CATTLE INDUSTRY (EMERGENCY PROVISIONS) [MONEY].

HC Deb 18 February 1935 vol 298 cc47-113

Considered in Committee under Standing Order No. 69.

[Captain BOURNE in the Chair.]

Motion made, and Question proposed,

"That it is expedient—

(1) to provide for extending, by not more than six months, the period during which cattle or carcases of cattle must have been sold in order that payments in respect thereof may be made out of the Cattle Fund under Section two of the Cattle Industry (Emergency Provisions) Act, 1934;

(2) to authorise the Treasury to make, during the months of April, May and June, nineteen hundred and thirty-five, advances to the said fund, not exceeding in the aggregate one million and fifty thousand pounds, out of the Consolidated Fund of the United Kingdom, and to provide for requiring that any such advances shall be repaid from the Cattle Fund to the Exchequer of the United Kingdom before the fifteenth day of August, nineteen hundred and thirty-five; and

(3) to provide for other matters connected with the matters aforesaid,"—(King's Recommendation signified.)—[Mr. Elliot.]

The MINISTER of AGRICULTURE (Mr. Elliot)

This Financial Resolution makes provision for further advances from the Exchequer to the cattle fund with a view to payments being continued at the present rate to the producers of fat stock in the United Kingdom for a period of three months from 31st March, 1935, when the present Act expires. The present Act, of course, has not yet expired, and I am sure it will be for the advantage of all of us in this Committee to see that no rush takes place in this matter and that arrangements are made for the period to succeed 31st March well in advance of any crisis which might otherwise arise. The Committee will recall the circumstances in which Parliament was asked to approve the Cattle Industry (Emergency Provisions) Act in July last. In the memorandum on the livestock situation issued by the Government before that legislation was introduced, attention was called to the very serious decline which had taken place in 1932, 1933 and the first part of 1934, in the prices of fat and store cattle in the United Kingdom. It was then explained that the alternatives before the Government were either drastic reduction of imports to the point that was necessary to sustain prices of United Kingdom livestock at a remunerative figure, or the introduction, in agreement with overseas countries, of a levy upon imports, the proceeds of which would be available for the assistance of home industry.

The first solution, quantitative regulation, corresponds more closely with the views advocated by the right hon. Member for Darwen (Sir H. Samuel). The second one, the levy used to balance up the home price, corresponds more closely with the solution advocated by the right hon. Member for Swindon (Dr. Addison) and his party. [HON. MEMBERS; "No!"] I do not expect all my hon. Friends opposite to be conversant with every detail of their official programme.

As regards the levy upon imports, it was explained in July last that the quantity of the imports might either be left entirely free or subjected to such moderate regulation as might be thought necessary to prevent the market from breaking altogether. It was, however, pointed out that without the consent of the countries concerned no duty could be imposed on Dominion meat before August, 1937, or on Argentine meat before November, 1936. The immediate crisis in July last was met by a subsidy to cattle producers in order to give time for negotiations on the proposals for a levy.

No one realises more clearly than the United Kingdom Government the extreme difficulty of the problems with which overseas supplying countries are faced, and negotiations involving issues of such far-reaching importance cannot be rushed. I stress that again to the Committee—that the trade and Imperial issues involved in these negotiations are of the greatest importance, and that it is vitally necessary that supplying countries should feel that every possible consideration would be given to their views and that every effort would be made to meet the arguments which they repeatedly advance to the Government of this country. We have been anxious to give the fullest possible opportunity for the examination of alternatives, neither of which, it was well recognised, could be regarded as palatable. It was hoped that the seven months' period during which Parliament has agreed to the situation being held by payments from the Exchequer would have sufficed for this purpose. That hope, however, has not been realised.

It would, of course, have been open to us at any time in the last seven months to have cut the Gordian knot and to have solved the problem by the limitation of imports, as we have power to do under the agreements that we have signed; but to avoid the shock to the trade of supplying countries, which it is very necessary to do, we have held our hand in the interests of the general trade and commerce of this country, and the general trade and commerce of this country has benefited by the fact that we have negotiated and have not decided to take the drastic and immediate action which, all admit, was open to us under the legal agreements which have been drawn up. There was the question whether in these circumstances it would not still be necessary to bring into operation on 1st April next the alternative of drastic supply regulation, which was indicated in the White Paper of July last.

There can be no question that if the adoption of one or other of these alternatives is to be deferred, a continuance of financial assistance to the home beef industry is absolutely necessary. The fat cattle prices in England and Wales have fallen to 33s. 8d. per cwt. live weight. That is lower than the price in the corresponding week of 1934 by 4s. 8d., or practically the whole of the subsidy. The average price for the five months, September, 1934, to January, 1935, has been 34s. per live cwt., compared with an average of 36s. 3½d. in the corresponding period of 1933–34.

Dr. ADDISON

The right hon. Gentleman mentioned a decline of 4s. 8d. in the price. Would he give us the dates again?

Mr. ELLIOT

In the twelve months period, taking this week with the corresponding week of last year, the price has fallen by 4s. 8d.

Sir PERCY HARRIS

That is since the subsidy.

Mr. ELLIOT

Oh yes. There was no subsidy at this time last year. The decline in the period of five months, September, 1934, to January, 1935, was about Is. 4d. per cwt., or 3 per cent., and the producer was during that period, other things being equal, better off to the extent of about 37s. 6d. per beast as a result of the subsidy. Probably I shall be asked by hon. Members opposite whether the butcher is getting the money. All I shall say at the moment is that if I am asked that question I shall be willing on another occasion to deal with it at length. As to the question of the butcher not getting any of the money that would involve us of course in a further extension of control which it is very desirable to avoid. Nobody wishes to extend control any further than is absolutely necessitated by the circumstances of the case. If the prices were unremunerative in 1934 they are worse now.

Sir HERBERT SAMUEL

Is the right hon. Gentleman not going to tell us where the money goes that is voted by Parliament? He said that if the question were asked he would deal with it on some other occasion, but we ought to be told now when we are being asked to vote the money.

Mr. ELLIOT

I do not wish to throw my remarks out of proportion and after all there are many factors involved in the question of where the money voted by Parliament has gone. As I say, there is a seasonal decline about that period of the year which inevitably absorbs a considerable quantity of the money. There have been heavier supplies for the market and cheaper supplies to many of the people of this country. Putting these and other factors together it would require an analysis of some length to work the matter out in detail. Taking it altogether there has been a certain advantage to the producer in this country and a certain advantage, no doubt, to the retailer in this country and a certain advantage to the consumer in this country but I do not wish to go into those factors at length at the moment.

All that can be done pending the conclusion of negotiations to hold the import situation has been and is being done. The reduction in foreign supplies of frozen meat agreed to at Ottawa, namely, 35 per cent. of the Ottawa year quantities has been maintained and the 10 per cent. cut in respect of foreign chilled beef first imposed in November, 1932, has also been continued. A very substantial measure of voluntary co-operation has been secured from Empire countries in conforming to the programmes put forward by the United Kingdom Government covering the periods July to September, 1934, and January to March, 1935. There has been a substantial reduction in the supplies of fat cattle from the Irish Free State and it is interesting to see how far the prophecies of evil which were launched by the Opposition have been falsified in the event. To listen to or to read their speeches anyone would conclude that beef was about to be made unprocurable by the working class of this country; that prices were to be hoisted to a region which would take beef utterly out of the reach of working-class households. Those extravagant assumptions have not been realised in practice, but what we forecast has been singularly closely realised, namely, that the reductions which we were making were barely enough to hold the market where it was and that any suggestion that this would lead to a great rise in prices would not be borne out.

Sir P. HARRIS

We never said that the subsidies would cause an increase of price—quite the contrary.

