BRITISH SUGAR (SUBSIDY) BILL.

HC Deb 19 March 1934 vol 287 cc972-1010

Order for Second Reading read.

8.48 p.m.

The MINISTER of AGRICULTURE (Mr. Elliot)

I beg to move, "That the Bill be now read a Second time."

I think that it is as true as it was in 1931, when Parliament asked for increased assistance to the home industry, that in no country in the world can the beet sugar industry be maintained on a profitable basis unless supported by substantial artificial aid. In other countries assistance is being accorded through the incidence of sugar duties, import restrictions, fixed internal prices and so on. In most continental countries, it is interesting to note, the effective assistance exceeds that which is at present provided in this country. The introduction of this Bill was foreshadowed in the Speech from the Throne on the occasion of the opening of the present Session. The purpose of the Bill is to authorise the payment of a subsidy to the British beet sugar industry, in continuation of, and—subject to a modification as regards molasses—on the same scale as that which is at present payable under the Act of 1925. That Act authorised the payment of a subsidy on sugar and molasses manufactured in Great Britain from home grown beet during a period of 10 years, which expires on 30th September next, and it is proposed under this Bill to extend the period to 31st August, 1935. There is an Amendment down for the rejection of the Bill in the names both of the Opposition above the Gangway and the Opposition below the Gangway.

Mr. PARKINSON

Double-barrelled.

Mr. ELLIOT

Double-barrelled, but only one charge. The objection of my hon. Friends opposite is all the more remarkable, since it was in pursuance of an undertaking given by them when in office that the beet sugar subsidy was introduced. My hon. and right hon. Friends below the Gangway can claim a longer record of consistency in their opposition to the Act, the opposition to the British beet sugar subsidy being in fact, as far as one can see, the only raison d'etre for the continued existence of their party. They are, however, placed in a new difficulty by their criticisms in their recent brochure entitled "The Liberal Address to the Nation." In that entertaining document they come down quite definitely on the abolition both of the sugar subsidy and of the Wheat Act arrangement. It is the more extraordinary since both my right hon. Friend the Member for Darwen (Sir H. Samuel) and my right hon. Friend the Member for Caithness and Sutherland (Sir A. Sinclair) voted for that arrangement on the Second Reading of the Bill, and again on the Third Reading of the Bill, and my right hon. Friend the Member for Caithness and Sutherland wound up the first day's Debate for the Government on that Bill in a speech of great eloquence which was admired by us all. That was in 1932. But in March, 1934, in an admirable foreword, the document to which I refer states: In these anxious times, testing man's capacity with many new and formidable problems, what is the policy, what are the proposals of British Liberalism? The document gives the answer, and, on page 10, we find: The State should cease to burden the nation with heavy charges for maintaining wheat and sugar production for which other countries are better suited. That is a change from the eloquent address of my right hon. Friend commending the Second Reading of the Bill to the House of Commons, and his commentary on the speech of my hon. and gallant Friend the Member for Pembroke (Major Lloyd George) whom he took seriously to task not on the agricultural issue of the Wheat Quota Bill which he was commending to the House, but on the general issue of whether assistance should be given by the taxpayers to the agricultural industry of this country. The right hon. Member for Caithness and Sutherland said that the hon. and gallant Member for Pembroke was shocked at the taxpayers being called upon to come in and help the industry. The Wheat Bill, he pointed out, placed no burden upon the taxpayer, but the hon. and gallant Member for Pembroke seemed to be shocked at the very idea of bringing in the taxpayers to help to reconstruct industry.

I do not think, said my right hon. Friend the Member for Caithness and Sutherland, that you will get a practical reconstruction of industry until you get some help of this kind from the taxpayers. Now he and my right hon. Friend the Member for Darwen are in opposition and are supporting the suggestion that this should no longer be given. The fact of the matter is that the 10-year period which was then suggested is due to come to an end, and the question is whether we are now in a position to form a final verdict upon the merits of the experiment or the desirability of continuing it. My right hon. Friend the Member for Darwen says that we are now in that position, and that the experiment should now be discontinued. He will make a speech which we all expect from him—an eloquent, carefully-phrased speech showing the size of the industry, the contribution it has made towards employment, the heavy burdens which have been placed upon the State, and he will come to the conclusion that the industry should be discontinued. Then, I ask myself, what industry would he wish to have continued? Whenever there is a proposition that anything practical should be done for any industry, he says that that particular industry should not have any State assistance given to it, and should be allowed to disappear if it cannot exist in present economic conditions. What are the present economic conditions to which he wishes to expose our industries? They are conditions under which he will admit there is no world economic price for any of the articles concerned. The price of any of these articles in the so-called world market is the sum total of conflicting national policies, with no relation to the cost of the production of the article. As I have said before, and I say again, if British agriculture is exposed in every case to the competition of selected men, producing a selected product, at a selected time and pushing that product on to the market with a selected amount of subsidy, it is going to be most difficult for British agriculture to compete.

If the right hon Gentleman is to argue against such State assistance as we propose he will have to defend the position which he has taken up in regard to other agricultural products of this country in the Liberal Address to the Nation, He says that the State should help by all the means in its power the effective organisation of animal husbandry, dairying, poultry farming, pig farming, fruit cultivation and market gardening. But organisation alone will not save any one of those industries unless there is adequate insulation from the shock of the world market in some form or other.

Does anyone suggest that animal husbandry, dairying, poultry farming, pig farming, fruit cultivation or market gardening will continue to flourish in this country under present economic conditions? They will not, and unless something is done we shall have the spectacle of the disappearance of not merely one but all our agricultural industries. How much better off would the right hon. Gentleman be under the gospel of buying in the cheapest market if as a nation we are to form up in queues outside the Employment Exchanges drawing unemployment assistance and then buying with the assistance we get from the taxpayer the extremely cheap goods that will be sent to us from abroad. Is it not better that we should have a strong nation which is able to stand upon its feet and look its competitors in the face, a nation which is in the condition to stand the shocks of modern existence?

Admittedly uneconomic as these experiments are, the burdens on the State as a whole are not so burdensome as the prospect which is offered to us of resigning ourselves completely to the destruction of any of our industries which happen to be attacked from abroad by the wash of the world market or the deliberate assault of some powerful competitor. We have to plan our insulation at home against attack from abroad. The proposals which we put before the House are of a temporary nature, that is with the object of seeing how in this as in other industries it will be possible finally to extend a reasonable amount of protection at home. I say that without any hesitation.

A considerable amount of employment has been given by the expansion of the sugar-beet industry. The acreage under sugar-beet has risen from 22,000 to 366,000. The number of farmers growing sugar-beet 10 years ago was 4,000 and last year it was nearly 40,000, more that three-quarters of whom grew less than 10 acres each.

The tonnage of beet crops has increased from 184,000 to 3,306,000 and the average yield of beet per acre over the 10 year period has been eight and a-quarter tons. That average was pulled down by poor growing seasons in 1927, 1928 and 1931 but in 1933 the yield was as high as 9 tons per acre, comparing favourably with the average yields, in Germany of 9.9, and in the United States of America of 9.6 tons, and equalling the average yield of France, which was 9.1 tons. It was however below the high yields of 13 tons in the Netherlands and 11 tons in Belgium. The average quantity of raw sugar per acre produced in Britain during the years 1927–1929 was 2,660 lbs. and the average for the years 1930–33 was 2,965 lbs. In all these figures there is a picture of advance in the British sugar beet industry. I do not wish to put it unduly high but there is an advance when we can point to yields per acre comparable with those of great Continental countries, a rise in the production of sugar and increased efficiency of those who are working upon this crop. The industry supplies one quarter of the country's total requirements of sugar. I do not think it is an unreasonable inroad upon the world market as things are to-day when this country is still willing to purchase overseas three out of every four pounds of sugar. It is making a contribution towards the world market which very few of our great competitors are making. Certainly the United States of America, which is held up to our admiration by hon. and right hon. Members on the other side, is making no such contribution in its purchases towards a reduction of the great surpluses which admittedly weigh upon the world just now.

The value of State assistance to the industry is still considerable. From 1931 onwards the rate of State assistance has been 12s. per cwt. although at the commencement of the subsidy period the total amount of State assistance, which had the backing of hon. and right hon. Members opposite was no less than 23s. 8d. per cwt. The reduction from 23s. 8d. per cwt. which was the programme of right hon. and hon. Members opposite to 12s. which is our suggestion to-day—

Sir H. SAMUEL

I do not think it is quite fair to the party above the Gangway to make that statement, because the original Act provided for a gradual decrease of the subsidy.

Mr. ELLIOT

I am interested to see my right hon. Friend rushing in to defend the party opposite.

Sir H. SAMUEL

I do not like unfairness wherever it comes from.

Mr. ELLIOT

If I am to be accused of any unfairness in this respect I should have thought that I was more answerable to the party opposite than to the right hon. Gentleman. It may be that they do not know the case so thoroughly as he does.

