MILK [MONEY].

HC Deb 31 May 1934 vol 290 cc367-479

Considered in Committee under Standing Order No. 69.

[Captain BOURNE in the Chair.]

Motion made, and Question proposed, That it is expedient—

(1) to authorise the payment out of moneys provided by Parliament of such sums as may be necessary for securing that if, in the case of any month falling between the end of March, nineteen hundred and thirty-four, and the beginning of April, nineteen hundred and thirty-six, the cheese-milk price for the month, as certified by the Minister of Agriculture and Fisheries and the Secretary of State for Scotland, is less than the standard price for the month, the Minister within the meaning of the Agricultural Marketing Act, 1931 (hereinafter referred to as 'the Minister'), shall, in certain circumstances, pay to the board administering any scheme under that Act for regulating the marketing of milk (hereinafter referred to as 'a milk marketing scheme ') a sum not exceeding the difference between the two prices aforesaid, in respect of each gallon of milk produced in the area to which the scheme applies with respect to which the Minister is satisfied—

1. (a) that, having been delivered on the sale thereof by a registered producer otherwise than to the board or on the sale thereof by the board, it has, in that month, been used (elsewhere than at a farm) in manufacturing cream, butter, cheese, milk powder, or condensed milk; or
2. (b) that it has, in that month, been used by the board in manufacturing cream, butter, cheese, milk powder, or condensed milk; or
3. (c) that, having been produced by a registered producer, it has, in that month, been used by him in manufacturing cheese at a farm in his occupation;

(2) to provide for requiring that if, in the case of any month falling between the end of March, nineteen hundred and thirty-six, and the beginning of April, nineteen hundred and thirty-eight, the cheese-milk price for the month, as so certified, exceeds by more than one penny the standard price for the month, the board administering any milk marketing scheme shall pay to the Minister a sum equal to the difference between the standard price for the month, increased by one penny, and the cheese-milk price for the month, as so certified, in respect of each gallon of such milk used in manufacturing cream, butter, cheese, milk powder, or condensed milk, as Parliament may hereafter in the present Session determine; and for requiring the Minister to pay into the Exchequer all sums paid to him as aforesaid by any such board; so, however, that a board shall not be liable to pay as aforesaid any sum in excess of the aggregate of the sums which have become payable to that board in accordance with paragraph (1) of this Resolution;

(3) to provide for securing that, as respects any payment payable or paid in manner hereinbefore provided to or by the board administering a milk marketing scheme, the board administering any milk marketing scheme which revokes the first-mentioned scheme shall be treated as if it were the board administering that scheme; and for securing that, in the event of the winding-up of the board administering any milk marketing scheme, the amount of any sums which have become payable to that board in accordance with paragraph (1) of this Resolution (less the amount of any sums paid by that board in accordance with paragraph (2) of this Resolution) shall, in certain circumstances, be deemed to be a debt due from the board to the Crown;

(4) to authorise the payment, in certain circumstances, out of moneys provided by Parliament to the Government of Northern Ireland—

1. (a) of a sum not exceeding two hundred thousand pounds in respect, of milk produced in Northern Ireland which has, in the year beginning on the first day of April, nineteen hundred and thirty-four, been used in manufacturing cream or butter at premises registered under any Act of the Parliament of Northern Ireland relating to the marketing of dairy produce; and
2. (b) of such sum (if any) as may be agreed between the Treasury and the Government of Northern Ireland in respect of milk so produced which has, in the year beginning on the first day of April, nineteen hundred and thirty-five, been so used as aforesaid;

and to provide for the repayment, in certain circumstances, to the Exchequer of any sums paid to the said Government in accordance with this paragraph;

(5) to authorise the payment out of moneys provided by Parliament of sums not exceeding in the aggregate seven hundred and fifty thousand pounds, to be applied by the Minister of Agriculture and Fisheries and the Secretary of State for Scotland, respectively, during a period of four consecutive years, with the object of securing, so far as practicable, that the milk supplied for human consumption in Great Britain is pure and free from the infection of any disease; and to provide for requiring boards administering milk marketing schemes to make payments after the end of that period to registered producers in respect of milk produced by them in such circumstances as may be prescribed by the Minister with that object;

(6) to authorise the payment out of moneys provided by Parliament of sums not exceeding in the aggregate one million pounds, to be applied by the Minister of Agriculture and Fisheries and the Secretary of State for Scotland, for the purpose of making to boards administering milk marketing schemes contributions not exceeding one-half of such expenses incurred by the boards respectively in giving effect to approved arrangements for increasing the demand for milk, as are attributable to any time before the end of two years from the day on which the first such arrangements as aforesaid are approved: and to provide for treating as part of the expenses incurred by the board administering any milk marketing scheme in giving effect to such arrangements as aforesaid, such sum as may be certified by the Minister, with the approval of the Treasury, to be properly payable to the board by way of compensation by reason of the fact that milk has, in pursuance of the arrangements, been sold at reduced prices for certain specified purposes;

(7) to provide for extending the functions of boards administering milk marketing schemes:

(8) to provide for regulating the manner in which milk is described for the purposes of advertisement and sale;

(9) to provide for such matters as are incidental to, or consequential on, the matters hereinbefore mentioned; For the purposes of this Resolution—

1. (a) the cheese-milk price for any month shall be taker "to be the excess over one penny three-farthings of the average price per pound at which cheese such as is commonly known as" New Zealand finest white "and" Canadian finest white "was sold wholesale in Great Britain during the immediately preceding month; and
2. (b) the standard price for any month falling between the end of March in any year and the beginning of the next following October shall be taken to be five-pence, and the standard price for any month falling between the end of September in any year and the beginning of the next following April shall be taken to be sixpence.—(King's Recommendation signified.)—[Mr. Elliot.]

3.40 p.m.

The MINISTER of AGRICULTURE (Mr. Elliot)

We have before us to-day the Financial Resolution in connection with a Bill which will shortly be introduced to deal with the milk situation and to bring about certain reforms which are considered advisable in the production of milk in this country. These Measures will vitally affect one of the greatest of British industries, whether we regard that industry from the point of view of the sums of money involved in it, or from the point of view of the number of persons engaged in it, or from the point of view of its significance to the health of the nation, or from the point of view of its Imperial and international repercussions. The annual value of the products with which we are about to deal is £63,000,000, and the Committee may appreciate that figure better when I say that it is £11,000,000 greater than the total electricity supply revenue for the whole of Great Britain. There are about 3,400,000 dairy cows in the country, and the number of persons engaged in the industry is estimated at 320,000. That is more than the total of those engaged in the manufacture of woollens and worsteds. It is larger than the combined totals of those employed in blast furnaces, steelworks and iron foundries and in the manufacture of nails and screws, etc. It is even larger than the figure for the electrical engineering and shipbuilding industries put together.

It is clear, therefore, that the preservation of this industry is a matter of the greatest importance, not merely to the industry itself, but to the nation, since the employment and revenue figures which I have given show that we must count it among the greatest industries in the land. As to the importance from the trade point of view of this great dairy produce traffic—the manufacture at home and the importation from abroad—we may see that from the statement that over 80 per cent. of the world's export of butter and over 50 per cent. of the world's export of cheese are sold and consumed here. The importance of this market to Dominion producers is even more marked. The United Kingdom is practically the sole market for New Zealand and Irish Free State butter, and it takes about 90 per cent. of Australia's supply. As regards cheese, we take practically 100 per cent. of the New Zealand exports, over 90 per cent. of Canada's exports, about 90 per cent. of Australia's exports and practically 100 per cent. of the exports from other Empire countries.

The milk position is so technical and complicated that I should not like to have to give a complete exposition of it to the Committee this afternoon. I have before me the commission's report drawn up under the chairmanship of my hon. Friend the Member for Altrincham (Sir E. Grigg) and I am sure that he would admit, in spite of the great services which he and his Commission rendered, that they were not able fully to cover every aspect of the situation. It would take me many hours to read the report of the commission aloud to the Committee, and I shall not embark upon that formidable task. But if I omit any feature of importance from my review I trust the Committee will not hold it up against me, but will take my omissions in good part and seek to extract further information from me in the later stages of these discussions.

In dealing with the present position, which is so clearly brought out in the report of the Grigg Commission, may I say first that the milk crisis is not a thing of yesterday. The difficulties in connection with the milk position have been growing since the War, and, since 1922, efforts have been in progress to grapple with them in an organised fashion by means of what was known as the Permanent Joint Milk Committee, a committee of producers and distributors. But these voluntary efforts were working with increasing difficulty and as is so clearly brought out in the report, and as was agreed to by all the parties who gave evidence before the commission, something further was necessary. Consequently a scheme under the Agricultural Marketing Act of 1931 was introduced. It passed a public inquiry, was submitted to both Houses of Parliament and passed by them and was submitted subsequently to the producers themselves who voted in favour of it by a very large majority. We have, therefore, an organised industry and in spite of the great difficulties which any scheme of organisation is bound to encounter, particularly a scheme covering in a few months a trade which employs more people than the shipbuilding and electrical engineering industries put together, I think we may flatter ourselves, as the President of the National Farmers' Union recently said, that although 25 per cent. of the milk producers may have suffered under the scheme 75 per cent. have derived substantial advantages.

Nobody can pretend that such a scheme is in any way perfect or that it will not require a great deal of overhauling. But that is not the task to which the Committee has to address itself this afternoon. The task to which we have to address ourselves is the consideration of the Resolution which has been tabled on behalf of the Government for carrying out the statement of policy which I recently made. We have to address ourselves to the questions: first, are the objects there set out desirable, and, secondly, are the steps which we propose to take calculated to secure those objects adequately I As to the first question, I think the mere fact that this formidable Resolution has been on the Order Paper for weeks and that no Motion for rejection has been put down from any section of the House shows that the objects which we seek to achieve commend them selves to the good sense of the House of Commons as a whole. As to the question of whether the machinery which we adumbrate here—for we do no more than that—is sufficient to carry out that task, we can best examine it in detail on the Financial Resolution itself and on the Clauses of the Bill which is to follow.

As to the general policy of the Government, the objects which we seek to achieve are a bigger consumption of milk and—to secure that bigger consumption—a clean-up of the herds. To secure both those things we shall require time, and we cannot allow the industry to sink while the House or the Government are considering the ideal conditions under which milk should be produced and consumed in this country. We, therefore, have to consider this policy both as a long-range and as a short-range policy, the short-range policy being emergency advances for the purpose of putting a bottom into the market for manufactured milk, and the long-range policy, the cleaning-up of the herds and, based upon that, a campaign of publicity and, if we can, of cheapness, for increasing the consumption of milk and thereby dealing in the only satisfactory manner with the great glut which is upon us at present.

We have chosen the line of insuring the organised milk producers to some extent against the difficulties of the present low values for milk products, which are due, I think, largely to heavy importations, and in some cases to depreciated currencies as well. We have to ensure against the bottom levels, because the bottom levels of manufactured milk were the levels at which the whole of the milk scheme, and indeed the whole of the milk industry of this country, was courting destruction. In the unorganised state of the market a year or two ago, milk in my own part of the country, in Wigtownshire and Galloway, was being sold as low as 3d. per gallon. You cannot produce to sell milk in this country at 3d. per gallon. Milk at this low price is no advantage even to the consumer, because he is getting the milk below replacement value; the industry is running into bankruptcy, and in those circumstances sooner or later milk would not be produced in this country at all.

Mr. KIRKWOOD

That 3d. was not to the consumer?

Mr. ELLIOT

It was not to the consumer. I am saying that whoever paid 3d. per gallon for milk would derive no benefit. Although he would receive a temporary advantage, the industry would break under that strain, and, in fact, the production of milk in this country would come to a stop. We have had to take measures to guarantee a minimum price of 5d. and 6d. for milk although in fact the market price of milk for the cheaper products is more like 3d. to-day.

It has been said that the price structure of the milk supply in this country is a most artificial one and that the steps which the Government are taking to deal with the matter are wrong. One of the criticisms which I have seen made by those who favour a national minimum and who have recently sent round a document to Members, is that it is a mistake to use any public funds for assisting cheese-making and the manufacturing side of the industry, and that the whole of this money should be devoted to increasing the consumption of liquid milk in schools. As soon as we look at the respective sizes of these two supplies, we see that that would be totally inadequate to deal with the situation. Let us take it that some 10,000,000 gallons a year are being con sumed in the schools by roughly 1,000,000 children. If that were doubled in the first year—and it would be a considerable increase—an additional 10,000,000 gallons would be utilised. Milk used for manufacture in 1933 is estimated to have totalled 160,000,000 gallons. Therefore, it is clear that the relief given to the milk market by the consumption of an extra 10,000,000 gallons in the schools would not be any use at all to preserve the industry. At the same time, we have to take steps to deal in some way with the 160,000,000 gallons which are used for manufacture. Even milk made into cheese on the farms may amount to 45,000,000 gallons. When we are dealing with figures of that kind, it is clear that unless we tackle this 200,000,000 gallons as well as the problem of greater consumption, our ship will sink while we are attempting to remedy the problem by means of the extra 10,000,000 gallons or so which it might be possible to secure by an increased consumption of milk in the schools.

The policy of the Government, of course, is conditioned by our international engagements, and the chief of these engagements is the Ottawa Agreements. It may be desirable at the beginning to clear up that position completely. There is no suggestion that we desire to modify the Ottawa Agreements in any way whatever. We have set our signature to the Agreements and they stand. We make no proposals for any reduction of milk products from the Dominions. Those who suggest that some pressure is being put on the Dominions just now to reduce their dairy imports into this country are under a complete misapprehension. Indeed, that misapprehension stands on the face of it. In the White Paper which was published recently giving the interchange of communications between my right hon. Friend the Secretary of State for Dominion Affairs and the Government of New Zealand, in response to the inquiry made by the Government of New Zealand whether His Majesty's Government in the United Kingdom considered it desirable that there should be a restriction on dairy produce imported into this country, we said that we had made our arrangements to deal with the situation; that our arrangements were embodied in the statement of policy recently made on behalf of the Government by the Minister of Agriculture, which would run for the next two years; that the question, therefore, was an entirely academic one, and that it was a matter purely for the Dominions themselves whether they desired to organise the imports of dairy products into this country. Therefore, let the Committee as a whole realise that in our Debate to-day inter-Imperial questions do not enter in any way whatever. We have chosen a line to deal with the situation which does not involve any infraction of the Ottawa Agreements or any request to the Dominions to consider an infraction of those Agreements. In these circumstances, we may say, truthfully, that we have completely and absolutely carried out, as we intend to continue to carry out, the bond to which we set our hands at Ottawa. We have, therefore, to work within the limits which are available to us. I have given a broad outline of these proposals in my opening remarks.

I come now to the Resolution itself, and I wish to refer generally to the proposals covered by Paragraphs (5) to (9), which are those which deal with the cleaning up of the herds and the campaign for increasing the demand for milk. Paragraph (5) provides the money to launch a campaign for securing a pure milk supply. "We know that we cannot build a campaign for a larger consumption of goods except upon public confidence in the quality of those goods. We know that the whole of this question has recently been exhaustively reviewed by the Committee of the Economic Advisory Council under the Chairmanship of Sir Gowland Hopkins, whose report has been published and is now in the hands of Members. It is unnecessary to argue further the case for Paragraph (5). I think it is true to say, that whatever may be the merits of pasteurisation, a universal compulsory scheme is at present entirely impracticable, and so far from touching the main problem, that of tuberculous milk, I would quote the words of the Hopkins Committee on page 91 (paragraph 26): The total eradication of bovine tuberculosis from all herds is the only complete solution of the problem of tuberculous milk. I say that from the point of view not merely of the consumer, but of the producer, because it is not a paying business to have to feed tuberculous bacilli. To find diet for cows is already sufficiently difficult without giving it to tuberculous bacilli which pay no dividends. That solution could not be obtained for many years and without considerable expenditure, but, as at present advised, we propose to use our £750,000 primarily for making a start on this great problem. It was recently said by one of the great scientists of our country, Dr. John Orr, that the present position of the dairy cows is a reproach both to the Department of Health and to the Department of Agriculture. I think that that is true, and I think, furthermore, it is a reproach to the nation also which permits those conditions. I sometimes think that if we had spent half the attention on the improvement of the milk supply that we have spent on many far less urgent and important questions, we should not have had that reproach laid at our doors today, because many other countries have tackled this problem, and with a great deal of success—sufficient success, anyhow, for us to resolve here and now that we will no longer suffer under this, out will do our best to see that in quality of milk as in quality of stock our dairy herds are the best in the world.

In the present unfortunate circumstances both of the Milk Board and of the producers, I think that it is impossible to expect them to bear the cost of the scheme for the establishment of tubercle-free herds as well as the scheme for the Roll of Accredited Producers which, following the recommendations, of the Grigg Report, is about to be undertaken in England and Wales by the Milk Marketing Board itself without Government aid. But it is essential that continuity should be guaranteed to the scheme, and the Bill to be laid before Parliament will enable the Ministers concerned to require the boards to make provision for the continuance of the campaign without further assistance from the Exchequer. I shall, of course, have more to say on this subject when the Bill comes before the House, but the Financial Resolution does not prejudice the consideration of the Clauses of the Bill in any way, and I am sure that some of those points will be more usefully reviewed when we can see the Clauses of the Bill actually before us.

Paragraph (6) of the Resolution authorises a contribution of £1,000,000 from the Exchequer on a £ for £ basis for a period of two years for the purpose of increasing the demand for milk. The milk marketing boards are, of course, to contribute the other pound. The boards will be required to submit schemes for the approval of the Government; the grant will only be available for the execution of approved schemes, and, as was stated in the announcement made in the House of Commons on 22nd February, the programme submitted by the boards will not be approved unless it contains provision for the supply of milk to schools at reduced rates. Let the Committee observe again that that merely says one of the things which the schemes are to contain. It does not in any way prejudge the question as to what other provision the schemes might contain. It allows as much latitude and discretion in the tackling of this new problem as possible, and, consequently, I hope that generally the House will be able to approve the proposals in the Financial Resolution, and, if possible, reserve further criticism until we get to the details of the Bill.

I do not suppose that anyone desires to argue the general ease for increasing the consumption of milk. The consumption of milk is low as compared with other countries, although the extraordinary lack of reliable data on this subject can best be realised when I say that when inquiring as to the consumption of milk per head in other countries, I could not get, in many cases, statistics which came down later than 1922, and, consequently, the figures as to the comparative consumption of milk per head in this country compared with the consumption in other countries must be taken with a certain amount of reserve. We must also take into account the very great consumption of milk products such as butter and cheese which goes on in this country as compared with some of the other countries with which we are making comparison, but if we could have increased even a year or two ago that consumption by, quite a small percentage, it might have been unnecessary to present this Financial Resolution to-day or to introduce the Bill for which it is the foundation.

We have this £1,000,000 for milk publicity, some of it for direct campaign publicity, and some of it for a campaign which will advertise the product through the product; for I believe that the product itself is its best advertisement, and I believe that after a year of experience of the increased milk diet in schools which will be possible under this scheme, you will have a self-increasing advertisement which will go on continually, as against the necessity of continually renewing wide schemes of publicity. But I will not be taken as one desirous altogether of ruling out the possibility of increasing milk consumption by means of direct publicity. When one sees the amount of effort and expenditure which great firms find it remunerative to undertake to convince us that Guinness is good for us, I am sure it should not be out of the question for us to consider whether other liquids also might not, in some small measure, come into the same laudatory category.

This will take time, and we have to handle the crisis which is upon us just now. Therefore, we come back to paragraph (1) of the Resolution—because without that paragraph I assure the Committee that it will be impossible for us to hope for success in the campaigns covered by the other paragraphs—the emergency advances. Paragraph (1) seeks authority for the payment to milk marketing boards for two years from 1st April, 1934, out of moneys provided by Parliament, of such sums as may be required to raise the value of milk manufactured in certain commodities to a minimum price of 5d. per gallon in summer and 6d. per gallon in winter—the standard prices. The normal method of valuing milk for manufacture into cheese and butter in this country has been for a number of years to take the value of manufacturing milk per gallon at the price of imported cheese, that is, to take a pound of cheese as a gallon of milk less l½d., which is assumed to represent the cost of manufacture. This method has been adopted for the purpose of the present proposals, and the cheese milk price is taken as the average price per lb. of New Zealand and Canadian finest white cheese in the previous months less lid. At present cheese prices, that works out at 3½d., that is to say, we insure the milk producer against the disastrously low level of 3½d. per gallon, and raise it by means of advances from the Exchequer to a minimum of 5d. No one could say that a minimum of 5d. was an exaggeratedly high price for a gallon of milk, but that is the figure which represents not an unreasonable one in comparison with the price which manufacturing milk has fetched in recent years when disaster did not beset the industry.

Of course, the existence of these two levels—this very low level of manufactured milk and this relatively much higher level for milk for liquid consumption is clearly an anomaly, and one to which we should bend all our efforts to get rid of; but it is not going to be an easy task. It arose through the efforts of the permanent Joint Milk Committee, the object of those concerned in the industry being to deal with the question of a temporary flush of milk, and it is interesting to note that attempts to deal with the milk situation have been tried very much on these lines in Norway and Sweden, the Netherlands, Austria, and the United States of America. In all those countries it has been found necessary to make provision for the flush of milk to be drawn off at prices below the prices prevailing for the normal consumption of liquid milk. We cannot get away from the fact that you always will have a flush of milk in the summer, and even in the winter time now we have an excess of milk over liquid requirements amounting to some 20 per cent., while in the summer it may rise as high as 40 per cent. I should hesitate to say that we should try to reduce that consumption to a point where it only just balanced, in case Providence were to laugh at us— "Well, you want less food, and you shall have it"—and some day or other a disaster might come upon us to which we should have to admit we had contributed to some extent, and confess that we had brought it upon ourselves. I recommend that Clause to the right hon. and gallant Member for Caithness (Sir A. Sinclair), whose support I hope to have in all stages, and indeed for other Measures we may bring forward of the same kind, because we do not forget his eminent services as Minister of Agriculture in Scotland—when, of course, he was jointly responsible for launching many of those great schemes—and for his other eminent services in support of my hon. and right hon. Friends opposite when, against considerable criticism from this side, he forced through and placed on the Statute Book the Act under which these marketing schemes have come about.

Advances will be payable in respect of the milk sold under the marketing scheme for the manufacture into cream, butter, cheese, milk powder or condensed milk, or used by the boards in the manufacture of those products. The rate of advance payable in respect of milk manufactured in factories will be determined monthly, and will be the difference between the standard price and the cheese price, or between the standard price and the net price of a gallon of milk, whichever difference is less. Advances will also be payable in respect of milk manufactured into cheese on the farm for which the boards have agreed to assume full responsibility. From the figures I gave earlier in my remarks, the Committee will realise that that is a very important factor, and unless some measure were taken to clear up this milk, it might easily go through unaccustomed channels, breaking that fine structure of the industry, and bringing disaster not only to the producers but eventually to the consumers also. We have not made provision for milk manufactured into butter on farms. It is less mobile, because it is intimately associated with stock-raising.

The Committee will desire to know what the total amount of the advances is likely to be. It is difficult to estimate the amount in the first year, because it depends upon two factors, first, the quantity of milk which will be covered, and, second, the rate payable per gallon. But, assuming that 160,000,000 to 180,000,000 gallons will qualify for advances, then the expenditure in the first year should not exceed £1,000,000; but as there are two unknown factors it has been thought prudent to budget for a maximum expenditure of £1,500,000 to £1,750,000. As to the second year, I do not think it is necessary to make a forecast now. We shall be able to forecast that more accurately when we see the working of the scheme in the first year. At the end of two years the system of advances ceases and the repayment under paragraph 2 begins, but only provided that the cheese-milk price exceeds the standard price plus a penny. In that case the board will be under an obligation to repay the difference between the standard price augmented by 1d. and the cheese-milk price.

