CLAUSE 1.—(Extension of period in respect of which subsidies are payable under 15 & 16 Geo. 5, c. 12.) (Hansard, 31 May 1934)

§ Mr. LEONARD
On the Financial Resolution I had to go into considerable detail on this matter, covering the profits which had been enjoyed by the beneficiaries of the subsidy, the sources of capital of some of the companies, and the intricacies of the subsidies which have been paid to producers of sugar. Since then I have heard of no satisfactory reason for continuing the subsidy as 480 proposed in this Bill. I have entered into discussion and listened to many individuals. I have even sat through a rather long explanation of the incidence of this matter upon military practices going back to Napoleon. Notwithstanding all the discussion, I am still of opinion that we have paid enough money in subsidy to this industry. I should have thought, if the statements made in regard to Empire subsidy had been put forward by those who are rather keen in expressing themselves on that line that a little more attention would have been paid to parts of the Empire which are capable of giving greater satisfaction in regard to productivity than this country, than to continuing to bolster up one of the most uneconomic crops that could be grown in this country.
A lot of detail was entered into, in the years when the refining interests in this country were not deemed to be suitable to be taken under the wing of an Agricultural Marketing Act, and in these days the present Secretary of State for Scotland made speeches in regard to these interests and the relationship to them 481 of a subsidy. It would be very interesting to hear those speeches made to-day from the benches opposite. Lord Olivier, at the request of the British Government, paid a visit to the British West Indies, and he made it quite clear that the sugar industry in that country was applying the most economical methods possible to get the best result that could be got in any part of the world, with the exception, in his opinion, of Java. That part of the Empire was capable of giving greater satisfaction for the production of beet sugar than can he given in this country.
It surprises me that a Government such as this, which is so strong in Empire policy, does not pay a little more attention to the possibilities in that direction. I think that the 10 years' experience that we have had is sufficient. We have been paying, during part of that 10 years, no less than £l per cwt., in some respects to Dutch capital, for sugar that we could have got from Empire sources for a payment of 5s. per cwt., and I think we are entitled now to look rather minutely on any further proposals to give help to an industry which has taken so long to give a satisfactory answer as to whether it should continue or not. The purpose of the Bill is to allow of the preparation of a scheme to cover the interests that would be left, as it were, in the air if the subsidy were withdrawn, and I think it right to ask for an explanation of the attitude that has been adopted. In the first place, we find that it has been the policy in the past—I speak subject to correction——

§ The CHAIRMAN
The hon. Member seems to be making a Second Reading speech. The question before the Committee is that Clause 1 stand part of the Bill.

§ Mr. LEONARD
My point was that this proposal is for the purpose of giving time for those interests in the sugar industry to prepare a scheme, and I thought I should have been in order in saying something with regard to the scheme as far as it has appeared at the present time.

§ The CHAIRMAN
That would not be in order.

§ Sir S. CRIPPS
On that point of Order. Clause 1, as I understand it, is 482 for the purpose of continuing the subsidy for a limited period, and the question which my hon. Friend is raising is as to the purpose of that continuation for a limited period. There has been discussed recently, at a public inquiry, a marketing scheme for sugar which deals with the very sugar in respect of which the subsidy is to be paid, and I submit to you, Sir Dennis, that it is in order in a discussion on this Clause, which relates to the period for which the subsidy is to continue, to discuss the reasons why that period should be inserted in the Clause.

§ The CHAIRMAN
The hon. Member was proposing to discuss the scheme, and I have ruled that he cannot do so on the question which is now before the Committee.

§ Mr. LEONARD
I accept your Ruling. I want to make a point with which I can deal within your Ruling. I want to refer to the promise which was made in the House in March, 1932, by the Chancellor of the Exchequer, who gave an undertaking to the House that, before we were asked to proceed, as we are now being asked to proceed, there would be an inquiry into the sugar industry. We waited for that inquiry, but up to the present have not received any report from the Committee. It should have reported before the end of the subsidy period: that was the specific undertaking that was given; but the Committee, which it was then thought would be speedily put into operation, has only been appointed a few weeks. We feel, therefore, that, because of the failure to honour the promise made by the Chancellor of the Exchequer on that occasion, the Government are not entitled to come forward with this Bill at the present moment before we have the details of the inquiry.
My intention was to go into some of the aspects which I think should have been put before the House, and which would, in my opinion, have been put before the House had the committee of inquiry been put into action. That has not been done, and I regret that the opportunity does not occur now to touch upon some pertinent details that should have been displayed as regards the relationship of the Government to the interests concerned, the discussions that have been taking place, the promises that the Government have made, and as to whether a public utility basis should not 483 be the basis in future, as against monopoly powers which everyone now is fully conscious are to be put forward as the basis for the industry in the future. The possibility that the people who have already received £40,000,000 in subsidies will be able to take £46,000,000 in the next 10 years is sufficient reason for making no further progress until we receive a report from the committee.