Sir H. SAMUEL

I am drawing attention to their innocence.

Mr. ELLIOT

I am not quite sure that my right hon. Friend has not taken with his right hand the assistance which he has given to them with his left. I am not sure whether I should prefer to be defended from unfairness by my right hon. Friend or to be chaffed on account of my innocence. I hope that neither of those fates will ever befall me. We are asking for the prolongation of the original Act which expires this year. I will give hon. Members opposite full credit; they did envisage a gradual reduction, but the right hon. Member for Darwen will not deny that on more than one occasion they had to reconsider the question with a favourable attitude towards the sugar growers, and against some protests by the right hon. Gentleman himself, who thought that if the whole Conservative party went into the same Lobby as the Government of the day, he and his friends could safely lead their legions into the Lobby against it. The desirability of this prolongation has been a matter of controversy between the right hon. Gentleman and myself. My right hon. Friend the Chancellor of the Exchequer, when he was about to set up the Committee of Inquiry on this matter, said in his Budget speech: As to what is to happen when the present Subsidy Act expires in 1934, I am not at present in a position to express an opinion, but with a view to receiving guidance on this and other matters, the Government have further decided to appoint a committee to inquire into the conditions of the United Kingdom sugar industry as a whole, including production, refining and distribution, and to ask this body to report to them before the present Subsidy Act expires."—[OFFICIAL REPORT, 19th April, 1932; col. 1435, Vol. 264.] The right hon. Member for Darwen has on several occasions complained that he and the House had a grievance in that this Committee will not be able to report before the present subsidy period expires. My right hon. Friend who demands fairness will agree that I am putting this matter quite frankly before the House. It is true that the report will not be in the possession of hon. Members before they are asked to carry out this further prolongation, but I wish to recall to the House the circumstances of the case. For several months after the announcement of the Chancellor of the Exchequer the Locarno and Ottawa Conferences had first claim on the attention and resources of the Government. There was certainly the possibility of the preference position with regard to sugar being raised at Ottawa, and until the completion of that conference no attempt could be made to formulate a long-term policy. We all remember the conclusion of the Ottawa Conference and the great convulsions into which this country was thrown, the earthquake which passed over our political sphere, and the possibility of the Government for some time having to confine their attention to the most urgent of the problems arising from the unprecedented fact that by the termination of the agreement to differ the right hon. Member and his colleagues withdrew themselves from our councils and our assistance. The whole position was deeply convulsed, and for a long period the Government was unable to devote the calm and cool attention to these matters which it could have done if the right hon. Gentleman and his colleagues had not seen fit to withdraw.

I myself as a new, callow and raw Minister inducted into the important seat of the Ministry of Agriculture, demanded time to study this problem. I am sure that the right hon. Gentleman did not expect me coming so fresh into these great questions to pronounce immediately on the problems before me. When we came to examine the sugar question we found that the whole situation was complicated by differences among interested parties. Producers and refiners appeared to represent opposing interests; in both camps there was a divergence on fundamental issues. The work of the Committee will be difficult and technical enough as it is, but if it is to be called upon to probe into and pronounce upon questions of commercial inter-relationship their work would be involved beyond measure. Nothing would have been more difficult for the Committee than to have had a ferocious warfare between rival sugar interests when it was desirable it should come to some ascertainable facts, and I say quite frankly to the House that I did my utmost to get the interests together. I discussed the matter with them, and tried to get them to come to an agreement on those matters where they were in disagreement and variance before they brought them before the Committee. I was hopeful that the internal differences between the various parties would be rationalised on a voluntary basis rather than by Government direction. These negotiations were, of course, protracted, and it was clear that there would not be time for the deliberations of the Committee of Inquiry before the Act began to run out.

The period of the 1925 Act began to terminate in September last, and it was desirable that some decision should be made before that date. Meanwhile the Government were saving the Committee's time in another direction. One of the main sets of data which the Committee would require were authenticated factory cost data, and steps were taken to get that information. That was the position when I was able to announce to the House before it rose for the Summer Recess that we had decided on the step which this Bill implements. We said that we based that decision on the understanding that the refining and beet-sugar manufacturing interests would formulate a scheme under the Agricultural Marketing Act and that they would be prepared to co-operate in due course with the growers of sugar-beet in the promotion of a development scheme under which the operations of sugar manufacture refining, and processing might be rationalised in the interests of greater productive efficiency. Since I made that statement the beet-sugar factories and refining interests have fulfilled their undertaking and have submitted a scheme under the Agricultural Marketing Act to regulate the marketing of sugar in Great Britain. The draft scheme is now going through the statutory process required by the Act. The growers of sugar-beet also have reached an advanced stage in the preparation of a scheme to regulate the marketing of their product, and it may be possible, if this scheme is acceptable, to have it in operation in time to control next year's crop. The industry, therefore, has fulfilled the conditions upon which the Government undertook to introduce the present Bill, and the stage is now set for the Committee of Inquiry to commence its work. Its terms of reference are: To inquire into the condition of the sugar industry in the United Kingdom, including both home-grown beet-sugar and imported sugar-covering production, refining and distribution, and having in mind the changes in the structure of the industry which would follow upon its reorganisation under the Agricultural Marketing Acts and to make recommendations for its future conduct, and in particular as to the application of State aid in so far as this may be considered necessary. In spite of the comprehensive nature of these terms of reference there is every reason to believe that the committee will present its report in time to enable the Government to determine its long-term policy before the contract period for the 1935 crop begins.

Let me deal with the Clauses of the Bill. Clause 1 proposes to extend the payment of subsidy for 11 months only instead of for a full year, in order to bring the statutory year into line with the actual manufacturing campaign. The Bill proposes to terminate on 31st August instead of 30th September, 1935. Clause 2 (1) proposes, in effect, that the subsidy upon sugar will be continued at its present rate for one further season. Subsection (2) proposes that there shall be no subsidy upon molasses manufactured between 30th September, 1934, and 1st September, 1935, that is to say, from sugar-beet grown during 1934, unless the average market price of raw sugar is less than 6s. per cwt. If the average market price is less than 6s. then the subsidy will be payable at the rate prescribed in the Schedule to the Bill. Sub-section (3) enjoins that the subsidy on molasses manufactured during September, 1934, shall be calculated at the new and not at the old rate.

Clause 3 proposes that so far as Scotland is concerned the subsidy shall be payable by the Minister of Agriculture and Fisheries instead of by the Secretary of State for Scotland, in view of the relatively lesser interest which Scotland has in the proposals under discussion. Clause 4 (1), in order to depart as little as possible from the principles of the Act of 1925, empowers the Minister to make such advances as he thinks fit on account of molasses subsidy which is likely to be payable. Sub-section (2) empowers the Minister to recover any overpayment. In the Schedule the average market price of raw sugar is laid down under procedure similar to that employed under the British Sugar Industry (Assistance) Act, 1931, and in paragraphs 3 and 4 arrangements are made by which if the average market price of sugar is 5s. 6d. per cwt. or less the subsidy on molasses shall be continued at the rate now prevailing, but if the average market price is between 5s. 6d. and 6s. per cwt. the rate of subsidy payable will be proportionately decreased, and will completely disappear if the average market price of raw sugar reaches 6s. per cwt. Those are the main provisions of the Bill. The sugar industry has undergone very violent fluctuations and there have been very great falls in the value of the commodity.

Mr. BOOTHBY

Why?

Mr. ELLIOT

The hon. Member asks why. I should say that it was due to world conditions.

Mr. BOOTH BY

Glut.

Mr. ELLIOT

To world conditions, which my hon. Friend knows as well as I do, and I should say that the word "glut" probably sums it up accurately. I should say that a country which is willing to continue to buy three pounds of sugar for every pound that it proluces at home is making a sensible contribution towards a reduction of that glut. The country which has a sugar industry established here should not let it disappear simply because of the political conditions in the island of Cuba, or the particular position of the Philippines vis-a-vis the United States of America, or the particular state of affairs in Java or the other islands of the South Seas. There are too many incalculable factors in the world to-day to allow our great industries to be at the mercy of any of them.

I should also say that the sugar islands of our own Empire have a very serious interest in this matter, too, and they must have looked with some gloom at the questions asked by my right hon. Friend the Member for Darwen, who brought it out that it would be greatly to the financial advantage of this country if in addition to extinguishing the whole of the sugar industry in this island we extinguished the whole of the preference which this country gives to its own sugar-producing islands, and thereby led to the extinction of the sugar industry of the Empire as a whole. It is likely that great financial advantage would come to this country, but the ledgers of Empire are not all kept in calculations of that kind. I do not believe that this country wishes its home industry or its Imperial industry in sugar to be destroyed. If it wishes these things to continue it must be prepared to give some preference both at home and abroad to its own nationals and to members of its own Common-wealth of Nations, as opposed to the advantages which it gives to those outside.