The liability of the boards will be limited to such sums as they have drawn for the first two years, and at the end of March, 1938, the boards are relieved of liability for any balance not repayable by that date, because clearly if these very low levels of price for butter and cheese products continue the nation will have gained a great deal more than ever it will have lost by the writing off of these repayable advances. If prices rise the boards certainly could commence to repay some of the money which they have been borrowing, but if prices do not rise it is difficult to see how it will be possible for them to repay these advances, and I am very anxious not to put the nation or the boards into a position where it was actually desired to screw up the price of milk so that a very large area of consumers should be drawn upon in order to repay the relatively small advances made to guarantee the producers against disaster.

Sir FRANCIS ACLAND

Is there in this Financial Resolution a limitation of £1,500,000 for the first year?

Mr. ELLIOT

No, Sir, that is merely our estimate. It is desirable that the House should have some estimate; but clearly it is not within our power to give a firm estimate, and accordingly a firm estimate is not found in the Resolution.

Mr. de ROTHSCHILD

Is not the estimate given as £3,500,000 for the first two years?

Mr. ELLIOT

Yes, but I am not capable of saying what the figure will be as between one year and another year. I am taking the figure for the two years. It may well be that less or more is required in one year than in another. We have to deal generally with this matter, because we are working with two unknown factors, and there is a third unknown factor, consumption of milk, which it is difficult to estimate. I would draw attention to the fact that since I made my statement in the White Paper the Government of Northern Ireland have found it possible to frame proposals which will be introduced shortly to carry through a similar series of reforms in Northern Ireland. Their legislation will be different in detail from ours, in some ways it will be more drastic, as legislation in that country is a little apt to be, but the Government there are carrying out the broad general principle of grading the milk, of cleaning up the herds and saving the industry from disaster, and also are providing a supply of milk to the children in schools.

I am sure the Committee will be glad to learn that the proposals made to this House have commended themselves to another Government and that the Government of Northern Ireland are following a path which will remove from their country a reproach which has weighed upon it equally with this country as to the quality of its milk. We are at the beginning and not at the end of the discussion of these proposals. Probably a great many points will be brought out during the Debate on which we shall require to give answers from time to time; but I am certain that the policy is sound and I hope the machinery is adequate, and if we are resolved, as I think we are, without distinction of party, to carry out the policy, I am certain the House will not shrink from giving whatever additional powers or resources are necessary to ensure that the ideals we have set before ourselves in this Resolution and in this statement of policy are translated into practice.

4.21 p.m.

Mr. T. WILLIAMS

It is so long since I made my last speech from this Box that I almost feel that I ought to claim the indulgence of the Committee. I am very pleased to be present, if only to be able to offer a mutual welcome to the right hon. Gentleman the Minister of Agriculture, who has been a fellow victim. He and I can have fellow feelings, and all the time that he was speaking this afternoon I could not, despite my hostility to his sins of omission and commission in connection with this scheme, help picturing him on his sick bed and feeling sympathy for him. I ought to say at the beginning, and on behalf of the party I am representing, that we entirely agree as to the importance of the dairy industry. Not only is it worth £63,000,000 to £65,000,000 to the producers, hut, when all the distributors and the middlemen and the manufacturers of machinery are included, it is an industry which may be said to be worth somewhere about £125,000,000 to £130,000,000. Whatever our attitude may he to the scheme of the right hon. Gentleman, and I fear that it will not be as sympathetic as he anticipated, I must point out that this is one more instance of the breakdown of unregulated competitive capitalism. The right hon. Gentleman is fast acquiring the title of chief of the industrial red cross society in this country. We can blame world factors, imports from the Dominions and imports from foreign countries, dumping from Scotland and dumping from Ireland, the transfer from arable to dairy farming or any other cause we may choose for the present state of affairs, but all the same this is one more instance of organised society coming to the rescue of disorganised industry.

These proposals must come as a shock to many old-fashioned Conservative Members, and, indeed, to many old-fashioned Liberal Members, who, for generations, have chanted, "Hands off industry." The right hon. Gentleman has never had his hands off industry since he took office, and I do not blame him, because I am one of those who realise that sooner or later Government will have to control and regulate industry infinitely more than has been the case in the past. We have dealt already with sugar, wheat, fruit, pigs and bacon, and now the right hon. Gentleman comes to the rescue of milk. No Conservative or Liberal, especially no National Liberal, will be able to condemn any future Socialist Government for interfering with industry. The present Government have given ample precedents for control, regulation, restriction, subsidy, loans or any other course. The proposals before us this afternoon can be placed in two categories instead of three. The proposals for securing a purer supply of milk, the maintenance of prices, of manufacturing milk, publicity, and milk for children can be placed in one category. Plans for a purer supply of milk are not put forward before they are due.

I commend to every hon. Member the report of the Hopkins Committee, which contains some amazing revelations. Not only is it a damning indictment of the dairy farmers but a damning indictment of our larger local authorities and, in fact, of all past. Governments. The figures in that report would disturb the most undisturbable creature. They show that no less than 40 per cent. of our milch cows react to the tuberculin test, and that there is no sign of any diminution in the number. They show that of the samples of milk taken in four large cities in Scotland 10 per cent. were tuberculous infected, and that of the local authority samples taken in this country 7 per cent. are tuberculous infected. We are a long way from that happy day which the right hon. Gentle man suggested ought to be our goal when we shall have the cleanest herds in any part of the world. Forty per cent. of the cows in this country are tuberculous, as compared with 4 per cent. in the United States and 12 per cent. in Canada. Also, we have a long way to go in the matter of increasing the consumption of milk. I do not see how we can hope to increase consumption until we can guarantee a much purer supply of milk than we have at the moment.

Not only does the existence of tuberculosis militate against the consumption of milk, but it is also very costly to the farmer. This report tells us that the average life of a milch cow is about 5½ years, whereas it ought to be somewhere between 11 and 12 years, and that 5S per cent. of the cattle that are disposed of prematurely are killed off because of disease. I accept no responsibility for the figures. The Committee toll us that it is calculated that this means an annual loss of anything up to £3,000,000 to dairy farmers. If by creating confidence in the milk supply we can assist an increased consumption of milk we shall assist to solve the problem of the surplus, which is worrying the right hon. Gentleman in his sleeping and waking hours.

Our local authorities have some power to deal with this problem of disease, but what have they done during the last few years? I would commend to the attention of the Committee pages 132 and 139 of this report. There they will see bow many local authorities have really been alive to their responsibilities not only to the farmers but to consumers of milk. I will give one or two instances to indicate the sheer indifference of local authorities as to ensuring a purer milk supply. In Bedfordshire there is no whole time inspector and in Berkshire no whole time inspector. Devonshire had neither a whole not a part-time inspector. Gloucester, Huntingdon, Lancashire, the Isle of Ely, Lincoln have part-time inspectors. In London and Middlesex they have one full-time inspector. In Norfolk and Northampton they have neither a whole-time nor a part-time inspector. Coming to my own part of the country to its everlasting disgrace—not to the disgrace of the West Riding, because they are the best example—in the East Riding of Yorkshire they have one whole-time inspector but they never carry out any inspections.

It seems to me therefore that the agricultural counties and past Governments have been guilty of negligence. The Committee state that they are not quite sure that the supply of milk is as clean as it should be either for children or for adults. The "Manchester Guardian" says: Without strong and drastic efforts for safer milk we shall, as the 'Lancet' says, be running the serious danger of tackling the problem from the wrong end. The medical profession, to quote the 'Lancet,' is constantly affirming and demonstrating that the present ordinary milk supply is not safe and it is a vehicle for the spread of disease, yet agricultural interests have, on the whole, been unresponsive to the demand for safe milk, and have opposed the measures which authorities advising the medical profession regard as necesary to provide a satisfactory supply. The first proposal of the right hon. Gentleman is fully justified except that it is so ridiculously inadequate for the job, that one' is almost amazed that he should have produced his policy. He says that £750,000 will be set apart to be expended in four years to clean up all the herds, 3,000,000 in number in this country, 40 per cent. of whom are suffering from tubercular affection. That will mean £180,000 for four years to give us a pure milk supply. I am not an authority on this matter and I am not a statistician, but I have heard it said by fairly responsible people, who say that they can demonstrate this statement in fact and figures, that to clean up all the herds in this country would cost anywhere between £30,000,000, £40,000,000 and £50,000,000. The right hon. Gentleman proposes to expend £180,000 per annum.

What does the right hon. Gentleman propose to do with that £180,000 per annum? 'Is he going to provide Grade (A) T.T. milk, or is he going to provide a national veterinary inspectorate to inspect all these animals as they should be inspected from time to time, instead of leaving the responsibility purely a local one? Disease, as the report says, knows no boundary. You may have one county dealing effectively with the problem from their point of view, but an adjoining county which has no inspectors to carry out any inspection can disturb the equanimity of a clean county owing to the movement of cattle all over the country. We on these benches agree that if money is to be spent on procuring a pure milk supply, then the report of Sir Merrik Burril on page 99 of the report ought to be applied as quickly as possible. Despite any criticism from local authorities, responsibility ought to be taken out of their hands. There ought to be as part of the policy a national organised service of inspectors who are thoroughly trained and fully qualified to do the job, and no boundaries ought to intervene between them and their duties to the State and the people. While we agree that everything that can be done to procure a pure milk supply, to relieve fears, to stimulate demand for the consumption of liquid milk ought to be done, we say that this £750,000 is merely a shield for the second and third part of the policy of the right hon. Gentleman. With regard to the maintenance of minimum prices, publicity, and cheap milk for school children, we think there may be a germ of wisdom in the latter proposal, but even that is so small as not to be commendable to those who sit on these benches. If the right hon. Gentleman said: "Because of unregulated production and competition and the other individual elements within the dairying industry, a surplus of milk has been produced, and there are no customers to consume it or no customers who can afford to buy it at the price, we must do something temporarily, because we have neglected our duty so long in the past," we might have agreed with him, but it seems to us that instead of subsidising the production of cheese or the manufacturing of milk products, except as a purely temporary measure, the whole time of the right hon. Gentleman and his Department should be occupied, and the State funds that are being made available for this purpose should be utilised for increasing the consumption of liquid milk, and particularly making supplies free to every elementary school child in the country.

Having said so much about the failure to secure a pure milk supply I might say in regard to the dairying industry that there are few industries that are improving their efficiency more than the dairying side of agriculture. We know that they are experimenting on improving their pastures for grazing and hay, the selection and breeding of cows, for milk yield, methods of feeding, rationing and balancing labour operations, all of which have been going on for a long time, with the result that from 1925 to 1931 the increased yield has been from 452 to 532 gallons per annum or an increase of 12 per cent. Without a single additional milking cow there is a 12 per cent. additional supply of milk available. Apparently, nobody has considered where that milk is going to. Consequently, we are suffering from a surplus. We are not suffering from lack of a potential demand. If the purchasing power of working class people was as I would like to see it I do not think that surplus milk would be there. From 1925 to 1931, according to the Hopkins Report, output has increased from 1,117,000,000 gallons to 1,425,000,000 gallons, a tremendous abnormal increase.

If we are going to guarantee prices for liquid milk, for manufacturing milk, if we are to guarantee certain money annually for advertising purposes, will not that attract a greater production of milk, and if so what will happen to that milk I We should prefer always to devote our time to developing consumption rather than restricting output, particularly because of the peculiar commodity under review at the moment. The sum referred to by the Minister for the first year and the unknown figure for the second year devoted exclusively to subsidising manufactured milk will not necessarily do anything of a tangible character permanently to solve the liquid milk surplus problem. We think that to a very large extent that money will be wasted. I know that it is supposed to be an advance and that at the end of two years if cheese prices reach a certain point there will be repayments. What will the price of cheese be before they commence repayment? Unless it reaches a price where it is no longer possible for the poor to buy the cheese, there will be no repayment at all, and we shall have a subsidy of £3,500,000 to £4,000,000 to the agricultural industry on this account.

We recognise that the consumption of liquid milk is very largely a question of purchasing power, and in the absence of increased purchasing power a very powerful stimulus will have to be provided before we can hope to consume the surplus on potential output. Publicity may be useful, but it is not enough. The Minister's proposal of £500,000 for two years on a pound to pound basis with the Milk Board is totally inadequate. Educate the parents by all means, educate the children and you will create a milk consciousness through the child which will provide you in future with the biggest market, a permanent market, that the dairy farmers in this country have ever had. I do not object to the right hon. Gentleman competing on the hoardings with Bass, Guinness and Bovril, or to his putting large profits into the pockets of advertising companies, but I should very much prefer to see the right hon. Gentleman putting milk into the stomachs of the poorest children. We think that when State funds are used for any purpose they ought particularly to be devoted in that direction.

On the question of the daily, weekly or annual consumption of milk, a very fine investigation took place in Cardiff last year. It was conducted on very sound lines by local authorities, the retailers and all who could render any assistance. They took a good middle-class area, a good working-class area, 'a new housing scheme, and a poor working-class area. Every house up to a specified number was carefully examined and watched over for a period of time, and it was discovered that in the good middle-class house the amount of liquid milk per person consumed was 3.8 pints per week, in the good working-class area 1.87 pints, in the new housing scheme, where the rents have been increased to the tenants, 1.32 pints, and in the poor working-class house 1.1 pints. In the houses examined the number of occupants were practically identical. In the middle-class area every house took its regular supply of milk. In the good working-class area 9 per cent. of the houses took no liquid milk. In the housing scheme 15 per cent. of the houses took no liquid milk. In the poorer working-class houses 26 per cent. took no liquid milk at all.

If we look at such milk as they are using, it will be readily conceded that the poor working-class homes only receive sufficient liquid milk for use in tea, cocoa or coffee. Out of one pint per week per person, there is not enough for milk puddings, and there is little or nothing for any children. Consequently, what milk they get must be of a very cheap quality. These are the figures with regard to skimmed milk taken in the same homes in the same area The good middle-class house took per week a quarter of a pint per person, a good working-class house 1.94 pints, a new housing scheme house 3.04 pints, and a poor working-class house 3.24 pints per week per person. It will be observed, therefore, that the poorer the family the smaller the quantity of fresh liquid milk it consumed and the larger the quantity of miserable skimmed milk as a substitute. I ought to point out that these poor working-class houses are not what the Cardiff City Council would characterise as in a slum area, but it demonstrates that the fact of the situation is that the quantity of liquid milk consumed is fixed in accordance with the purchasing power of the home. Therefore, purchasing power, above advertising or anything else, and above any change of habit, is necessary, but all these things will be necessary before we can rid ourselves of the surplus that the right hon. Gentleman declares is on the market.

It may be argued by some hon. Members that the tenants of good middle-class houses have a higher appreciation of food values than have the occupants of the poorer class houses, but that is not borne out by the facts, for in these same good middle-class, good working-class, new housing scheme, and poorer working-class houses as between where there are children and where there are none we see an extraordinary change in the consumption of fresh liquid milk. For instance, where there are children, in the poorer working-class house the Consumption is 1.1 pints per week per person, but where there are no children in that same area they consume 2.08 pints per week per person. It is clear, therefore, that the fewer the children, the more liquid milk they consume. I want to put another point with regard to these figures, which I think the right hon. Gentleman ought to take home with him. He ought at least to take them back to the Department. In the good middle-class homes, with children, every home was supplied with fresh liquid milk. In the good working-class homes, there were 9 per cent. of the homes where no liquid milk entered at all, and there were 12 children, only one of whom received any milk when at school, so that in the case of 11 children they received no fresh liquid milk. In the new housing scheme houses, 14 per cent. of the houses had no liquid milk, and out of 26 children there, 16 were under seven years of age and only two of the 26 received milk at school, so that 24 received no fresh liquid milk at all. Of the poor working-class homes 26 per cent. received no fresh liquid milk, and there were 31 children resident there, four of whom were supplied with milk at school, and 27 received practically no fresh liquid milk.

I could quote from the British Medical Association's report on nutrition and so forth, but the facts are so well known as not to need repetition here. I would emphasise that in the poorer districts of Cardiff—and I do not think Cardiff is untypical—a quarter of the homes of the working-class received no fresh liquid milk. If the right hon. Gentleman asked us to spend public money on the provision of milk for children born in working-class homes, through no fault of their own, we should be infinitely more sympathetic to his proposals than we are now. Low wages, unemployment, and long periods of depression have seen the consumption of milk in certain working-class areas slowly decline, because the occupants could no longer afford to buy it. Milk is one of the first things to go. Therefore, what ought to be our policy I Starting from the basis of an undisposable surplus, ought we to subsidise manufactured milk on the lines suggested by the Government, or ought we to see if we could dispose of the liquid milk in the most sensible direction?

The right hon. Gentleman referred to the capacity of the factories for a consumption of 200,000,000 gallons, whereas the elementary schools last year only got 10,000,000 gallons of milk., Assuming that the whole of the 6,000,000 elementary school children, without discrimination, were given half-a-pint of milk per school day, plus the same quantity during holiday periods, that would come to somewhere in the region of 80,000,000 gallons per annum, and it would be no more costly than the right hon. Gentleman's present proposals. Last year, say the Board of Education, 900,000 children in this country attending elementary schools received on an average one-third of a pint of milk per day, but they paid a penny per day for it, or 3d. per pint, or 2s. per gallon. We make the working-class mother pay 2s. a gallon for this milk that the children receive at the elementary schools, and we are subsidising milk at the factories to the extent of making the price 5d. a gallon. The thing does not bear examination.

Mr. ELLIOT

The hon. Member has devoted a good deal of time to pointing out that skimmed milk is taken by the poorest people in the land.

Mr. WILLIAMS

Merely because they cannot afford to buy the fresh milk.

Mr. ELLIOT

And we are subsidising the cheapest form of milk which is consumed.

Mr. WILLIAMS

My point is that instead of subsidising condensed milk, or cheese, if we subsidised or made free of all charge a daily supply to all the children attending the elementary schools, that would help us largely to get rid of the surplus, and it would do more. It would create a milk consciousness in the rising generation, which would grow up and provide the recipients of this free milk with a real appreciation of the value of milk as a food. Let me give the right hon. Gentleman an illustration. I happen to be one of 14 children, whose parents were poor. The whole family at one time depended on the wages of one individual. Does the right hon. Gentleman imagine that when there were about nine or 10 of us in the home, and only one worker, we could afford to have fresh liquid milk? It may be interesting to the right hon. Gentleman if I tell him that I did not know the taste of milk until I was perhaps in the teens of years, not because I could not have consumed the milk, and indeed he knows that I should have looked more like a man if I had had plenty of milk in my younger days. What applies in my case applies in tens of thousands of other cases. If the parents have not enough money over long periods to buy fresh milk, habits are created that take generations to eradicate.

We suggest that if we were to make provision, not to charge children 2s. a gallon for the little drop of milk that they are able to get at the elementary schools, but for half-a-pint each per day, we should find that, from a health point of view, a splendid investment for the future, as any member of the British Medical Association would tell you, but it would do more. It would create that milk consciousness that the dairy farmer really needs, and it would provide the best permanent market that the dairy farmers in this country have ever had. To subsidise milk consumed at elementary schools would be a good policy and would cost no more, and probably less, than the proposals of the right hon. Gentleman. I do not intend to deal with the question of pasteurised milk, or Grade "A" milk, or tuberculin-tested milk. I think this document that I have in my hands is sufficient to last either myself or any other hon. Member a long time, if only it is consumed adequately and clearly understood after it has been read.

We agree with the right hon. Gentleman that we ought to set to work to clear up our herds and to provide a pure milk supply, but we think the right hon. Gentleman's proposals have no real relation to the problems confronting the dairy farmers, and also we think that while you may spend money on hoardings, on trying to educate the parents, on cinemas, and so on, so long as you implant the idea into the minds of people that milk is an essential food, especially for children, side by side with educating the parents you must let the child have some milk, and if millions are to be hurled away, we think they should be hurled at the heads of the children in the form of free milk. I would say, in conclusion, that we think the Government have started at the wrong end. They will not clear up the herds so long as they leave it in the hands of county councils run by farmers and landowners. Rather should there be a nationally organised service, for only then will there be a real chance of clearing up the herds of this country. The Government are subsidising at the wrong end. We might forgive the Government if this was merely a temporary expedient, so long as a long-term policy was based on supplying children with what they urgently need and what many of them do not get, but because of these defects in the policy of the right bon. Gentleman, I am afraid we shall have to vote against it.

4.58 p.m.

Mr. de ROTHSCHILD

May I join the last speaker in congratulating the right hon. Gentleman the Minister of Agriculture on his return to the House I All of us on these benches were very glad to follow him in his happiness, but we were sorry to hear that he was interrupted and had to retire for a period. However, I am glad to see that on his return here he is in robust and, I hope I shall not offend by saying, rude health. I can say the same about the hon. Member for the Don Valley (Mr. T. Williams), who has just sat down, whom we are all glad to see back again.

As regards the Resolution which is before the Committee to-day, although I am prepared to agree with it on principle, I should like to point out that it includes three distinct projects, two of which are no doubt admirable in their intention and may possibly be well carried out, but the third I am not prepared to approve, and indeed I consider that it is fundamentally inconsistent with the other two. Many other hon. and right hon. Members of this House no doubt find both good and bad in this Resolution, and I have no doubt that the Minister has presented many Members with a choice of evils, either to vote for provisions with which they disagree or to vote against provisions they favour. It is a well-known method of Parliamentary procedure, and it is not for me to quarrel with it. This House is certainly in favour of taking steps to increase the consumption of milk in this country, and, although it is usual for the industry itself to provide the funds, I think there is some reason why it should be helped by the Government in this case. A national contribution in the case of milk may well be justified because of the beneficial effect of milk on public health which has been shown on many occasions, and especially, as we have heard to-day, in the case of the younger generation. There can be no doubt that money spent on the consumption of milk may produce an economy later on in the health services, and may therefore become a truly economic proposition.

I am glad, nevertheless, that the milk industry itself is to make a contribution to this campaign and that the right hon. Gentleman is taking a leaf out of the book of his predecessor in this House and is going to advertise in company with Guinness on the hoardings of our towns. I entirely approve, of course, of the proposal that milk should be given to schools. In fact, I agree with the hon. Gentleman who has just sat down that this aspect should be given greater attention and extension than in this Resolution. For all that, this part fits oddly with the rest of the scheme, because the rest of the scheme and the policy of the Milk Board forbid the producer to sell milk below a certain price, and now the State comes and buys milk at that price to give away. We must remember also that the success of these measures will depend ultimately on the industry itself. You may approve of measures to improve the consumption of milk, but it depends on the quality whether the consumption is increased. The industry must be able to produce not only an adequate supply of high quality milk, but to convey it to the public at a reasonable price, and this can only be done by a drastic reduction of the margin of distribution.

I sincerely welcome the provision of £750,000 to increase the purity of the milk supply. Whether it will be sufficient to obtain the object I do not know; anyhow it is making a good beginning. If the increased consumption of milk is to benefit the health of the public, there must be improvement in the standard of purity and freedom from disease, and especially is this the case as the right hon. Gentleman has pointed out in relation to bovine tuberculosis. Medical opinion, he says, is agreed about this. There is one thing that medical opinion is not altogether agreed about, and that is the question of pasteurisation, and it is one of the first things I submit that should be examined under this proposal. The question is indeed very important, because we cannot reach the desired standard of purity in unprocessed milk for many years as the right hon. Gentleman has pointed out. Pasteurisation must never be regarded as a substitute for pure unprocessed milk. The right hon. Gentleman has pointed out, and read from the report, that pure natural milk must be our object. I feel the gravest apprehension lest the adoption of pasteurised milk should retard our progress towards that goal. The present conflict in medical opinion is no doubt very acute. It may be very sincere, but it is worrying and intriguing the milk-consuming public.