Mr. ELLIOT

I am afraid I have not made myself clear to the hon. Gentleman. At the moment I was discussing the reduction of the supply in the market and I was referring to speeches by the hon. Gentleman and others indicating that the reduction in the supply of Irish cattle—which was the means by which we only just held the market from utter crash and collapse—would deprive his constituents altogether of that healthy and pleasant food, British beef. I am pointing out that those speeches have not been justified by what has actually happened. The total supplies of beef and fat cattle during the period September, 1934, to January, 1935, were maintained at practically the same figure as those for the corresponding period of 1933–34. They were not diminished. They were maintained and as we all know there is going on a certain change in public taste. There is a movement away from beef and in favour of other forms of meat so that in fact the beef market is actually shrinking and the supplier will need to square that fact with his desire to send increasing quantities into the market. You have a market in which supply is outrunning demand but that is not due to economic circumstances. The shift in the demand was manifest even in years of relatively low unemployment and high prosperity. Even during those times the movement away from beef was manifest and the present rush of countries to heap further supplies upon this market is bound to bring about a situation in which the conditions move against the producer and in favour of others who are interested in the trade. The arrangement recently made for regulation of the supplies of imported beef during the first quarter of 1935 are designed—making allowance for the beef equivalent of the imports of fat cattle—to secure a reduction from 3,220,000 cwts. in the first quarter of 1934 to 3,138,000 cwt. or a reduction of 2.6 per cent. and accordingly we have thought it justifiable to continue to negotiate.

At this point the Committee might be interested to have a few particulars as to the working of the Cattle Committee which will have to operate this Measure as it operated the last. The machinery for the distribution of the subsidy which was set up at very short notice and under great pressure has, I think I can claim, worked with remarkable smoothness and efficiency and I should like to take this opportunity of congratulating Sir John Chancellor and his colleagues of the Cattle Committee and their staff upon an administrative feat of which they and indeed the House of Commons may well be proud. Satisfactory results could not have been achieved without the help of various national organisations representing auctioneers, butchers and farmers who gave their active and cordial co-operation not merely in framing and launching the scheme but throughout its operation. The Act only received the Royal Assent on 31st July of last year and 10 days afterwards the Cattle Committee had presented its report and the Particulars of Arrangements required by the Act to the appropriate Ministers, who, on the same day, signified their approval of the arrangements. Invitations to apply for approval of certification centres were sent out to 800 markets provisionally agreed. On 29th August, the Cattle Committee were in a position to advise the Ministers that the arrangements were so far advanced that the scheme could be brought into operation on 1st September, the first date permissible under the Act.

It will be remembered that when the Measure was passing through the House of Commons grave doubts were expressed by hon. Members who were conversant with the practical working of the livestock trade as to whether a scheme could be got ready in time for the autumn. The scheme was got working in time and, what is more, it came into action with singularly little dislocation either of prices or supplies. There was no holding back before it and no rush into the market after it. The industry accepted the Act and worked it in a responsible and painstaking manner. By 31st August, over 600 applications for approval of live weight certification centres had been considered and passed. All these were markets likely to be held on Saturday, 1st September, and Monday, 3rd September, so that we had carried through all the complicated administrative details which were necessary to ensure that the certifying officers would be able to carry out their work. Twenty-five dead weight certification centres were approved in time to commence operation on 1st September and by the following Saturday the totals had been raised to 795 live weight certification centres and 29 dead weight certification centres. The arrangements for making the payments work so smoothly that payment is usually made within three or four days of the receipt of the certificate by the Cattle Committee—a very remarkable administrative result. It was estimated that about 1,000,000 animals were likely to be marketed in the seven months September to March. The present indications are that the number of animals likely to come forward in that period will be about 900,000, which is rather smaller than the number we expected. Of course, it was not possible last July to determine this figure with any precision. The figures on which the estimates were based were mainly derived from sales in the auction marts, and there was very little information available as to the numbers sold by private treaty, Dr direct to butchers. The average weight was expected to exceed 10 cwts. but, according to the latest information, the average will work out at something below 10 cwts., and that will affect the amount of the subsidy payments. Another factor very difficult to determine before the event was the extent to which the standards laid down by the Cattle Committee would render animals ineligible for subsidy. The percentage of rejected animals varies widely in different parts of the country, but the over-all average is not expected to be more than 9 per cent.

The experience now gained makes it possible to forecast the probable cost of operations during the three months April, May and June, 1935. The only significant figure affecting this calculation is the number of beasts likely to be certified as eligible animals during those three months. The figure depends on the voluntary action of thousands of producers throughout the country, and, while we cannot foretell what they will all do, I am advised that the number likely to come forward during those three months will be a total of some 400,000. Making the necessary allowance for expenditure on administration, which might be put at £20,000, and allowing for contingencies, the total will reach £1,050,000, which is the total set out in the Paper.

The Financial Resolution which I have the honour to submit to the Committee makes provision for advances from the Exchequer to the Cattle Fund to cover the period April to June, 1935, but I feel that the Committee is entitled to expect not only the explanation which I have given of the reasons which make this extension of the emergency provisions desirable, but some broader appreciation of the situation as it appears to us, and some indication of the lines which His Majesty's Government have taken, and are about to take to handle this situation. I feel that it is not, perhaps, necessary to, deal with the objections which have been raised by Members of the Opposition, because, in the first place, there is no, means test in this Vote, as we may say there is no means test for the bricklayers whose industry also receives great sums from the public purse under Measures now passing through this House—sums not grudged by anyone in any quarter of the House.

Nor is it necessary to deal with the opposition of my hon. and right hon. Friends below the Gangway who have-claimed that the policy of subsidy is, wrong, and that the Chancellor of the. Exchequer is a lax guardian of the public purse. It looked all very well in, the happy days a few weeks ago when, they were not members of the united party rallied under the leadership of a great leader, who came forward with a. policy involving an almost unlimited expenditure of public funds, not merely in existing industries, but in the great extension of new ones, and who, in particular, has nailed his colours to the mast for an extension of something like 1,000,000 persons to be settled upon the land. This is a policy which, as we all know, and which, I am sure, my hon. and right hon. Friends opposite, being students of, and great experts upon, agricultural subjects, will admit could not be done without either an indefinite raising of our present tariff system, or an enlargement of our subsidies to a point which would make anything I am suggesting here look altogether mean and ridiculous.

The House, with the exception of the immediate Labour Opposition, is committed to support an extension of agriculture. The only point of doubt is as to the measures to be taken, but I am sure that my hon. and right hon. Friends who press so keenly these matters upon us will not quarrel when we come to the practical details, such as those to maintain the agricultural population on the land in an industry which represents 54 per cent. of Scottish agriculture and something like 30 to 40 per cent. of English agriculture. It represents also an output of £200,000,000 or £300,000,000, and the major part of the livelihood of a great portion of those engaged in agriculture. Those who demand so keenly the extension of agriculture will not, I am sure, complain, at any rate, that Government aid has been given to this old and long-established—and rightly established—British industry of livestock and beef production.

It is impossible to survey this problem, or even the problem of all meat supplies, apart from the general provisions affecting supply conditions as a whole. There has been a call for a statement of the Government policy as a whole, and for an indication of the way in which it is linked with general trade considerations affecting world trade. The policy of His Majesty's Government with regard to food supplies may be very simply and briefly stated. It is to encourage the maximum supply of produce to the consumers in our markets at the lowest price, consistent with reasonable remuneration to the home producer. We wish to raise the maximum possible supplies, since restriction for its own sake finds no support either from me or any other Member of the Government or, I believe, of the House. We wish the returns to the home producer to be maintained at a point which gives him reasonable remuneration, since without that, not only will the great capital invested, amounting as it does to over £1,000,000,000, fall into decay and be ultimately lost, but also, and far more important, those making their living by this industry—well over 1,000,000 souls—will also lose the opportunity of earning a livelihood, and also fall into decay and be ultimately lost.

Without a reasonable level of returns to the producer in this country, no extension of rural population is possible. We must assert that again and again. Without such a reasonable living no schemes except those for merely small clubs of people living upon their own industry, and consuming nothing from outside and sending nothing outside, is at all possible. Nobody wishes to see any lessening of the rural population in this country, which is only 7 per cent. as against 20 per cent. in a country even so highly industrialised as Belgium. It has to be avoided at almost any cost, and an extension of that population is possible and urgent. It can be claimed that this policy of maximum supplies to the home consumer at the most reasonable prices has on the whole been well maintained. The food supplies of this country reach consumers at prices which compare more than favourably with those of almost any other country in the world, and those who complain that the cost of foodstuffs is being raised out of the reach of the working classes of this country, or the consuming class of this country, are talking without an examination of the figures.