It is a perfectly plain issue. It is not as cheap to produce sugar in Britain or to buy sugar under a preference from our islands as it would be to buy sugar from abroad and to charge the full rate of duty thereupon. What I ask the House to support is a decision taken by other Governments than this, that it is desirable that a certain production of sugar should take place here, that it is desirable that while the industry is reorganising assistance should temporarily be continued, that it is desirable that the great reorganisation of the industry which is going on now should be welcomed and fostered. The passages which I could easily quote from the speeches of right hon. and hon. Gentlemen opposite in favour of such planning and such reorganisation, have no meaning unless they apply to precisely those steps which the two sides of the industry, home-producing and importing, are taking just now. On these general lines I ask the House to give a Second Reading to the Bill.

9.23 p.m.

Mr. CHARLES BROWN

I beg to move to leave out "now," and at the end of the Question to add "upon this day six months."

The Minister of Agriculture is unlike most of his colleagues in the present Government. He differs from them very considerably. Having listened to his speech I have been driven to the conclusion that there is nothing in the political history of the last two-and-a-half years that he regrets so much as the departure from the National Government of right hon. Gentlemen and hon. Gentlemen of the Liberal party. That seems to be the greatest grievance the Minister has. Indeed it has been a considerable advantage to him, for if they had not left the National Government, I do not know what he would have done for an introduction to some of the speeches on the new economic ideas which he expounds to the House from time to time. I am rather inclined to think that the introduction to his speech to-night has been occasioned by the disturbance caused to him by the publication of the latest Liberal document. He evidently finds it necessary at the earliest possible opportunity to answer that document in the House of Commons. Obviously, that is a sign of the fact that he has been seriously disturbed by some of the arguments in that publication.

The Minister of Agriculture looks out on the economic life of to-day rather differently from many of his colleagues in the Government. He feels, of course, that something must be done, and he is willing to make experiments. Some of his experiments are rather novel, and it is too early yet to see what will be their outcome. Just because of that fact, however, his action in regard to this Beet-sugar Subsidy is all the more regrettable. In this case, he is making no new experiment at all; he is merely carrying on a bad tradition which he has inherited, and he is making all sorts of excuses for carrying on that bad tradition. What is the speech to which we have just listened to-night but a series of excuses for carrying on this Beet-sugar Subsidy? There can be no more glaring illustration of the gross incompetence of the Government than the fact that we are being asked to give a Second Reading to this Bill this evening.

This, as the Minister has frankly admitted, is an emergency Bill. We have had 10 years of the beet-sugar subsidy, and those 10 years have cost us upwards of £40,000,000. The Minister comes along to-night and says, in effect, "We have been in office two and a-half years and have had before us reports of one kind or another in regard to the sugar-beet industry; the Government have not yet been able to make up their mind on what is to be done. We have to put it off until some further period of time." The Minister of Agriculture is generally regarded as a man of action—decisive, prompt, calculated in most circumstances to do the necessary thing at the earliest possible moment. I am afraid that his reputation for being decisive and prompt will suffer very considerably from what he is doing in connection with the beet-sugar subsidy. I have a vivid recollection of what he said in the House of Commons nine months ago—in July, 1933. He himself will probably recollect something of what he said to us on that occasion. It was the occasion on which he was telling the House, when the Estimates and the Supply Vote were before the House, all about the activities of his Department, of its various functions and the work in which it was engaged. On this matter of the beet-sugar subsidy he drew for us a picture of intense Governmental activity. I have been looking up the speech which he made on that occasion, and I find, in regard to some points which were put to him by the hon. Member for Don Valley (Mr. T. Williams), that he told the House that there was going on in regard to this matter of the beet-sugar industry quite a number of inquiries, nay, all the best brains in the Department were at work on the job.

He was followed by the Noble Lord the Member for Aldershot (Viscount Wolmer), who congratulated him on the speech which he had made and on the activity of his Department, and urged him, if the Government came to a conclusion quickly during the Recess, not to wait until Parliament reassembled to announce it to the country. The Minister had actually conveyed the impression that there would be some decision during the Parliamentary Recess and that he would have something to say. But the Recess is over; Parliament has been reassembled for nearly four months, and still he has nothing of importance to say. All he can do is to come along to-night and ask the House to continue the subsidy for another 11 months, and for the next 11 months it is going to cost us nearly £3,500,000. The Noble Lord the Member for Aldershot, on that occasion—and I am mentioning this because of a point I want to put to the Minister—expressed the opinion that the acreage of sugar-beet in this country should not be allowed to increase any further. He said that because he had such great admiration for the agricultural experiment that the present Minister of Agriculture is carrying out; he did not think that this growing of sugar-beet should be allowed to go very much further, because these new marketing schemes that the Minister of Agriculture had in mind and was putting into operation might work in such a way that it would be better to concentrate on the growing of other crops and not to let sugar-beet extend at all.

I have mentioned that point because I want to ask the Minister when an industry is grown up; when can an industry be described as having passed the infant stage and to have grown up to maturity? Let me put it in this way: Is £40,000,000 enough to carry an industry through its infancy? Would he answer that question in a plain, simple, straightforward sort of way? It is a very simple question, and I think it ought to be frankly and straightly answered. Does the Minister, in view of the arguments which he has put before us to-night, intend—or do his colleagues in the Government at some later stage intend—to come along to this House and say that every industry in the country that is suffering from foreign competition of one kind or another, if it cannot be put on its feet by the methods which are being employed at present, shall be subsidised? What about, for instance, a suggestion from the Government to subsidise the Lancashire textile industry in view of the acute competion from which it is suffering at the moment? If it is necessary to protect a tiny industry like sugar-beet and keep it in existence, how much more important is it to subsidise a great industry like the textile industry and keep that in existence? Where is that policy going to stop, in regard to keeping these industries artificially in existence?

This industry is being defended on the ground that it has given a certain amount of employment. I have been rereading with great interest the report on the sugar-beet industry issued by the Minister of Agriculture in 1931. It would be safe to say that the employment value of this industry is not very great. I do not think that anybody would claim, after he has looked carefully into the figures, that the employment value is at all great. For instance, in 1931 the staff of all the factories is given as 783. Six hundred and forty-five of those are permanent officers. The number employed for the period of the "campaign," as it is called, was 138. That period is somewhere between 90 and 100 days, but in some cases may be longer. The growth of employment in the subsidy years is particularly stressed, and I am calling attention to these figures because of a certain reference I wish to make to them in a moment. In 1924 the number of persons engaged in the industry, apart from the staff, was 1,455. In 1930, it is true, 9,900 persons were engaged in the industry, but I wish to call attention to the way in which, in the actual production of sugar from beet, processes are rapidly being rationalised. The consequence is that the employment value of the industry tends generally to decline.

Take the figures for 1924. The tons of beet per person annually were 126; in 1930 that figure had jumped up to 329 tons. If you take it in terms of hundredweights of sugar, it is 329 cwt. per person in 1924, and 841 cwt. per person in 1930. There you have an indication of a rapid process of rationalisation inside the industry itself. It is spoken of in the Report as increasing factory efficiency. That, of course, is inevitable, but if the argument of the Noble Lord the Member for Aldershot, the point he put, is the point of view of the Government—that there should be no further very considerable increase in the acreage under cultivation so far as beet-sugar is concerned and that this industry should be regarded as having grown up—then, so far as the actual production of sugar from the beet is concerned, the employment factor will tend to decrease. There will tend to be a decline owing to the increasing factory efficiency.

Sir ERNEST SHEPPERSON

Has the hon. Gentleman considered the agricultural employment afforded in the production of the sugar beet itself?

Mr. BROWN

The hon. Member is quite right to interrupt me. Figures are available as to the additional number of people who have been put to work on the land. They are in the report which I have here but they are not on my notes and I do not propose to quote them. But the same sort of thing would occur I imagine in that respect. As the cultivation of sugar beet became a more familiar process on the farms of this country obviously the same thing would occur. Alternatively, it speaks badly for the farmers if, as a result of experience in cultivating this crop, they are not able to dispense with some of the volume of labour, found necessary in the earlier stages. If the farmers are to be commended for their energy and enterprise, then we must assume that rationalisation will take place on the farms as well as in the factories, though perhaps not in the same degree because there is not the same room for it on the farm as there is in the factory. But I have that consideration in mind. I was not leaving it out of account. I only want to point out that the employment factor can be seriously overstressed.