Certain quarters support pasteurisation because they see in it a possible substitute for a supply of pure natural milk. There is no doubt about that. It allows large distributors to foster low-grade production, and this is a policy that we know the great distributors have pursued for years past, and they desire to continue it. It allows them a high profit margin, because it depresses wholesale profits, and they process the milk. May I suggest to the hon. Gentleman who is dealing with this Resolution that we can only find out by experiments the relative values of raw and pasteurised milk. These could be conducted in schools over a sufficiently long period. Such an experiment, as the right hon. Gentleman knows, was tried in the Lanarkshire schools but proved rather inconclusive. This is the opportunity for a scheme of that sort to be carried out on a large scale which will satisfy the public and give confidence that we are drinking milk which, whether pasteurised or not, will be conducive to health. I know opponents of pasteurisation will agree that there is a present outcry that all milk given to children should be pasteurised, but I think at present it would be beneficial were this not so but if part of it were pure T.T. milk. We could then see whether they progress better on that milk than on pasteurised milk. I should like to see some of the money under this Resolution devoted to that object.

I have pointed out that the campaign to increase the consumption of milk can only succeed if the industry makes cheap supplies available. In the same way the campaign for purity can only succeed if the producer is encouraged and rewarded with higher prices for higher quality. At the same time it is essential that the price to the consumer should not be so high as to place pure milk in the luxury category. The distributor's margin for high quality milk can be drastically reduced because no processes are necessary, and his costs are the bare costs of distribution.

May I come to the provisions which I find some difficulty in commending to this House and to my colleagues on this bench and which I find it difficult to reconcile with those I support? I mean the provision of £3,500,000 to guarantee higher prices for surplus milk. It seems to me a strange proceeding that, while we are voting £1,000,000 towards a campaign to increase consumption and so absorb the surplus milk, we should at the same time vote some £3,500,000 to guarantee a higher price for the surplus, with the inevitable tendency to produce a greater surplus. Why is there such a colossal surplus now? It is largely because the Minister has promised the dairy farmers a better time as the result of the marketing scheme. This has led them to extend production. He comes now holding out further inducements to production and has pointed out to-day that he considers that about £1,250,000 will be spent in the first year. According to the White Paper, he considers that not exceeding £3,500,000 will be spent in the two years. That leaves a considerable margin for the second year—the difference between £3,500,000 and £1,250,000. Does the Minister really think the farmer is going to sit down under this promise and not increase the surplus in the second year? I should be very much surprised, and if this surplus is really increased and comes to very much bigger figures even with the additional grant made by the public, we may find the price reduced from what; it is to-day.

The Minister was very vague in adumbrating his views about Ottawa. He said that nothing changed or would be changed in regard to these agreements for at least two years. What has changed is that there is a war of subsidies between the Dominions and ourselves. The Dominions are subsidising their dairy exports to this country, and we are going to subsidise the surplus here. This competition in subsidy and assistance will lead to a chaotic state in a very short time. It is circumventing the Ottawa Agreements. There is an expression the Minister used to-day and has used repeatedly. He says he is putting a bottom in the scheme by guaranteeing a minimum price, but may I point out that you cannot put a bottom in the milk market or any other by eliminating the natural check on uneconomic production which is an uneconomic return? That is what the Minister is now attempting. I wonder if he has studied the report of the Fat Stock Commission. In discussing pig production, the report brings forward the case of surplus production and says: We think there is to-day scope for an increase in the pig population of this country, but that beyond this reasonable increase which may in the interests of elasticity he useful, surplus control operations may be necessary. Whatever method is used should be designed to discourage and not to encourage the production of further surpluses bearing in mind that any scheme which causes the surplus to be absorbed at an economic price to the producer implicitly encourages further surpluses. This appears on page 74, and it has a very obvious bearing on the present case. It is curious that it was thought necessary to include it in this report, and it is indeed an illuminating commentary on our economic plans. Further, it is very interesting that the report was addressed to the Minister himself. I wonder how they dared to give such a warning to the high priest of the economic faith of the twentieth century. Were they thinking in advance of the financial proposal we are now discussing?

Perhaps one day we shall be treated by one of the Members of the Front Bench—perhaps by the right hon. Gentleman himself—to a book on the 20th century economic theory. Some of us dullards will find it very helpful, because we cannot easily deduce its principles from the practical steps to which the right hon. Gentleman is trying to lead this House. They seem to be rather contradictory. On the one hand, we have a surplus of potatoes and on the other a surplus of milk. To deal with the surplus of potatoes we fine the farmer who grows more than a specified acreage, and to deal with the surplus of milk we give the producer a remunerative price. I am looking for the new "Wealth of Nations" to be published, and in it I know that these problems will be adequately dealt with, no doubt in the chapters on the economics of glut. I am looking forward to learning how we can reconcile two diametrically opposed remedies for the same problem.

The new planning is full of these inconsistencies. I will quote another example. The present proposal assures an increased price for the surplus, yet at the same time the appointed persons have settled the summer prices for liquid milk at lower prices than the distributors are prepared to pay. There can be only one reason for this, and that is to discourage production. Whether the arbitrators on this occasion were carrying out a policy inspired by the pundits of the Ministry of Agriculture I do not know, but there can be no doubt that they were helping the policy of the Ministry. I am not merely stating this on my own account, but on the authority of a well-known man, Professor Ashby, who was president of the milk inquiry.

Lieut.-Colonel ACLAND - TROYTE

Does not Professor Ashby say in his speech that he has no inside knowledge of the Milk Board?

Mr. de ROTHSCHILD

Yes, he certainly says that.

Lieut.-Colonel ACLAND - TROYTE

Then his statement has no more value than those of the hon. Gentleman.

Mr. de ROTHSCHILD

But he had been on the Milk Commission, and he must have had a little more inside knowledge than either the hon. and gallant Gentleman or myself. I will go further and say that the measures to make the surplus production more remunerative defeats the end of the campaign to absorb the surplus, but it is inconsistent with the other proposal to improve the quality of the milk supplies. The marketing scheme now operates to level out milk prices. It has, therefore, encouraged the production of low-grade milk, and this low-grade milk is cheaply produced because it is largely seasonal and unstable. It is not burdened with the costs which must be entailed in producing stable supplies of high-grade quality milk.

This proposal to make surplus milk production remunerative will have other important effects. I fear that it may encourage the growth of the manufacturing section of the milk industry based on subsidy, and anticipating improved prices for manufactured milk products two years hence. Improved prices, according to what the Minister has said, are still in the Utopian stage, and there is a grave danger that the trade is already increasing its factory plant because it anticipates continuing to buy subsidised milk at the present artificial price. If we are to have a chain of uneconomic factories fastened on the country, we may have to feed them permanently with a supply of subsidised milk.

The real point is that the rapacity of the distributors has been too much for the Milk Marketing Board. It has been too much for the Ministry of Agriculture. Only one share of the spoil is definitely safeguarded, and that is the distributors' margin of profits. The milk drinking public pays 2s. per gallon, and can therefore only afford to drink 60 per cent. of the available supply; notwithstanding that, they must subsidise the other 40 per cent. so that it can be sold at 3¼d. per gallon for manufacturing purposes. That is a Gilbertian situation. We know that small distributors are working on a margin of 5d. or 7d., and that large distributors have insisted on a margin twice as large and the scheme has given it to them. The margins to-day have been stabilised at this high level. This proposal, brought forward by the Minister for encouraging the production of low-grade milk irregularly and cheaply produced, will play further into the hands of distributors, from whom it should have been the main object of the marketing scheme to protect both producer and consumer.

5.21p.m.

Sir EDWARD GRIGG

I rise to support the Resolution in spite of what has been said by the hon. Member for Don Valley (Mr. T. Williams) whom we all welcome back to the House. If we had been considering a long-range policy, I should have been prepared to give his speech complete support, but we are dealing with an emergency policy to meet a critical situation in the milk industry. Giving milk to school children will not solve the emergency problem; it is impossible to give milk to all school children to-morrow, for the very good reason, as the hon. Member pointed out, that there would be instant complaints of the quality. The medical profession in this country naturally pay particular attention to the milk which is being given to school children. While I absolutely agree with the hon. Member for Don Valley that the provision of milk for school children is one of the ways by which the milk industry will be put on a thoroughly sound basis, I do not agree that that can be regarded as a substitute for the emergency measure which the Government are now proposing.

The marketing scheme is still in its infancy. It is not in full working order, and meanwhile the industry is passing through a very critical stage. Farmers throughout the country are giving a great deal of criticism to the Milk Marketing Board, but that is not in any way the fault of the board or of its working. The board have done admirably during the very short time in which they have been in existence. It is difficult to criticise the Ministry when considering the measure of success which the milk marketing scheme has achieved in securing the objects for which it was introduced. The first object was to stop undercutting of prices in the liquid milk market. There can be no question that that has been effectively achieved. There is no more undercutting in the milk market. The success of the pooling mechanism, which is very difficult and complicated, is a testimonial to the efficiency which has been shown in the setting up of the board.

Farmers may complain of minor difficulties in the scheme; there are plenty of them, and there was bound to be. Regions complain about unfairness as between one region and another, and producers complain, with even more justice, of unfairness as between one class of producer and another. I regret that the schemes were run even for six months in a manner which certainly penalised the better farmer. Those are defects which may be remedied, and I do not think that there is a just foundation for the wealth of criticism being levelled at present at the Milk Marketing Board. Moderate farmers recognise what the board have done for them. At a meeting of protest in Chippenham last week, called by farmers who were complaining that justice had not been done by the Government to their industry, I was very much struck with the fact that, amid all the complaints, never was any question raised of getting rid of the Marketing Board. On all sides there was general agreement that, however badly the board might have functioned, it should be retained. So far so good. Its record up-to-date in dealing with the undercutting of prices and the pooling system is a testimonial to the efficiency of those who had the task of setting up the marketing scheme.

Things are not so well with the other two main objects of the scheme. One, dealt with at some length by my right hon. Friend when he introduced this Resolution, was the object of raising or maintaining the value of the milk going into manufacturing. The board have done their best. They established a scheme under which manufacturing milk is paid for by realisation value, and that has been a distinct improvement. In spite of their efforts and in spite of the fact that they have successfully raised the prices of certain classes of milk going into manufacturing, prices have been falling, and it was quite inevitable that our prices for manufacturing milk should fall at the same time. When the Commission reported, manufacturing prices in this country stood at 5d. That is low enough, but 3½d. is absolutely-impossible from the dairy farmers' point of view. Up and down this country farmers are saying, and being told to say by critics of the Government, that that situation is due to inefficient restriction of imports. There is no ground for that criticism, and I deny altogether its foundation. The Government have done their utmost to deal with imports. I was very glad to hear the right hon. Gentleman say that he had been careful to avoid any strain in our relations with the Dominions. If manufacturing prices have fallen, it is for reasons with which no marketing scheme or any Government could possibly have dealt. If the Government had attempted to go further in dealing with imports, there was the danger that they would not only quarrel with the Dominions but would begin to set up dangerous quarrels between the farming industry in this country and the industrial interests. That would end up much worse for the farmers than for the industrial interests, which have much greater influence in this country. The marketing scheme has been shaken by the fall of prices, and I entirely agree that the right hon. Gentleman's emergency Measure was necessary to deal with the situation thus created.

The third object which the marketing scheme was intended to secure, and to which the hon. Member for the Isle of Ely (Mr. de Rothschild) made a very interesting reference, was that of raising the prices paid to the farmer in respect of liquid milk sold to the consumer. The board have done their best in that respect also, but the arbitration has gone completely against them, and there can be no question that the distributors have got the best of the bargain all along the line, so far. I am not going to join in criticisms of the arbitrators. I rather agree with the hon. Member for the Isle of Ely that the price in itself is not unwise, and I believe that that was said by one of my colleagues on the Milk Commission. Certainly, taking a long-range view of the interests of the dairy industry, it is questionable whether the actual price for milk could have been put any higher than it was. Much graver than the price of milk, however, was the additional charge for transport risk which the arbitrators placed on the milk industry. That is the real gravamen of the complaint, and there is much more justice in it. I think it is an illustration of the criticism which has been made of this system of arbitration, namely, that it is arbitration by men who are brought in at the last moment without intimate day-to-day knowledge of the industry and therefore very likely to make a mistake of that kind about details, much more important, perhaps, than they themselves realise until they know more about it.

The general result has been that the distributive margin has not only been stabilised, but increased, because the distributors are no longer taking any risk for surplus, and the result of the marketing scheme so far, on this side of its operations, is that it has not merely stereotyped the advantage which the distributors have always had, but has actually increased it, and has improved and strengthened their position. The board is not to blame for that, and I wish to make that very clear because I have been quoted as criticising the board for this result. I do not think the board is to blame for it in the least; it is a result of the system and the board could have done no more than it has done.

The industry, therefore, is certainly in a very serious predicament. I believe it to be a passing predicament, but it is a serious predicament, and the Government are fully justified, in my opinion, in introducing an emergency Measure to deal with it. After all, this is a proposal to spend something between £4,000,000 and £5,000,000 over a period of two years, some of it as grant and some of it as repayable advances, and for both of these forms of support I shall certainly vote with complete good will to-night. It shows that the Government really intend to do all they can for this most important industry at the present time. It should put heart into the industry, and I believe that the farmers will be wise to show some gratitude for what is being done for them at the present moment by the Government. I hope they will not continue always to lend an ear to those who say that this is nothing, and much more could have been done. It is really a very valuable contribution to the dairying industry at the present time, and the farmers of this country will be very unwise if they pretend that it is nothing and underrate it.

I have said all this in support of the Resolution, because I believe an immediate stimulant to be necessary; but we have to recognise that the after-effects of stimulants are not all agreeable or salutary. I believe we must also recognise that, having taken these emergency measures, which we cannot avoid taking and which are, I believe, indispensable, we shall find that some correctives are needed afterwards, and that measures must be devised without too much delay to deal with the fundamental problem of the industry—something more permanent than anything we are considering this afternoon. I support this as an emergency measure, fully believing that long-range measures which go more thoroughly into the problems and difficulties of the industry will be presented to us before long. I should like to make the grounds of that perfectly clear.

Let us consider the probable aftereffects of this Resolution. Let us consider, first of all, its effect on manufacturing prices. Under this Resolution, the rise of manufacturing prices will in fact be fixed at 6d. in summer and 7d. in winter, because if they rise above those figures repayment to the Government will begin. We must, therefore, regard this Resolution as putting a definite limit to the possible rise in the manufacturing price after the two years period. A rise to 6d. from the present price of 3½d. is only a rise of 2½d., and it is a rise which takes effect on only one-sixth—that is to say the surplus—of the total sales of the Milk Marketing Board. A rise, therefore, of 2½d., which is the limit of what can be achieved on the surplus milk, is less than ½d. in its effect on the total pool price. What the Government are doing now will not mean very much above ¼d. to ½d. But when this period of two years is over, and the repayment conditions come in, the rise will be limited to something like ½d. on pool prices.

Of course, the Government may waive this repayment. The right hon. Gentle- man suggested that that might prove to be necessary when the time comes. But, even if they do waive repayment, I do not believe it is going to be found possible to raise manufacturing prices very seriously; I think it will be found in practice that this same limit will be fixed by other considerations—first of all by the consumer. There is a great deal of feeling in the country at the present moment on the subject, for instance, of butter. Butter imports have increased enormously, and people are saying on a hundred platforms that this butter ought to be kept out, and that butter ought to be supplied by our own dairy farmers. I do not believe that that is a practical argument at all. The consumption of butter in this country is increasing at the present time for the very reason that the price is so low. In homes all over the country people are eating butter who never had butter before. Perhaps they had nothing in that way at all; perhaps they had dripping, perhaps margarine. Now they are eating butter, but only because the price is so low, and, if you exclude these imports which are coming in at this cheap rate, you are not going to get them to eat English butter at a higher price; they will go back to less butter, to dripping, or to margarine. Therefore, the idea that you can go very far in raising prices to the consumer on the manufacturing side, particularly as regards butter and cheese, is, I think, very misleading.

There is the further fact that, if you are really going to try to deal drastically with prices and with imported butter and cheese, you are going to be faced with a serious disagreement with the Dominions. After all, we are practically their only market for these commodities, and I do not see that there is really very much guidance to be got from the formula, which is now being recited everywhere, of putting our own farmers first, the Dominions second, and the foreigner third. By all means let us give the Dominions a preference over the foreigner, but, when we talk about putting our farmers first and the Dominions second, we have to decide exactly where the interests of this country lie, and where the interests of the Empire lie, and it would be very easy to interpret that formula in a way which would mean that the Dominions were kept entirely out of our British market.

It seems to be that the only possible principle for us to adopt in dealing with the Dominions in regard to our farm products is the principle which we have asked them to accept in regard to their manufactures, that is to say, that we should concentrate on things which we can produce on a reasonable economic basis. That is what we are asking them to do in regard to manufactures, and we are bound to take the same line in regard to our own farm products. There is strain at the moment in the Dominions. It arises not from anything that we have done, but from anxiety and uncertainty. They do not know what we are going to do in the future, and the sooner some principle like that is laid down in regard to our agricultural products—a principle which is the same as that which we have asked them to lay down in regard to their manufactures—the better it will be.

I am sure that the application of some principle of this kind will also be claimed by the industrial interests of this country, who are interested in export markets, and it would not really be in the interests of our agriculture to resist it. After all, there is a new spirit in this country towards agriculture, but it is still a delicate plant, and you do not want to encourage or stimulate any reaction on the part of the great industrial vote in this country against the interests of the farmer. I think, therefore, that we have to recognise as a fundamental fact that it will not be possible to raise pool prices very much from the manufacturing end, whatever may be attempted in other directions. It is a grave disservice to the farmer to suggest to him that the restriction of imports is the key to the prosperity of his industry. It is misleading him completely.

I believe that, if we try to put the dairy industry on a stable foundation, we shall be driven to deal with the other end of the industry—with the liquid milk market and subsidiaries to the liquid milk market, such as the market for fresh cream and the market for cheese made on our farms. The scheme which the Government have put before us this afternoon does something in this respect. It does begin to give definite encouragement to quality production, and it does at least make a beginning in the en- couragement of demand by giving more milk to school children; but here two difficulties are going to arise when the scheme terminates. When these grants terminate, the whole cost for whatever has been set up will fall upon the board, and the board, therefore, will have to meet heavier charges as a result of what has happened in these two years through the assistance of the Government. The board will be accumulating liabilities all this time, which it will be very difficult for them to escape afterwards, and, if they are to meet those liabilities in two years' time, and, indeed, to develop on the lines on which the Government wish them to develop, there must be an improvement in the price which the farmer receives from the liquid milk market.

The Milk Marketing Board is doing something itself—and I think that this deserves recognition—to deal with this question of the price for liquid milk. It is abolishing the idea that the retail price of milk is to be governed by what is called the prevailing regional price. That was a system under which the distributors fixed the price and then the board became responsible for enforcing it. The distributors in many cases during the past winter months have fixed what seemed to me to be quite exaggerated and improper prices, and the board have had to take the responsibility. That, I think, was a very undesirable system, and the board are quite right in escaping from it. They are going to lay down, I am informed, as an alternative, a system under which they fix minimum margins for distribution; that is to say, in certain places where distribution is comparatively simple, the margin is to be 8d., in other intermediary places 9d., and in the great cities 10d., or something of that kind, and the minimum margins are to be fixed at that figure. Of course, the margins may be greater if distributors so choose. At any rate, this introduces the element of competition, and it may be effective up to a certain point in reducing the distributive margin and keeping the retail price at a reasonable level. But even so, these margins are very wide and the danger, from the dairy farmer's point of view, is that every increase of the wholesale price to him will produce either a deadlock, such as occurred between the distributor and the producer before this scheme came in, which may always occur again, or an increase of price to the consumer, which would be even worse.

I believe, therefore, that in any adequate dairy farmers' organisation an impartial arbitral element will be found to be absolutely indispensable in securing the support of the public. I admit that the present system of arbitration is unsatisfactory, and I have no doubt that the board will now go ahead and attempt to dispense altogether with any system of arbitration. They are entitled to do that. The system expires, under the Resolution which we passed last year, I think on 6th October, and the board are perfectly entitled to go on and see what they can do without arbitration, but I am convinced that they will find that arbitrators are necessary and, without an arbitral element which will keep them right with the public and will also be able to deal with the great distributing interest, I think the hope of the producer getting an adequate share of the price paid by the consumer is very small indeed.

I believe also that he will not go very far in getting a better share of the price unless he gets the co-operation of the distributors. The system of distribution, after all, is an extremely elaborate one, and in a city such as London the task of distribution is immensely difficult. It is not merely that milk has to be delivered all over a vast area. There are also very difficult balancing functions to be carried out between the requirements of weekends, requirements during the week, and so on. This very complex and delicate machinery has been built up entirely by private enterprise and with a considerable investment of share capital, and it seems to me impossible, unless this House changes the policy of the country, to put an organisation of that kind, carrying a very large amount of share capital, conducted and created by private enterprise, entirely at the mercy of a statutory monopoly working in an essential commodity. I therefore think that the producers must get, if they can, the co-operation of the distributors, and that they will find that co-operation indispensable if the system of distribution is to be simplified and cheapened. I believe both these things are possible. They are the real key to the prosperity of the industry, and somehow or other that fundamental problem of the industry must be tackled. I do not wish to be in the position of one crying his own wares, but we attempted to deal with this in the report of the Milk Committee. There may be other ways of dealing with it. All I say is that the right hon. Gentleman will not put the dairy industry on a firm foundation until he has tackled this question of distribution and the costs and profits arising from it.

Furthermore—this is what will be necessary in addition to these emergency measures—the demand for milk must be increased, and for that purpose the price must be lowered. It is no good to denounce from farming platforms the people who buy tinned, skimmed milk. They buy it because they cannot afford anything else. It is ridiculous to abuse them as though they bought it because they preferred it to better milk which the farmers of this, country should produue for them. If milk is to be more widely drunk, the price of it must be reduced and at the same time, of course, the quality must be improved. That I believe to be possible, but only through the co-operation of the whole milk industry, including the distributors. Never try to proceed by the method of a war between the two sections of the industry—a war in which, whatever arrangements you make, the producers will always get the worst.

I think we have to spread the consumption of milk, and the key to that is the school children. I was very much surprised at the observations that the right hon. Gentleman directed to this subject. It was practically the only part of his speech with which I did not find myself in agreement. He seemed to suggest that the provision of milk to school children could only be made to deal with a comparatively small part of the surplus in the liquid market. I really do not believe that to be the case. I would go even further than the hon. Member for Don Valley. I believe the supply of milk to school children would consume something like 300,000 gallons a day, or 9,000,000 gallons a month, and that is a very large part of the surplus with which the Milk Marketing Board have to deal. Here is the Milk Marketing Board's report. The surplus in the first month, October, was 7,000,000 gallons, in November 8,000,000, in December 9,000,000, and of course, it has risen row to 15,000,000. Nevertheless, this provision of milk for school children is going to deal very effectively with the greater part of the surplus which the Marketing Board has to dispose of, and, if you add, as I believe you ought, milk for infants not yet of school age and assistance to nursing mothers, you will find that the whole of the surplus can be used very effectively indeed. The hon. Member for Don Valley made, as I thought, a most impressive case, though not as an emergency measure. If he had argued it from that point of view, I should certainly have agreed very fully with him.

There are certain difficulties about providing milk for school children. The right hon. Gentleman is tackling one of them. He is endeavouring to improve the quality. That is essential, of course, but we have to go further and face the great difficulty of providing milk on a large scale for school children of whom some pay and some do not. That makes a great difficulty for the teachers, and it produces a discrimination in the school between children which seems to me very undesirable. I do not agree that a system under which milk is paid for by those whose parents can afford to give them pennies to bring to school is at all desirable. It makes great complication for the teachers which they dislike and resent. They dislike having to collect the pennies and having to make the discrimination. That method should be avoided. On the other hand, I can quite see that there are strong objections to an entirely non-contributory scheme. It is true that, if the Government is going to spend money on the milk industry anyhow, it is better that they should spend it at this end than in any other way, but there are objections to a non-contributory scheme, and I would, therefore, beg the Government to consider the possibility of establishing something in the nature of a new children's health insurance fund to which contributions shall be paid by the milk industry and by the parents and made up so far as is necessary by the Government. Probably all parts of the House would join in supporting a measure of that kind. It might prove of the greatest value to all children while entirely removing discrimination between children whose parents can afford to pay and those who cannot. I have only been tempted to make these observations because this industry is so vital to the country and because I lived with its problems for something like nine months continuously. I believe, with the right hon. Gentleman, that a prosperous dairy industry is just as necessary to the health of the nation as it is to the welfare of agriculture, and anything that this House can do to assist the industry over the stile it ought to do. For that reason, I give my whole-heared support to the Resolution.