One example will suffice. The food items in the cost-of-living index were in 1930, when the present Government was not in power, 145; to-day they are 122. What then becomes of the accusation that the food supplies of this country, by the policy of restriction, are being taken away from the working men of this country? If that accusation were to be considered for a moment, those who in 1930 supported the Government when our food index was 145, have surely much more to explain away than those who stand at this Box when the figure is 122. The food value of wages, which in 1930 stood at 100, is 112 in 1935. If it had been the other way, we should have heard plenty about it from hon. and right hon. Members opposite. That has been concurrent with an extension of our trade, home and foreign, a fall in unemployment, and in recent years an improvement in the working conditions of over three-quarters of the agricultural labouring population.

To secure that, it has not been necessary to go to the lengths which many continental countries have found it necessary to do. The Wheat Act has proved that it is possible to safeguard the home producer from the full impact of world economic conditions while maintaining food prices at a level which gives the consumer practically the full benefit of the enormous supplies pressing upon the world markets to-day. Clearly it is to the advantage of all of us if this can be done. The individual consumer is benefited, the producer is safeguarded, and the level of consumption has been enabled to rise to a point at which real inroads are being made upon these enormous mountains of supplies. The best possible conditions are created for bringing the world surpluses into consumption, and if we can find new markets, not merely abroad but at home, and succeed in expanding consumption among our own people, we shall have gone a long way to solve many of the problems which we have to face.

These are matters of general policy, but they are matters which, I can assure the Committee, are not, and cannot be, for a moment absent from our minds when we are considering any question which concerns the food of the people and the well-being of those who produce it. The policy is succeeding. Consumption is going up and not going down. We have been accused, in the case of milk, of organising in such a way that the consumption of milk has to come down and not to go up, and many complaints have been launched in this House about areas where the consumption of milk has fallen, and not risen. We are able to examine the figures as a whole. The consumption of liquid milk sold on wholesale contracts in January was 2,500,000 gallons higher than in the corresponding month of last year—an increase of over 6 per cent. This is not a negligible fact. This increase is more than the whole of the increased consumption due to the milk-in-schools scheme, which accounts for an extra 1,500,000 gallons only. Even, therefore, if you put at 1,500,000 gallons a month the extra consumption due to the milk-in-schools scheme, there is still another 1,000,000 gallons included in the total I have given. It is not merely with words that the Government are supporting this policy; they are accompanying it with action.

The principle of the Wheat Act, is, however, not universally applicable. It must depend on the proportion of imports to the total supplies. In the case of meat, the Government stated, as long ago as July, 1934, that in its opinion a solution along that line would be the most favourable to all concerned. The policy which the Government desires to bring into operation, as soon as it is in a position so to do, is to assist the United Kingdom livestock industry according to the needs of the market from the proceeds of a levy on imports, not, of course, with a view to stimulating an artificial expansion of livestock production in this country, but in order to secure a reasonable return to the efficient producer.

The Committee will be fully aware that at the present time imports of meat are subject to regulation, in some cases imposed under Statute and in others under voluntary agreements. The Government has given careful consideration to the question whether action on its part in this direction will be necessary or desirable when a levy-subsidy scheme is in full operation. We have come to the conclusion that, while it may well be found that some regulation of the market in certain cases or at particular times is desirable in the general interest to prevent those wide fluctuations in supplies and prices which bring no benefit either to producer or consumer in the long run, the Government of this country cannot regard as a satisfactory permanent arrangement a system under which the responsibility for the regulation of the market would rest on us alone.

We have had perforce to regulate the market in more than one case, and while doing so, and in the interests of many of those who supply the market, overseas as well as at home, we have been subjected to violent criticism from those who themselves were benefiting, and substantially benefiting, from those regulations. That has got to stop. Those who are going to benefit by the regulated market must co-operate in working the regulated market, or else it is up to the people of Great Britain to take steps to look after the home producer and wait until sense is borne in upon the world suppliers. There is a great deal to be said from every one's point of view for orderly marketing, but the orderly marketing of supplies which come from the ends of the earth to the United Kingdom is a task which, in the opinion of the Government, could best be undertaken by the overseas suppliers themselves. Our concern is the safeguarding of the interests of the United Kingdom producers. That achieved, we are of opinion that overseas producers should be left free to send such quantities to this market as they themselves desire. That is our case.

With regard to the progress of the negotiations, I am not in a position to-day to say more than that these discussions are actively taking place. We hope it may be found possible to reach agreements, but I ask the Committee to make provision for the short extension of the subsidy arrangement which is vitally necessary to enable discussions to continue in a friendly atmosphere. No good purpose could be served, as I said earlier, by bringing down the Guillotine and saying that what we decide must be accepted by all those who are trading with us. We should not wish that in the case of our trade with other countries, and we do not wish to impose that on their trade with us. We say that the regulation of imports which other countries wish to undertake, as in the case of wheat, they will have themselves to hammer out in the first instance, and the United Kingdom task is, first of all, to secure a remunerative level of prices to our own producers. With that object in view, we are carrying on those negotiations, and I think I am able to say to the House that there are indications that those with whom we are negotiating begin to realise the point of view which I have put forward this afternoon.

4.20 p.m.

Dr. ADDISON

I should like, in the first instance, to associate myself with what the right hon. Gentleman has said as to the efficiency and success of the administrative arrangements which have characterised the operations of the committee that has been dealing with this matter, and I would ask those who continually try to cast aspersions upon the ability of Government Departments to assist in practical arrangements of this kind to note the efficiency of this organisation and how it has been proved to be so acceptable to industry. I derive encouragement for the hope that we can do better perhaps in the future by copying this example. With regard to the last part of the right hon. Gentleman's observations, what may perhaps be called Part II of his presentation of the case, I rather gathered, by reading between the lines, that he was confessing the failure of quantitative regulation. Whether he was waiting till Mr. Lyons arrived, I do not know, but, to my mind, he portended something which was creeping dangerously near to an import board.

So far as this particular Motion is concerned, it is, of course, a confession of failure. It would seem, after all this time, that the Government want another three months in which to make up their mind, and during that time this money is to be made available. Whether at the end of the three months they will then be able to make up their mind remains to be seen, but if there should be prolonged consultations, I imagine they will not and that, therefore, there will be a further £1,050,000 required. This really means that the quantitative regulation conception has broken down, and although the right hon. Gentleman has told us, quite properly, that the popular habit is changing, he is introducing this grant in order to encourage the production of beef, which he says the public is increasingly not requiring. It seems to me illogical, but perhaps it, might be better expressed if I were to transpose the right hon. Gentleman's words in the manner suggested by a neighbour on this bench, who said, "It should not be' temporary aid by the Government, but 'aid by a temporary Government'."

As a matter of fact, this grant does not lead anywhere. The House is no wiser as to what the policy of the Government is with regard to this section of agriculture than it was at the beginning. Thanks to the general review that the right hon. Gentleman has given us, I take it that I shall be in order in discussing the matter equally generally. Presumably the policy that the Government has in view is to give the producers a fair price for their product. The party to which I belong does not object to the producer having a fair price for his product. As a matter of fact, it wants a system of prices estab lished in which a fair return to the producer will be the first element of price. We think the miner, or the agricultural labourer, or the farmer is entitled, because he does produce for the community, to a decent and secure living, but, as the right hon. Gentleman said, we profoundly differ from the Government as to the methods which we think advisable to attain that end. I suggest to the right Lon. Gentleman that he has missed the two considerations which ought to govern his food policy, namely, in the first place, that there shall be abundant supplies for the community, and secondly that the idea that you can give to the producer a secure, fair, and reliable price by a limitation of supplies has clearly broken down.

I want to say a few words on the subject of quantitative regulation, of which this Vote recognises the failure. The purpose, I take it, of the restrictions which the right hon. Gentleman has imposed or has discussed from time to time with the Argentine in regard to beef and other commodities was to try to secure a fair price for the producer. Let us examine why those policies have failed, because they have, otherwise this Vote would not be brought forward. If those policies had secured to the producer the satisfactory prices which they were designed to secure, we should not be asked to vote this money.

Mr. ELLIOT

I cannot have made myself clear. I said repeatedly that we had not applied this Government policy of regulation which was in our power, and that it was because of that fact that we had had to bring forward this Vote.