I want to come to the general question and I ask the Minister and the House, where, to-day, can we find that enterprise and initiative which is said to be the foundation of our present economic system? We have had to pay a subsidy of £40,000,000 to attract a capital investment of less than £6,000,000 in this industry. That is what we have done up to this stage. Does any hon. Member here think for one moment that if that kind of policy had been adopted in days gone by, it would have been pos- sible to have built up, on the basis of private enterprise, the industries which have nourished in this country? Did anybody ever think of doing it in that way? I cannot understand why hon. Members opposite and Ministers in this Government are all the time giving away the fundamentals of their case as to the basis on which our economic system is said to exist. They are throwing overboard all those fundamental principles. They are coming to this House regularly to tell us that private enterprise and initiative can no longer effectively function in this country and that State subsidies of one kind or another are necessary. That is the charge which the Minister has to meet and to answer. He tells the House to-night that a decision cannot be reached about this industry because certain negotiations are in progress between the refiners and the producers of sugar beet. He tells us that a committee of inquiry is being set up and that in due course it will report. Of course he hopes that out of the negotiations another method of dealing with this matter will emerge. What does he hope to see emerge out of the negotiations? The establishment of a gigantic sugar trust in this country. What will be the outcome of that development, if no other machinery is set up to deal with it? Inevitably, it will be the exploitation of the consumers of sugar.

We are entitled to bring forward these criticisms against the continuance of this subsidy for a further 11 months and to make our protest on the Second Beading of this Bill. We are not surprised that the Government are adopting this course. It is in keeping with the general course of political conduct pursued by them. Let me indicate the general course which they are pursuing. It is to bribe steamship companies to build great liners; to bribe farmers to grow wheat; to bribe people to manufacture beet sugar. Yet if any of us who sit on these benches went out into the country and suggested that the power and wealth of the State should be used to relieve the poverty of the people we should be told that it was a gross form of political bribery and corruption. No worse political bribery has ever been perpetrated in this country than the bribery by this Government of certain sections of electors in one form or another. I am sure that hon. Members opposite will not object to me using this phrase, but they will know precisely what I mean when I say that they have bought every seat they hold by the distribution of the bounty of the State in many forms to landowners, farmers, manufacturers, to armament firms, to nearly every vested interest in the country. I know we shall protest in vain against the Second Reading of this Bill, but we shall register our votes against it in the Lobby because we feel that this Bill is only in keeping with that political bribery of which this National Government is the most pronounced exponent of any Government this country has ever known.

9.44 p.m.

Mr. LEONARD

I beg to second the Amendment.

I desire also to express my surprise at the length of time which has been found necessary to enable this industry to make some effort towards organisation. I think that, irrespective of the places in which we sit in this House, there must be general astonishment among hon. Members at the fact that 10 years have elapsed since this industry was established, and yet we are told to-day that-further support has to be directed to it. The Minister, in stating the case for the Government, has admitted that the load borne by the consuming public has been heavy. If the Government recognised that the burden was heavy, was it not possible for them to have expedited the inquiry, promised in April, 1932, before bringing forward this proposal to extend the subsidy in order to help the sugar industry to complete an apprenticeship which has lasted far too long already? I am of opinion that when the reorganisation activity which is taking place in the industry materialises, the result will be a new group of persons in this country exercising monopoly powers after having received a bounty of over £40,000,000 in State subsidy towards the stabilisation of the industry.

In view of the fact that the Measure is being introduced under the wing of the Minister of Agriculture, I wonder if he would tell us specifically what has the farming interest ever got out of this industry? Has it received anything commensurate with the sums of money paid in subsidy to the factory section of the sugar-beet industry. I am speaking from memory, but there was a report from the Minister of Agriculture, in, I think, 1931, when a complaint was made that the proportion of the subsidy that went to the farmers was far too small. I would like to know if anything has taken place to help the farmer who was, I suppose, the man most thought of when the matter was taken up by the House. The factory owners themselves for a considerable proportion of the 10 years have received from 10 to 25 per cent. in dividends in addition to considerable reserves. I admit that in the February issue of the Journal of the Ministry of Agriculture the amount of dividend is shown to be down to £5 4s., but in addition there are reserves and credit balances equivalent to 22 per cent. of the share loan capital. They are still generously treated and in a happy position compared with other industries. Since the Act started there have been years so beneficial to the sugar industry that the subsidy has exceeded the total value of the sugar crop. Can no better use be made of the land of Great Britain than that? Is there no more beneficial interest for agriculture than the interest which has received this help?

Reference has been made on more than one occasion to the value of the employment that has accrued to certain working people in this country, but you have to place against the number of men who have been absorbed the dislocation caused elsewhere, and I think the Secretary of State for Scotland could give some detailed information as to the considerable dislocation that has been caused in the refining districts of Greenock and elsewhere by the operation of the subsidy. I would like to direct the right hon. Gentleman's attention to one who knows something about this industry and who may be in the near future a beneficiary of the new proposals. Sir Leonard Lyle, in the "Financial Times," on 14th December, 1931, said that: The actual cost to the taxpayers of the subsidy and the Preference at the end of the subsidy period would amount approximately to £37,000,000. We know now it will be over £40,000,000— and it has been stated in the House that for every man brought into employment by the undertaking the State has had to pay more that £2 every day. The figure actually given here, I believe, shows a cost of no less than £384 per annum, and that is a state of affairs that would not be tolerated in any industry with less power and prestige behind it. I admit the possibility of a lower subsidy, but, even if it is lower, the principle is just as vicious, and I desire to see it departed from altogether.

I have referred to the dividend and reserves accumulated by the companies, and I would ask the attention of the House to where some of these dividends are being directed, because I have before me details connected with four of the English companies. They are managed by a gentleman who comes from Holland. The House will pardon me if I do not attempt to pronounce his initial name, but his last name is Van Rossum. He is evidently a very shrewd man as far as sugar is concerned, and eminently capable of looking after his shareholders, because I find in the six years ending 31st March, 1931, the total earnings of the four companies was no less than £3,455,000 after Income Tax had been paid. It is allocated as follows: Depreciation written off, £1,192,000; placed to reserve, £960,000; dividends paid, £1,303,000. These stupendous profits, I would ask the House to bear in mind, have been earned in six years on a capital of £1,800,000. No wonder these gentlemen are desirous of keeping a grip on an industry so profitable to themselves, and are glad to have a breathing-space and £3,500,000, and the monopoly power to be given to them. The value of the net liquid assets of the company in the month referred to amounted to £1,423,000.

With regard to the expenditure of these companies, those who interest themselves in calling upon Russia to spend money in this country should note that the total expenditure by 15 companies on plant and machines paid to foreign countries was £1,023,000. The "Investors' Review" says that the Anglo-Dutch companies in six years have nearly all their capital represented by solid cash, assets with buildings, plant and machinery thrown in. From the details of these four companies at Somerset House, I find that two definitely Dutch companies have interests of £336,000 in the English Beet Company. The English beet company was interested in two, one to the extent of £30,000 and the other £50,000. The Prudential Assurance are interested in three companies—£85,000 in one, £37,000 in another and £40,000 in a third. With regard to two gentlemen from Threadneedle Street, they go from a humble £3,000 up to £50,000 in four companies. Others not specified, but likely to include foreign money, range from £75,000 to £109,000.

That is a clear indication that we are subsidising foreign capital in this country, the proceeds of which will be going outside, despite all the outcry that has been made. In all the 15 companies no less than 33 per cent. of the holdings are foreign. There is no reason why we should hesitate in attacking this proposal to give further help to companies such as I have indicated in detail, and I want to ask the Minister, if he does intend to go on with this matter to-night, whether he will give an undertaking that at least he will place a limit to the acreage which he will recognise for subsidy and, failing the possibility of limiting acreage, whether he will not, in view of the details I have given, fix a specific sum which the Government are prepared to pay in subsidy, and not leave it as it is at present?

9.55 p.m.

Sir H. SAMUEL

The House is well aware from previous discussions that of all the many items of expenditure in our immense national Budget, the case for this expenditure upon the beet-sugar subsidy is really the weakest of all. The Minister is aware of that too. He must have felt in his speech that he had a poor case to present to the House or he would not have pursued the debating line which he did. He began with a few party jibes which were quite unworthy of his own reputation and which would have been regarded as unworthy even in an undergraduates' debating society. He mentioned a statement of policy of this party which has just been published, and said we would readily admit subsidised products coming in from foreign countries to compete with our own, although in that statement it is clearly stated that we opposed subsidies whether given here or abroad and would be prepared to take measures against them. He amazed me when he took to task the Labour party for having introduced the Bill giving a large subsidy and went on to say that under the Conservative Government that subsidy was reduced by one-half, when he knew quite well that the original Bill introduced by hon. Members above the Gangway when they were a Government made the provision that on a certain date the subsidy should be reduced by one-half. It was not my concern, but I could not sit still and hear such a misrepresentation of the facts given to the House without at least doing this justice to the party above the Gangway.

Finally, in order to introduce political prejudice, the right hon. Gentleman endeavoured to broaden the issue and brought in the whole question of whether the State should come to the aid in any circumstances of any industry in order under that cloud to get away with the particular proposal which is now before the House. We are not going to be tempted to enlarge the scope of this Debate. This is a Bill for continuing the sugar subsidy, and my remarks will be addressed entirely to that. It is not to be considered on the same footing as the other Protectionist measures which have been carried by this House because even the Conservative Economy Committee in this Parliament in their report had a paragraph urging that this subsidy should be abolished, although they went on to say that provision should be made to safeguard the industry in another manner. Further, even the docile "Times" had a leading article some time ago describing this as an unnecessary subsidy and calling for its discontinuance. I invite the House therefore to bring its attention to this matter alone, in isolation, without being led away by the attempt of the Minister of Agriculture to introduce general considerations which do not arise on this occasion.