5.57 p.m.

Mr. LAMBERT

I agree with very much of my hon. Friend's speech. He has made a very valuable contribution to the Debate, as would be expected from one who has lived for nine months with the problems of the industry, and I am sure, though I disagree with one or two points that he has made, that he has the interests of the industry at heart, as we have. May I add my word of congratulation to the hon. Member for Don Valley (Mr. T. Williams). He was so vigorous that I think he must have been indulging in a milk diet. Then we come to the Minister. We are all glad to see him back. He is the mainspring of the whole machine. The Resolution has been on the Paper for a month and it could not be taken because he was not here. Personally, I wish he had been married twelve months ago. Then he would have learnt more about marketing. Under this Resolution we are to vote a considerable sum of money until the beginning of April, 1936. I want to know what is going to happen then. Are we to have before that a long range policy for the milk industry? My hon. Friend says we cannot expect higher prices. If we cannot expect higher prices, tell the people so, because the milk industry is one that cannot be built up in a moment. It takes some years to build up and, if you are not going to give them higher prices for its products, tell them so. Do not lead them into the illusion that this subsidy will come to an end at that time. I am asking on behalf of the milk producers. It is very easy to talk about milk and milk distribution here, but my mind goes down to the thousands of small milk producers in Devonshire who are working not six, but seven days a week, and many hours a day, and they cannot at present make a living. It is our duty to see that such men can make a living.

I am going to ask one or two questions of my right hon. Friend. I do not understand why the milk industry has been dealt with in a different way from other industries. These milk schemes were the progeny of the Ministry of Agriculture. We must not talk about them having emanated from the farmers themselves. The Milk Marketing Board was set up by my right hon. Friend. I am very doubtful if these marketing schemes will succeed unless they are very considerably altered. I am certain that this marketing scheme cannot succeed unless it deals with the distributors. At the present moment the farmers, who are presumably working the scheme, are under all sorts of restrictions. They are at the producing end, but they have nothing whatever to do with the selling end of the business. I have figures here from Devonshire proving that actually the distributors in this matter are getting a larger percentage of the total profit than before. I understood that marketing meant that the producer was to get more, the consumer was to pay less, and that the retailer would get a lessened margin. The contrary has taken place.

I have the figures for Torquay. In 1913 the retailers' margin was 5d. a gallon, in 1918 it was 8d. per gallon, in 1933 it was 9d. a gallon, but now under this marketing scheme the producer gets 10¼d. and the retailer sells at 1s. l0d. The retailer buys at a shilling a gallon and there is l½d. taken off for carriage. I am only talking of Torquay, and I have obtained the figures from a very well-known milk producer. In most cases the carriage is very much higher. I am giving the figures to prove that the retailer is actually, under this marketing scheme, getting a larger share of the profit than before. The retailer buys at a shilling and sells at 1s. 10d. Therefore, instead of obtaining a margin of 9d. as in 1933, he gets a margin of 10d. a gallon. The producer, even in this favoured case, only gets 10¼d. for production. Can that be right?

Mr. CHARLES WILLIAMS

As the right hon. Gentleman is speaking of my constituency, would he permit me to say that I know a very large number of people in the constituency who only get from 8d. to 9d. as producers, which makes the position far worse than that shown by the figures he has given.

Mr. LAMBERT

My hon. Friend who represents one of the constituencies in Devonshire knows that I am always moderate and try to put the moderate side of the case. These figures were given to me by a very well known milk producer in the County of Devon. If my hon. Friend makes the case stronger, all well and good, but I am only stressing the point to show that the distributors-under the marketing scheme are getting a larger share of the profits than before. If that be so, cannot the position be altered I My right hon. Friend the Minister appointed the arbitrators, and if the three arbitrators are to fix a given sum without any idea as to the cost of the production of the milk, the milk producer will be in the cart. We know that there is no one more zealous in promoting the agricultural interests than my right hon. Friend. He has shown it on every occasion, and therefore I want to help him to make his policy a success. I want to help hon. Members who think with me because in 1936 a General Election will be very near, and I do not want to see the hon. Gentlemen who now sit on the opposite side of the House on this side. I tell them that quite frankly. It is one thing I am living for at the present moment. I want my right hon. Friend to realise these difficulties.

We heard a great deal from the hon. Member for Don Valley about the purity of milk. You can get milk as pure as you like if you are prepared to pay for it. It is a question of cost. I happen to be Chairman of an institution, the Seale Hayne College in Devon. We produce Grade A (T.T) milk, but it is costly. The hands of the milkers have to be clean, and the milk has to be cooled and bottled, which is a costly business. If you are to increase the purity of milk it will cost more money, and I do not understand how the hon. and gallant Member for Altrincham (Sir E. Grigg) can remedy that position. I know something about the production of milk and the keeping of cows and all the rest of it. It is said that all the tuberculous cows must be killed. That would cost a tremendous lot of money. In our college some of the cows had to be killed off, and it cost the college £500. That is not the way to decrease the cost of milk. We can have milk perfectly clean, but we shall have to pay for it.

Sir FRANCIS FREMANTLE

I would point out to my right hon. Friend that the report did not as a matter of fact suggest that the cows should be killed, but that when tuberculous cows were taken about the country measures should be taken to avoid the infection of other cattle.

Mr. LAMBERT

To tell you the honest truth I do not take an awful lot of notice of this particular report. It is drawn up by a number of gentlemen who sit in London and who do not know anything about milk production or they would not talk so freely about it. I do not take much notice of it. I want my hon. Friends to understand that if you have a cow reacting to the tuberculin test, if you are honest, you do not sell it. It has to be got rid of, and therefore it is a loss. Hon. Members opposite talk so much about the purity of our milk, but what about the purity of supplies which come into this country? I have here the statistics of the milk products which come into this country from several Northern countries. I took them from the Board of Trade Returns. There are milk products from Soviet Russia, Finland, Estonia, Latvia and Lithuania. From Soviet Russia we received in the first four months of this year 96,430 cwts., and from Finland 47,000 cwts. I will not bother the Committee with the other figures. These are the milk products which are coming into this country, and I would ask whether all the conditions laid down in this report are practised in those countries? Can anybody tell me that the butter and milk products which come from Russia do not come from tuberculin cows I Can anyone say so? We are entitled to fair play, and if we are compelled to produce under these very clean conditions, then we must compel our competitors to do so too.

It is very curious that you must not interfere with any import which is called food. You can call anything food even though it is made under the most filthy conditions. I am full of suspicion that in some of these Northern countries milk is not dealt with under the cleanest and most hygienic conditions, and I do not suppose that butter is made under conditions which would pass the test of the committee which issued this report. When my right hon. Friend is dealing with this question I want him to tell us what he is going to do, when spending a large sum of money in cleaning up our own herds, to prevent competition from herds which are not as clean as ours. I ask the question as a matter of fair play for the home producers. At the moment I think that a very sympathetic interest is being taken in the agricultural industry. The people in the large towns want to know what they are buying. They do not want to buy butter produced under disgusting conditions. I ask these questions of my right hon. Friend, not in any spirit of criticism, but because I want to help him in this matter. As we are spending this considerable sum of money, the dairy farmers of the country want to know where they are. I hope that the Milk Marketing Board will succeed. I have always had my doubts about it, and they were confirmed when I read the forms which were sent to me the other day. It will take a lawyer like the hon. and learned Member for East Bristol (Sir S. Cripps) to understand them. I shall never understand them.

Sir STAFFORD CRIPPS

I will advise the right hon. Gentleman if he wants me to do so.

Mr. LAMBERT

Provided the right hon. and learned Gentleman does it under the Socialist system.

Sir S. CRIPPS

We have not a Socialist system yet.

Mr. LAMBERT

It must not be under the Capitalist system. In Devonshire there has been something like a riot going on, and I hope that the difficulties will be smoothed out. The Government must bend their energies to this task, otherwise the milk industry, which must be given assurance of permanence, cannot prosper.

6.14 p.m.

Mr. LEONARD

This matter has been introduced to us to-day by a very explanatory statement from the Minister of Agriculture, and I know that he will understand me when I say that it was adequate as far as detail was concerned but of very vulnerable character so far as the right hon. Gentleman the Member for South Molton (Mr. Lambert) was concerned. I listened with great interest to his statement as to the strength of this industry in comparison with others, and while it may be the case that there are 220,000 connected with the dairy side of the farming industry, we must not forget that they are producing a product of tremendous importance to the whole of the community, and as some 21,000,000 of people are depending on it for some of their energy to earn their livelihood, we have to look carefully on the matters brought before us.

While it is true that we have to pay greater attention to the improvement of our herds, one of the most important of the proposals in the Resolution, that referring to a greater production of milk, will be to the ultimate advantage of the people of the country provided it is made accessible to them. That is one of the points which is very often missed, or rather which is not given its proper place in our discussions. I see no hope for the milk industry at all unless the things they produce are made more accessible to the people, and if it is not going to be in the form of an increase in wages it must be attended to through the price. These are emergency proposals, and as long as we confine ourselves to emergency proposals we are simply putting off the day when we shall have to face up to the position which confronts us in this industry. I accept the position that we cannot shut out of consideration our relationship with other parts of the Empire. We have received a statement from the Minister of Agriculture to the effect that Ottawa and its Agreements are a thing apart and do not touch these matters at all, but I am afraid that I cannot accept that proposal.

Before passing to a consideration of one or two of the details I should like to say to the right hon. Member for South Molton that I have rather an intimate connection with farmers. I myself do not farm, although I have farmed in other countries, and without disparaging farmers at all I must say that I have never yet met a farmer who has been satisfied with the conditions on his farm. They have always been dissatisfied, and are never prepared to say that they have had a good crack of the whip. There is a point in what the right hon. Gentleman said in regard to conditions in other countries. If we are going to do anything here we are entitled to look at the conditions which prevail in other countries; at the same time, it is our job to put our own house in order. There was the case which has been put forward by the hon. Member for the Don Valley (Mr. T. Williams) and, therefore, irrespective of what other countries may do, we must put our own house in order and then we shall be in a better position to tell those countries which do not come up to our standard that they will have to conform to them in some way or other. Until that is done we have rather a poor case for insisting on better conditions in other countries.

In the past there has been a tendency on the part of Government supporters to deplore the policy of subsidies, and I find that in the Resolution now before us the word is not mentioned. We have to countenance the possibility of a payment for two years of £1,750,000 a year, although according to the interjections it may possibly exceed that figure in any one year. I do not know whether if the total is swelled in the second year we shall be able to exceed the £1,750,000 in the next year. However, these payments are to be called repayable advances, and the hope is that the price of home milk products will be sufficiently raised, by artificial means, to enable repayment to be made. To my mind the position in two years from now, so far as these repayable advances are concerned, or what I may call a subsidy, will be such as to enable farming cheese makers not only to make a profit but sufficient to enable them to make a repayment of the loan; and this will certainly be done by an increase in prices to the consumer. Again, on the question of imports, I cannot see how that can be done unless there is recourse to a policy of a restriction of imports which does not confine itself to foreign countries but extends to Empire sources as well. This is all because the people of this country are not getting the wherewithal to buy the milk which is essential to keep them in a fit bodily condition. The winter surplus is about 20 per cent. of the total milk under contract. During this summer it will be about 40 per cent., and from another source I am informed that it may be 50 per cent.

May I deal with the 5d. and 6d., and make this one point with regard to the computations which take place. They are based upon the average of two prices, the price of New Zealand cheese and the price of Canadian cheese. I am informed that Canadian cheese is from 12s. to 14s. above that of New Zealand cheese, and also that the imports of Canadian cheese are very much below the imports of New Zealand cheese, that is in quantity. Therefore, I ask whether any consideration was given—I am not making any point about it—to the weighted average instead of the straight average, because of the difference in the amount coming from New Zealand as against that coming from Canada and the higher price obtained for the smaller quantity. As regards quality, everyone will agree that it is of tremendous importance. Public confidence will react if the quality is made better, but I wonder whether it is right to ask the taxpayer of the country to foot the bill. We have milk producers giving low quality milk and others giving high quality milk, and as far as I can ascertain they are all receiving the same price. I should like to know what methods are going to be taken to see that proper standards are complied with. I should be much more in line with the desire expressed in the report dealing with the question of the grading of milk, which was— No liquid milk should be sold which does not attain a fixed standard of cleanliness. I do not know whether the taxpayer should be required to pay for cleanliness. There are farmers, indeed whole districts, producing a good standard of milk without having directed to them special payments for the purpose, and I should like to know whether it is the intention to pay bonuses as one of the means of obtaining the desirable object of a better quality of milk. The Minister of Agriculture has already stated that many other countries are facing this problem with success, and perhaps when he comes to reply we may be told how these countries have coped with the problem of the purity of milk and whether it was by means of bonuses or not. In connection with publicity a sum of £500,000 a year is to be directed. The Resolution is drawn rather wide and we do not know what the board may be able to do in the name of publicity. It may of course advertise its product through its product, but I think part of it will be directed to the schools. On this point the Minister of Agriculture was hesitant to-day and rahtre overcritical of the claims made by the hon. Member for Don Valley, which, however, have been more than supported by the hon. Member for Altrincham (Sir E. Grigg). I was wondering why any hesitation was displayed by the right hon. Gentleman. May I remind him of the speech he made at Truro on 23rd February of this year, in which he said: Unquestionably the provision" of milk for school children at cheap rates would have far-reaching effects on public health, unquestionably the milk in schools movement offers a most promising field for the development of liquid milk consumption and the alleviation of the surplus milk difficulties of the dairy industry. I hope that the Minister of Agriculture intends to stand by that statement, but I was a little doubtful when I saw his attitude towards the hon. Member for the Don Valley. Let me say a word in regard to paragraph (7), which deals with the extension of the functions of the board. It is very indefinite, and I should like a little more detail as to what these extensions may be. Do they mean the erection and control of centralised factories throughout the country and, if so, what relationship will they have to factories already functioning and producing the necessary products I Paragraph (8) deals with advertisements and descriptions. The words are: to provide for regulating the manner in which milk is described for the purposes of advertisement and sale. I agree that if this censorship, as it might be called, is going to prevent the introduction into newspapers and other journals of misleading advertisements referring to the quantity of milk contained in some given product, a matter which requires to be very carefully investigated, it is all to the good, but if it is to be some form of control over the manner in which milk is described for the purposes of advertisement and sale, the board may be inclined to get into controversial issues. Reference has already been made to a question which has not yet been settled as between raw and pasteurised milk. If it is going to allow the board to take up an attitude as between raw and pasteurised milk before the matter has been properly settled, it will contain elements of danger which will require and should receive detailed attention in the future. To my mind the position was properly stated by the hon. Member for Altrincham when he said that he does not see much chance of repayment. This is a subsidy. The first subsidy was given in the case of bacon, now we have a subsidy for milk, and I suppose we are going to have a subsidy in regard to sugar. What is it to be next? I put it again to the Committee that if a subsidy is the only way of dealing with this matter, if the taxpayer and the consumer have to pay, then they have a right to some degree of control. This control must either be in the form of public control and management or an integral part of the duty of the board which is in charge of this scheme. Until such time as that is done, my hon. Friends and I will have to continue the opposition to this proposal which has been indicated.

6.30 p.m.

Mr. OSWALD LEWIS

I suppose most Members of this Committee regard with the greatest sympathy the strenuous efforts which the Minister is making to restore prosperity to different sections of agriculture in turn. It is a task from which a man less bold might easily have shrunk. I, for one, certainly wish him "God-speed" in it, but when any Minister comes to the House of Commons and asks that money should be voted by way of a subsidy or by way of advances the repayment of which is very problematical, we as Members of this Committee have a double duty to perform. We have to consider not only the effect of these payments upon the industry which they are designed to benefit, but also the burden which is cast thereby upon the community as a whole. I want to examine the proposals outlined in this Resolution from those two points of view.

As I understand it the Minister's case for the Resolution may be summarised in this way—that the marketing scheme is endangered by the present large surplus and the prospect of a future even larger surplus of milk supplies over the amount required for liquid consumption; that most of that surplus is used to make cheese or butter and that the prices of those commodities are depressed chiefly owing to importation at low prices from abroad. I think the Minister might have made some reference to the fact that dairy farmers in this case have a distinct grievance because many of them were induced to join and help to work the marketing scheme on the distinct understanding that effective measures would be taken to control those imports—which from one cause or another has not yen been done. The Minister reminds us than under the Ottawa Agreements free entry is accorded to cheese and butter from the Dominions up to November, 1935, and, that being the situation, he proposes, I understand, to deal with it by guaranteeing a standard price for cheese-milk, over two years, at 5d. in the summer and 6d. in the winter. He hopes to accomplish that purpose by making advances of an uncertain but undoubtedly large total amount, which may or may not be repaid. The repayment in any case will depend upon a substantial advance in the cheese-milk price and the maintenance of that advance during the two years ending in April, 1938.

The Minister also tells us that to increase the probability of this better cheese-milk price, on which repayment depends, he proposes to make a great effort to increase the consumption of liquid milk and so reduce the surplus for manufacturing purposes. In order to do this he brings forward a proposal to spend £750,000 over four years on improving the purity of the herds and £1,000,000 over two years in increasing the demand for liquid milk. The first criticism which I have to offer is this. I cannot help thinking that it would be advisable if the period of the advances were limited to 12 months. That would have the effect of retaining much more effective control of the scheme in the House of Commons. I do not know if any Members of the Committee have noticed the words of the Memorandum on the Financial Resolution—Cmd. Paper 4597—with regard to this matter. On page 3 it is stated: The advances from the Exchequer are estimated to amount to from £1½ to £1¾ million in the first year. In the second year the advances will be of a similar order but an accurate forecast cannot be given. The Minister went even further in his speech, and made the somewhat surprising statement that in his opinion it was not necessary to make a forecast for the second year. In amplification of that statement he said he would be in a better position at the end of the first year to know what was required for the second year. No doubt that is true but surely it is trying this Committee rather highly to say to them, "We want you to authorise the spending of a certain approximate amount this year and the spending of a lot more next year, but we shall not know until the end of this year the amount which we now ask you to give us authority to spend next year." It would be preferable if the Minister had to come again to the House of Commons in a year's time for the supply necessary to make the advances in the second year. I am aware that one criticism which will be used against that argument is that owing to the incidence of the Ottawa Agreements the position will not materially change in 12 months because those Agreements do not run out until November, 1935. But I venture to remind the Committee that the Dominions, though very important sources of the supply of milk products to this country, are not the only sources of that supply and I cannot help thinking that more might have been done in the meantime by way of restriction of supplies of milk products from foreign sources. I heard with some astonishment an observation on that point by the hon. and gallant Member for Altrincham (Sir E. Grigg). He said that in his view the Government had done all they could by way of restriction of imports. If that be his view to-day, it would appear that he has receded some way from the view set out by the Commission of which he was chairman. The Reorganisation Commission for Milk make this observation on page 137 of their report: We consider that, in so far as protection is to be afforded to the home dairy industry, cream is the product which should claim first attention. In our opinion, a much higher duty than the present might be imposed on all supplies of fresh and sterilised cream and it might even be considered whether the duty should not be prohibitive. The Government do not seem to have adopted that recommendation.

Sir E. GRIGG

I would point out to the hon. Gentleman that I had to cover a wide range of subjects, and I specially said that I thought the industry could be helped inside the liquid milk market and the market for fresh cream and the market for farm-made cheese. I made those exceptions, and I do not recede from anything in the report of the Commission.

Mr. LEWIS

I took it that the hon. Member said that in his view the Government had done all they could by way of restriction of imports. Of course, if he makes reservations of that kind one can understand his attitude, but his statement surprised me at the time. A good many of us think that more might be done in the direction of limiting these foreign supplies and that, to my mind, is an additional argument for limiting the period of the advance to 12 months. During that 12 months the Government could see whether further steps might not be taken in that direction.

I do not know what reasoning has led the Government to fix upon the particular figure in the price above which repayment of these advances is to be made. I listened intently to the Minister's speech, and if he made any reference to the subject, it escaped me. I would ask him later in the Debate to tell us why these advances are not to be repayable in the event of the price for milk during the two years ending April, 1938, reaching the standard price. Why does he go one penny beyond that price before requiring that any repayment is to be made? These advances are held out to the Committee as not being a subsidy in the ordinary sense. We are invited to expect the return of the money. The repayment is always problematical. It is severely limited in point of time to two years for reasons which the Minister gave and it seems to me that we are making it additionally improbable if it is to depend on the turn of a penny in the price. I hope the Minister will give us some explanation of how that figure was arrived at and why. With regard to the encouragement of the consumption of liquid milk the Government have more than once announced that such encouragement is their policy. In the statement of milk policy issued by the Minister in Cmd. Paper 4519, we read, on page 2: The expansion of the liquid milk consumption of the country would not only be of the greatest benefit from the public health point of view but would alleviate in the most satisfactory way the difficulty of surplus milk. I submit that that statement, standing alone, is not quite true. There is a qualification which does not appear in that statement. It is this—provided that the increase in supply does not keep pace with the increase in demand. We have heard nothing of any precaution in that respect. I think it a great pity that it has not been found possible to follow in this respect the admirable precedent of the Wheat Act. In that Act it was a condition that if more than a certain quantity of wheat was produced only a proportion of it could claim the benefit of the guaranteed price. As a result of that and the other excellent arrangements under that Act we see from the latest report that the wheat growers have received a price about 80 per cent. above the price which they would otherwise have received. This has been accomplished at a negligible cost to the consumer and imposes no burden upon State funds at all. I would like to see something of that kind attempted in the case of milk.

I regard it as a cardinal point that, if anything of this kind is being done, there should be some limit on the amount of production which is to rank for the benefit of the standard price. The only possible hope that I can see in that direction, under the Government's proposals, is the somewhat indirect one that, if an endeavour is made to clean up the herds of the country, in the course of that effort a certain number of cows will be eliminated. To that extent you will diminish the source of supply. As against that, as the hon. Member for Don Valley (Mr. T. Williams) has clearly pointed out, are the constantly improved methods of production resulting in a higher yield per cow. As far as I can see, the inducements held out in the Resolution are calculated rather to increase the supply of milk which will come forward to benefit by the standard price than to diminish it. That, in my view, is a serious difficulty in the ultimate success of the scheme. In regard to the question of the methods to be pursued to secure an improvement in the health of the herds, we have not heard very much from the Government about what is proposed. I suppose that they want, quite naturally, somewhat of a free hand in the matter, but it would be interesting to know whether, broadly speaking, the idea is to provide financial inducements to the owners of individual herds to make them disease-free.

I can imagine very strong arguments that might be brought forward in favour of the ultimate benefit to the country of such a course, but at the same time I cannot help wondering what will happen at the end of the four years. The hon. Member for Altrincham used the expression "the after effect of a stimulus." That is a fair parallel. The Government must have some idea in their own minds, and the Minister might take us into his confidence a little and say whether they have in mind a water-tight system which will last just for four years, and not require to be continued, or whether, when they talk of four years, they really mean 40 years and propose that they and following Governments should come to the House for a continuance of these payments. These are matters which will eventually affect the public purse of which we in this Committee are the ultimate guardians. The hon. Member for Don Valley was rather scornful about the amount to be devoted for this purpose. After all, the Minister might, in justification, say that he is making a beginning, and that if it is only £750,000 it is still that amount more than any Labour Government ever devoted to the same purpose.