§ Mr. C. WILLIAMS
This is a most extraordinary Clause. Whoever heard of a Clause to extend a period for 11 months? It is one of the most awkward periods of the year, and we should have some very strong explanation of it. My first objection is that you are extending it till August, and that is not a convenient time. If you are going to extend the beet-sugar subsidy, it should be to such a time, September or October, or even later, as is convenient for preparing the ground for the coming year's crop. August is well before the crop has been gathered and you are thinking of preparing the ground for next year, and to extend it to August is bad from that point of view. I could understand a date about December or January, which would cover the subsidy for the period in which the crop has been marketed and made into sugar. That would be sensible, but I do not think it is right that the Government should bring in an absurd date such as this. It is the sort of silly, half-baked thing that might have been done by their predecessors. I have the strongest objection to seeing a good, sensible, honest Minister, controlled by an able Parliamentary Secretary, playing the fool in the stupid sort of way that their predecessors did. I do not wish to be unkind, but it really is not sense to bring in this particular time. If you look at it from the point of view of finance, August does not coincide with the financial year in any way, and from that point of view it would have been far better to extend it until next April. But what really appeals to me is that you are continuing the time at all. I am convinced that subsidies are wrong, and I will do what I can to make it inconvenient for any Government to bring in subsidies of this character. It has 484 been the accepted policy of a very great number of Members at the earliest possible moment to repeal this subsidy and deal with sugar-beet in a proper method.
I suppose the Minister will use as an excuse or reason for this 11 months the fact that this committee of inquiry has been going on. I do not think the House of Commons wants committees of inquiry. What we want is action. It would have been simple and easy to have repealed the whole of this matter and to have put on a duty. It would net have been necessary to have had this Bill, or awkwardness at this time of the night. What was necessary could have been done under the Budget. There is plenty of ability in the Ministry and among Members of the Government to decide these things without any committee of inquiry, which only wastes time in making reports. This is a thing which nine-tenths of the Members of this House could settle straight away by a duty on foreign imports, and a bounty on English and Colonial sugar. I regret that the time of the House should be taken up by a Measure of this kind, when a simple Clause in the Budget would have dealt with the whole thing.

§ The CHAIRMAN
I am afraid that I have allowed the hon. Member to go on too long.

§ Mr. WILLIAMS
Naturally I do not desire to discuss anything which has to do with the Budget, but I object to the extension of the period in this way by the Government. I know that the Government have a lot of docile followers who, if the period had been 11 or 32 months, would, in all probability, vote for it in the hope that the best thing would turn up. The Government have done so many good things that it is almost impossible, when you get a Clause of this sort, for one to realise that they are doing wrong. The Government are making a fundamental blunder.

§ Mr. ELLIOT
I am sure we all realise that at this time of the evening some-thing rises in the head of my hon. Friend the Member for Torquay (Mr. C. Williams) like wine. We, who have admired his skill in opposition cannot reasonably complain if, from time to time, he gives us a dose of the medicine 485 which he has administered in such liberal doses to hon. and right hon. Gentlemen opposite. We think that he has, perhaps, not shown his full technical skill, though all his wonted Parliamentary skill has appeared in the skilful manner with which he discussed a new Clause in the Budget, the suggested introduction of a bounty system, a preference for Dominion sugar and several other subjects equally remote from the matter under discussion. Although he was able to show good Parliamentary skill, he confirmed, I am afraid, the statement he made earlier this evening, that there were very few agriculturists in the great Division of Torquay which he represents. The great sugar-beet areas of Torquay have, no doubt, escaped his attention. The times at which sugar-beet is lifted in Torquay, owing, no doubt, to their taking place in the remote parts of the town, have not been brought to his attention, and therefore he thinks that the period of 11 months is due to some political technicality, not realising that it is founded on fact.
The period was chosen by practical men who have had experience of the working of the Act and in accordance with the run of the seasons, not with any nefarious intention by His Majesty's Government. The proposal to extend the subsidy for 11 months is in order to bring the statutory year into line with the actual manufacturing campaign. When the Act of 1925 was drawn up with the support of the hon. Member for Torquay, the practical aspects of the industry had not assumed a settled condition and no sugar or molasses were manufactured before 1st October, but there have been occasions since when the season has finished in January and some factories have commenced operations during the last half of September: possibly the tourist season in Torquay has obscured this fact from the hon. Member. In 1933 manufacture began in the autumn of that year and ran to the autumn of 1934, so that sugar-beet planted in the spring of 1934 and harvested before the autumn of that year would qualify for subsidy at the rate intended for the 1933 crop. That has led, on occasion, to a decrease in the subsidy rate, but by agreement with the Department the factories have refrained from claiming the subsidy at the higher rate to which they were legally but not morally entitled. I am 486 sure that such a stickler for procedure as the hon. Member will agree that to ask factories to waive rights to which they are entitled under the Statute is toally wrong and that it is desirable to bring the Statute into accord with the facts of the case, which is what we are doing in this case. That is why the present Bill proposes to terminate on the 31st October instead of the 30th September, 1935, and thus avoid a recurrence of that situation. I hope he will agree that I have done my utmost to meet his point and will be satisfied with the explanation I have been able to give.