The House is in an unfortunate position in debating this matter, because there has been no inquiry such as was definitely promised by the Chancellor of the Exchequer two years ago. There has been no recent report upon the condition of the industry, and the House has only the information which was presented in a report published by the Board of Agriculture in 1931, together with such supplementary information as may be obtained from answers to questions. From that report I gather that the working of the industry compared with the Continental sugar industry is as follows. There may have been some progress since. The right hon. Gentleman gave some figures this evening, but I was not able to follow them precisely as he gave them, and there may have been some progress since, but it has in the main not altered the situation which is shown in the report presented by the Board of Agriculture in 1931. In Continental countries which produce beet-sugar and with which we are competing, the farmer receives in payment for his beet about one-half of what we are paying to the British farmer. His crop per acre gives 50 per cent. more sugar than the British crop gives. The cost of transport to the factories on the Continent is one-third the cost of transport in this country. The cost of manufacture is two-thirds. These are the latest official figures to be published, and I quote them as such. There may have been some slight improvement since, but I have no information to show that it is at all considerable.

If you compare the production here, not with the Continent, but with countries that produce cane sugar, the situation is even more striking. An answer was given by the present Home Secretary when he was Minister for Agriculture on the 10th March, 1932. The production of sugar per acre in Great Britain is 22 cwts.; in Jamaica, where it is remarkably low, 27 cwts.; in Trinidad, 54 cwts.; in Java, 119 cwts. In Java, where the industry is very highly developed, where they have an administration which pays great attention to agricultural research, and where they have developed a sugarcane with a high sugar content, the amount of sugar produced per acre is five times the amount in this country. Lord Olivier, who has made a careful study of this question, and was formerly Governor of Jamaica, wrote an article in the "Times" in which he said: As to yield, cane cultivation on a minimum average (standard of economic efficiency yields almost exactly twice as much raw sugar an acre as British beet cultivation; twice as much sucrose at half the cost a ton; and there is more attainable margin for improvement in West Indian cane yields than can be hoped for in beet. Therefore, this industry in this country is entirely artificial. It is utterly uneconomical. It is not as though there were a great world shortage of sugar. There is a world glut and the sugar-producing countries are endeavouring to curtail their production and to arrive at some combination that may succeed in maintaining remunerative prices while the British taxpayers have been paying tens of millions to increase the sugar production on this grossly extravagant scale, thereby increasing still further the world glut.

Although we may be surprised at the extremely poor production of sugar in our climate and on our soil compared with climates and soils naturally adapted for this particular foodstuff, that has not prevented those who have been engaged in this industry from reaping very large profits. The report of 1931 shows that there had been invested in this industry £8,700,000 of capital. Within six years those companies have been able to put by to depreciation, reserves and un-appropriated balances, £4,494,000. They have been able in six years to put aside sufficient money to repay one-half of the whole of their original capital, and in addition in the last year given in the Report, the profits came to an average dividend of 13 per cent. There are some later figures with regard to these companies. The "Ministry of Agriculture Journal" for last month gave the figures for 1933. Several of the companies have not been doing well during the last year or two, but others are still very prosperous. The Ipswich Company, which for many years paid 12½per cent., now pays 6 per cent. tax free, which is equivalent to 8 per cent. The Central Sugar Company paid last year 10 per cent. tax free, equivalent to 13 per cent. The English Beet Sugar Company 10 per cent., tax free, the Ely Beet Sugar Company 10 per cent., tax free. The average for all of them, taking into account those which are at present unremunerative, was, according to the Ministry of Agriculture Journal, 5.4 per cent.—not so bad in these times of trade depression. While we may rejoice that such ample profits should have been earned by those who had the enterprise to take up this industry, we are not so pleased when we remember that the whole of this has been paid out of the pockets of the British taxpayer.

The assistance given to the industry is of two kinds. There is the cash payment, which under this Bill is to be continued at the rate of £3,250,000 this year, and the industry also has half the taxation remitted which would have been collected if the sugar had been imported from foreign sources. In a paper which was presented to Parliament in connection with the Supplementary Estimates a week or two ago there was a footnote to say that this sugar had paid Excise duty to the amount of £2,000,000. Yes, but under the ordinary taxation it would have paid £4,600,000. No one will doubt that this rebate of taxation is a loss to the Exchequer and a gain to the industry, and is just as much a charge upon national funds, for the benefit of this industry, as if the money were paid out in cash. In the report published by the Ministry of Agriculture there are tables showing the State assistance given to the industry and they include "(a) subsidy, (b) rebate of taxation." When the Chancellor of the Exchequer was asked on 13th February what was the total assistance given to the industry he said: The total amount of State assistance given to the beet sugar industry in subsidy and revenue abatement, from 1924 up to the present date, is £39,631,000."—[OFFICIAL REPORT, 13th February, 1934; col. 1754, Vol. 285.] To quote again the "Times" newspaper in connection with this question of the rebate: If the sugar had been imported the Exchequer would have received considerably more in duties and would not have had to pay out any subsidy at all. I hope that in this Debate no hon. Member will come forward to say "Well, the subsidy is £3,250,000, the Excise is paid £2,000,000, and therefore, on balance, we pay only £1,250,000." On the contrary, the subsidy is £3,250,000, the loss of duty is £2,500,000, and in addition we have just had a Supplementary Estimate, which was passed a few days ago, for £450,000, so that the total we are now voting for this industry is £6,250,000. Even that is not all, because under the Trade Facilities Act these companies were guaranteed capital to the extent of £2,200,000, and out of that £400,000 has been written off—it has not been repaid although due, and it is I believe regarded as irrecoverable. Even that does not conclude the tale, because the British shipping industry, which as we all know is in very dire straits, loses in freights on account of this subsidy the sum of £300,000 to £400,000 a year. The report of the Chamber of Shipping, published last November, gives the loss to the shipping industry at £300,000 to £400,000 a year because of the sugar subsidy and the discontinuance of the freightage which they had previously earned.

What is the value of the sugar which is produced? One of my hon. Friends asked on 7th March what was the market value of the sugar produced under subsidy, and the reply given, a very remarkable reply, was that it was £8,400,000 duty paid. Why should it be "duty paid"? We were not asking the value including duty, we were asking the value of the sugar produced at the factories, and the definition "market value" is included in this very Bill, the Schedule stating that market value is to be calculated as the c.i.f. value at the port of entry of an equivalent quantity of sugar. Then my hon. Friend asked another question, on 12th March, as to what would be the market value of the sugar without duty, and the answer given was £6,300,000. My hon. Friend was much surprised, and we made inquiries, and found that for the sake of this Parliamentary answer they had included the subsidies, and that as a matter of fact the true market value, according to the definition given in the Bill itself, was £2,900,000. Why should there have been this reluctance, this failure, to give precisely the figure asked—giving first a figure of £8,400,000 and then £6,300,000, when the right figure was £2,900,000? For this sugar, worth rather less than £3,000,000, we paid over £3,000,000 in subsidy, £2,500,000 rebate in taxation, and, this last year, nearly £500,000 under a Supplementary Estimate, and we lose £300,000 or £400,000 in shipping freights.

What are the advantages to be set on the other side? No one would conceivably make any such proposition as this unless there were some colourable case for it. In the first place, the farmers receive a cheque for this subsidy each year, and naturally are very pleased to have it. My constituents in the cotton industry, who have suffered terribly by a fall in the price of cotton goods and by their exclusion from export markets, through no fault of their own—though I will not deny that there are defects in the organisation of the industry—would equally rejoice to receive cheques from the taxpayer to increase their incomes. In addition, it is said, and I believe with truth, though the matter is, I am told, controverted by some agriculturists, that the beet crop is advantageous to agri- culture because of the favourable effect it has upon succeeding corn crops, and therefore it is a national advantage that it should be continued. I have here a statement circulated to Members of the House by the British Beet-Sugar Society in which they say: Farmers are practically unanimous as to the improved yields of corn crops following sugar beet. It is not possible to arrive at exact figures, but observations by experienced people indicate they are 10 to 15 per cent. That is very satisfactory, but why should the taxpayer bribe farmers to grow a-crop which not only provides them with a useful feeding stuff in the tops of the beets, but also gives 10 to 15 per cent. more yield with succeeding crops? If this is a fact, and I do not dispute that it is, it is rather a reason why there should not be a subsidy than that there should be a subsidy.