With regard to the question of advertising a product by offering the product, in other words, by trying to increase the demand for liquid milk by supplying quantities at low prices or free of cost to certain sections of the community, a difficult problem is raised on the medical side of the question. Hon. Members may have noticed that I have one or two Amendment on the Order Paper, but I do not propose to delay the proceeding by moving them. The last one makes a suggestion as to the qualifications which should be required before public money can be used for the distribution of milk below cost, qualifications, that is to say, as to the condition of the milk. It is a thorny problem on which doctors disagree very violently as to what is the best treatment for milk, whether it should be pasteurised, or what the respective risks and merits of a greater consumption of raw milk by the population may be. I feel that I am inadequately equipped to enter into the details of that controversy, but I think we might put this point to the Minister. It is clearly undesirable indiscriminately to increase consumption of raw milk regardless of the possibility of spreading disease. Obviously, some qualification is required, and I think it might assist matters at a later stage if someone on behalf of the Government could assure us that they have in mind some definite qualifications to be laid down with regard to the raw milk to be supplied to schools or other purposes which are to be made possible under the Resolution, qualifications which are to be carried out before that milk can be so supplied. In conclusion, I want respectfully to wish the Minister the best of luck with his proposals, but at the same time I would advise the Chancellor of the Exchequer to keep a close eye on him.

6.51 p.m.

Sir F. ACLAND

The more I read this Financial Resolution the more envious I am of its ingenuity. One can speak of the first two paragraphs in two very different senses, and I have already seen them spoken of in two different ways. Those who wish to show what great things the Government are doing for the industry talk of this as a grant to help the milk industry. Those who are anxious to show how careful the Government are of the national finances talk about this proposal as a loan. Either word is equally applicable or inapplicable as one likes, but, looking at it from the point of view of it being intended to be a loan, there is something I would like to say on the financial principle. It is a habit, which, I hope, these marketing boards will not be encouraged to get into, to come to this House when they want to borrow money. This, of course, does not apply to farmers only, who are just as human as other people and no more covetous, but inevitably when people borrow from the Government they regard the loan, not as something they must automatically repay, but as something which they must automatically try to get out of repaying if they can.

People have different standards in money relationships when it is a question of the State and when it is a question of a private individual or an ordinary corporation. We all remember during the War how men used to come home who would never have dreamt of taking a mutton chop out of a shop, but who boasted of having scrounged, or wangled, or annexed something and posed as almost great heroes for having done it because it was merely Government property which belonged to everybody and was therefore fair game. One cannot help feeling that if we are to lend money to these boards we cannot preserve our attitude of detachment from them and their operations quite as much as we have been doing lately. Whenever anyone suggests that the board does anything wrong and asks that it should be put right, the Minister inevitably replies that these boards really have very little to do with the Government as they are set up by the farming community, and the Government have no say as to their operations, and that things are wholly within the board's own control. Some of my hon. Friends recently were interested in the salaries, alleged by some people to be unduly high, paid to the officials of the Milk Marketing Board. If people can do that work efficiently, they are worthy of considerable salaries, and my fear is that no salaries will be sufficient to get people to do the work which is to be done by these marketing boards. That information in regard to salaries was refused because we were told that the board is nothing to do with the Government, but that it is the farmers' own concern.

Do not lend money to boards of that kind, because, once you begin to lend, the claim for control over the operations of a board is bound to grow up. In general, on the point of loans to these boards, the principle is surely right that if bodies of this kind require money, and if their security is good enough, they ought to go to the open market and get it, like a big corporation has to do, from the Public Works Loan Board or something of that kind. They can get their money very cheaply. If they cannot get their money in that way because their security is not good enough it ought not to be for the Government, the State and the taxpayer to advance the money.

Mr. ELLIOT

Does the right hon. Gentleman approve of steps being taken to improve the milk position at the present time?

Sir F. ACLAND

I am only putting in a caveat against a habit which I do not want to grow, because this is the second time that a proposal to lend money to a marketing board has come before us. I am putting in a caveat against the general policy of doing that. The present instance, of course, is a hybrid; it is a sort of mixture between a grant, a loan and a subsidy, and I admit it would not have been possible for the Milk Marketing Board to go to the money market with any scheme of this kind, for no outside body would have lent a penny on the security which is held out in paragraph (2) of the Resolution.

While I am on financial principles, let me make another point. I do not like passing a Financial Resolution which gives the House no definite idea of the liability it is incurring. I remember in years gone by how a very honoured and respected authority on the financial procedure in the House of Commons—Sir Frederick Banbury—used to make the point time and time again that in all Financial Resolutions there should be a limit. He would not have been satisfied, and quite rightly, with the Minister saying, "I think it will be £1,750,000 for the first year, and it may be the same or something like it for the second." He would have said, and all the other financially-minded Members would have agreed with him, that it was better to put in some definite figure like a maximum of £4,000,000 so that we would know where we were, and so that if that sum were exceeded the Government could come back and ask for more.

It is not sound finance to grant money of an unknown amount and not to be told what the liability will be. Some maximum ought to be stated. It is perhaps merely a matter of meticulous financial susceptibility for me to ask the Government to put in a figure on the Report stage of £4,000,000, or whatever sum they like, so that at any rate we shall know where we are likely to be. There is not, when one looks into it, much chance of any of this money being repaid. The arrangements under paragraphs (1) and (2) surely make that clear, and I think it is difficult to understand why the proposal has been made in the form in which it has been. You state that for two years certain grants may be possible. So far as we can tell the money we shall have to pay will be quite as much in the second year as in the first. Then we are told that for two years after that and during those two years only the money is to be paid back again, not if the price continues as it was, but if the price goes up one penny higher. That is right and natural if there is some real prospect of cheese prices from New Zealand changing at the end of two years. It would be right if there were a reasonable expectation of a change in your subsidy to ask the House to regard this as a loan.

The point I want to make is that the Government have not put before us any reason to expect any change of policy en their part, or on the part of the milk industry of New Zealand, which is likely to make any of this money repayable at all. It would be straighter and better and more natural for the Government to keep out the very shadowy proposals with regard to readjustments and to say: "We look to get a subsidy of a possible total of £4,000,000 for the two years," and to make it clear on that basis. We know quite well why these cheese prices at present are so low. It is because of the Ottawa Agreement, and because the milk industry of New Zealand gets a subsidy for dairy products. Our effort so far as the Government are concerned will stop in two years' time. The Ottawa Agreement will have expired by then. The Minister was perfectly right in making it clear that he did not intend during the currency of the agreements to interfere with them, but will he put up with a different basis when they have expired, or will he do what we on these benches would like to do, penalise subsidised products which come here, whether from foreign countries or the Dominions, either by total exclusion or by countervailing duties? If that is the policy of the Government as soon as they are made free, by the Ottawa Agreement coming to an end, then it is sensible and right and a natural provision to suggest that this loan should be repaid; but, if nothing of that kind is going to be done, it seems to me almost a farce to put in paragraph (2) of the Resolution at all, and to encourage us to think that this money will ever come back.

Captain CROOKSHANK

Do I understand that the Liberal party now agree that subsidised imports should be totally prohibited?

Sir F. ACLAND

My hon. and gallant Friend is not up to date. We have always taken the view—either by a countervailing duty, or totally prohibiting subsidised imports. That has been a part of our policy.

Captain CROOKSHANK

It has been kept in the background.

Mr. ELLIOT

Do I also understand that the right hon. Gentleman extends this exclusion to any country with a depreciated currency?

Sir F. ACLAND

That is a different matter entirely. It is difficult to deal with currencies in the same way, as experience has shown when that was done against Germany. It was suggested two years ago, and I believe we supported the measures taken by the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George). In regard to subsidised products, we have always said it is perfectly legitimate to stop them in the way I have indicated. The question which must be in the minds of hon. Members is really this; granted that there is a serious temporary emergency, is it necessary in order to meet that emergency, to make these proposals in the way that they are put before us to-day? If you meet an emergency by something which is to last for two years, you are turning that emergency into a habit. There is this emergency during the present summer season. I can imagine that it is right to help things during this summer glut of milk. I can equally imagine that, although the emergency is very much less in the winter months, as was shown by the fact that the Milk Marketing Board, on the whole, made a considerable success of their operations during the first six months after they came into existence, it would be natural enough to prolong your subsidy over the succeeding six months of winter. But if you not only pay the industry for this summer and the following winter, but do it again for next summer and next winter, there is really nothing to prevent the industry saying: "Why on earth should you not go on with this indefinitely?" Emergencies ought to be regarded as emergencies, and it is wrong to prolong them into habits, and bad habits from the point of view of getting committed to a permanent subsidy.

The publication of the report of the Economic Advisory Council puts the matter in a new light and ought to encourage the Government to change the basis of the policy which is put before us in this Financial Resolution. I have been making as good use as I can of my time in reading that report, and I wish it had given clearer and tighter consideration to the administrative and financial aspects of its recommendations. At any rate, the report does concentrate on one thing, the practicability and desirability of the eradication of bovine tuberculosis. They say that that is possible and that it ought to be done. I have on it just two short comments to make. First, I do not see how you could do it as long as you allow to be sold, as the report proposes to be allowed to be sold, milk uncertified, to use the report's title—that is, milk cleaner than it has to be now, but not derived from tubercular-free herds. As long as you allow that sort of milk to be sold for human consumption, it will be sold, and you will not clean up your herds. With regard to that, I suppose the Committee would say: "One step at a time. Let us see how far we can get by offering a higher price for clean milk and by giving inducement to clean up the herds. Let us not anticipate the prohibition of the sale for human consumption of milk that is not tubercular-free." But if these recommendations mean anything at all, they mean that some time—I do not know when; it may take 10 years—you have got to make it illegal to sell tubercular-infected milk for human consumption.

The second point is this: I believe that there is more of a chance of immunising herds by inoculation than one would conclude from what has been put before us in this report. I have been for my sins very much in the hands of doctors who deal with inoculation, and I believe I can help the Government advisers to the services of a man who has, perhaps, worked on this more than anyone else. In spite of my cross-examining of him every day I go to see him, he is perfectly certain that by two simple inoculations of young calves he can render them immune from tubercular infection for the rest of their ordinary lives. That side of it, the side of research on immunisation by inoculation, is surely a matter which ought now to be taken up with the very greatest activity.

In view of the possibility which this report brings before us of cleaning up herds, the Government's proposal in this Financial Resolution seems to be out of perspective. First, there is an indefinite subsidy, up to £4,000,000 or so, as we know, to help the price of milk. That is the lack of balance I want to bring out. Three quarters of a million spread over four years, less than £200,000 a year, is to be spent on cleaning up the herds and £1,000,000 a year in advertising the pro-duet by increasing the demand for milk. Surely it is a sound principle of advertising that it you have not got a good article advertise it and hope for the best, but if you have got a good article, or if you can make it a good article, make it good first and advertise second. I should have thought that in view of the possibility of really cleaning up our herds, as recommended in this report, the Government ought to concentrate on getting the article good first and then advertising it.

Those who have spoken about the question of milk for schools are perfectly right. I would rather delay that until we have a certainty of a tubercular-free and wholly sound supply for the schools. The policy of spending five times as much on advertising as you are on cleaning up must be wrong, because you are liable to waste your advertising if you are advertising an article which really is not sound and free from the possibilities of tubercular infection. The right line would be not to let the subsidy, or loan, which the Government propose to give to become so much established as it will inevitably be in the two-year period. Let us tide over the emergency of this summer and next winter, and then see where we are. Let us put all our power behind the policy of cleaning up the herds and then, when we have really made progress with that, let us concentrate on the advertising side of the campaign.

Here I want to say just a word in conclusion about the side of this proposal dealing with milk in the school. I am proud to have my name associated with those of others as backing up the policy known as the Children's Minimum, which in this connection asks that milk should be provided free to all elementary school children and for necessitous children under five, and for expectant and nursing mothers. I am not going to try and make out the case for it because I think it will probably be made out better by other people.

Sir F. FREMANTLE

May I ask the right hon. Gentleman, does he qualify support of the Bill by saying we should wait until clean herds have been obtained?

Sir F. ACLAND

I am very much afraid, if you rush into this proposal of distributing milk to schools, that you will get some medical officer saying that some child has acquired tuberculosis from milk. That will be a fearful handicap and do away with all the good of the advertising and pasteurisation of milk, which undoubtedly can be done and will be done. I think it is much the best way of advertising your milk and establishing the milk habit. I am very much afraid of the attempt to establish the milk habit going wrong, if the milk is not made absolutely clean and tubercular-free. I would rather put it off for a year, or two years, until you could be certain of an adequate supply of really tubercular-free milk.

The UNDER-SECRETARY of STATE for SCOTLAND (Mr. Skelton)

Does the right hon. Gentleman apply the same principle to the supply of milk to children in their own homes?

Sir F. ACLAND

Oh, no; I am one of those who think that on the whole we do a great deal more good by getting more milk drunk than by saying that nobody should ever drink milk which has not been approved by all the medical authorities in the country. I think many medical officers of health very much overdo their pursuit of pasteurisation and so on. I believe there is very little pasteurisation which is really foolproof. Pasteurisation is a very critical physical condition, and, as far as I know, no one has laid down the exact conditions for it. I am glad to see among the recommendations one that all apparatus to be used for pasteurisation should be approved by the National Physical Laboratory. It is one thing to say, as I do, that I believe we do more good on the whole by having more milk consumed, even though we are not quite sure about all that milk, and another thing to bring milk into schools as part of a Government campaign if some medical officer is in a position to report against that milk, because all the good done by popularising milk as by far the best human food—as it is—would then be undone. But for this report I would have said, "Go ahead with more milk and risk it," but, in view of the possibilities contained in this report, I say that if we cannot be really sure of the supply we ought to delay the "boost" to the schools until we can be certain that we have a product which will stand "boosting." I had not finished my speech, but I see that a number of other hon. Members wish to take part in the Debate and, therefore, I will not stand any longer between them and the Committee.

7.17 p.m.

Colonel RUGGLES-BRISE

I am sure the Committee must have listened with surprise to the speech of the right hon. Member for North Cornwall (Sir F. Acland). It was an exposition of the laissez faire school at its best, or at its worst, a cry of "Put off to to-morrow what ought to be done to-day." Another surprising passage in the right hon. Gentleman's speech was that which explained how the Liberal party which sits with my right hon. Friend would deal with the question of imports into this country. I heard with some surprise that it is part of the Liberal faith that if imports should reach these shores from some foreign country or even, I think, from some Dominion, which were subsidised or the subject of export bounties or had come with State-assisted shipping, they would be definitely excluded from these shores. I think goods from countries with a depreciated currency did not come under the ban, or at any rate that point was left open to doubt. I welcome this announcement, because the burden of my few remarks will be to ask the Government to take steps very much on those lines. Before I come to that point, however, I would like to say a word on the speech of the hon. and gallant Member for Altrincham (Sir E. Grigg). With the first part of his speech, which dealt with the Milk Marketing Board, I found myself in entire agreement. He gave it as his opinion, an opinion which must carry great weight not only in this Committee but outside, that the Milk Marketing Board was worthy of the support of all milk producers in this country. The more often that is stated the better. If the operations of the Milk Marketing Board were to cease there would be a complete collapse of the milk industry. Therefore, I welcome the opportunity of supporting that part of his speech, though later I shall differ from him just as wholeheartedly regarding another part of his speech.

I turn now to the proposals of the Government to deal with the serious situation in the milk industry. I am certain those proposals will be welcomed not only by the milk industry but by agriculturists generally, because no branch of the tree of agriculture can wilt or fade without the tree as a whole suffering. I would call the proposals of the Government the policy of the three Ps. First, steps are taken to deal with the plurality of our milk supplies, secondly with their purity, and thirdly with publicity for milk. I selected the word "plurality" designedly because it is not sufficiently realised that there is no glut or surplus of home-produced milk on the home market. The home market is more than large enough to absorb every gallon of home-produced milk, either in its liquid form or in the form of butter or cheese or some other processed product. It is the plurality of milk in our markets which has created the present difficult and grave situation. For the truth of that statement I have only to turn to a speech made by the Minister of Agriculture in this House on 22nd February. After stating that the surplus in the winter months would be in the neighbourhood of 20 per cent. and in the summer months 40 per cent. he went on: This surplus milk has to find a market in manufactured form, chiefly as butter and cheese. I do not think I make a wild statement when I say that the butter-making industry in England is already dead—dead entirely. Then my right hon. Friend went on to say: Prices of butter and cheese are at very low levels, owing to exceptionally heavy imports and present market conditions generally."—[Official Report, 22nd February, 1934; col. 501, Vol. 286.] That is a statement on behalf of the Government that this situation has been brought about by exceptionally heavy imports. If that is so, and our own butter industry is destroyed, surely we ought to look around to see whether we are taking all the steps that are open to us to deal with such a grave situation. We know that the per capita consumption of milk in this country is not as high as in some other countries, but while that is a contributory cause of the present situation the real explanation for it is to be found in the fact that the surplus of milk and milk products in our own home market is excluding that portion produced at home. The Government propose to meet this situation by a subsidy. It is welcome and it is necessary in the circumstances, but I think the Committee ought to inquire whether the subsidy is to be given in the best way and will be adequate to the situation. I rather think that the grant of a subsidy is a contradiction in view of the statement of my right hon. Friend on 22nd February, because a subsidy will do nothing to deal with superfluous imports.

As regards imports being abnormal, I will give a few figures which will provide a comparison between 1933 and 1928. In 1928 just over 6,000,000 cwts. of butter were imported into this country, and in 1933 just under 9,000,000 cwts. In five years there was an increase of nearly 50 per cent. in butter imports. Do we wonder that our butter industry is dead? The population has not increased by 50 per cent., but the butter has gone into consumption, and that must mean that some producer has fallen out of business. It is the home producer who has fallen out of business. He has been displaced by this abnormal increase of imports. One may take the analogy of a sponge. When dry a sponge is capable of absorbing a large amount of moisture, but there comes a saturation point, and our capacity for consuming milk in all its forms appears to have reached saturation point. There is only one way by which one can make the sponge take up more liquid, and that is by squeezing a portion of it, and I suggest that the part of the sponge that has been squeezed is the home producer, who has been squeezed out of business. Therefore, my first criticism is that the Government's method of tackling this situation is not adequate, however welcome the subsidy is and however necessary it is.

My right hon. Friend mentioned in his speech to-day that we are taking, I think he said, 90 per cent. of the dairy products of Australia and 100 per cent. of the dairy products of New Zealand. In the year 1928 we were equally taking 90 per cent. and 100 per cent. of the produce of those two Dominions, but the imports from those Dominions in 1933 as compared with 1928 have gone up immensely. The 100 per cent. is now 200 per cent. in rela- tion to 1928. For instance, Australia sent us butter to the extent of 872,000 cwts. in 1928, but last year the total had gone up to 1,693,000 cwts. Therefore, they had doubled their butter supplies to this country in five years. New Zealand in 1928 sent us 1,223,000 cwts. and in 1933 the figure was 2,512,000 cwts., almost double the quantity. Therefore, when the right hon. Gentleman says that we take 100 per cent. and 90 per cent. respectively of the dairy produce of those two Dominions, I ask him: "What is the measure by which that percentage is gauged. Are we to go on and in another five years' time to take double the quantity of that which we are receiving at this moment from the Dominions?" If so, there will be nothing left of the milk industry in this country.

I agree with my right hon. Friend when he says that this country intends to honour the Ottawa Agreements, to which we have set our hands. Of course, we shall honour them in the letter and in the spirit, but I must ask him to keep before him the significance of the figures which I have quoted. While we are perfectly willing to take 100 per cent. of the imports of any given Dominion at this moment there must be a limit to which the 100 per cent. may grow in the future, if we are to have any regard for our own home production.

Sir E. GRIGG

Would the hon. and gallant Member apply the same conditions to the imports of our manufactures to the Dominions? Are they never to increase?

Colonel RUGGLES-BRISE

I think the hon. Member will agree that our manufactures imported into the Dominions have not increased to one-tenth the extent that the figures which I have just quoted have increased. If it were on a fifty-fifty basis, or if the whole thing were absolutely equal, it might be a question then for high Government policy as to what particular industries we should limit in this country and what industry should be limited in the Dominions.

Sir E. GRIGG

indicated dissent.

Colonel RUGGLES-BRISE

The hon. Member shakes his head. I would ask him to deny the statement that I have made. Does he suggest, with the vast increase in the imports of dairy produce from the Dominions, that we have increased in those five years our exports of manufactured goods in a similar degree. I have challenged the hon. Member and I do not think that he is able to reply.

Sir E. GRIGG

Now that the hon. and gallant Member has said that, I must reply. I understood him to say that in future we ought to say that Dominion imports are not to increase by more than a given amount. I asked him whether he was prepared to accept the same limitation in regard to the imports of our manufacturers into the Dominions?

Colonel RUGGLES-BRISE

That is no answer to my challenge. I ask my hon. Friend quite definitely whether he is prepared to say in the face of these vast increases in the imports of dairy produce from the Dominions, that there are comparable increases in the exports of our manufactured goods to the Dominions.

Sir E. GRIGG

The hon. and gallant Member challenges me on a subject to which I have not referred, and I do not intend to take up the challenge.

Vice-Admiral TAYLOR

Now that my hon. and gallant Friend has given us the figures of imports from the Dominions, will he say something of imports from foreign countries?

Colonel RUGGLES-BRISE

Certainly, I shall be delighted to do so, if I may trespass further on the time of the Committee. I will give the figures for the Soviet Union and Denmark. In 1928 the butter imports from the Soviet Union were 336,000 cwts., and in the year 1933, 669,000 cwts., an increase of about 70 per cent. Denmark has not increased to that extent but only by about 20 per cent. in the five years. From all countries during the five year period the butter imports increased from 6,000,000 cwts. to just under 9,000,000 cwts., an increase of nearly 50 per cent. I give that as one of the reasons why we are faced with this crisis in our home milk industry to-day.

The price of world butter, especially butter coming to this country, has fallen in a most amazing way. In the year 1928 the butter which the Soviet Union sent to this country was priced at 157s. per cwt., but the butter which the Soviet Union has been sending to us during the first three months of this year has fallen in price to 41s. per cwt., an enormous drop. What is the effect of that drop in price on our milk situation at home? It has already killed our home butter market, it has damaged very much our cheese market, and we are finding ourselves with all this surplus liquid milk upon our hands. We do not know what lies behind this very low price of butter from the Soviet Union, but we know that the State for reasons best known to itself desires to undersell all other countries not only in regard to butter but other products. The result is that not only is our home producer being gravely affected by the low price of butter but our Dominions are also suffering. One of the reasons why the Dominions have almost doubled their dairy imports into this country is that the price has been half what it was, so that both the Dominions and the home farmer is suffering very gravely in consequence. I will not say more on the plurality side of the subject.

I should like to say something on the purity side. I am sure that the proposals of the Government in this respect are welcomed by everybody. It is proposed to provide £750,000 over a period of four years in order to increase the purity of our milk supplies. I find myself in agreement with the right hon. Member for North Cornwall (Sir F. Acland) when he says that in view of the magnitude of that subject that does not appear to be a very large sum, but nevertheless it is extremely welcome. My right hon. Friend the Member for South Molton (Mr. Lambert) uttered some very profound truths when he drew the attention of the Committee to the costliness of a pure milk supply. Not only is it going to be a costly process to get tubercular-free herds in this country, but the maintenance of a pure milk supply will be costly. One of the reasons why the milk industry is finding itself in a good deal of difficulty and why a price has had to be set for wholesale liquid milk is that the amount attached to the depreciation of milch cows has been appreciated. The normal depreciation of the herds of England is very great and if we shorten the life of a milking cow by even one year, the yearly overhead charges become very much larger than would appear at first sight. Therefore, if we are to enter upon the process of cutting down the herds by any such drastic method as slaughter the; cost will be prohibitive. The encouragement to milk producers to obtain a, higher standard of purity is all to the good, and very welcome.

