned, is adequate, and to ask the Financial Secretary whether he does not think that a year is a long interval before Parliament is told of the excess.

§ Mr. T. WILLIAMS
The extraordinary but usual speech of the hon. Member for Torquay (Mr. C. Williams) makes it clear that either the Member has not read the Vote, or, as is so frequently the case, he has read the Vote and the explanation without applying any native intelligence to it. I want to protest against this unnecessary attack upon the officials in the box, who have no opportunity of replying, for this under-estimate during the last Government.

§ Mr. C. WILLIAMS
I never attacked the officials, and my hon. Friend should not say that. I attacked the last Minister.

§ Mr. T. WILLIAMS
As the officials advise Ministers, not excluding those in 732 the present Government, if the hon. Member attacks the Government it reflects on those who advise them.

§ The CHAIRMAN
It is well known that Ministers are always held to be responsible, and an occasion of this sort cannot be used to make an attack upon the permanent officials.

§ Mr. T. WILLIAMS
I want to draw attention to the actual wording of the explanation to this Vote: The reason for the under-estimates was that the late-harvested beets were of a higher quality than had been anticipated. Moreover, the 1930–31 manufacturing season was exceptionally prolonged and the factories had insufficient experience to gauge accurately the sugar-content of beets held over for working in January and later. So not the Government, nor the Minister, but the factory owners were the people who had to make the estimate.

§ Major ELLIOT
I think, perhaps, that the hon. Gentleman did not accurately hear the speech of the hon. Member for Torquay (Mr. C. Williams), which was devoted to the second part of the Vote concerning public buildings. It had nothing whatever to do with factories.

§ Mr. T. WILLIAMS
The right hon. and gallant Gentleman cannot himself have been listening very much. It is true that in the latter part of the hon. Member's speech, he referred to the second Vote. The former part was devoted to the £22,000 Vote for the beet-sugar subsidy. The only point about that Vote is that by some fortunate circumstance the sugar content in the latter part of the crop was larger than was originally anticipated, and on the basis of a predetermined price any increase in the sugar content implies an increase in subsidy payments. Therefore, this sum of money which we are asked to vote to-day is due to a stroke of good fortune. I should like to ask the right hon. and gallant Gentleman whether the profits that have been made in the past are likely to continue, and whether, when looking to the future of this industry, the sugar content, improved methods, and the general results, will occupy the attention of the Government. This sum is not large, and. I should like to ask the Financial Secretary whether, as a result of the extraordinary season, more workmen were employed.

§ The CHAIRMAN
I am afraid that the hon. Member must not continue his speech on that subject.

§ Mr. T. WILLIAMS
Would it be in order to ask how this £22,000 would be allocated Would it be sent direct to the factories, and if so, in what proportion would it be divided between the factory owners and the beet producers?

§ The CHAIRMAN
That, again, is a question of the administration of the subsidy generally, and it cannot be raised on the excess grant.

§ Mr. T. WILLIAMS
If we are unable to put questions as to the ultimate destination of the sum referred to in the Vote I do not see how the Debate can be carried further. All I would say to the right hon. Gentleman is that there is great disquiet in all parts of the country with respect to these payments, and that I hope the Government, when considering their general comprehensive agricultural policy, will not lose sight of the fact that this disquiet does exist.

§ Mr. DENMAN
The Committee are rightly critical of an Excess Vote, which is something of an abnormality in our financial system, and it is only courteous to this Committee that a Member of the Public Accounts Committee should express their view on this matter. The Public Accounts Committee have the strongest objection in principle to an Excess Vote. In this House we are accustomed for money to be voted in advance and if there is any surplus it is surrendered, but the question we had to consider was whether in the present circumstances this was a reasonable procedure, and we unanimously decided that in each of these cases the Government was abundantly justified in proceeding by the method of the Excess Vote. It was clear that the Ministry of Agriculture could not know the facts in time to present an ordinary Supplementary Estimate of any real value; it would have been a guess which would have demanded more public money than was absolutely needed, arid in the circumstances the Excess Vote was obviously the correct procedure. There is no doubt that in each case the sums of money were properly demanded and properly expended, and, as to the method, the Public 734 Accounts Committee unanimously decided that it was the right one in the circumstances.

—	Amount to be Voted.
Class VI.	£	s	d
Vote 9. Boot Sugar Subsidy, Great Britain.	22,972	4	0
Class VII.
Vote 9. Public Buildings Overseas.	10	0	0
	22,982	4	0"