With regard to the next point. The Minister of Agriculture on 22nd December, 1932, said that the average number of people employed in the factories was 7,130; that about 5,360 of them were seasonal, they are employed for only about three months, and that only about 2,000 were employed during the whole year. On the farms there is a certain amount of employment, particulars of which I will give in a moment. That, again, is undoubtedly of advantage to those counties which have that number of people employed. No doubt this expenditure of £40,000,000 of public money within a short period in a comparatively small district is highly popular. It would be very surprising if it were not; any other district would be glad to have £40,000,000 of public money spent upon it. The hon. Member for Mansfield (Mr. C. Brown) said with great truth that this is one of the most salient examples of mass bribery in our present-day politics. A recent writer, a modern Greek and a professor, in an article which I happened to come across, wrote this, not long ago, and his words I think are very cogent: Of the two kinds of corruption—that in which the politicians take the bribes, and that in which they give the bribes—there is much to be said for the view that the second, which is the modern kind, is the more dangerous to the public interest. This is an admirable example of politicians giving bribes to an industry in a particular locality at the public expense and to the public detriment.

As to the cost. No one denies that advantages accrue from the expenditure, but are the advantages proportionate to the expense? The facts lend themselves to this conclusion: The Government might pay all the workers who are now employed on the farms in the production of sugar beet, £2 per week to stand idle; they might give all the workers employed in the factories £3 per week to stand idle; they might give all the farmers who now grow sugar beet £3 an acre to grow something else; they might pay all those beet sugar companies their full dividends, not according to last year but according to one of their good years, to keep their factories inoperative, and then the Government might have enough money to buy an equivalent amount of sugar and distribute it to the populace for nothing—free, but charging only the amount of the Customs Duty. I am sure that every Member of the House will think that this is incredible. I will give exact figures to substantiate my statement.

An answer given in this House was to the effect that the number of man-weeks per year in field work for farmers for the growing of this crop was 692,000 on the average, during the period of the sugar subsidy. I suggest that all those men should be given £2 per week to do nothing, and that would amount to £1,384,000. The factories employ 5,000 workers for three months, who should have £3 per week; that would amount to £180,000. They employ 2,000 people for the year, and at £3 per week that would be about £300,000. I suggest that every farmer should get £3 per acre in order not to grow beet; there are 366,000 acres, so that that is just over £1,000,000. I suggest that the dividends should be paid to the companies at the rate of their year 1930–1931, when they were paid an average of 8.8 per cent. Pay them 8.8 per cent. if only they would not work their factories—that would amount to £411,000. The total of all these amounts is £3,275,000, and that would leave a saving of £3,000,000 upon the present State expenditure, which would be enough to buy the whole crop of sugar, worth £2,900,000, and to distribute it to the population free, charging for it only Customs duty. Over and above that, we should have the advantage of £300,000 or £400,000, for our shipping industry, which they would receive and would be very glad to have.

I submit, and have submitted for years past, that it is absolutely essential that this matter should be probed to the bottom. It is a very grave scandal, and the House of Commons has been doing far less than its duty as the guardian of the taxpayers' purse in not insisting upon a full and impartial investigation of the whole matter. Take, for example, this report, published by the Board of Agriculture. It says that the report states the facts but the Board take no responsibility for what it contains. That is not surprising, for it was prepared by two gentlemen, one a member of the markets division of the Ministry and the other who was, to use the words of the report itself, selected as representing the industry. The report was prepared in consultation with a third gentleman, whose qualifications were not that he represented the consumers or the public, or was an independent person. He was appointed in a consultative capacity, being a director of the Anglo-Scottish group of beet-suger factories. That is the only inquiry that there has been so far. It states the facts very ably, and no doubt impartially, because it included a civil servant, who, I am sure, would not lend himself to anything that was not absolutely accurate; but, of course, an inquiry of that kind could not be regarded as the kind of inquiry which the public are entitled to have, investigating the whole policy of the matter. In April, 1932, when I was a Member of the Government, the Chancellor of the Exchequer gave a specific pledge on this subject. He said in terms that there would be an impartial inquiry which would go into the whole matter; and he said, further, that that body would be asked to report before the present Subsidy Act expired. The right hon. Gentleman now says, and, indeed, it is obvious, that it will not report before the present Subsidy Act expires, and, therefore, the pledge given by the Chancellor of the Exchequer in his Budget speech has been broken. He undertook that there should be an inquiry. There has not been an inquiry.

The Minister of Agriculture gives all sorts of ingenious—or rather, not very ingenious—explanations. He repeats what he said in the House on the 6th March, namely, that the Government were so busy over the Lausanne Conference and the Ottawa Agreements that they really could not give attention to this matter, and, therefore, the committee could not be appointed. But how much time does it take to appoint a committee? I am not aware that the Minister of Agriculture of the day was at Lausanne, though I think he was at Ottawa, and certainly the Government as a whole was not so immobilised and paralysed that it could not appoint a committee for more than a year. Then the right hon. Gentleman says, with somewhat elephantine humour, that the Government were so convulsed by the resignations of some of their colleagues, and by the dissensions with regard to fiscal policy, that it was perfectly impossible for them to do anything so mundane as the appointment of a committee of this kind. These explanations do not carry conviction. Indeed, the Chancellor of the Exchequer stated quite frankly what the facts really are, and the right hon. Gentleman himself says that this is the explanation of the more recent delay. The Chancellor of the Exchequer a year ago, on the 16th March, 1933, said: The beet sugar and sugar refining industries have been conferring with the object of submitting agreed proposals for the consideration of the Government. These proposals have now been received and are being examined. That was a year ago. In the meantime, I have thought it desirable to defer the appointment of the Committee to which the right hon. Member refers."—[OFFICIAL REPORT, 16th March, 1933, col. 2132; Vol. 275.] That is the simple fact of the case. It was intended to create a great sugar monopoly trust, and, until those plans had matured, it was decided not to have any inquiry at all; and only now is the inquiry being set up.

The Committee that is being set up is, in my view, totally inadequate for the task. It is to be a committee of three members, presided over by a distinguished lawyer. When you have an expenditure of £40,000,000 of public money, when a very great question of policy is involved, and when there are many difficult matters to be carefully probed, a small departmental committee of three persons is quite inadequate. You want something much more in the nature of a Royal Commission, or a large committee consisting, I will not say of antagonistic elements, but a number of people, including representatives of the consumers—people who will not easily be misled, who will carry the matter through, and who will be qualified to advise the House and the country on the matter as a whole and on the question of policy. I can well believe that these three gentlemen, when they have met, will present a very able report, giving many statistical facts, but they will say, "Of course we cannot be expected to say whether this is a right thing to do; we cannot take the responsibility of making any recommendation that might involve shutting down the whole, of this industry;" and we are likely to get a somewhat diffident and very probably inconclusive report. The inquiry ought to have been on a much larger scale, covering the whole question systematically and thoroughly. There has been this delay of two years since the Chancellor of the Exchequer promised the inquiry, which has never yet been set up, and there has been a delay of a year since the Chancellor of the Exchequer gave the answer which I have quoted to the effect that the proposals of the industry had been received, and until they had been examined, they were not going to set up the Committee—a very costly delay. About £6,000,000 is the cost to the nation of this delay in addition to such costs of such delay as may have been due to the Lausanne and Ottawa Conferences. This is an industry of which the "Times" said: It was the intention, and morally the condition, of the original Act that the production of home-grown sugar should become self-supporting. Unquestionably, when Parliament 10 years ago was asked to sanction this experiment, every one held, and its advocates no doubt sincerely believed, that within a decade, which is a long time, this industry would be able to find its own legs and would no longer be a burden on the taxpayer. The 10 years have expired, and, as always happens in such cases, the infant industry complains that it has not yet grown up and it must still continue to be spoon-fed. Now we have this latest development, that there is to be a combination of the refiners, the producers, the merchants and others. About a year or so ago there was a quarrel between the beet industry and the sugar refiners. The refiners com- plained that this highly subsidised industry was using its factories to refine riot only their beet sugar but also imported sugar, and they said, "Why should we have to submit to this subsidised competition with our own industry?" There was quite a campaign by the refiners against the sugar-beet growers. They reconciled themselves. They made a combination between the two and they are now excellent friends. I noticed that at last annual meeting of Tate and Lyle's, the chief sugar refining company, in December, Sir Ernest Tate, the Chairman, gave a not unsatisfactory account of the present condition of that company. He explained that they were carrying out a great reorganisation of their sugar works at Liverpool which would involve a very large sum, and they were meeting that out of profits to a considerable extent. But for that, they would be able to give a larger dividend. However, he was able to declare a dividend for the year of 17 per cent.

There is to be formed this combination under the Agricultural Marketing Act. Parliament will not longer be troubled with these controversial Debates. This grossly extravagant industry will still be maintained, possibly receiving still this £6,000,000 a year to keep it going, but it will be taken out of the consumer. It will be removed from the Debates in the House, and will be put into the grocers' bills. As the "Economist" newspaper said the other day, the proposal is that the uneconomic sugar producer should be maintained in future out of an indirect, invisible tax instead of the present direct, and visible one. I feel that the future historian, examining the records of this time and reading the urgent appeals made in this time of depression for ruthless public economy, reading of the sacrifices made in order to balance the Budget by the servants of the State, by the taxpayers, and by the unemployed, will be amazed at the successful audacity of this raid upon the public purse.