In regard to publicity it is very necessary that there should be a greater measure of publicity in regard to milk. Here, however, I will enter the caveat that I do not think that any real results will be achieved, even by the most ably conducted publicity campaign, if we allow the cancer of subsidised foreign milk products to continue to grow. I do not believe that in such circumstances a publicity campaign will be successful. I think the Government will be forced into the position of dealing with these foreign milk supplies, which are very largely sent in under subsidised and artificial conditions. The proposal of the Government to make it a condition that part of the money to be spent in connection with the publicity campaign should be devoted to providing school children with milk will be welcomed everywhere. Let us remember that the school children are to get their milk at a reduced price, I presume at or below the manufacturing price ruling—I am not clear on that point—but the fact that the milk will be consumed, while all to the good, will not materially help what we are trying to do, namely, to get a higher average price level for wholesale milk. That statement is not a criticism but merely an observation on a point which ought to be mentioned.

The fact that the Government are so alarmed at the gravity of the situation is a fact which the farming community as a whole will appreciate. They realise that we have a Government who intend to come to the rescue of the great industry of agriculture. As agriculturalists we believe that the Government's purpose in that policy is twofold. They are actuated by high purposes. They realise that this country cannot be restored to complete health unless the great industry of agriculture is restored to health. Further, they recognise that the industry of agriculture alone almost among the great industries of the country is capable of great expansion. Many of our great industries have reached saturation point. We in agriculture are saturated not with our own output but with the output of other countries. I believe that if it can be felt among the agricultural community of this country, as indeed it may be felt, that the Government will not be content and will not rest until they have really restored to the home producer that share of the home market which the home producer has had promised to him, it will give them great satisfaction.

7.46 p.m.

Captain HEILGERS

I find myself in agreement mainly, as regards the Milk Marketing Board, with what was said by the hon. Member for Altrincham (Sir E. Grigg). The Milk Marketing Board has rendered a very great service to the producers of this country by finding a market for all their milk. I recollect an experience of my own. Just before the election in 1931, I was told by one of the big distributors in common with all the producers in my neighbourhood, that my milk was no longer required after the expiration of 10 days' notice. I spent some four days in travelling around London and trying to sell my milk, which came from a herd producing high grade milk, a herd which had achieved a fair reputation as a pedigree herd, and yet nobody wanted that milk. Under the milk marketing scheme that has been changed. We have disarmed the big combines and got security for the producer. The Milk Marketing Board cannot be blamed for the position to-day. I do not think the point has been made yet that they have kept up the sales of liquid milk. The Milk Reorganisation Commission estimated that between 607,000,000 and 730,000,000 gallons of liquid milk were the annual need of this country. The Milk Marketing Board sold between 6th October and 31st March 311,000,000 gallons, and usually there is a larger consumption of liquid milk in the summer, so that they look like going very nearly to the amount that was needed in 1931, if not beyond it.

I would emphasise one thing on the subject of imports. I compare the imports for the first three months of this year with the imports for the first three months of 1932, before the Ottawa Agreement, and I find that there has been an increase of 25 per cent. in butter, that alone amounting to 140,000,000 gallons. Without wearying the Committee with all the figures, I would like to say that the net increase was 137,500,000 gallons for the three months. If you work that out, you will find that it totals up to an average of 550,000,000 gallons a year, which is very nearly the total of all the sales of liquid milk in this country, and that has been added to the handicap which the Milk Marketing Board or anyone who might have had control of milk sales in this country has had to face in the narrow space of two years alone. We are still facing troublesome times in beef, and bad beef makes much milk.

Turning to the actual terms of the Resolution, I have heard numerous hon. Members representing industrial constituencies, both this afternoon and previously, making the point that this subsidy given to manufacturing milk would be likely to increase the production of milk. The hon. Member for Altrincham said it amounted to between a farthing and a halfpenny a gallon. I believe that it is nearer a farthing a gallon, and such a very small amount cannot possibly be any inducement to producers to produce more milk in this country. Actually, I believe it is already earmarked by the Milk Board for a purpose advocated by many hon. Members, including the hon. and gallant Member for Maldon (Colonel Ruggles-Brise), namely, for publicity, less 10 per cent. for research.

Next I come to the paragraph in the report which deals with the question of clean milk. I, as a Grade "A" producer, regard that as the most important provision in the whole of this Resolution. I welcome the fact that the Minister has seen fit to give accredited producers a chance to get a reward for the labours that they have carried on now for some very considerable time. I am sorry the hon. Member for St. Albans (Sir F. Fremantle) has gone out of the House, because I want to put up some ninepins for him to throw down, if he can, later in the Debate. In my opinion, the doctors have done a tremendous amount to kill the production of clean milk in this country, and not only have they done that, but by crabbing the milk supply day in and day out they have succeeded in making it most difficult for the Milk Marketing Board to raise the sales of liquid milk in this country. If only they had gone out and said that milk was definitely slimming, there would have been another tale to tell, but they have plumped for pasteurisation, and imperfect pasteurisation, such as there is today, as is acknowledged in the Economic Advisory Committee report, and so they have played into the hands of the distributors in this country.

The big combines of distributors see in pasteurisation the very chance they want of getting the whole control of the milk supply of this country into their own hands, and, as this report says, dirty milk cannot be made clean by pasteurisation. The report goes on to say that if only the farmer would grasp that fact, he would soon produce cleaner milk. I agree that a pre-pasturisation standard is needed, but you cannot force the farmer to produce cleaner milk unless he gets a reward for so doing. After all, certified milk costs nearly 3d. a gallon extra to produce, and if we are to produce clean milk, we must get more for it, as is advocated in the case of the accredited producers. Another point that I would like to mention as regards pasteurisation is this: Not very long ago I went to Reading, and there I saw a large number of rats being fed on raw milk and on pasteurised milk. At the time I was there the experiment had not been concluded, but they found they could not get rats fed on pasteurised milk to live beyond the second generation, but rats fed on raw milk were still alive and breeding to the fifth and sixth generation.

I feel, with the Minister, that it will be a great thing if we can only clear tuberculosis from this country, but I feel also that the doctors have not given the producers a fair deal as regards the dangers which they have represented as arising from tuberculosis. The odds are 2,200 to one in any year against any child getting tuberculosis, and the mortality rate for measles, whooping cough, diphtheria, and other diseases is much greater. In the countries in Europe where double as much milk is consumed as in this country—and raw milk too—the incidence of tuberculosis is considerably less than it is here.

Finally—the point has already been made to-day—why should we not account for the incidence of bovine tuberculosis in this country as coming from imported butter and cream and even perhaps imported beef. I hope that any hon. Member of the medical profession who may be speaking later in the Debate will reply to my remarks. The hon. Member for Don Valley (Mr. T. Williams) made the statement that it would cost between £25,000,000 and £50,000,000 to eradicate tuberculosis from this country. I think he is absolutely right, and I believe that the only way is to raise a huge loan in this country and tackle it in the right way. I do not believe you can do it piecemeal. Only last week-end, as a matter of fact, the hon. Member for Don Valley and myself were at the University of Wales, where we saw their Grade "A" tuberculin-tested herd, which had been free of tuberculosis for four years, and which had suddenly got 11 reactors, obviously coming from outside. We must tackle the whole question in one fell swoop.

I want briefly to refer to the question of the provision of milk for children. That has met with almost unanimous approval, but it seems to me that it ought to be administered and paid for by the Board of Education. The effect on the children would be just the same, and I cannot help having an uncomfortable feeling at the back of my mind that while this provision will have a tremendous indirect value in future, the actual value to the producer at the present moment may be a minus one. He is going to lose £500,000 on the children who at present are supplied with milk, and he is going to gain a problematical £2,000,000 on the 4,000,000 children who do not get milk to-day. But what is the distributor going to get out of it? Supposing you supply milk at 1s. a gallon to the children, the distributor will make 8d. or 9d. out of that, and the producer will only get what amounts to a manufacturing price for it.

No one is a stronger supporter of milk for children than I am. I was responsible in my own county for experiments on those lines, and I would point this Committee to experiments conducted by Dr. Corry Mann at the Foundling Hospital. He divided his children into seven groups. One group was given a pint of raw fresh milk, and the other six groups were given sugar, casein, watercress, and other forms of nourishing food; and one of the six was given no milk at all. At the end of the year the group which got raw fresh milk increased by 6.98 pounds, and the remaining group, including the one that did not have any milk, increased in bulk by 3.85 pounds; in height the milk group had increased by 2.63 inches and the other group by 1.84 inches. That seems to me very conclusive proof of the value of milk.

There is one other suggestion I would like to make. I believe it is the Milk Marketing Board's intention to try to extend the rate of cheap milk, not only to schools but also to factories, mines, and workshops. I would like to suggest to the Minister that he should institute a national roll on the lines of the King's Roll for ex-service men. If he would get a national roll and make employers, as the hon. Member for Don Valley put it, milk conscious, and stimulate competition to be on the roll, it would do more than anything to encourage the production of milk in this country. If only employers on that roll would undertake to supply the employés with milk at 11 o'clock each morning, there would be an enormous increase in the consumption of liquid milk. Finally, I would respectfully offer my congratulations to the Minister on having the courage and wisdom to bring in the proposals contained in this Resolution. If he succeeds in getting the milk of the country purer and getting the people to realise that milk is a beverage better than any other beverage or commodity in this country, it will do more than anything else towards producing good health, and substituting for a C3 nation an Al nation of which we can be proud.

8.1 p.m.

Brigadier-General CLIFTON BROWN

Like my hon. Friend who has just sat down, I speak from the point of view of a milk producer who depends on the board for his money for his milk, and who is glad, if the board cannot be helped in any other way, that the Minister is alive to the necessity of keeping it in a position to pay the bill. After all, it is not only the farmers who are concerned, but our milkmen and labourers depend on a fair price for milk. This Resolution, whether we agree with it altogether or not, will give the Milk Board some time to consider the difficult position in which they find themselves. There is to be an election next weak which may or may not enable them to feel that they still represent the majority of producers. At all events, they will hear plenty from those who think they have done badly. Personally, I am in a favoured part of the country. We were told that this scheme would cost us money and we should have to pay more and not come well out of it. Although we expected to lose money, I do not think the Milk Board ought to lose the confidence even of those who were least inclined to vote for the scheme when they came into office. In the six months the board have been in office, there has been a bad summer and they have had to meet an extraordinary situation of importation to this country, as I think will be admitted by the leaders of the co-operative movement.

Although I think it is a pity—and my hon. Friend the Member for Altrincham (Sir E. Grigg) agrees—that this milk scheme was hurried so quickly, and therefore will have to be amended, I do not want to see the same mistake committed again. The board is ready to amend the scheme when it knows what amendments are needed, and I should not like to hurry the board into an amended scheme. Perhaps they will take another year to think it over and bring in what is necessary to amend the scheme. Since they have been in office we have had the report referred to by the hon. Member for Don Valley (Mr. T. Williams) and others, and this may be among the things that will change this scheme. However much we farmers may grumble, no one can deny that we have had some sad experiences. We have never forgotten how we were let down in the Corn Production Act, and it makes us suspicious. Although it is an old saying that you should never look a gift-horse in the mouth, we are inclined to look very carefully. The question on which I should like to be quite sure is what is to happen in two years' time. The advances made to bring the price up to 5d. and 6d. a gallon will not have to be repaid unless the price goes up to that figure in the meantime. There is a certain amount of doubt among those who are willing and anxious to have this £1,000,000 given to school children to know whether at the end of two years milk will be expected to be sold at the price of 1s. or 1s. 0½d. per gallon. I suppose the Board of Education or some other authority at the end of two years will carry on that liability.

While I am somewhat suspicious about these subsidies and repayments of loan, it is important, if the board are going to make plans, to make it clear that, we shall not be treated like the Bacon Board, and have to repay. I also regret we cannot now lay down more of a permanent solution of some of these troubles the board have to face. These schemes would never have come into operation if the farmer had not expected protection against the dumping of foreign products. Even from the point of view of cleaning up the herds of which the report speaks, it is recognised that there is a danger from the health point of view in the imports of milk products. The question of tuberculosis is raised in the report, which says that cheese is not likely to harbour infection if kept in store as the chemical changes destroy the tubercle bacillus. Dried milk is rendered safe by the process of manufacture, but butter, cream, cream cheese and ice cream from raw milk are capable of carrying infection. The hon. Member for Altrincham has particularly mentioned the question of cream, and that is one of the things which ought not to be allowed to come into this country. If we stopped it, it would help us to deal with the surplus milk of this country which even he, as a Free Trader, thinks we might consider. I hope that the board will take notice of this.

When the Marketing Bill was brought in, we voted for it in the belief that we were to get protection against the foreigner, and I am disappointed that Section 2 has not been used more against foreign manufactured products. I do not see any necessity for apologising or going back on our word to the Dominions at Ottawa. I have seen very little effort in Parliament by the Board of Trade or the Government to put Section 2 into effect in dealing with the dumping from Denmark and Holland of milk products which help to make a bigger glut than ever in our markets. I should not like the board to feel, by this bolstering up by subsidies, that they have not got to stand on their own feet. They should have the Government behind them in insisting on putting Section 2 of the Marketing Act into operation whenever unfair foreign competition makes it difficult to sell their goods.

8.12 p.m.

Vice-Admiral TAYLOR

I was delighted to hear the Minister state that the Ottawa Agreements are to stand, and that there will be no restriction in the imports of dairy products from the Dominions during the duration of this agreement. There has been, undoubtedly, some uneasiness in the Dominions in this matter and that declaration will be received with the greatest pleasure by them. I am sorry that the hon. and gallant Member for Maldon (Colonel Ruggles-Brise) is not in his place, because he was attacking the Dominions as being the cause of the depression of the market here and antagonistic to the interest of the British farmer. He said, as an example, that products from Australia had doubled in a certain number of years. He omitted to tell the Committee the reason for the increased products. He omitted to say that we have a large amount—I think about £470,000,000—of British money invested in Australia, and the only way in which Australia or any other Dominion in which we have vast sums of British money invested, can pay the interest on the loans and money invested there is by our buying their goods or accepting their services. There is no other possible way in which the Dominions can pay. The prices of the products are halved, and naturally Australia and other Dominions, in order to pay us, have had to increase their exports to us. There is an Empire policy and there are many Members supporting the National Government and presumably supporting the Empire policy, but there are far too many, in my opinion, with all respect to them, who makes speeches continually attacking the Dominions and blaming them for the depression in the agricultural market in this country. I consider that such statements are neither correct nor fair.

With regard to butter, which was mentioned by the hon. and gallant Member for Maldon, as a matter of fact the total import of butter from British sources in 1933 was 4,584,654 cwts., while from foreign countries it was 4,249,860 cwts. We received from foreign countries very nearly the same amount as we received from British countries. With regard to milk and milk products practically every atom of condensed milk and skimmed milk came from foreign countries, and practically none whatever from the Empire. Hon. Members who are so ready to criticise the Dominions ought, in fairness, to mention the imports from foreign countries, but they generally omit to do so. As the Minister said to-day, the Empire is entirely dependent for some of its products upon our market in this country, because there is no other. If we restrict that market, there is no future for Empire policy. The problem of imports and depression of price to the British farmer has been very much influenced by the import from foreign countries, not necessarily of vast volume. In the case of butter, quite sufficient volume" have been imported at a very low price to have had the result of depressing the whole of the price market in this country. That is an absolute fact, and that is what has killed the price for the British farmers, not the import from the Dominions as is so often stated.

In this matter of restricting foreign imports the Government have not taken all the steps which they should. They ought to take steps to prevent the import of products which depress the price in this country to such an extent that it is entirely uneconomic. If there is to be any prosperity for the farmer, we must not only raise the price to the producer, and that is one essential which is being dealt with as an emergency to-day, but we must increase production and increase the purchasing power of our people, in order to spread over a far wider area than exists to-day, the people who are enabled to buy the products of the British farmer. That is the problem. I do not agree in principle with the restrictive measures which are being taken with regard to agriculture. We presumably desire to rehabilitate agriculture. We must get back on to the land of England as many people as that land will hold, and we must cultivate the land to its utmost, to its full production. That must be our aim. We must increase production, but we must also make it possible for the people of this country to buy the products, and the policy should not be as it is in the case of potatoes, where a man is fined if he has more than a certain acreage under potato crop, but the policy of increased production and distribution.

The restrictions which are the policy of the Government with regard to agriculture are entirely wrong in principle in my opinion. What we have to do is to increase the production of this country to the utmost capacity of the land, to enable people to buy the products and to give a remunerative price to the farmer. There are immense imports from foreign countries, and there are also immense imports from the Empire. There is no room to-day for the full production of this country, the production of the Empire and the production of foreign countries. There is an immense volume of imports from foreign countries which we have the power to restrict and should restrict. That has not been done by the Government. We are told that the Ottawa Agreements are being carried out; that is true so far as the Dominions are concerned, but I would be far more satisfied if the Minister had told Us something about the measures which the Government were going to take with regard to the restriction of imports from foreign countries which directly affect the imports from the Dominions.

Since the Ottawa Agreements we have made various trade agreements with dairy-produce countries, such as Denmark and Sweden, and now we are negotiating with the Netherlands. They are dairy-producing countries who export to this country, and in every instance we have made those agreements to the detriment of the Empire and to the advantage of the foreigner. That is not strictly carrying out the spirit of the Ottawa Agreements. I realise that the trade agreements were made in order that we might sell more coal to those foreign countries, but, so far as our country is concerned as a market for the Dominions, they are diametrically opposed to the advantages to the Empire which were obtained by the Ottawa Agreements. I hope that the Government will take more active measures to restrict foreign imports into our markets, and to develop our own production and the production of the Empire as far as it is possible for us to do so.

Now I would like to deal with the expenditure of £750,000, which is to be spread over four consecutive years with a view to securing as far as practicable that the milk supply for human consumption in Great Britain is pure and free of infection of any disease. Every hon. Member will agree with that object. It is essential that the food placed on the market for the British people to consume should be as pure and as free from disease as possible. That restriction, however, should not only apply to British-produced food, but should apply to foreign-produced food as well. I have in mind a particular article which is imported here, skimmed condensed milk, which is labelled "Unfit for Babies" with a large label on each tin to that effect. It is well known to the right hon. Gentleman I am sure. I entirely sympathise with those who, unfortunately, are too poor to buy expensive food or to buy the best grade of milk; but it is monstrous that this country, which has done so much, and proposes to do more, to insist upon the purity of the food which the British producer shall produce and place on the British market, should allow the import into this country from a foreign country of food which is so low in its food value that it has to be labelled as unfit for babies.

That import ought to be prohibited. It has no right to come into this country at all. While we are expending £750,000 in order to impose upon the British farmer certain restrictions and regulations which will ensure that he is placing on the British market pure food—which of course means food having the largest food value and' raises the cost of the British product—to allow those regulations to be stultified by the import into this country of food which has to be labelled as unfit for babies is monstrous in my opinion, and ought to be stopped. There is no reason for it whatever, and I would like an assurance from the Minister that some steps will be taken to prohibit the import of this absolute trash so far as food value is concerned, because it must be remembered that, although it is labelled as unfit for babies, there is no guarantee whatever that those people who, unfortunately, cannot afford to buy good milk, are not constrained to give this condensed skimmed milk to their babies and do inestimable harm. It cannot be argued that it is cheap. It may be cheap to buy over the counter, but it is extremely dear when you consider that the children who have to drink it are receiving practically no nourishment from it at all, so I hope that the Government will take steps to prohibit the import of this skimmed milk.

Suppose that factories in this country were to start the manufacture of condensed skimmed milk here, what then would be the attitude of the Minister?

He is bringing in regulations, and he is going to spend £750,000, in order to get pure food, but supposing that a factory here were to manufacture this condensed skimmed milk, which has no food value at all, I wonder what action the Minister would take. Would its sale be allowed? It would stultify the advantages of the production of pure food under these regulations. I fully realise that it is necessary in the emergency to bring in these regulations in order to save the farmer, but this is only dealing with one small item of the problem, and it will be of no ultimate advantage to the farmer, if it remains by itself and nothing else is done. The real problem for the Government is to tackle the reorganisation of the dairy industry of this country as a whole. As regards marketing and distribution, we have already been told by various hon. Members that there is too large a margin of profit for the distributor. If that be true, something more can be done in reorganisation to make possible a greater distribution of good milk over a larger area of the population.

There is one more point that I should like to make. The right hon. Gentleman the Member for North Cornwall (Sir F. Acland) made a really blood-curdling speech so far as the parents of this country are concerned. Any mother reading the speech of the right hon. Gentleman would shun milk as she would shun the Devil; she would never allow any child of hers to drink another drop of British milk again. I protest in all seriousness against speeches of that sort being made. They must do incalculable harm. All the efforts of the Minister will be brought to naught if speeches of that description were to be made up and down the country. Naturally they frighten people, and I hope that when the Minister replies he will be able to reassure us and nullify the very bad effect which that particular speech must have produced, and assure the consuming public that the average supply of milk in this country is perfectly good and sound for them to drink. It is most necessary that more milk should be drunk in the country, especially by children, owing to its great nutritive value, and I hope that the efforts of the Minister in that respect will be crowned with success.

8.32 p.m.

Mr. McKIE

I am sure that, whatever opinion may be passed in the Empire tomorrow about the sentiments which have fallen from various hon. Members who have spoken in this Debate, the speech of the hon. and gallant Member who has just addressed the Committee will be received with universal approbation in all parts of our far-flung Empire. I am very glad, Captain Bourne, to have been able to catch your eye this evening, and to be the first Scottish Member, at all events from a rural constituency, and, incidentally from the largest area under cultivation in Britain, to have the privilege of taking part in this Debate, more especially because my right hon. Friend the Minister of Agriculture alluded in the opening part of his speech this afternoon to the constituency which I have the honour to represent. He drew attention, very rightly, to the terribly low price which the dairy farmers in Galloway had up to a very short time ago been receiving for the milk which they had to offer on the market. I am exceedingly glad to be the humble bearer of congratulations from dairy farmers in all parts of Galloway to the Minister on what his scheme has been able to do for them up to the present. There are among farmers many critics of these schemes, and certainly the milk scheme has not been immune from a great deal of hostile talk, but I am glad to be in the happy position of saying, speaking from a purely selfish point of view, that those whose cause I have the honour to plead have perhaps come off better than arty dairy farmers in any other part of the country.

In all parts of the Committee general satisfaction has been expressed at the emphasis which the Minister this afternoon placed upon the value of advertisement with regard to agriculture in general, and milk products in particular. We all know that it pays to advertise, and on more than one occasion I have taken the liberty of stressing, to those with whom I come in contact in agricultural matters, the value of acting on this line. Agriculturists, and perhaps Scottish agriculturists in particular, have been remarkably reticent with regard to advertising the wares which they have to offer on the market. While I do not wish to bore the Committee, I might perhaps give one instance of what I mean in this connection. A friend of mine who was at a shooting lunch not very long ago, enjoying the particular cheese that was handed round, asked what it was and was told it was Wensleydale. He said, "I have a cheese which I think equally good which comes from my part of the country," but no one had ever heard of it. Wensleydale is really only a glen, it is true, in a great historic English county. Galloway is a great, far-reaching province entirely concerned with livestock raising and with milk production in particular. But our cheese, largely through reticence on the part of our producers, has not the, I will not say world-wide but countrywide reputation that it undoubtedly ought to enjoy.

Having said a word of praise of the Minister, I must go on to make one or two criticisms with regard to what he has told the Committee. I was rather surprised at What he said about the Ottawa Agreements—surprised rather with regard to the way in which he said it. He said "Come what may, the Ottawa Agreement will stand for two years." I do not say this in any carping way, but I hope that does not mean that the Government may fall in two years. Of course, this country stands by the Ottawa Agreements. We always stand by our pledged word. But with regard to these Ottawa Agreements, there are several possibilities in the two years mentioned by my right hon. Friend. Revision is possible, and he has also on more than one occasion said there was ample scope for voluntary restrictions where necessary between the various Dominions which are serious competitors in the home market with regard to agricultural produce. I hope that what he said does not mean that he will not use every loophole to revise the agreements where necessary—and there are many loopholes and many ways in which the agreements ought to be revised for the benefit of our home producers. I hope he will do all he can, in the very tactful way that he possesses, in getting the Dominions to agree to that voluntary restriction about which he has so often spoken in the House and on the platform.