Dr. ADDISON

Yes, but the right hon. Gentleman knows very well that the arrangement with the Argentine was to restrict imports from the Argentine to a certain extent. The same applied to the importation of Danish bacon, and I think in that case the cut was 10 per cent. or 15 per cent. At all events, it was a cut, a restriction of supplies, and the idea behind it was to secure a system under which the home producer would secure a fair price. That is why it was done.

Mr. LAMBERT

It has not been done.

Dr. ADDISON

It has been done in the case of Argentine meat and in the case of bacon, and I will say why the restric tions failed. What actually happened in the case of the Argentine was that the price for home-grown beef of good quality three months after the restriction was applied was unprecedently low. It went down, and the fact that quantitative regulation was a failure is the reason for this Vote. If it had been a success, this Vote would not have been wanted. Why was the price lower than before? It was because the housewife in this country, who had not any more to spend on Friday, went into the shop to buy her weekly joint, and, having no more to spend and seeing that the restriction had to some extent tended to enhance the price of the cheaper qualities, she naturally did not want to buy the dearer qualities. The result was that there was immediately a depression in the demand for the higher quality homegrown article, with the result that its price was forced lower down. As a matter of fact, any scheme which restricts supplies and enhances scarcity in any direction must necessarily, so long as you do not have an increase in the purchasing power of the people, force down the price of the costlier sections of supply. The right hon. Gentleman made a point of the decline in prices between 1930 and 1935 from an index figure of 145 to 122. The reason for that is that the purchasing power of the people has diminished, and as purchasing power diminishes the demand for higher quality supplies diminishes, and the diminishing demand necessarily depresses the price. That is what has been happening all along.

Apart from quantitative regulation being a failure, I suggest that it is immoral in itself. It is wrong to try and force upon the country, when there is abundance in the world, a system that restricts supplies. I am glad, however, that the right hon. Gentleman admits the failure of a system of quantitative regulation as it has been adopted, because the object at which to aim is surely to stimulate demand and to increase purchasing power. There are hundreds of thousands of people in the country who could do with a good square meal, and we do not want less beef, but more. When we hear the protestations of the Government about their anxiety to provide the people with abundant supplies, we are entitled to ask why in the world they ever went in for restriction. The scheme which the Government have been operating all along has been to restrict supplies. If the right hon. Gentleman wants to have a system which gives the producer the benefit of a stable price, he must in common sense establish machinery to see that he gets it.

What happened in the case of bacon? There was a restriction of, I think, 15 per cent. That restriction was operated, as I gather the right hon. Gentleman still proposes to operate it, by the exporters. I do not know whether he has the Dominions in mind, but he says that it is up to the other country to set up its own machinery for sending its quota or for regulating its quantities to our market. That was a method adopted in the case of Danish bacon. The restriction was applied, and it was left to the Danish exporters to manage their exports. The immediate result was that you forced the formation of an Export Board in the exporting country, and as we had to take 90 or 85 per cent. of their supplies, they controlled the situation. The consequence was that in a week they put 2d. per lb. on bacon. They received more money for 90 per cent. of their supplies than they had previously received for the whole 100 per cent. By this machinery you put the whole power into the hands of the exporters. If we are to have a managed market, let us manage it ourselves. Why do we need to leave it to the exporting countries to manage the quantities that come into our market? The sensible thing is to manage it ourselves.

Let us trace this a little further. This idea of giving the producer a fair price by limiting supplies broke down in the case of bacon because every retailer or wholesaler had to buy supplies at 2d. per lb. dearer. He did not know what was going to happen next week, so he put on a little more, and by the time the quota had been operating a very short time the price to the consumer over the counter was 3d. or 4d. a lb. dearer. Everybody was uncertain what would happen next week. That must be so if you just leave it to chance. It is futile to think that by knocking off 10 or 15 per cent. something or other will happen which will benefit the producer. The thing that happened in this case, as in the case of Argentine beef, was that hundreds of thousands of pounds were put into the pockets of the middlemen handling the commodity, and it happened within a very few days in both cases. The blind enforcement of some curtailment of 10 or 15 per cent. is not a sensible way of dealing with the problem. If you want to give the producer a stable price, you must establish the proper machinery for seeing that he gets it. Otherwise, you may be certain it will be grabbed, as it has been in both these cases, by other agencies.

There is another vital consideration which must go with any system which seeks to give a fair price to the producers. Two other things must be added. You must see that the other section of the producers, namely, the agricultural labourers get their share. We see farmer's representatives on county wages committees refusing to acquiesce in a rise of a shilling or so, although they have received £3,000,000 for beef during the last year, and other millions for various other things. It really means that the benefit which the right hon. Gentleman's system is designed to bring to the producer has been taken on its way by other people. That is why he is having to introduce this Motion. We are having to pay for the failure of his policy, I want the farmer to have an extra 55. or whatever it is he is supposed to get, and the fact that he has not had it is the explanation of this Motion. The farmer has not got it because the right hon. Gentleman has not devised the machinery to see that he gets it. Any scheme of this kind ought to be associated with control of distribution and price, Unless we can regulate and control prices down to the consumer, the same thing will happen as happened in the case of bacon. Within a month the price of bacon went up by 3d. or 4d. a lb., but the farmer did not get the extra price. A grant of £300,000 had to be made.

Mr. ELLIOT

I can assure the right hon. Gentleman that there was no grant whatever made under the bacon scheme.

Dr. ADDISON

It was a loan.

Mr. ELLIOT

Of which every penny has been repaid. Does the right hon. Gentleman call that a grant?

Dr. ADDISON

It had to be made. However, I am glad to hear that it has been repaid. It had to be made because the system was breaking down. The proof of its breaking down was an enormous diminution in the demand for bacon, and, while it was designed that the farmer should get at the utmost 1d. per lb. increase in price, the housewife had to pay 3d. or 4d. more for her bacon over the counter. No policy can succeed while it is accompanied by consequences of that kind. Whether it be beef, bacon or any other commodity, the Government must see, if we are to have a system of stabilising food prices, that it is accompanied by a scheme which protects the consumer. We must control costs down to the consumer. If the right hon. Gentleman will dip a little further into the Labour party's policy, he will get nearer and nearer to adopting the principles which we commend. We say that if we are to have a managed marketing scheme, we should have one where we manage it through proper import board machinery and do the thing ourselves. Do not let us leave it to the exporter in some other country to do it. If we do, he will simply hold us up to ransom as he has done in the case of beef and bacon. Such a scheme must be associated with machinery here which will secure that the consumer is safeguarded. I am sure we can devise and work, especially with the excellent example of administrative efficiency which the right hon. Gentleman has quoted, a system which will control and regulate distribution and prices and safeguard the consumer against a rise in prices, while at the same time ensure to the producer security of price.

What security does this Motion give to any beef producer? It gives him a, further three months' grace. I remember once being condemned, when I was addressing a, Socialist meeting, because I was not revolutionary enough. I was describing the principles which I thought ought to be embodied in a system of import boards and control of food prices, and I was told that we ought to go much quicker. I replied to my interrupter, "Anyhow, it takes three years to produce a milch cow." Is any beef producer going to have any more confidence in planning the economy of his farm because he has another three months' grace from Parliament? It will not make any difference to his planning of his herds or his breeding system, because he does not know what the right hon. Gentleman is going to do afterwards.

There is another vice which is attached to the system of quantitative regulations of which this Motion is the confession of failure, and that is the embroilment in which it necessarily brings us with our Dominions. I have here a cutting from to-day's "Manchester Guardian" which refers to the fact that the Australian delegates are to discuss these matters with the right hon. Gentleman. Apparently some rather bitter things were said about the Mother Country. That goes to show that the system of artificial restriction of supplies, when what is wanted is more not less, is irritating to our friends in the Dominions. I am afraid the right hon. Gentleman will find when the delegates get over here that the proceedings of the last three years have not made his path much easier. If we had a rational import board system, we could give all the preference we wanted without friction to our Dominions, but this arbitrary restriction of quantities is irritating, and must in the nature of the case be irritating, to our Dominion brethren. It is proved to be futile. This Motion shows that it is futile. It is the cost of its futility. While I am sure the right hon. Gentleman will get this Motion to-night, I think that the fact that Parliament is asked to vote blindly another £1,050,000 in the absence of any constructive long-term policy, and will probably have to vote more, only makes it more necessary that, some time or other before the next General Election, the Government should make up their mind what their long-term policy for agriculture is.

4.45 p.m.