10.30 p.m.

Lord WILLOUGHBY de ERESBY

It is with the greatest diffidence that I rise to address this House. I am still a comparative new comer to this House, and it is not for me at this late hour to monopolise the time at the disposal of the House. I realise that there are many more experienced and more mature speakers than I desirous of talking on what appears to be an extremely controversial subject. Seeing that I have only once before made use of the time at the disposal of this House, I would pray for indulgence for a few moments, because no one can speak with more whole-hearted sincerity than I in asking the House to support the Bill which we are now discussing. It does not appear to me to be the most appropriate or the most opportune moment for discussing either the merits or the demerits of the policy of aiding industry by means of subsidy. The beet-sugar subsidy has now been in existence since 1925. The farmers in many parts of the country have been encouraged by successive Governments in the past to include sugar beet among the normal rotation of their crops, and many of them are relying on this further support in the coming year. It is a crop which employs a very considerable amount of labour on the land, and, thanks to the subsidy, farmers have in the past received sufficient return for their outlay to enable them to meet their wage bill.

The conditions in agriculture to-day are still, unfortunately, not as we would all like to see them, and I do not hesitate to say that the condition of agriculture in many parts of this country would be very considerably worse if it had not been for the existence of this subsidy. In spite of the remark made by the hon. Gentleman opposite, certainly in those parts of the country which I know, there would be many more men out of employment to-day than there are at the moment, many more acres out of cultivation, and many more farmers, not only out of pocket, but in the bankruptcy court if it had not been for this means of assistance. It may appear to have been expensive in the past, but it must be remembered that for several years it has been practically the only assistance which has been given to the farmers, and has had to carry the total cost of the farm.

Another line of attack is that this assistance is being given to an uneconomic branch of agriculture. I do not attempt to deal with this attack. It will be idle to pretend that the future development of sugar-beet growing is in the best in- terests of agriculture or the country as a whole. It is not a branch of agriculture which I or, I am sure, my right hon. Friend the Minister of Agriculture would wish to encourage if circumstances were fortunately very different from what they are at the moment. There are other branches of agriculture which I consider can be developed to greater advantage than sugar-beet. There are also other means of assistance than subsidies, such as, in many cases, an increased measure of protection which I would prefer to be asking this House to support to-night. But I would seriously ask those who are going into the Lobby in opposition to this Bill to in some way justify their action in the future. Let them make every effort to hasten the moment when we need no longer rely on the beet-sugar subsidy to keep our farm workers in employment and our farmers out of the bankruptcy court. Let them hasten this day by giving their support and exercising their undoubted powers of oratory in support of many other Measures which the Minister of Agriculture from time to time lays before this House to advance and encourage those branches of agriculture which are most suitable in this country for further development.

I am sure that it is recognised by every Member of this House that it is a matter of the very greatest national importance that we should once again have a prosperous agriculture and a healthy and vigorous agricultural population. Anyone who has been connected with agriculture during the past few years of acute depression cannot but realise that in many parts of the country the beet-sugar subsidy has been a lifebelt to the farmer in a very stormy sea. No one would choose a lifebelt as an ideal means of conveyance across a stormy sea. We should all prefer to travel in the "Majestic," but I am glad to say that, thanks to the tireless efforts of my right hon. Friend the Minister of Agriculture, many to-day do see land ahead where two and a-half years ago there was nothing but a fathomless void. When land has been reached or the "Majestic" or some other more comfortable means of conveyance is handy, then will be the time to deprive the farmer of his lifebelt, but not now when he is still struggling to keep his head above water.

10.32 p.m.

Captain HEILGERS

The speech of the right hon. Member for Darwen (Sir H. Samuel) may be popular in Darwen but in my part of the world, in East Anglia, it would be far from popular. I must admit that I was almost convinced by the wonderful prospect that the right hon. Gentleman put before me as to how I was going to draw something like £6 an acre and to live in comfort and leisure for ever afterwards.

Sir H. SAMUEL

Three pounds.

Captain HEILGERS

We must not allow sugar beet to die in this country. I would remind hon. Members opposite that beet-sugar forms 40 per cent. of the production of sugar in the world, and it is grown in every country in Europe. France grows two and a-half times as much as we do, to maintain a more or less similar population; Italy grows two and a-half times more than we do and Germany five times as much. This growth of sugar beet is subsidised or protected in every one of those countries in Europe which are growing it today. Why should we be the country to allow the sugar beet industry to die? May I put to hon. Members what it means to me as a farmer? I have roughly 13 per cent. of my arable area under sugar beet, but it represents 25 per cent. of my takings. I wish that I could grow more than 13 per cent. of my acreage but I cannot grow more because with the present capacity of the factories we are not allowed to contract for a bigger acreage. If, however, the nagging at the beet-sugar subsidy were to cease and the country would face the fact of the great advantage that the growing of sugar beet is to the arable side of agriculture, and particularly to the eastern seaboard, and we were allowed to increase our sugar beet acreage, as I hope we shall, our employment value would be enormously increased. I employ seven extra men on my farm throughout the year because I grow sugar beet.

Take other figures which have been given to-night. There are 110,000 people who are affected by the sugar beet subsidy. There are over 40,000 growers, 29,000 men employed throughout the year, 30,000 casually employed, and there are now 10,000 employed in factories. That is a total of 110,000 who will be affected if the subsidy is withdrawn. £7,000,000 is paid out by the factories, and over £1,000,000 paid out in transport, road and rail, coal, jute and in other ways. There is no other industry which gives so large a return for money advanced by the State as sugar beet. In other industries £1,000,000 gives employment to between 3,000 and 4,000 people, but in sugar beet it gives employment to over 6,500 people according to the figures given by the Minister of Agriculture. I think that only those who are the enemies of arable agriculture and the enemies of those farmers and farm workers who produce food for the people in the great towns, will vote against the Second Reading.

10.42 p.m.

Sir E. SHEPPERSON

I have no desire to detain the House and, indeed, I am only tempted to rise by the speech of the right hon. Member for Darwen (Sir H. Samuel) and the speech of the hon. Member who moved the Amendment. The only point I want to make is connected with the question of employment in agriculture as a result of this subsidy. The argument of the hon. Member who moved the rejection was that there was not much employment given in factories as a result of this subsidy. I accept the figures he gave, but he did not mention the increase of employment in agriculture itself. The beet sugar industry was subsidised for the one purpose of assisting British agriculture, and the question is whether this experiment has been a success. The right hon. Member for Darwen says that it has not, but there I am in direct opposition to his opinion. I suggest that it has been a great success indeed in helping British agriculture. There are 365,000 acres under sugar beet this

year. I have grown sugar beet for many years and my experience has taught me that you cannot grow sugar beet without an expenditure of from £8 to £10 per acre in labour. This industry therefore has consumed annually in labour for some years practically about £3,000,000 per year, and almost the entire amount that is given as a subsidy to this industry by the State finds its way, directly or indirectly, into the pockets of agricultural labourers. It is for that reason, in the interests of the agricultural labourer, that I submit that the House ought to support the Bill.

I would suggest one other point which has not been referred to so far. The maintenance of the sugar-beet industry means an increase in the total acreage of land under arable cultivation. Sugar-beet cultivation is one crop in the rotation of arable cultivation. Sugar-beet can be grown only one year out of three. Therefore, as 365,000 acres are cultivated for sugar-beet, something like 1,000,000 acres of land have to be kept under arable cultivation. It is because I feel that British agriculture in the last 10 years has been assisted to an enormous extent by the maintenance of the sugar-beet industry that I am supporting the Bill. The Bill carries on the industry for only one more year. Like another hon. Member who has spoken I would have preferred to have supported a Bill which dealt with the importation of sugar by preferential tariff treatment rather than by subsidy. But as an agriculturist I am not going to quibble as to the method by which agriculture is helped. Since this Bill is one to help British agriculture I give it my support without any question.

Question put, "That the word 'now' stand part of the Question."

The House divided: Ayes, 189; Noes, 49.