§ Mr. C. WILLIAMS
The right hon. Gentleman has referred to certain factories and their claims, the position as to their claims at different dates, the 31st August and the 30th September. Suppose he had taken it for the extra month—I am trying to bring myself into line so that I can vote for the Clause-can he say what he would save by getting the extra month? If he can give us the figure in actual cash, I shall be much more satisfied.

§ Mr. ELLIOT
The bon. Member will agree that factory owners should not make claims which they are not entitled to make. Nobody would be more indignant than the hon. Member if I made a prophecy which I could not substantiate. I merely say that there is a loophole for irregularities and that we are closing that loophole. If we had not done so, I am sure that we should have heard from the hon. Member on some future occasion. The hon. Member for St. Rollox (Mr. Leonard) spoke on the position of the Clause as a whole. It is extremely difficult to argue in favour of the Clause without recapitulating arguments which were used on the Second Reading. The whole position of the British sugar industry is at present under inquiry. The Bill continues the subsidy during that period. I think none of us would wish by deleting this Clause to throw operations in the sugar-growing districts into chaos and cause widespread unemployment in areas of the country which have little other resource. The general arguments have been threshed out ad nauseam, and it is because repeated defences of the proposed operations by Governments of many complexions have not brought full conviction 487 to the House or the country that the Chancellor of the Exchequer promised an inquiry under Mr. Wilfrid Greene, which is now sitting and the report of which we shall have, before we set this industry on a permanent basis. I do not think there is any specific point on which I can reasonably answer the hon. Member. The points which have been raised are points which concern the whole working of the sugar scheme and can only be dealt with when we have the report of the impartial inquiry which is going fully into the matter under very wide terms of reference.

§ Sir S. CRIPPS
I do not think that the advantages of democratic government are shown very clearly by the discussions which are introduced by the hon. Member for Torquay (Mr. C. Williams), which seem to be mere fooling, to use a term which I think he used himself. This Clause raises a serious point. Under it, the Government purport to continue for a further period the subsidy to this industry. Over two years ago an undertaking was given by the Chancellor of the Exchequer that before the period of the subsidy expired, under the then existing Act, a full inquiry would be made and the result of that inquiry would be laid before the House of Commons in order that the House might determine whether the subsidy should continue or not. If this Clause were not passed and if chaos were to supervene in the industry, the responsibility would be solely that of the Government. It is all very well for the right hon. Gentleman to say to the Committee, "You must pass this Clause or there will be trouble in the industry," -when the Government have purposely and designedly held up this inquiry for their own reasons. They have done so in, order that they might enter into negotiation with the large sugar industries in this country to try to get out a scheme which they could present as a completed scheme to the Wilfrid Greene Committee so that the House of Commons would not have the proper opportunity to which it is entitled, before it discussed a problem of this gravity.
This is a singular breach of undertakings given to this House by His Majesty's Government, and we protest 488 violently against that procedure. I ask the right hon. Gentleman, categorically, is it not a fact that as early as the beginning of 1933 he and his Department were discussing in detail with the interests concerned in the sugar industry the substitution for this continuance of subsidy of another scheme by which a levy should be made upon sugar for the benefit of the sugar interests. I ask him whether that scheme has not been discussed and worked out in the intervening time before the Wilfrid Greene Committee was set up to inquire into the whole matter. I ask him whether the delay has not been for the purpose of having this matter discussed, naturally behind closed doors, and with all the interests in the trade, and whether he thinks it fair, while those discussions are being so conducted and while the Government are refusing to implement their pledge, to come to the Committee and ask them to vote a large sum to continue this subsidy. In our opinion it is not a fair procedure. The right hon. Gentleman should have said, if it be the fact, that some other arrangement was being contemplated and that this was a temporary measure which the Government intended to substitute by some other means or method, which would be linked up with the marketing scheme which has recently been discussed and reports of which have appeared in the Press. I ask the right hon. Gentleman to state categorically "aye" or "no" if such discussions have been proceeding since the beginning of 1933, and why, if those discussions were proceeding, was not the Wilfrid Greene Committee set up at the beginning of 1933.