He received an unexpected ally in the hon. Gentleman the Member for Altrincham (Sir E. Grigg). The Committee listened with the greatest respect to what the hon. Gentleman had to say. He has done most valuable service to the cause of farming, and dairy production in particular, within the past few years. What he has to say always commands, at all events, respect if it does not always win unanimous approval. He praised the Government, as we are all bound to do, for having in the two and a-half years since they have been confirmed in office undertaken more agricultural legislation and set more schemes afoot than any other Government that has ever presided over the destinies of the country. He went on to refer to the critics of the Government who state that imports coming from foreign sources and from Dominion sources, too, are very prejudicial to the interests of our own producers, and, if I understood him correctly—and I think I did—he denied the value of such suggestions in toto. I wonder if the hon. Gentleman, who represents a division which is very largely agricultural, would go down there, or stand on any platform in the country, and maintain such a statement. If he did, I should be very happy indeed to be in the audience and to listen to him. I think it has been made pretty plain that imports coming in haphazard from foreign sources and, despite what my hon. Friend said, from inside the Empire too, are a very serious handicap and hindrance to our home producers in the great battle that they are fighting. Many of us who endeavour, in the most helpful way, without any wish to carp at the Government, to point out these facts are very often brushed aside, as it seemed my hon. Friend was inclined to brush us aside, with the suggestion that we are merely following out the dictates of Beaverbrook, Rothermere or Mosley. That suggestion is very wide of the mark.

We are being asked to vote a very large sum of money to assist the dairying branch of farming. We are asked to do it in an emergency, to meet a crisis. Of course, we all wish to assist agriculture in every possible way and, in view of what has been said about the great work of the Milk Board, we wish to give those associated with the board every facility for carrying on their good work. But I wonder, and I am sure many Members wonder, if this subsidy is the most direct method of securing what we want. I think it is a very indirect and roundabout way. It is taking two steps and then remaining on the same spot—a step forward and a step back again. You are dipping your hands into the pockets of the taxpayers to provide this £4,000,000 or £5,000,000 to assist the Milk Board to give the home producer an assured price—a bottom in the market, as the Minister calls it—and at the same time you are allowing this flow into the country of agricultural products, and milk products in particular, to continue as before no matter whether they are from foreign sources or from the Dominions or Colonies.

The Minister went on, in outlining his scheme, to talk about the possibility at the end of the two years' period of the board being unable to repay the money, but he said it would be all right. We should be compensated in the cheap prices and the universal prosperity that would ensue. I wonder if the farming community will see matters in that light. I rather doubt it from conversations which I have had with fairly prominent agriculturists in Scotland within the past few weeks and months. Members of the farming community are not a bit interested in the debating points for which we all in this House have a weakness and which we like to score from time to time. They want a direct, vigorous and drastic policy. They only want the statement of governmental policy, which has been made repeatedly since the first Debate on the Address in reply in the Gracious Speech from the Throne in the first Session of this Parliament, to be carried into effect. What is it? First, preference in the home market for the home producer, in the second place preference for the Dominions and Colonies, and in the third place, if space remains, for foreign countries who wish to send their agricultural produce here. That statement has been made over and over again. I remember in the Debate on the Ottawa Agreements the hon. Gentleman the Under-Secretary of State for the Dominions, being interrupted in the course of his speech and pressed upon this point, declaring with great emphasis at that Box that that was the goal and ambition of the Government, and that by their statement they would stand. I very much hope that the Government are still of that opinion. The farming community hope that they are still of that mind, but they wish to see their good intentions a little more speedily trans- lated into action than they have been since what many of us considered the, in some directions, ill-timed Ottawa Agreements were carried into law.

This afternoon we have heard two speeches from prominent Members of the Liberal party in this House. I see that the hon. Gentleman the Member for Althincham has now re-entered the Chamber. While he was out I took the liberty of commenting upon one or two points in his valuable speech. I think—and I hope that I do not do him an injustice—that his speech this afternoon was conclusive evidence that he has not forgotten his good training in the Free Trade school, but we had other speeches from avowed Free Traders this afternoon. We had the usual negative criticisms poured upon not merely Government ideas and policy, but upon any proposal from any source for dealing in a constructive way with the agricultural problem. Most of those speeches, it is true, went off into side issues compared with the main theme; side issues with regard to the purity of milk in all its branches, etc. When they came back to the main line of attack, the comments that were made were of a purely negative kind, and, I might say, of a destructive character. That is not going to win approval from the farmers or from any practically minded body of men or women. Those who are interested in, and have their living to gain from, agriculture are not concerned about the principle underlying Ottawa, but about the way in which that principle has so far been applied.

This afternoon we are voting £4,000,000 or £5,000,000 of public money to assist the Milk Board to carry on, and are allowing this flow of foreign and Dominion imports coming into the country to the detriment of our home producers to continue as before. The hon. Member for Don Valley (Mr. T. Williams) twitted Conservatives in this House with being a party to undue State interference. I do not think that he can really seriously ask the Committee to believe any such remarks that he made a few hours ago. The Conservative party, it is true, have always stood for the smallest amount of State interference as contrasted with the Liberal party, who have stood for the doctrine of complete laissez-aller and laissez-faire. The Tory party have always insisted that there are times when it is absolutely necessary for the State to intervene and to assist industries and groups of men and women when it can conclusively he proved that it is only by outside assistance that they can work out their salvation.

The Minister of Agriculture in one of his great speeches in this Parliament emphasising the dire position of farming said that it was a time for action—I forget exactly what the Debate was about—and remarked: "You ask for action, here it is." I very much hope—I believe it too—that my right hon. Friend will be as good as his word. If there is to be a Division to-night I shall have no hesitation, because the milk scheme has to be assisted, in supporting this grant with my vote, but I sincerely hope that the Government are going to act upon the lines which they have enunciated so often from that Box and from platforms in all parts of the country, and to see to it that our home producers are assisted by protection from all sources whether it is from the foreigner or from inside the Empire, because the position is so critical that only drastic remedies can be indulged in.

8.53 p.m.

Sir F. FREMANTLE

I want to confine my few remarks to the question of the purity of milk, which is one of the main objects of the Measure which we are discussing this afternoon. I am always asked, as a medical officer of health, not to exaggerate or perhaps not to emphasise the danger of disease arising from milk. But I have to speak not only as a medical officer of health—that I am no longer except in what is called a consultant capacity, which is never consulted—but also as an active and practical dairy farmer with 32 cows and a loss which is carefully calculated for me every year in order that I may really find out the position of affairs, and as president this year of the Central Council of Milk Recording Societies, one of the main features of the progressive side of the dairy industry. No one who knows anything about the subject would wish to exaggerate or intensify the fears of people in regard to infection from milk. Sometimes professional medical men, who may see only one side of the question, may possibly exaggerate the dangers, but, on the other hand, those agriculturists, and there are some hon. Members in this House, who try to belittle the amount of disease which may arise are doing the worst possible injury to the dairy industry. The first thing one learns on entering public life is to size up your enemies and your difficulties, and those who belittle facts which have been clearly demonstrated by professional societies and associations and criticise the finding of a professional body concerned simply with ascertaining the truth in regard to this subject are doing a great dis-service to agriculture. The actual facts are clear. The People's League of Health established a very strong veterinary council and medical science council, and between them they established a combined commission for studying questions relating to milk supply. They reported last year, and in April of this year sent a deputation to the Minister of Health and the Minister of Agriculture. They presented an extremely carefully drawn up statement and proposals, which were emphasised by the report of the Economic Committee of the Privy Council. I will read what they said: In the first place the cow suffers from several conditions which serve as a source of disease in man, and among the diseases so conveyed are tuberculosis, undulant fever and septic sore throat. Of these tuberculosis is the most important, and the facts are serious. A very large proportion, at least 40 per cent., of the cows in this country is infected with tuberculosis. That has not been sufficiently met by those who speak for the dairy industry. It is not only tuberculosis in human beings, but in the cows as well: At least one in every 100 cows is actively discharging tubercle bacilli into the milk or elsewhere. Anything from 5 to 13 per cent. of the milk sold for human food contains living, virulent tubercle bacilli. On the human side we find that about 2,000 deaths in England and Wales, mostly in children, occur annually from infections with the bovine bacillus…and not less than 4,000 fresh cases of tuberculosis of bovine origin occur every year. These figures are borne out later in the report, where the number of deaths is stated to be 2,500 for Great Britain, that is including Scotland, but there is another side to be considered, with which the medical profession is concerned, and that is the nutritive value of milk. Gentlemen interested in the dairy industry constantly speak of the magnificent nutritive value of milk and take the advice of the medical profession, but at the same time deride the dangers of infection. The nutritive value of milk must be considered in conjunction with its infectivity. About eight years ago we were referring to a series of extraordinary experiments by Dr. F. Mann, a well-known children's doctor, as to the nutritive value of milk on children in a Poor Law institution over a period of several years. Some were fed on an extra diet of milk, and others were not, but were given a corresponding amount of ordinary cereal food. The result was perfectly astonishing as regards weight and height and general well being. There is no question that the nutritive value of milk is very great. But how are you going to combine the two things? It is absurd to say that the medical profession ought not to pay any attention to the comparatively small amount of tubercular milk. If one looks at the sufferings of crippled children, on the streets and in our hospitals, to say nothing of the 2,000 deaths per year and the 4,000 fresh cases which arise every year, it is no use saying that we ought to take the risk. We can leave such speeches out of account, we can march straight through them.

There are certain devices which are perfectly possible. I know that the dairy industry object to any suggestions which will involve expense, and that they have objected to the idea of pasteurisation. It is perfectly simple. It is a process of treating milk in order to render it innocuous. In France the housewife as a matter of course always boils the milk. We go much better, and we have discovered that if you simply bring it to scalding point you do not destroy the nutritive qualities of the milk or its flavour. The difficulty is the machinery, but that it seems to me is solving itself. About 95 per cent. of the milk which comes into London for consumption is pasteurised, but in farms and in out of the way places, where there is only a small consumption and also a small staff, there is almost as much danger in the use of this machinery as there was when using filters for water. There is a danger in using these methods as it requires a good deal of intelligence and ingenuity if the machinery requires to he repaired.

We come back to the idea which was the only practical conclusion of the right hon. Gentleman the Member for North Cornwall (Sir F. Acland). He referred to the proposals of the Children's Minimum Committee with which his name is associated. I do not know whether the right hon. Gentleman suggests that we should wait for 10 or 20 years in order to ensure a tubercular-free supply of milk. If we put it at that we should be a great deal more realistic than the right hen. Gentleman was. He suggests that every home can look after its own milk. They can do so but they will not always do so and the proper attitude is to do anything that can be done with the methods at present available. If you provide milk for schools it will be under the authority either of the school medical officer or of the medical officer of health advising the education and public health authorities. They will have to consider what is the best way of protecting, as far as possible, the milk supply which is to be given in that way. I feel strongly that the greater number of them will say that it is possible to pasteurise milk cheaply and that in any case the nutritive value of the milk will be infinitely to the advantage of the children and they will desire to give as large a supply to the children as can be allotted.

The fact is that on this question of cleanliness we have advanced considerably during the last decade. We certainly have advanced in popular knowledge and understanding of the difficulties and of the manner in which progress can be made. We have to distinguish clearly in this matter between the short-term policy and the long-term policy. The short-term policy is represented by the measures already referred to such as the pasteurisation or boiling of milk. The long-term policy is the policy of the eradication of tubercle from the herds. I hope the Committee will not err either on the side of imagining that that is an impossible task or on the other side of imagining that it can be done in one or two years. It is not an easy business. It will be most difficult, but I believe that it can be done by a proper long-term policy and that long-term policy is set out in the two reports to which I have referred. The main question, which, I am glad to see is strongly emphasised in the last report, is that we want greater support for the veterinary profession in connection with the supervision of the condition of dairy cattle. Secondly, we want a system of tuberculin testing and the isolation of tubercular cattle from those which are not tubercular. That will require large measures, and I hope that it will be taken in hand under the proposals which we are considering to-day.

The veterinary profession hitherto has grown locally, very much as the medical profession grew in past centuries, and it has not advanced with the times. There are prominent instances of men who have, despite the difficulties, shown themselves all the greater by their manner of dealing with those difficulties, but ordinarily speaking the veterinary profession has suffered through want of proper training such as is arranged for in many other countries. The difficulties in connection with the Veterinary College are well known and the possibility of increasing proper educational facilities and bringing up a new generation of veterinary officers is one which should receive consideration. You cannot have proper veterinary inspection without properly trained veterinary officers. You cannot have properly trained veterinary officers without the adequate machinery of college and staff and you cannot have that machinery unless you are going to attract the right people to the profession. Hitherto we have not offered sufficient attractions to bring into the profession men of corresponding status and learning to those in the other professions. You have men who enjoy an open-air or an agricultural life and who have taken up veterinary work in order to get that kind of life, but you want to attract to the profession men who are students as well as agriculturists. You will not get them unless there is the proper machinery for their training and unless they are offered a career which is worth having.

We must recognise the value of real scientific work for the prevention as well as the cure of disease in dairy cattle. We must recognise that such work is worth paying for and that we ought to have the services of veterinary surgeons, as they are called, who will do work in connection with cattle such as the medical officers of health for 50 years have been organised as a profession to do in con- nection with diseases among human beings. I hope that every county and county borough will before long have its proper veterinary staff and equipment on those lines and that men of high standing will be attracted to the profession and will help to work out the elimination of this plague of tuberculosis as well as other infectious diseases which pass from cattle to human beings. We feel that that is a necessity before we can get a supply of clean milk such as can be publicly recommended to everybody as safe apart from any kind of treatment whatever.

Finally, I would say that despite all the difficulties, the nutritional element in milk is immense and it would be an enormous gain if the proportion of food given to children in the form of milk every day could be increased. Whether it can be increased by the means suggested in connection with these proposals-I do not know. There is a danger in-stimulating the supply too much and creating a too sudden change. One danger is that if a child is suddenly given a large supply of milk in the middle of each day and if the child's parents are unemployed or are in great poverty there will be a tendency on their part to think that they need not give that child the full amount of the ordinary meals at home. The tendency in certain homes might be to deprive the children of other food because they were getting the milk at school land perhaps in the long run some of the children would be getting less food and not more and the new milk supply would only be looked" upon as a means of relieving the family budget. If you were to distribute milk on a large scale straight away free of any charge even to those who can afford to pay for it a great deal of the expenditure might be wasted. But if the system is carefully introduced and the proper proportions are observed I am certain that we can give a large measure of help to the dairying industry in this way and also help the children of to-day and the future generations of this country by means of the proposal which we are glad to support this evening.

9.15 p.m.

Sir STAFFORD CRIPPS

I should like to refer to something which the hon. Member for Galloway (Mr. McKie) said, namely, that the Conservative party had.

always been prepared for a certain measure of State interference. The supporters of the Conservative party are always prepared to demand a certain measure of financial assistance from the State—which is rather a different proposition: Whenever they see that the profits in a particular industry like milk are diminishing or have diminished, they hurry almost indecently to this House and demand that they shall be given some form of dole, and be it noted that there is never any means test connected with that dole. There are no doubt many hon. Members in this House who own dairy herds and who will get the benefit of some of the money which they are voting to-day under this Financial Resolution. I venture to suggest that if the means test were applied to them very few would qualify for it. When it comes to the question of increasing or creating profits in an industry, it seems to be one of the primary principles of the Conservative party that it is indecent to consider anything like a means test.

When one looks at the question of the disposal of the so-called surplus milk, the arguments that are put up strike one as slightly fantastic. As I understand it, we are told that this milk is too impure to give to school children, that it is so full of disease. The Minister does not say so, but we have been told to-night that this milk is really too impure to give to school children and that therefore we ought to subsidise its manufacture into some other article.

Sir F. FREMANTLE

I hope the hon. and learned Gentleman did not take my remarks as suggesting that that is the case, because it is certainly not the case

Sir S. CRIPPS

I gather that the hon. Member did not take that view, although he, like myself, considers the danger a very serious one which ought to be dealt with by the State and that the advantages of milk consumption by children is often out-weighed by the disadvantage which comes from the impurity of the supply. The hon. Member for Altrincham (Sir E. Grigg) stated that it would not be wise at the present time to try and give any increased supply to the school children because the quality of the milk really was not such as could be properly offered to them. The Minister, I am glad to see, does not take that view at all. If the quality of the milk is good enough, though not so high as it should be, why is it, if we want to get a greater area of distribution for liquid milk, that we should subsidise its use for manufacture rather than subsidise its use as liquid milk?

The right hon. Gentleman intervened when my hon. Friend the Member for Don Valley (Mr. T. Williams) was speaking to point out that the poorest people were forced to drink this manufactured milk, and that if you subsidised the manufacture you were therefore subsidising the poorest people. Surely it would be simpler to subsidise the poorest people direct with liquid milk rather than put it through the process of manufacture in order to get it to them as a cheap and much less desirable article. It seems that if your only purpose is to subsidise the poorest people by subidising the manufacture of liquid milk you are putting yourself to a great deal of unnecessary trouble, and furthermore putting the poor people whom you subsidise to the disadvantage of having to drink tinned milk instead of having to drink liquid milk, which would be far preferable and better for them. Of course, this loan is a pure farce, as everybody to-night has realised.

If we are going to subsidise milk at all, it would be far better to pick out that portion of the population that everybody admits requires milk and see that it gets it. That would be the sort of sensible proposition of anybody who was in charge of any community. You find in a certain area a great admitted want. You have, on the other hand, a great over-supply as it is called. It is perfectly possible to bring these two together. There is nothing to stop it. Yet instead of bringing these two together—the demand of the children and the over-supply of the farmers—you divert it through the canning factories or the manufacturing processes in the hope, the Minister tells us, that the poor people will get it back in a cheap form after it has been through the manufacturing process. I venture to suggest that nobody outside Hanwell or some such institution would think of such a device, unless it were the necessity for maintaining the profit-earning system. I see that the right hon. Gentleman does not like that.

Mr. ELLIOT

I find it very amusing.

Sir S. CRIPPS

Perhaps one day the right hon. Gentleman will be walking outside the walls of Hanwell and somebody will beckon to him and say, "Why don't you come in here?"

Mr. ELLIOT

Some people say that the hon. and learned Gentleman is there already.

Sir S. CRIPPS

I feel like it when I am so close to the right hon. Gentleman. The trouble with regard to the over-supply arises from the confusion between what is the need of the people and what is the effective demand which those people present as purchasers for milk. If the whole of the needs of the people could be made vocal in the market there is very little doubt that, practically speaking, the whole of the liquid milk available in this country could be consumed. Our consumption per head is vastly lower than that of many other countries, and we could very easily, if our people had the means of making themselves vocal in the market and making their demand effective, absorb this liquid milk without going to this device in order to get rid of it in making cheese, handles for knives or anything of that kind. In order to do that, it is true that we must first of all make sure that the supply is such that it does not damage people in their health and frighten them and does not allow such persons as Mr. A. P. Herbert to put across on the wireless a talk comparing beer with milk, in which milk comes off a very bad second. It is enough to make one's flesh creep when one hears of the dangers that are contained in a glass of milk as advertised by him over the wireless.

Therefore, it is essential that some really large measure should be taken for the purpose of cleaning up the herds and the methods of producing milk on the farms and when it passes from the farms into distribution. We do not think that the allocation which is made in this Financial Resolution will be able really to begin to tackle that problem, if it is to be tackled, and that it would have been far better to make a real frontal attack on this problem in order to make a basis for the wider distribution and the advertising, if we are to resort to advertising, in order to get a distribution. This report of the Economic Advisory Council as to the condition of milk is not a very happy basis for advertising. If you advertise on the placards and hoard- ings of this country what is said in the report I do not think the right hon. Gentleman will get much success as regards a wider distribution of milk. Of course, if you try, within our present system, to bring about a better condition in the milk trade, you are necessarily forced to try to keep up prices. That is one of the penalties which you have to pay for our existing system. You cannot force down wages; therefore you have to try to force up prices, and every time you force up prices you make your difficulty of distribution greater, because you narrow your area of consumption. For every penny per gallon milk goes up, so many fewer people are able to buy the same quantities which they could buy before and you are always met, as you must be met under our present system, with the necessity of imposing control to bring scarcity, rather than imposing control which will enable you to create an abundant supply. That is why in this scheme to-day you are forced to try to put milk into manufactured products rather than try to put milk into liquid consumption, and the whole of this scheme is to try to invent a means of getting rid of milk from the liquid market in order that the liquid market may have a higher price for its milk. That is being done by an attempt to restrict the market.

Something has been said about distribution. This difficulty which arises on distribution and the enormous power of the distribution combine is one which is in no way peculiar to this country. When I was recently in the United States of America I had a long discussion with the person who was in charge in the Department of Agriculture of the milk distribution scheme in the United States of America. I was told that the problem of milk distribution, owing to the large combines there, and also owing to the racketeering which has got into the milk business, was one that it was almost impossible to solve. However, the person who was speaking to me said, "We have got one district in which I am glad to say that the distribution is operating with great success both for the consumer and the producer." I ventured to say to him, "Well, I will guess which that is; it is Milwaukee." There has long been a Socialist administration in that city, and they had municipalised the whole distribution of milk, to the enormous benefit both of the farmer and of the consumer.

I suggest to the right hon. Gentleman that, if this trouble as regards distribution is to be got over in this country, it will never be got over until these big combines are put out of the business of distribution, and it is either turned over to co-operative or to municipal distribution. You will not be able to narrow down this enormous market in regard to which, as the right hon. Gentleman for South Molton (Mr. Lambert) showed, since 1913 the distributive margin had gone up by over 100 per cent. Whereas it was 5d., it has gone up to 10d. That has been a gradually increasing margin with the increasing strength of the distribution combines, and their reaction on the rest of the trade. They have gradually been sucking more and more out of this milk distributing business and naturally leaving less and less for the producer, until at the present time there is something like sharing the price between them. The producer gets half and the distributor gets the other half. That problem, which has not apparently been alleviated very much by the recent arbitration proceedings, is one for which I believe there can be no solution so long as you allow these enormously strong capitalist combines to control the distribution channels of milk.

We believe that that is one of the vital deficiencies of a scheme such as this, though, of course, any scheme in which you retain the profit basis at the very centre is almost bound to work out on the same sort of lines—that is, prices going up, the State drawn in to give subsidies of one kind or another, and the consumer left to pay a greater and greater ransom. We believe that that will be the fate of this scheme—no doubt it is the fate to which the right hon. Gentleman looks forward for all these agricultural schemes to which he is putting his hand—but it is not one which we believe to be consistent with the best interests of the community.

9.31 p.m.

Mr. SKELTON

We have had a most interesting Debate and one most interesting to listen to from this bench. Many valuable opinions have been expressed, and it has been interesting, and indeed gratifying, to watch the way in which, so soon as criticism of one part of the Financial Resolution was made from one quarter of the House, it was immediately destroyed from another. My right hon. Friends and myself have been to a large extent sitting in clover in this instance. None the less, the Debate has raised some interesting questions that demand discussion and reply. Let me recall the nature of this Financial Resolution. It has three main heads. The first is the sum, broadly estimated at £3,500,000, to be spent in the next two years for the purpose of giving an economic return to the milk used for manufacturing purposes. The second head is the £750,000 which is to be used for beginning a process of cleaning up the milk supplies of this country. The third main head is the £1,000,000 to be used within two years or so for the purpose of increasing the consumption of liquid milk. One criticism has been with regard to the proportion which these three sums bear in the Financial Resolution. I do not propose to discuss that at great length, because various tastes might distribute these sums by different means.