Division No. 174.]	AYES.	[10.48 p.m.
Acland-Troyte, Lieut.-Colonel	Brocklebank, C. E. R.	Craddock, Sir Reginald Henry
Albery, Irving James	Buchan-Hepburn, P. G. T.	Crooke, J. Smedley
Allen, Lt.-Col. J. Sandeman (B'k'nh'd)	Burgin, Dr. Edward Leslie	Crookshank, Col. C. de Windt (Bootle)
Anstruther-Gray, W. J.	Burnett, John George	Crookshank, Capt. H. C. (Gainsb'ro)
Aske, Sir Robert William	Campbell-Johnston, Malcolm	Croom-Johnson, R. P.
Baldwin, Rt. Hon. Stanley	Caporn, Arthur Cecil	Cross, R. H.
Bateman, A. L.	Chapman, Sir Samuel (Edinburgh, S.)	Cruddas, Lieut.-Colonel Bernard
Beaumont, Hon. R.E.B. (Portsm'th, C.)	Christie, James Archibald	Culverwell, Cyril Tom
Bottom, A. C	Churchill, Rt. Hon. Winston Spencer	Davidson, Rt. Hon. J. C. C.
Boulton, W. W.	Cochrane, Commander Hon. A. D.	Davies, Edward C. (Montgomery)
Bower, Lieut.-Com. Robert Tatton	Colman, N. C. D.	Davies, Maj. Geo. F. (Somerset, Yeovil)
Bowyer, Capt. Sir George E. W.	Colville, Lieut.-Colonel J.	Doran, Edward
Braithwaite, J. G. (Hillsborough)	Cook, Thomas A.	Duckworth, George A. V.
Broadbent, Colonel John	Cooper, A. Duff	Duncan, James A. L. (Kensington, N.)
Edmondson, Major A. J.	Lees-Jones, John	Remer, John R.
Elliot, Rt. Hon. Walter	Leighton, Major B. E. P.	Rickards, George William
Elliston, Captain George Sampson	Levy, Thomas	Rosbotham, Sir Thomas
Emmott, Charles E. G. C.	Liddall, Walter S.	Ross Taylor, Walter (Woodbridge)
Emrys-Evans, P. V.	Lindsay, Noel Ker	Ruggles-Brise, Colonel E. A.
Erskine, Lord (Weston-super-Mare)	Little, Graham, Sir Ernest	Runge, Norah Cecil
Erskine-Bolst, Capt. C. C. (Blackpool)	Lloyd, Geoffrey	Russell, Albert (Kirkcaldy)
Essenhigh, Reginald Clare	Locker-Lampson, Com. O. (H'ndsw'th)	Russell, R. J. (Eddisbury)
Everard, W. Lindsay	Lockwood, John C. (Hackney, C.)	Rutherford, Sir John Hugo (Liverp'l)
Fleming, Edward Lascelles	Loder, Captain J. de Vere	Salmon, Sir Isidore
Fremantle, Sir Francis	Lovat-Fraser, James Alexander	Salt, Edward W.
Gillett, Sir George Masterman	Lumley, Captain Lawrence R.	Sandeman, Sir A. N. Stewart
Gilmour, Lt.-Col. Rt. Hon. Sir John	Lyons, Abraham Montagu	Scone, Lord
Glossop, C. W. H.	MacAndrew, Lieut.-Col. C. G. (Partick)	Selley, Harry R.
Goff, Sir Park	MacAndrew, Capt. J. O. (Ayr)	Shaw, Captain William T. (Forfar)
Graham, Sir F. Fergus (C'mb'rl'd, N.)	McCorquodale, M. S.	Shepperson, Sir Ernest W.
Graves, Marjorle	Macdonald, Sir Murdoch (Inverness)	Smith, Sir J. Walker (Barrow-in-F.)
Greene, William P. C.	McLean, Major Sir Alan	Smith, R. W. (Ab'rd'n & Kinc'dlne, C.)
Gretton, Colonel Rt. Hon. John	Macmillan, Maurice Harold	Somervell, Sir Donald
Grimston, R. V.	Manningham-Buller, Lt.-Col. Sir M.	Somerville, D. G. (Willesden, East)
Gunston, Captain D. W.	Margesson, Capt. Rt. Hon. H. D. R.	Spens, William Patrick
Hacking, Rt. Hon. Douglas H.	Marsden, Commander Arthur	Stanley, Rt. Hon. Lord (Fylde)
Hammersley, Samuel S.	Mason, Col. Glyn K. (Croydon, N.)	Stanley, Hon. O. F. G. (Westmorland)
Hanbury, Cecil	Mayhew, Lieut.-Colonel John	Stevenson, James
Hanley, Dennis A.	Mills, Major J. D. (New Forest)	Stewart, William J. (Belfast, S.)
Hannon, Patrick Joseph Henry	Milne, Charles	Stones, James
Harbord, Arthur	Mitcheson, G.G.	Storey, Samuel
Harvey, George (Lambeth, Kenningt'n)	Morris, John Patrick (Salford, N.)	Strauss, Edward A.
Haslam, Sir John (Bolton)	Morris, Owen Temple (Cardiff, E.)	Strickland, Captain W. F.
Headlam, Lieut.-Col. Cuthbert M.	Morris-Jones, Dr. J. H. (Denbigh)	Sugden, Sir Wilfrid Hart
Hellgers, Captain F. F. A	Morrison, William Shepherd	Sutcliffe, Harold
Henderson, Sir Vivian L. (Chelmsford)	Muirhead, Lieut.-Colonel A. J.	Thompson, Sir Luke
Heneage, Lieut.-Colonel Arthur P.	Munro, Patrick	Thomson, Sir Frederick Charles
Hepworth, Joseph	Nail, Sir Joseph	Thorp, Linton Theodore
Hills, Major Rt. Hon. John Waller	Nail-Cain, Hon. Ronald	Tufnell, Lieut.-Commander R. L.
Hornby, Frank	Nation, Brigadier-General J. J. H.	Turton, Robert Hugh
Horne, Rt. Hon. Sir Robert S.	Nunn, William	Wallace, Captain D. E. (Hornsey)
Horsbrugh, Florence	O'Donovan, Dr. William James	Wallace, John (Dunfermline)
Howitt, Dr. Alfred B.	O'Neill, Rt. Hon. Sir Hugh	Ward, Lt.-Col. Sir A. L. (Hull)
Hudson, Capt. A. U. M. (Hackney, N.)	Patrick, Colin M.	Ward, Irene Mary Bewick (Wallsend)
Hudson, Robert Spear (Southport)	Peat, Charles U.	Ward, Sarah Adelaide (Cannock)
Hunter-Weston, Lt.-Gen. Sir Aylmer	Percy, Lord Eustace	Warrender, Sir Victor A. G.
Hutchison, W. D. (Essex, Romf'd)	Pybus, Sir Percy John	Whyte, Jardine Bell
Jackson, J. C. (Heywood & Radcliffe)	Ralkes, Henry V. A. M.	Williams, Herbert G. (Croydon, S.)
James, Wing-Com. A. W. H.	Ramsay, Capt. A. H. M. (Midlothian)	Willoughby de Eresby, Lord
Jesson, Major Thomas E.	Ramsay T. B. W. (Western Isles)	Wills, Wilfrid D.
Jones, Sir G. W. H. (Stoke New'gton)	Ramsbotham, Herwald	Wise, Alfred R.
Kerr, Lieut.-Col. Charles (Montrose)	Rankin, Robert
Latham, Sir Herbert Paul	Reed, Arthur C. (Exeter)	TELLERS FOR THE AYES.—
Law, Richard K. (Hull, S.W.)	Reid, William Allan (Derby)	Mr. Blindell and Mr. Womersley.
NOES.
Adams, D. M. (Poplar, South)	Groves, Thomas E.	Mason, David M. (Edinburgh, E.)
Attlee, Clement Richard	Grundy, Thomas W.	Maxton, James
Banfield, John William	Hamilton, Sir R. W. (Orkney & Ztl'nd)	Milner. Major James
Batey, Joseph	Harris, Sir Percy	Moreing, Adrian C.
Bevan, Aneurin (Ebbw Vale)	Holdsworth, Herbert	Paling, Wilfred
Brown, C. W. E. (Notts., Mansfield)	Janner, Barnett	Parkinson, John Allen
Buchanan, George	Jenkins, Sir William	Rathbone, Eleanor
Cape, Thomas	Jones, Morgan (Caerphilly)	Rea, Walter Russell
Daggar, George	Lawson, John James	Rutherford, John (Edmonton)
Davits, David L. (Pon[...]pridd)	Leonard, William	Samuel, Rt. Hon. Sir H. (Darwen)
Davies, Rhys John (Westhoughton)	Logan, David Gilbert	Smith, Tom (Normanton)
Edwards, Charles	Lunn, William	White, Henry Graham
Foot, Isaac (Cornwall, Bodmin)	McEntee, Valentine L.	Williams, David (Swansea, East)
George, Major G. Lloyd (Pembroke)	Maclean, Neil (Glasgow, Govan)	Wilmot, John
Greenwood, Rt. Hon. Arthur	Mainwaring, William Henry	Wood, Sir Murdoch McKenzie (Banff)
Grenfell, David Rees (Glamorgan)	Mallalieu, Edward Lancelot
Griffith, F. Kingsley (Middlesbro', W.)	Mander, Geoffrey le M.	TELLERS FOR THE NOES.—
		Mr. D. Graham and Mr. John.

Question, "That the Clause stand part of the Bill," put, and agreed to.

Bill committed to a Committee of the Whole House for To-morrow.—[Captain Margesson.]