Mr. MALALIEU
We have listened to an extraordinarily interesting and amusing speech from the hon. Member for Torquay (Mr. C. Williams), and there is only one reason for which I regret the speech. That is because it enabled the Minister of Agriculture to get away with a speech not giving a single reason why this Clause should be accepted, in spite of the weighty criticism that had been levelled at it by the hon. Member for St. Rollox (Mr. Leonard). I hope we shall have some answer to the pertinent question put by my hon. and learned Friend the Member for East Bristol (Sir S. Cripps). A good many of 489 us have been most alarmed at the delay which has been shown in the appointment of the Wilfrid Greene Committee. Some definite answer should be given by the Minister of Agriculture before he asks us to vote upon this Clause. This day will be memorable to many Members of the Committee. The first part of the day we were discussing the economies of glut in one way, and now we are being called upon to discuss the economics of glut in a different way. In the first case, the Government were trying to do away with some of the glut of milk, and now, owing to the fact that most European countries have been subsidising the production of sugar at home until there is a complete glut, the Government are asking us to go still further and continue a subsidy which will make the glut even worse; and this in spite of the complete dislocation which this subsidy must cause and continue to cause in many of the sugar-growing Colonies for which we profess to have so much respect—that is, for which some of us have so much respect, and for which the Conservative party and the National party only profess respect.

§ Mr. ELLIOT
What form does the hon. Gentleman's respect take?

§ Mr. MALLALIEU
The respect which my party always has taken of leading them along the path of freedom, in the teeth of hot Conservative opposition for the most part. It has not been to encourage them to prey upon other members of the Empire, nor indeed has it been in the form of discouraging the natural production on their land by unnatural production on our land.

§ Mr. ELLIOT
Would the hon. Gentleman sweep away all the preference given to the sugar-growing Colonies?

§ Mr. MALLALIEU
I did not say that we would do that. What I said was that I would not hinder the Colonies by the un-economic production of sugar in this country, which is a different thing.

§ Mr. ELLIOT
The hon. Gentleman would not give them any financial assistance?

§ Mr. MALLALIEU
I certainly would not. I do not believe in subsidies. It is there where I differ from the right hon. Gentleman. I do not deny that this subsidy, if continued, will continue to put a 490 certain amount of benefit into the pockets of a very limited class of the community. There are a certain number of companies which own factories which are making a very good thing out of the subsidy. There are also some companies which are so inefficient that they cannot make proper profit, even with the vast subsidies that have been given. Nevertheless, I am bound to admit that some have made very good profits as the result of the largesse which this Government seeks to continue by this Clause to certain of the companies. I do not deny that there has been a certain amount of employment given, again in very limited areas in this country, as the result of the subsidy. But from all other points of view, especially from the point of view of the dislocation the subsidy has caused in the Colonies to which I referred, surely the whole thing has been a most lamentable and complete failure. In passing this Clause we are also doing something else. We are not only continuing the subsidy, but we are depriving the Exchequer of sums which would have been paid into the Exchequer were the sugar imported from foreign countries or from the Colonies. Therefore, there is this two-fold way in which the country is being mulcted merely for the uneconomic production of sugar in this country. It is not so long ago since the President of the Board of Trade showed up the whole folly of this subsidy which we are asked to continue.

§ The CHAIRMAN
I think that I must stop this discussion going on on the lines of a Second Reading Debate on the Bill. It is perfectly true that very often it happens with the first or some other Clause of a Bill that technically it is not irrelevant to discuss the whole principle of the Bill. Within certain limits that may be reasonable for a speech or two at the beginning, but it is, in my opinion, an abuse of the procedure of the House to have a Second Reading Debate on any Clause of the Bill in Committee and I do not propose to allow it.

§ Mr. MALLALIEU
I am bound to bow to your Ruling, but it does seem to me exceedingly difficult to discuss whether or not a subsidy should be continued unless one is to say whether the subsidy is a good thing in itself in the first place.

§ The CHAIRMAN
That is exactly what I say is not in order—to discuss the principle of the subsidy, whether it is good or not.