I will say a word as to why we have selected the distribution of these sums in the way in which they are based in the Financial Resolution. Take, first of all, the money which is to be spent with regard to giving an economic return to the milk used for manufacturing purposes. More than one hon. Member, and particularly the right hon. Gentleman who has just sat down, seemed to think that there would have been some special advantage to be gained had that item been devoted to increasing the consumption of liquid milk, and he specifically invited me to say a word on that point in reply. I do so with pleasure, for the method which we have adopted in regard to the use of that sum will result, we hope and believe, in maintaining a very important agricultural and rural industry, namely, the making of cheese in this country. There are districts both south and north of the Tweed, large and important agricultural districts, whose prosperity in the past has been founded on cheese-making—a most expert and important industry which develops a very high class of agricultural worker, which is of great value, and which, so far as its results are concerned, produce cheeses which are unrivalled among the cheeses of the world. Therefore, to say that it would have been better in principle to do nothing except to help the consumption of liquid milk, and to allow this most important rural industry to continue to decline at the rate at which it has been declining in the last few years, throwing permanently out of employment a very highly skilled class of workers, is to put forward a proposition which has only to be looked at to be rejected. Let me add a word about the tinning of condensed milk, which will also be helped by this money. Is it of no value that we should substitute for the imports of foreign condensed milk condensed milk manufactured at home?

Sir S. CRIPPS

Why not substitute liquid milk?

Mr. SKELTON

Because, as my hon. and learned Friend must, I think, be aware, it is not poverty alone which makes many people use condensed milk. [HON. MEMBERS: "No!"] Then is it also poverty which has so much increased the use of other canned foods in this country? Not at all. All these canned foods, including milk, are used to some extent, and increasingly so, on account of their greater convenience. Especially is that so in the case of milk, because families who use only small quantities of milk find that a tin of condensed milk will keep for two or three days. Everybody who was through the War, to put it no higher, knows the convenience of condensed milk.

Mr. KIRKWOOD

The working-class regard tinned fruit as a luxury, but condensed milk is recognised as an absolute necessity. That is the difference.

Mr. SKELTON

That may be the difference, but my hon. Friend's observation merely brings out the point I am trying to make, that it is astonishing that one substance in a tin should be regarded as a luxury and another as a hardship. I fancy that I have had as much experience of condensed milk as any Member in this House. However, I leave that point, only emphasising that there is a real advantage in substituting home-produced condensed milk for foreign. The fact that so much more work will be given to people in this country may not interest hon. Members opposite, but it is the basis of our general economic policy, a policy which is securing a reduction of unemployment and an increase of purchasing power. I come now to the item of £750,000 to be expended on cleaning up the herds. It has been said that more might have been spent, but it must be pointed out that this money is being spent to some extent experimentally. It is the beginning of a work which, as my hon. Friend the Member for Don Valley (Mr. T. Williams) has said, has been long delayed. I do not think any hon. Member can cavil at the fact that we are at last making a beginning.

To turn again to the £1,000,000 to be spent on increasing the use of liquid milk, those who desire that more should be spent in that way ought to be satisfied that we are likely to spend £1,000,000, because that is at least of some value. On this topic the most remarkable diversity of view has been expressed. The hon. Member for Don Valley rather indicated that he would like to have seen the whole of the money available spent upon increasing the consumption of liquid milk, but the right hon. Member for North Cornwall (Sir F. Acland) presented a very remarkable proposition, because he said that, eagerly as he desired to see the consumption of liquid milk increased, he would postpone the consumption of a single gallon or pint of liquid milk in the schools until he had entirely cleaned up the herds.

Sir F. ACLAND

I am sorry if I gave that impression. I intended to say that we should not let the supply of milk for the children be outrun. I would not delay any supply until everything had been cleaned up.

Mr. SKELTON

I am glad that what I have said has enabled my right hon. Friend to make that explanation, because I think all hon. Members who were present will agree that what I have said represented the impression left by his speech.

Sir F. ACLAND

It was my mistake.

Mr. SKELTON

I do not think he need have any fear that there will be an inadequate supply of safe milk for the children of this country. There is a considerable and growing number of certified herds, and what is as important from the point of view of safe consumption is that, certainly as far as London is concerned, the great bulk of the milk if not the whole of the milk is pasteurised. I do not think we need postpone encouraging the consumption of liquid milk on account of any fear that there may not be a sufficient supply of safe milk. Into the question of pasteurisation or clean herds I will not enter, though it has been discussed this afternoon. It is a large and difficult and scientific problem, but the Committee will agree that prevention is better than cure, and that if we can clean up the herds we secure a degree of safety which we can never attain by pasteurisation, which has anxieties and dangers of its own.

The next main topic which appeared in many speeches was whether under the existing Milk Board the distributors both in England and Scotland get too large a profit. Until the milk scheme came into operation there was no organised body on the side of the producers at all equivalent to the various organisations which represent the distributors, and therefore it cannot be a matter of surprise if in the early months of the life of the Milk Board a final figure for the proper costs of distribution has not been reached. I think we all agree that the experience of the Milk Board up to date shows that the ascertainment of the proper costs of distribution is one of the most vital matters ahead of the milk scheme. There is an increasing realisation on the part of the board, the producers, the consumers and I believe the distributors that the distributors must satisfy the nation as a whole that in the organised system which the milk scheme has produced they get their fair share, and no more than their fair share, of the costs and the profits, but that is a very different thing from saying that the figure, the opportunity for inquiring into which is so new, should have been finally and infinitively ascertained.

I have dealt with the main matters which have been raised, but one or two special questions were also referred to. My hon. Friend the Member for Colchester (Mr. Lewis) whose self-control in not moving his Amendment I greatly appreciate, raised a matter on which he had put down an Amendment. He was anxious to ensure by a provision to be inserted in the Bill or in the Financial Resolution that only milk of the most safe sort should be supplied in schools, and that conditions should be laid down in the Financial Resolution and the Bill absolutely to secure that. On that topic we are in principle entirely at one with the hon. Member, as no doubt the whole Committee are, but that is another matter from seeking at this point to lay down an actual standard in the Financial Resolution. We think that that would be an unwise thing to do. In certain circumstances in certain districts safety may be secured by pasteurisation, elsewhere by the development of certified milk, and there are even rural districts where the normal raw milk supplied is so clean that certificates by local medical officers will, we believe, be a sufficient guarantee that it may safely be used in schools. These are matters which ought to be carefully explored and looked into when the scheme is in operation, and we de-sire that our hands should be left free so far as the phraseology of the Financial Resolution is concerned.

There is hardly any other question to answer in detail, because the main topics covered a variety of separate questions. Therefore I would conclude by saying a few words on the speech of the hon. and learned Member for East Bristol (Sir S. Cripps). He was very eloquent on the subject of restriction and the dreadful career of crime that we were pursuing in our general agricultural policy. What legislation enabled us to pursue this career of crime I Surely it is very largely if not exclusively the Marketing Act of 1931.

Mr. T. WILLIAMS

Surely the hon. Member will not suggest that the Agricultural Marketing Act of 1931 gave a licence to any Government to subsidise the sale of diseased milk.

Mr. SKELTON

No legislation ever has been or ever will be passed to do that. I was only reminding the hon. and learned Member that the legislation which we are calling in aid is legislation in which he was greatly interested, and I do not think that it lies in his mouth to accuse us of going off on a rake's progress of restriction when our guide and compass is an Act of Parliament passed by himself and his friends.

Sir S. CRIPPS

The Marketing Act of 1931 did not lay down any necessity for restriction or scarcity of supply, but it might equally be used for scarcity or abundance. The further step to have been taken would have been the elimination of the profit-earning system.

Mr. SKELTON

That last horrifying statement of the hon. and learned Gentleman shows once again how often in the history of Britain fate steps in at the right moment, and in that case fate stepped in with great effectiveness and decisiveness, and it appears that we shall have to wait for some time until that beautiful sequel of the Marketing Act of 1931 takes place. I have dealt with the various topics that have been raised. I know that although criticism has been made, and very properly made, this Financial Resolution will pass with the good will of the great body of the House, and that it has strong underlying support even from those who are determined to vote against it. I believe that they would be in their hearts extremely sorry if they were to find themselves in a majority, for it is from academic and theoretical reasons that they are going to record their votes against proposals in which they adherently believe

9.52 p.m.

Mr. CHARLES WILLIAMS

I should like to congratulate the Under-Secretary of State for Scotland on a very skilful speech. He has covered a great deal of ground in a very short time with wonderful clarity, but he has not yet dealt with the important and very able speech made by the hon. Member for the Isle of Ely (Mr. de Rothschild) which dealt with the financial side of the Resolution, and particularly with the matter of subsidy. I congratulate the Under-Secretary most sincerely on having avoided a difficulty. This is a very long Financial Resolution. There are bits of it with which almost every one of us would agree, and there are bits of it on which one finds oneself in agreement with most strange persons. I find myself almost in agreement with the hon. and learned Gentleman the Member for East Bristol (Sir S. Cripps). He may be improving; there is always hope.

The extraordinary thing about the whole of the arguments that we have heard to-day is that in this Financial Resolution there is no financial limit laid down and no real time limit laid down, by a House of Commons which was elected to look after the finances of the country, and we have not once from beginning to end had the attendance of any Finance Minister. I will not develop that matter, but there is a serious point which I feel deeply as an agriculturist. In the Resolution there are all sorts of things laid down. It is provided that milk for consumption by children shall be pure and free from infection. We are all agreed upon that, as far as possible. It would be better if the House of Commons spent its time in seeing that some of the foreign milks that come here are free from any sort of infection.

I should like to refer to the speech of the hon. Member for Altrincham (Sir E. Grigg) with regard to the effect on the whole milk position. I want to help the Government as much as I can, and any criticism that I make is because I sincerely and honestly believe that the method of the Financial Resolution is the wrong method. The hon. Member for Altrincham congratulated the Minister on the fact that the Milk Board had succeeded in preventing undercutting. I am in an extraordinary position. Some people in whom I am interested have done very well under the milk scheme, but others in whom I am interested, and who happen to be voters in my division, have done amazingly badly under this scheme and are finding that, instead of being saved from undercutting, they are cut very nearly 50 per cent. compared with this time last year. That means that that land, which is most suitable for clean milk production and which is near to a town, will go out of milk production in the immediate future in all probability. That is a disastrous thing to happen.

The second point is that the hon. Member for Altrincham, who was full of praise for the Minister—and no one delights more than I do to see him back, well and sane and able to work for his Department—said he had failed in regard to the middleman. Any of us who have been connected with farming questions for most of our lives know that that is the essential question to deal with at present. I am entirely sympathetic with the Minister, because I think the thing that is killing him at present is the perfectly imbecile Marketing Act of 1931. If it were not for that imbecility, which he thinks he must use, he would do much better. If he had the courage to get up and say, as some of us have, that it is a thoroughly wrong and badly constructed Act, and if he had scrapped it in the beginning, he would be far nearer to-day to getting a proper marketing system. That is my conviction. I say this system is entirely wrong and has misled the right hon. Gentleman from the beginning.

The trouble with which we are trying to deal in this Financial Resolution is that the bottom of the milk market has dropped out, and there is no way in which we can deal with it except, in the first place, by increasing consumption. We have got to get milk as a common article of diet for millions more people, and to do that we do not want to bolster up the price, either by subsidy or in any other way. A helpful part of this Resolution is that part which, although it is uncontrolled and badly regulated, helps to bring milk closer to the school children. I am not going into the controversy that has been raised by those who like hair splitting on small points, as to whether it is better to get a little milk more quickly to a few school children, or whether some wretched medical officer will come in and say, "Here is a school child who is tuberculous through tubercular milk," and thereby make milk unpopular. All that is immaterial. Although I dislike subsidies, if we are to subsidise anything, I would subsidise school children first every time, and particularly the school children in the very heavily necessitous areas. It would be far better to spend money in pouring milk into those districts than in many of the ways in which we are spending it at the present time.

But after increasing consumption we must do something to limit the extraordinary amount of milk and milk surpluses coming to this country from various sources, and that is why I think the Minister is wrong in pinning his faith to the Milk Marketing Board. The best and the only way in which we can deal with this ever-growing amount of stuff that is coming in is deliberately to say that certain foreign countries cannot import more than they were importing, say, five or six years ago, and to make an effort in that way to limit our surplus. That, after all, would be taking us back to the time when we had a very considerable trade. I say that, not because I wish generally to limit development, but because I believe—for various reasons, one of which, and the worst of all, except perhaps the financial one, is this matter of subsidies—that you have got to deal with this question of surpluses in an entirely fresh way.

We are to-day in this absurd position, that we are offering a subsidy to the milk suppliers of this country, and we are offering it in direct competition with the subsidies given by some of the Dominion Governments. What is the good of the taxpayer in this country finding money to subsidise milk production here, and the taxpayer in Australia and in New Zealand doing the same thing in their own countries? Would it not be better to come to some sort of fair wages agreement, and get it in through your Dominions settlement, whereby it would be agreed as a primary factor in all trade agreements within the Empire that there must be no subsidy of any sort or kind for the goods going either from here to the Dominions or from the Dominions to this country? It is nothing new. It is only what Canada is doing. It is quite easy to arrange, and I believe that if it were put in that way, it would assure that the Dominions would have, not merely a share, but a growing share, in our markets; and unless that share can be a growing share we cannot hope to deal with the emigration problem, which is essential for our own unemployment question.

It would be far better if this House, instead of building up a steadily growing system of subsidies, turned its attention to the elimination of subsidies, which would save the taxpayers' money and at the same time to making definite agreements, which would help us with our Dominions overseas. We are dealing in this Resolution with what seems to be, to some people, an emergency, but this question of a milk subsidy has been growing for many years now. It is not something which is new or sudden. This may be a more or less temporary Measure, and I want to see, not something temporary, but something which can be accepted by men of goodwill in all parties and something which is permanent. I have had, the whole of my life, some connection with agriculture, and nothing has been better for agriculture than the good will which has been growing up, slowly, between the towns and the countryside during the past few years, while nothing has been worse for agriculture than the Corn Production Act, which was passed after the War and which had to be repealed because it was unjust and exacted subsidies from taxpayers and because the country could not afford it.

I see subsidies being brought in for all sorts of things, and I do not believe they are sound. I believe it is possible to go to work in some other way, and I say, as an agriculturist who has lived practically the whole of his life, except while here in the House of Commons, in the country, that I am convinced that if you are going on subsidising and building up subsidies, you will come to the same position as Parliament was in from 1918 to 1922, when the Corn Production Act was brought in and almost immediately repealed. I personally have not the slightest intention of voting for this subsidy. Nothing would induce me to vote for something which I think is going to put agriculture

in a false position with the towns at present. There are very few agricultural voters in my division, and a great number of town voters. It is absolutely wrong at the present time to ask the House of Commons to adopt these temporary patching-up measures for two years. It would be better to cut out some of our foreign competitors in this country and work on such lines as would increase the home market for our own people. I am glad to see that the cheese producers' business is to be more successful, but the worst thing under this scheme is that it does not help those districts and areas which are the best natural milk-producing areas. To-day your best and most natural milk-producing areas are being driven out of existence and many areas which ought to be growing wheat or corn are producing milk because of the natural contraction of prices in the last few years. Unless you can reverse that process, as we are doing in the wheat subsidy which is on sound lines, you are not working in the interests of agriculture or of the country as a whole.

Question put.

The Committee divided: Ayes, 177; Noes, 43.

Division No. 260.]	AYES.	[10.8 p.m.
Acland-Troyte, Lieut.-Colonel	Conant, R. J. E.	Hannon, Patrick Joseph Henry
Adams, Samuel Vyvyan T. (Leeds, W.)	Cook, Thomas A.	Haslam, Henry (Horncastle)
Agnew, Lieut.-Com. P. G.	Courthope, Colonel Sir George L.	Headlam, Lieut.-Col. Cuthbert M.
Albery, Irving James	Craven-Ellis, William	Heilgers, Captain F. F. A.
Allen, Sir J. Sandeman (Liverp'l, W.)	Crooke. J. Smedley	Henderson, Sir Vivian L. (Chelmsford)
Anstruther-Gray, W. J.	Crookshank, Capt. H. C. (Galnsb'ro)	Hills. Major Rt. Hon. John Wall[...]r
Appiln, Lieut.-Col. Reginald V. K.	Croom-Johnson, R. P.	Hornby, Frank
Apsley, Lord	Cruddas, Lieut.-Colonel Bernard	Horsbrugh, Florence
Aske, Sir Robert William	Davies, Maj. Geo. F. (Somerset, Yeovil)	Howitt, Dr. Alfred B.
Astbury, Lieut.-Com. Frederick Wolfe	Denman, Hon. R. D.	Hudson, Capt. A. U. M. (Hackney, N.)
Baldwin, Rt. Hon. Stanley	Dower, Captain A. V. G.	Hunter, Dr. Joseph (Dumfries)
Barclay-Harvey, C. M.	Drewe, Cedric	Hunter, Capt. M. J. (Brigg)
Beaumont, M. W. (Bucks., Aylesbury)	Duckworth, George A. V.	Hurd, Sir Percy
Beaumont, Hon. R. E. B. (Portsm'th, C)	Duncan. James A. L. (Kensington, N.)	Jackson, Sir Henry (Wanoswarth, C.)
Bernays, Robert	Edmondson, Major A. J.	James, Wing.-Com. A. W. H.
Blaker, Sir Reginald	Elliot, Rt. Hon. Walter	Jones, Sir G. W. H. (Stoke New'gton)
Blindell, James	Elliston, Captain George Sampson	Ker, J. Campbell
Bossom, A. C.	Emmott, Charles E. G. C.	Kerr, Lieut.-Col. Charles (Montrose)
Boulton, W. W.	Essenhigh, Reginald Clare	Knight, Holford
Bowyer Capt. Sir George E. W.	Evans, R. T. (Carmarthen)	Lamb, Sir Joseph Quinton
Braithwaite, J. G. (Hillsborough)	Fleming, Edward Lascelles	Leech, Dr. J. W.
Brass, Captain Sir William	Ford, Sir Patrick J.	Lees-Jones, John
Brocklebank, C. E. R.	Fraser, Captain Ian	Leighton, Major B. E. P.
Brown, Ernest (Leith)	Fremantle, Sir Francis	Lennox-Boyd, A. T.
Brown, Brig.-Gen. H. C. (Berks., Newb'y)	Fuller, Captain A. G.	Lewis, Oswald
Burghley, Lord	Gillett, Sir George Masterman	Liddall, Walter S.
Burgin, Dr. Edward Leslie	Gluckstein, Louis Halle	Loder, Captain J. de Vere
Burton. Colonel Henry Walter	Goodman, Colonel Albert W.	Loftus, Pierce C.
Campbell, Sir Edward Taswell (Brmly)	Greene, William P. C.	Lovat-Fraser, James Alexander
Caporn, Arthur Cecil	Grenfell, E. C. (City of London)	McCorquodale, M. S.
Carver, Major William H.	Grigg, Sir Edward	McKie, John Hamilton
Castlereagh, Viscount	Grlmaton, R. V.	Macqulsten, Frederick Alexander
Chapman, Col. R.(Houghton-le-Spring)	Gunston, Captain D. W.	Magnay, Thomas
Clayton, Sir Christopher	Hales, Harold K.	Makins, Brigadier-General Ernest
Cochrane, Commander Hon. A. D.	Hamilton, Sir George (Ilford)	Manningham-Buller, Lt. Col. Sir M.
Margesson, Capt. Rt. Hon. H. D. R.	Rankin, Robert	Stuart, Lord C. Crichton-
Mason, Col. Glyn K. (Croydon, N.)	Reed, Arthur C. (Exeter)	Sugden, Sir Wilfrid Hart
Mayhew, Lieut.-Colonel John	Reld, William Allan (Deroy)	Taylor, Vice-Admiral E. A. (P'dd'gtn, S.)
Mills, Major J. D. (New Forest)	Remer, John R.	Thomson, Sir Frederick Charles
Milne, Charles	Renwick, Major Gustav A.	Todd, Capt. A. J. K. (B'wick-on-T.)
Mitchell, Harold P. (Br'tf'd & Chisw'k)	Rickards, George William	Todd, A. L. S. (Kingswinford)
Morrison, G. A. (Scottish Univer'ties)	Rosbotham, Sir Thomas	Turton, Robert Hugh
Moss. Captain H. J.	Ruggles-Brise, Colonel E. A.	Ward, Lt.-Col. Sir A. L. Hull)
Muirhead, Lieut.-Colonel A. J.	Runge, Norah Cecil	Ward, Sarah Adelaide (Cannock)
Munro, Patrick	Russell, Hamer Field (Sheffield, B'tside)	Wardlaw-Milne. Sir John S.
Nicholson, Godfrey (Morpeth)	Russell, R. J. (Eddisbury)	Warrender, Sir Victor A. G.
Normand, Rt. Hon. Willrld	Rutherford, Sir John Hugo (Liverp'l)	Wedderburn, Henry James Scrymgeou
Nunn, William	Salmon, Sir Isldore	Wells, Sydney Richard
O'Donovan, Dr. William James	Salt, Edward W.	Whyte, Jardine Bell
O'Neill, Rt. Hon. Sir Hugh	Sandeman, Sir A. N. Stewart	Willoughby dc Eresby, Lord
Patrick, Colin M.	Savery, Samuel Servington	Wills, Wilfrid D.
Pearson, William G.	Selley, Harry R.	Wilson, Lt.-Col. Sir Arnold (Hertf'd)
Penny, Sir George	Shaw, Helen B. (Lanark, Bothwell)	Wilson, Clyde T. (West Toxteth)
Petherick, M.	Shaw, Captain William T. (Forfar)	Windsor-Cilve, Lieut.-Colonel George
Pike. Cecil F.	Shute, Colonel J. J.	Wise, Alfred R.
Powell, Lieut.-Col. Evelyn G. H.	Sinclair, Col. T.(Queen's Unv., Belfast)	Womersley, Walter James
Radford, E. A.	Skelton, Archibald Noel	Worthington, Dr. John V.
Raikes, Henry V. A. M.	Smiles, Lieut.-Col. Sir Walter D.
Ramsay, T. B. W. (Western Isles)	Somerville, Annesley A. (Windsor)	TELLERS FOR THE AYES.—
Ramsden, Sir Eugene	Spens, William Patrick	Commander Southby and Dr. Morris-Jones.
NOES.
Acland, Rt. Hon. Sir Francis Dyke	Grenfell, David Rees (Glamorgan)	Mallalieu, Edward Lancelot
Adams, D. M. (Poplar, South)	Griffith, F. Kingsley (Middlesbro', W.)	Mander, Geoffrey le M.
Allen, William (Stoke-on-Trent)	Griffiths, George A. (Yorks,W. Riding)	Milner, Major James
Attlee, Clement Richard	Grundy, Thomas W.	Rea, Walter Russell
Batey, Joseph	Hamilton, Sir R. W. (Orkney & Z'tl'nd)	Sinclair. Maj. Rt. Hn. Sir A.(C'thness)
Brown, C. W. E. (Notts., Mansfield)	Holdsworth, Herbert	Smith, Tom (Normanton)
Cocks, Frederick Seymour	Jenkins, Sir William	Tinker, John Joseph
Cripps, Sir Stafford	Jones, Morgan (Caerphilly)	Wedgwood, Rt. Hon. Jostah
Daggar, George	Kirkwood. David	White, Henry Graham
Davies, David L. (Pontypridd)	Lawson, John James	Williams, David (Swansea, East)
Dobble, William	Leonard, William	Williams, Dr. John H. (Llanelly)
Edwards, Charles	Logan, David Gilbert	Williams. Thomas (York. Don Valley)
Foot, Isaac (Cornwall, Bodmin)	Macdonald, Gordon (Ince)	Wood, Sir Murdoch McKenzie (Banff)
Gardner, Benjamin Walter	McEntee, Valentine L.
Greenwood, Rt. Hon. Arthur	Mainwaring, William Henry	TELLERS FOR THE NOES.—
		Mr. John an d Mr. P. Creham.

Resolution to be reported To-morrow.