Sir P. HARRIS

I shall not intervene for more than a few minutes, because there are many agricultural experts in the Committee, and that side of the problem will be dealt with by my right hon. Friend the Member for North Cornwall (Sir F. Acland); but the Minister has looked very pointedly at me, and I approach this problem from the point of view of the townsman and the consumer. Incidentally, I wish to congratulate the right hon. Gentleman upon his activity. There is a good deal of criticism of the Government for their inertia, but that is the last thing with which we should charge the right hon. Gentleman. He does stand for activity; rushing hither and thither from one policy to another in pursuit of a cure for the agricultural position. He is ready to try anything. Perhaps he acts first and thinks afterwards. I will not say that he repents as soon as he has initiated a policy, but he is certainly not embarrassed by preconceived notions or abstract theories. He has indulged in a threefold policy and now, obviously, his Department stands for tariffs, the quantitative restriction of imports, and subsidies. Where he can he tries one, and if that fails he embarks on another, and if he is prevented by treaties or pledges—I suppose pledges have their weight too—then he turns to another expedient.

I have always had a shrewd suspicion that the reason the Government did not embark upon a duty on meat was to be found in the specific pledge given by the President of the Board of Trade. He made it very clear at St. Ives that though he was not against duties he would not agree to a duty on imported meat. My hon. and gallant Friend the Member for Bournemouth (Sir H. Croft) will remember a sensational Division after a tariff Debate three years ago, when he tried to disembarrass the Government of that particular pledge, but the President of the Board of Trade proved to be stronger than he was. Perhaps the Minister will make it clear whether the President of the Board of Trade has been thrown overboard, or whether we are now to continue with subsidies as the alternative.

The right hon. Gentleman twitted me with contradictions. He reminded me of my opposition to the restriction on imports of cattle from Ireland. I may be old fashioned in my attachments, but I have always clearly held to the view that if supplies are stopped the tendency will be for prices to rise, and, on the contrary, if supplies are stimulated by artificial means—by subsidies—the tendency will be for prices to fall. When the subsidy was before the House on a previous occasion I did say—people were surprised, but I said it—that the effect of offering a subsidy to the farmers to bring cattle into the market would be not to raise prices but to keep prices down, and I proved to be a prophet. Prices have not revived as the result of that subsidy. The right hon. Gentleman brushed that aside as a small detail which he might dispose of in a future discussion—I suppose in his next speech in Committee—but he still has to make clear to the Committee and the country, as I hope he has made it clear to the Chancellor of the Exchequer, whit has become of the money. Where has it gone? Is it in the pockets of the farmers? Has the subsidy saved the agriculturist? I do not want an explanation from the former Minister of Agriculture but from the present Minister. Has the subsidy resulted in keeping meat prices low? Has it gone to the butcher Has it stimulated the bringing of extra meat into the market, or what has become of the money? Because these are big sums.

I am reminded that this is the ninth subsidy in 12 months that the Government have asked the House to vote, and figures mount up. We have a responsibility not only to producers and consumers but to the general taxpayer, and we have to be sure that this is an effective way of doing what we want to do, and that is to help the farmer to tide over the bad time through which he is passing. I always maintain, and I think it can be (.roved by figures, that the price of home-produced beef has very little relation—some relation, but very little—to imports from abroad. Chilled beef and frozen beef appeal to a different public. The price factor is most important. I have found by careful inquiries in industrial districts that when employment is good and money is plentiful the working man, in particular, always gives a preference to home produced fresh beef over frozen or chilled beef. One of the main reasons why there is such depression in the livestock trade—not the only reason, but one of the main reasons—is that the miner, the docker, and the worker in the heavy industries is either unemployed or on short time. If we take 2,000,000 consumers out of a market it must materially affect the price of the commodity. There are other factors, for example, the change of taste, the consumption of mutton in preference to beef, the great increase in the consumption of butter and eggs, fruit and vegetables; but the change in taste is not the only factor.

I believe the real way to help agriculture is to put the industrial population into a position in which it is able to buy the home-produced article, which is, after all, the best. Anybody with a full pocket will naturally buy the best article and the British is the best, because it is fresh, it is produced at our doors and has not to go through any freezing or chilling process. The real trouble is that the Government are looking at this problem from a wrong angle. We agree that marketing and co-operation—which has fallen very much into the background—are the right line of approach, but what is most serious is the tampering with our connection with our Dominions beyond the sea. I have had the opportunity of reading the papers and some of the correspondence between the Dominions and this country. There is serious apprehension that the policy of restriction which I understand the Government desire to embark on—

Mr. ELLIOT

I do not wish to bore hon. Members by repeating my speech, but I thought I spent a lot of time in explaining to the Committee that I was not asking Parliament to embark on a policy of restriction, and that was why I was coming here for this temporary assistance.

Sir P. HARRIS

The right hon. Gentleman never need fear that he is not clear. He is very clear to me. I thought he did make it clear that he desired to do so, but was prevented from doing so by the Dominions.

Mr. ELLIOT

I did my utmost to make it, clear to the Committee that we were not prevented by any agreement, that we were wholly at liberty to reduce the imports from the Dominions but were not doing so because we desired that that line of policy should not be followed out. We were anxious that the Dominions and the other suppliers should send in their produce freely if we could insulate the home producer by a levy on imports.

Sir P. HARRIS

Now I understand that the quantitative restriction on imports is abandoned and that there is to be a levy. In other words, the President of the Board of Trade is to be thrown overboard, and now we are to have a duty on imported meat and the money is to be handed over as a subsidy. The subsidy is to be continued and it is to be paid for by the poorest section of the community, because it is they who eat the chilled and imported meat from abroad.

Lieut.-Commander AGNEW

I thought they ate bread also.

Sir P. HARRIS

Fortunately the working man of to-day eats a little more than bread. We do not want to go back to the old times. My hon. and gallant Friend seems to suggest that the working man is to be allowed to eat only bread for seven days a week. But I do not quite understand the relevance of his interruption.

Lieut.-Commander AGNEW

May I make it quite clear? When the Wheat Bill, which embodied the principle of a levy on flour in this country, was brought forward, the Liberal party, now in opposition to His Majesty's Government, voted for it.

Sir P. HARRIS

I can only say that I voted against it. One or two of my right hon. Friends voted for it, in order to keep the Government national, as part of the bargain. They were not unreasonable. They were prepared to swallow their theories to a small extent in order to get unity.

Mr. ELLIOT

I thought the hon. Baronet was also prepared to swallow tariffs now to keep the Government national.

Sir P. HARRIS

I have never swallowed any of my principles. I am able to look after my own principles. Apparently they are not as elastic as the principles of my right hon. Friend. It is clear that we have now got it out of the right hon. Gentleman that the quantitative restriction of imports is abandoned, and that the exporters of the Argentine, New Zealand and Australia are to be allowed to send as much as they like to market—to flood the market, if you like—as long as the Government can be allowed to impose a tax on the foreign meat that comes to the country, the proceeds of the tax to be handed over as a subsidy. In other words, it is clear that the policy of subsidies is to be continued. This subsidy, I repeat, is borne by the people who eat the inferior article, chilled or frozen meat. Having elicited this point as my contribution to the discussion, I think I may now resume my seat.

4.59 p.m.

Mr. LAMBERT

The Minister of Agriculture has been congratulated, and deservedly so, on the efficiency of the Government department. My right hon. Friend the late Minister of Agriculture associated himself with that congratulation. I have never had any doubt that public officials can spend public money. They can always do that with great facility. Still, this has been done very well. My right hon. Friend, who was a colleague of mine in Governments in days gone by, said he wished more of the product to go to the producer. I am with him absolutely. I want to benefit the farmer, the actual producer, and with the farmer the labourer. Whatever may be thought of this subsidy, it is essential that some help should be given to the beef producers to save them from ruin. I have never known the beef trade in such a critical position, even with the subsidy. May I trouble the Committee with a few figures. In 1913 the price per live cwt. of beef was £1 16s. 4d. The right hon. Gentleman has just given us a figure of 33s. 8d.; that represents a reduction of something like 2s. 8d. per cwt. as compared with the price before the War, and everyone knows how costs have gone up. Even the figures of my right hon. Friend are higher than ours in the West of England. I happened to be in Devonshire this week-end, and I saw the prices of beef at the Exeter cattle market. I will quote from the official reporter of the Ministry of Agriculture and the Farmers' Union. I take this from the "Western Morning News": Steers and maiden heifers, super quality, 35s. 6d. per cwt."— They are exceptionally beautiful North Devon beasts, and you cannot get anything finer in the world— first quality animals estimated to kill out at 58–64 lb. 33s.; second quality, 30s. 6d. Fat cows, first quality 22s. 6d. per cwt.; second quality 16s. Those are quite impossible prices; and I say that, knowing the conditions, the country and the very skilled men who produce the animals.