§ Mr. MALLALIEU
I am endeavouring to discuss the question whether or not this subsidy should be continued, and I have attempted to limit my remarks to that question alone. I was pointing out in the opening remarks of my speech that things have not been made any easier for those of us who criticise the Bill—indeed, for those who support it—by the fact that the Committee to which reference has been made was not appointed earlier. We do not know whether—to use the words of the President of the Board of Trade in 1927—we are simply squandering the national money over two continents. We cannot debate seriously the question that we really have to debate, to decide whether or not this Clause should be accepted. We simply do not know if we are throwing money away with both hands. As he said, with reference to this very subsidy, we are getting no adequate return and we do not know whether it is still "the worst example of crazy finance" he has ever known. Those are the words of the President of the Board of Trade. All the time we have had delay for months on end by this great master of men, the Minister of Agriculture, who could not find time to appoint a committee to enlighten the country on these important matters. Yet only a few weeks ago he was administering some sort of rebuke to his seniors in the Cabinet because they were not sufficiently active. I suppose he thought that the country would replace them by him [lnterruption]——

§ The CHAIRMAN
I must warn the bon. Member of the Ruling I have already given, and I must ask him not to proceed with a Second Beading speech.

§ Sir PERCY HARRIS
Are we not justified in saying that this particular subsidy should not be extended for 10 months?

§ The CHAIRMAN
I do not know whether the hon. and gallant Baronet bas heard my Ruling, but I endeavoured to make it perfectly plain that I was not going to allow any further discussion on the Question that Clause 1 stand part 492 of the Bill on the lines of a Second Reading debate on the principle of the Bill. I adhere to that Ruling. I ask the hon. Member in possession of the Floor to adhere to it.

§ Mr. ATTLEE
On that point of Order, may I ask whether, in discussing a Clause of a Bill, one is not entitled to discuss the principle of the Clause? The essential principle of this Clause is, whether this subsidy should be continued, and I take it one is perfectly in order in giving reasons as to why this extension should or should not be made.

§ The CHAIRMAN
That depends entirely on whether such reasons come within what was the very clear and definite Ruling which I have just given

§ Mr. MALLALIEU
I really will attempt to keep within your Ruling, Sir Dennis. The difficulty I am in is that I am asked to discuss—[HON. MEMBERS: "No!"] Well, we feel it our duty to discuss the vast sums of money which it is suggested we should throw away. We cannot tell whether this subsidy ought to be continued. We have our own suspicions, based upon the experience of past years, but the Government have deliberately foiled all attempts to have an impartial investigation of this question.

§ The CHAIRMAN
The hon. Member is now offending against another rule by repeating what he has said. He has had an opportunity of saying what he wants to say on Second Reading—he may have done so—but he must not do so now.

§ Mr. MALLALIEU
I will endeavour not to repeat myself. I would remind the Minister of Agriculture of the very important question put to him by my hon. and learned Friend the Member for East Bristol (Sir S. Cripps) and ask him to give a definite reply. If he will do so I will leave him time to reply.

§ Mr. DAVID GRENFELL
Are we not to have a reply from the Minister to the questions put to him? He appears to be bubbling over with anxiety to reply to questions not put to him, but is not prepared to answer questions which are addressed to him. I will sit down immediately if he gives us an assurance that he will reply.

§ Mr. ELLIOT
Surely it is clear to the Committee that within the next few minutes it will be quite impossible for me to reply. [HON. MEMBERS: "Tomorrow."] Well, I shall be pleased to do so. I was intending no discourtesy either to the Committee or to my hon. Friends below the Gangway opposite or to my hon. Friends above the Gangway who have put questions, but it would require more than the two minutes so generously conceded by my hon. Friend the Member for Colne Valley (Mr. Mallalieu) to reply to these questions. I can only say in answer to my hon. and learned Friend the Member for East Bristol (Sir S. Cripps) that I have a full and complete reply which I shall be pleased to communicate to him and the House. I have a complete answer to the suggestions made that some underhand work is going on—not made by him, I agree, but by others, including the Cooperative Congress. The organisation which is being proceeded with under the Marketing Act of 1931 is an organisation of which the House is very well aware. It has been explained to the House time and again in answer to questions by my hon. Friend the Member for Henley (Sir G. Fox) and my hon. and gallant Friend the Member for Houghton-le-Spring (Colonel Chapman). It will be perfectly 494 possible to show that the House has been kept acquainted at every stage with these proposals for organisation, but I do not think it is possible to do it in ten seconds.

§ Mr. ATTLEE
I am glad to have the assurance that we shall have a full reply on these points. There is another point on which we have had no explanation, and that is why there has been a departure from the pledge given to the House by the Chancellor of the Exchequer that this subsidy should not be extended until we had a full report from the Committee. The House is entitled to have the Chancellor here to explain, because the word of a Minister is very important.