The right hon. Gentleman the Member for Swindon (Dr. Addison) has not talked about the doles to farmers. I was rather expecting to hear a lecture from some of the miners' representatives so I prepared some remarks on that. I was going to tell the Committee what doles the miners are getting, but will not, as the subject has not been raised. [HON. MEMBERS: "Go on."] Well, I will do it. I have stated clearly that the price of beef is below that before the War. I ascertained from the Mines Department, the price of coal from the pit head. The pit-head price of coal in 1913 was 10s. 1½d. per ton; in 1934 it was 12s. 10d. per ton, an increase of 25 per cent., not like beef, which is lower than pre-War. When coal comes to the consumer its price is very much bigger, but I will not go into that aspect of the subject at the moment. How has that increase of price in coal been brought about? It was by the Coal Mines Act, passed by the Labour Government in the last Parliament, by which supply has been regulated. If there were a full supply, there is not the slightest doubt that the price of coal would have dropped to pre-War level.

Last year 220,000,000 tons of coal were raised. The increase in price was 2s. 8d. per ton over the pre-War price and, therefore, something like £30,000,000 a year is being taken out of the pockets of the consumers of coal in this country and given to the coal miners. Having got that sum, the miners' representatives come down here and object to us poor farmers getting a very much smaller sum. There is not much comradeship in that. The right hon. Gentleman the Member for Swindon told the Committee that as Argentine imports were regulated the price went down, but he forgot entirely the Dominion imports. I beg him to look over the trade returns for 1934. If he will take the figures, he will find that New Zealand and Australia sent us in 1932 1,460,000 cwt. of beef, frozen and boned. In 1934 they sent us 2,660,000 cwt., and that increase has been the cause of the drop in price here. Although our people all prefer good North Devon meat, this frozen meat does come—

Dr. ADDISON

Are those the figures for beef?

Mr. LAMBERT

Yes, boned and frozen beef. I am sorry did not bring in the trade returns, but my right hon. Friend may take it that the figures are pretty accurate. They represent 'almost 90 per cent. increase in two years, and that is why the price has dropped here. Argentine imports have, as he says, dropped 10 per cent. I looked at the trade returns just now. Australia has sent us an enormous quantity of beef this last month. In January, 1933—my right hon. Friend knows that the trade returns are only given for two years—the Australians alone sent us 46,000 cwt. In January, 1935, they sent 103,000 cwt. In reality, it is Australian and Dominion imports that are causing the great fall in price.

Dr. SALTER

Does the right hon. Gentleman want to keep them out?

Mr. LAMBERT

I want the home producer to get a fair price for his product.

Dr. SALTER

Does the right hon. Gentleman want to keep them out?

Mr. LAMBERT

I would keep anything out to save the home producer. If the hon. Member would come down to Devonshire we could talk that matter out. As an old Liberal I do not like these subsidies, but something has to be done. The Government have been free with their subsidies, which, I am very much afraid, may have a bad effect on the Budget; but we must leave that until the Chancellor of the Exchequer unfolds his Financial Statement. I am sorry for some aspects of the policy of the Government. From an agricultural point of view Ottawa was a mistake. It may have been of advantage to some industrialists; I do not know, but I can assure the Government that the Ottawa rose has not a sweet perfume in agricultural nostrils. I hope that in these matters the Government will resume their fiscal freedom. Let us have fiscal freedom here. We want to encourage inter-Imperial trade, but we must have freedom. I am sure that Australia would never permit us to interfere with Australian trade. The Prime Minister of Australia is coming here. I have here what he said in Melbourne. There will be a very considerable amount of discussion, between the home Government and Mr. Lyons. Mr. Lyons said—this is reported from Sydney on 11th February, just a week ago: Any attempt to curtail our exports must be resisted strenuously. Unless Dominion exports are restricted British agriculturists cannot live. We have to get that quite clearly into our minds.

Mr. CHARLES BROWN

Breaking up the Empire.

Mr. LAMBERT

I am not breaking up the Empire, because I regard England as an important part of the Empire, but unless Great Britain flourishes, the Empire will wither, and Great Britain cannot flourish upon a ruined agriculture. Let us get that quite clearly into our minds. What Mr. Lyons said was, in effect, "Unless you take our exports, we cannot pay our debts." That really means that the British farmer is to be responsible for the debts of the Australian bondholders. I object to that.

Sir STAFFORD CRIPPS

The right hon. Gentleman cannot both get paid the debts of this country and keep out the products which help the debtor to pay them.

Mr. LAMBERT

When I have to make the choice, I come down favourably on the side of the producer at home. I will go a little further into this question of debt. The Minister of Agriculture gave us figures some time ago showing that the capital value of the land of this country had decreased by 25 per cent. between 1925 and 1931. It was stated also that the occupiers' capital had also decreased by 23 per cent. I have had to deal with a case of Conversion 3½ per cents., in changing some trust securities, and I found that Conversion 3½ per cents. were issued in 1921 at 65; to-day the market price is 109. Why should there be that great capital appreciation for those who hold Conversion Loan, while those who work on the land have suffered a great capital depreciation? It is all wrong. If my hon. and learned Friend opposite were in office, and if he brought about, as he said, a financial crisis, something like that might happen.

Sir S. CRIPPS

May I point out that I never suggested bringing about a financial crisis? The right hon. Gentleman is under a mistake. It was right hon. Gentlemen on the benches opposite who said it would cause a financial crisis.

Mr. LAMBERT

I am very sorry; someone has been misleading me. A statement has been printed to the effect that my hon. and learned Friend said that, if the Labour policy is carried into effect, it will cause a first-rate financial crisis.

Sir S. CRIPPS

May I just correct the right hon. Gentleman? What I said was that, if a Labour Government came into office, there would be a first-class financial crisis, caused by right hon. Gentlemen opposite.

Mr. LAMBERT

At any rate, I am glad to have an authoritative quotation from my hon. and learned Friend. I will leave it at that—that the present Government being out of office would create a first-rate financial crisis. I do not quite know what the policy of the Government is going to be. I presume it will develop as time goes on. But I want to warn the Government, and that is that up to the present they have been infected with a marketing microbe. Marketing is my right hon. Friend's specific, but I am not very fond of it. Up to the present, so far as it has been tried, it has created a tremendous amount of unrest—

Dr. ADDISON

It is not my scheme.

Mr. LAMBERT

If my right hon. Friend's scheme would put more money into the pocket of the farmer, then I wish he would infect the Government with it; but, as far as I can see, this marketing simply determines the prices to be paid by the consumer. I think the Government will have to reconsider their policy. I could understand marketing in some directions, but at the present moment, in our part of the world, milk is sold at a certain price and it cannot be sold at less. I think that that is wrong, but I will not dwell on it, because it would be somewhat outside this discussion. My hon. Friends opposite talk about free imports, but you cannot have free imports with fixed costs of production. There is no possible way to consolidate the two, to enable the two to harmonise.

Wages are fixed, and I agree that, unless you pay good wages to the labourers on the land, they will not stay there. Indeed, something like 180,000 have left in the last few years. Unless you increase the price which the employer receives for his product, he will not be able to employ the labourers. That, to me, is as clear as crystal. Taking wages at £80 per annum in 1925, if wages had fallen as the prices of agricultural products have fallen, wages to-day would be £55, so that to-day farmers are paying £25 a year more in wages than the price of the Product warrants. I want to get the price of the product up, so that the labourers can be paid good wages, as that will never be possible unless agriculturists are in a position to employ plenty of labour. I have other things to say, but they can wait for other occasions. This, however, I do say to the Government: For agriculture there have been marketing schemes, but for iron and steel there has been a tariff—a 25 per cent. tariff. There has been no talk about marketing for that industry.

I suggest that import duties will have to be used for the purpose of equalising costs as between this and foreign or overseas countries. I regret it. I have never had any great faith that tariffs or trade agreements would bring great prosperity. But, in the conditions as they are at the moment, I see nothing for it but import duties, if you like on the same conditions as the wheat subsidy. There the bread consumers pay to the millers a certain price, to enable them to make payments to the farmer. It is not an unreasonable price that he receives. I do not think that anyone, even hon. Members on the Labour benches, would object to the farmer getting 45s. a quarter for his wheat. It is only a reasonable price. I think the Government will have to come to this proposal for a duty on imports. I was interested by the recent speech of the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) at Bangor, when he said: We have tariffs; let us use them; you have in this market the great food market of the world; you could make almost any country come to heel on the question of tariffs. I have no doubt whatsoever that the Australians would reduce their tariffs. We have a trade agreement with Denmark, and here again the coal-miners are the spoilt darlings of the country—

Mr. PALING

That is why they get such big wages.

Mr. LAMBERT

They get better wages than the agricultural workers.

Mr. PALING

We want to see the wages of the agricultural workers brought up.

The DEPUTY-CHAIRMAN

I must point out that the Committee is supposed to be dealing with beef.

Mr. LAMBERT

I am sorry if I have transgressed. I will make one more remark in conclusion. I hope that this subsidy will be only temporary; the shorter the period for which it continues, the better; and I hope that the Government will give us a long-term policy which will restore some kind of hope to the agricultural community.

5.25 p.m.

Colonel Sir EDWARD RUGGLESBRISE

I entirely agree with my right hon. Friend the Member for South Molton (Mr. Lambert) that some kind of import duty or levy is probably necessary to meet the case of the livestock industry, but personally I do not believe that that alone will be adequate, or will give to the home producer that reasonable price level to which he is entitled and which has been definitely promised to him. The right hon. Gentleman the Member for Swindon (Dr. Addison), who has experience in these matters, made a great point of the fact that in his view quantitative restriction has failed, and he said that that was the reason why the Committee are being asked to pass this Vote to-day. I think I am quoting him correctly. I should like him to consider for a moment what use has been made up to the present of the weapon of quantitative restriction. The only instance in which real quantitative restriction has been used so far is in the case of the importation of foreign meat, under the Ottawa Agreements. It has otherwise been merely exercised voluntarily by such countries as we have been able to induce to enter into some voluntary agreement with us.

I understand that the right hon. Gentleman the Member for Swindon is in favour of import boards. If that be so, am I right in thinking that one of the chief weapons in the armoury of the import board would of necessity be the method of quantitative restriction? The right hon. Gentleman, I understand, shakes his head, and denies that the import board would make use of quantitative restriction, but in that case I cannot quite see what function the import board will fulfil. If it will merely try to create a tremendous glut of superfluous foodstuffs over and above the requirements of con sumers in this country, in order to wreck the agricultural industry in this country—

Dr. ADDISON

The object would be to assist agriculture in this country and to safeguard the consumer.

Sir E.RUGGLES-BRISE

That is a most desirable object, and one to which, I am sure, every Member in the House subscribes, but I cannot imagine how the right hon. Gentleman is going to do it by means of import boards unless he uses the weapon of quantitative restriction as one of the means. However, I will leave that to the right hon. Gentleman to solve for himself. From what the Minister has told the Committee it is clear that the level of prices received by producers for home-produced beef is totally inadequate. My right hon. Friend has stated that prices are now at the pre-war level or something below it, and it is clear that something has got to happen. Either the livestock industry has to be supported in some way, or it has to be allowed to fall into decay and ultimately to die. His Majesty's Government have come to the conclusion, as I believe rightly, that this country cannot afford to let such a great and important industry as the livestock industry in this country fall into any further decay than that into which it has already unhappily fallen, and, therefore, my right hon. Friend comes to the Committee to-day and asks for a Vote to tide over a period until, it is hoped, other arrangements may be made whereby there may be a future for the livestock industry in this country.

I hope and believe that the Committee will concur in the passing of the Vote. We in the livestock industry are asked to-day to produce beef at a price which will be very attractive to the consumer, but which is utterly ruinous to the producer. We have been adjured in the last few days to cut unnecessary costs. I feel certain that every farmer in England is doing all he can with might and main to eliminate everything unnecessary in his costs of production. But in the production of livestock, as of most other agricultural products, apart from a share of overheads there are two main costs. One is the cost of feeding stuff, and the other the cost of labour. The producer of livestock has no control whatever over either. It is difficult, therefore, tip see how he is still further to cut unnecessary costs.

The Minister alluded to the fact that there had been a shifting away from the consumption of beef towards mutton. I believe that is quite true, but another shift has taken place in relation to the consumption of beef, and largely of all meat. The consuming public are now able as a whole to buy better cuts than they used. It is a satisfactory sign from one point of view, because it means that the general purchasing power of the community has improved and, if one looks at the wholesale index figure of agricultural commodities which to-day, apart from the livestock subsidy and the wheat quota deficiency, stands at a figure of about 112, whereas we know that the level of wages has increased very far beyond that point, it is obvious that the consuming public as a whole is able, to buy, and does in fact buy, better cuts than it used.

What is the effect of that on the price of beef to the producer? At first sight it would be imagined that it was all to the good owing to the fact that a larger number of people go in for the prime joints of the home-produced beasts and, therefore, the producer of that beast is likely to obtain a better price for it. But, in fact, it operates in exactly the opposite direction. Although more animals are required to produce the prime joints, owing to the increased demand for prime joints there is a far greater waste of the inferior joints, and that is the point at which the producer gets hit. The butcher, although he knows that he will be able to get rid of all the better cuts, is left possibly with a very large portion of his bullock unsold. He says, "I have paid so much a cwt. for my bullock and I get more cwts. now wasted than I used to in the old days when I was able to sell every piece. Now I am going to pay the producer less because I am faced with a greater waste of the inferior cuts." Therefore, you get this paradox, that the shifting of taste owing to increased purchasing power on the part of the consuming public, which operates to make them buy the better cuts, is one of the causes why we have a very low price level for home-produced beef.

I should like to say a word in reference to the Government's beef policy. We understand that negotiations have been in progress for some time past and are to be resumed in the near future with the Dominions as to the future regulation of our beef supplies. As I understand it, the Government's policy is that, if the Dominions are prepared to submit to a levy plan, there shall be for them a completely unrestricted market in this country. I feel bound to enter a caveat here. I can visualise a position when quite possibly the Dominions would agree to the imposition of a levy, the proceeds of which might be passed on to the home producer, as in the case of the deficiency payments under the Wheat Act, but unless the Dominions were able to agree among themselves some method of quantitative regulation, some way of dividing up the market for meat imported into this country, they would create such a permanent glut of meat here as would swamp the home market and the market for themselves as well. I believe my right hon. Friend will be well advised if he will consider whether it is possible, with all the facilities that exist for bringing in meat in every form from the ends of the earth, to maintain a reasonable price level of meat for the home producer in this market if you are going to allow the whole world unrestricted entry. It will be a policy fraught with some danger unless there is the safeguard of quantitative restriction as well as levy.

Hon. Members above the Gangway have really to face up to this definite point. The livestock industry cannot go on as it is to-day, completely unaided and unsheltered. If they concede that point, which I feel quite sure they will, they must agree that something has to be done. Do they desire that the Government should leave the livestock industry completely unsheltered, that they should withdraw this Vote, that they should say to the producer of beef, "We are going to let things slide. We have no further interest in you. Look after yourselves." [Interruption]. The right hon. Gentleman understands perfectly well that this Vote is a temporary measure until the long-term programme of the Government has had time to fructify. If he would deny the home producer this Vote, is he prepared to see the inevitable collapse that is bound to overtake that branch of British agriculture, the great livestock industry? That is the alternative. It is true that this amount of assistance that we are asked to vote is not going to bring salvation, or riches, or great prosperity to the livestock branch of agriculture, but it is at least something to try to keep its head afloat until some more permanent and more satisfactory measures can be brought in. The taxpayer may not like to foot the bill for £1,050,000, but will he like to foot the bill for keeping a larger number of people in unemployment when by voting this money he will at least have done something to keep them in employment?

5.42 p.m.

Mr. TURTON

The right hon. Gentleman the Member for Swindon (Dr. Addison) said that after hearing the Minister's speech he was still at a loss to know what the Government's policy was. The Minister made it quite clear both in July and to-day that his policy is a levy. I found it very hard to understand why the right hon. Gentleman the Member for Swindon talked against quantitative restriction. Surely, if we have an Import Board, its function is to regulate imports. If you regulate imports, you have either to restrict or to increase them, otherwise you do not achieve your function of regulation. If you restrict imports you are doing the very thing, under an Import Board, that the right hon. Gentleman seemed to dislike doing. Yet at the end of his speech, when we all thought we ought to have heard some new Socialist policy of helping the farmer out of the mess, what we hear is that he would devise some machinery. He has a great deal of machinery up his sleeve, but we have not seen a cog of it. He talks about machinery. He ought to let us know what his machinery is, and whether it is the same sort of machinery that he would inflict upon agriculture as the ex-Solicitor-General would inflict upon the banks. The only machinery that we know is that he is going to put an Import Board to deal with beef. If there is an Import Board, there must be this quantitative restriction, which I am delighted the Minister has decided not to continue on beef. If we agree to a long-term policy similar to that for wheat, with a guaranteed price, as Members in all parts of the House, with the exception of the hon. Baronet the Member for South-West Bethnal Green (Sir P. Harris) do, surely also we shall agree that the beef industry must not fall before the long-term policy comes in?

I am surprised, when so many hon. Members have spoken, that not one has mentioned that this is not a subsidy. It is an advance. When the bacon scheme was not operating to the advantage of the curers, there was an advance, which was in due course repaid. This advance can similarly be repaid if the Government will bring in their long-term policy without undue delay, and if that policy operates as I believe it will. Let us see what the temporary advance is to be. The subsidy is to continue for three months. It has not, the Minister has pointed out, succeeded in the previous six months in bringing satisfactory prices for beef. The Minister quoted the average price as being 33s. 8d. The prime quality price last week in the local market was 32s. per live cwt., and I am afraid that, even with the 5s., it is a far worse price than we were receiving both at the beginning of the subsidy period and at the same season last year.

Where has the subsidy gone? It certainly has not gone to the farmers. I took the opportunity of trying to find out in London how far it had gone into other hands. I went to the butcher's emporium nearest my chambers, and I was told that in July, when the subsidy started, the price of beef was from 1s. 5d. to 1s. 6d. per lb., and that on Saturday it was from 1s. 1d. to 1s. 2d. per lb. I recall the Debate which took place in the heated atmosphere of last July, when hon. Members from the Labour Benches said that the subsidy would put up the price of food, and that it was unfair to the poor consumer. The result of the subsidy has been that the consumer has had the advantage of 3d. or 4d. a lb. on beef. We must not forget, when we talk about the price being unfortunate and expecting the butcher to have gained a great deal, that one of the effects of the subsidy has been that the consumer has had cheaper beef. No one would quarrel because the consumer got cheaper beef, but we have to ensure also that the producer gets an adequate price for the live animal he is putting into the market.

Whatever the result in the fall in the price of the live animal has been, it is clear that the failure of the policy of restriction has played a considerable part. If one takes the year 1934, it will be found from the figures given in the Trade and Navigation Returns that more beef of all kinds entered this country than in the previous year, or even in the previous two years. In 1934, over 12,600,000 cwts. of beef came into this country, whereas in 1933 the amount was 12,000,000 cwts. and in 1932 12,100,000 cwts. That is a very unsatisfactory state of things, and one must congratulate the Committee that the Government are not going to pursue that method of dealing with the price of beef. That, probably, is the reason why the price of beef is so low to-day. If, as has been said, there has been a fall in consumption of beef per head, at the same time there has been an increase in the foreign imports of beef.

I want to put two other suggestions to the Minister as to why the subsidy has not achieved its proper effect. I believe that if he could institute some form of graded subsidy, he would achieve far better results than he is doing at present. He ought to raise the minimum level of qualification for subsidy. I will take the last point first. At the present time I understand that they are regarding as a minimum a killing percentage of 54. At this time of the year, and during the remaining three months of the subsidy period, we should have expected that the beef would kill at 8 lbs. to the stone, which is a percentage of 57. If you have this low killing percentage, you are encouraging farmers to put beasts on to the market which are not in the same condition of killing as they otherwise would have been. In farming, as in everything else, it costs a great deal more to get to a pitch of perfection, and I ask the Minister to consider the question about the killing percentage. As regards grading the subsidy, the man who is breeding and feeding the prime quality beef is really being hit harder than the man who is placing upon the market the lower quality beef. The consumer wants to encourage the beef of good quality, and I would ask the Minister to divide the subsidy as to 7s. 6d. for first quality beef, and 2s. 6d. for second quality beef. It would not mean to the Treasury a penny more, but it would encourage farmers to breed and produce a prime quality of beef. At the present time there is probably a difference of only 3s. on the market between first and second quality beef, which is far too small a difference to encourage farmers. If this were possible, it would be to the advantage of the working of the subsidy.

May I also ask the Minister to consider whether cow-heifers, if after the second calf they are not of bad quality, can be included in the scheme? Surely the standard should not be, how many calves a cow has had, but whether it is good beef or bad beef. No one wants, and I least of all want, bad cow beef to qualify for the subsidy, but I am afraid that in my constituency the fact that all heifers which have had calves are disqualified from receiving the subsidy whether they are good or bad beef does cause a hardship. I ask the Minister in the course of the further legislation, which, I suppose, will be necessary, to give serious consideration to the question as to whether heifers which have had one or two calves should not still be allowed to qualify for the beef subsidy.

I pay my respects to the Minister for his very clear enunciation of policy. It is that they are not going to cause restriction and try to drive up prices by restriction, but they accept the fact that if the Dominions and the Argentine want to send their beef they must pay for the privilege. The policy will not harm anyone, but it will help the farmer and the agricultural worker. I do not know whether Socialist Members appreciate that for which we are fighting I We are fighting for a price for beef of about 48s. a. live cwt. If you take my killing percentage of 8 lbs. to the stone, you will find that it means that we are asking that we should receive 48s. for 64 lbs. of dead beef, and that work out at 9d. a lb. If any Member of a mining constituency wants to get his miners' beef at 9d. a lb. any farmer or farming Member of this House will be willing to sell him beef at 48s. a live cwt. and he can take it home and kill it and sell it to his mining constitutents at 9d. a lb. We have in Yorkshire great community of interests between the miners and the farmers. In good times we do well together, and in bad times we try to help each other. Do not let us have a feeling of hostility between town and country in regard to the beef position. Do not let beef down, and it is going down. It will pull down the miner as well as it pulls down the agricultural worker, who has a difficulty in buying his coal. He has low wages owing to beef being down. Any Member of this House who votes in the Lobby to-night against the continuation of help to the livestock industry is voting against the agricultural labourer receiving a due wage and paying a decent price for his coal.

5.54 p.m.

Mr. C. BROWN

The hon. Member for Thirsk and Malton (Mr. Turton) began his speech by expressing some pleasure in the fact that prophecies, which he said were made from these benches in the heated atmosphere of last July, have not been fulfilled. Surely he must understand that we on these benches have to take his Government at their own valuation, and when they tell us that the main plank in their policy is to raise prices, we have to face up to what they say. The Chancellor of the Exchequer at the World Economic Conference made it clear that the main line of policy of His Majesty's Government in this connection was to raise wholesale prices.

Mr. HASLAM

Wholesale prices.

Mr. BROWN

I said wholesale prices, but the comment we made last July was that, if His Majesty's Government were successful in raising wholesale prices, inevitably at some stage it would be followed by a rise in retail prices. The whole speech of the Minister of Agriculture, as has been stated already from these benches, was a complete confession of failure on the part of the Government to implement their policy of raising wholesale prices. Therefore, I cannot for the life of me see why the hon. Member for Thirsk and Malton should express views of that kind at the beginning of his speech. Our criticism last July was justified entirely on the grounds of the announced policy of the Government. The fact that their policy has failed is not our fault, but their fault. If their policy had succeeded our prophecies would have been true by this time. Their policy has completely failed. Therefore the Minister comes along this afternoon and tells the Committee that in spite of the subsidy, and of all the money which the Government have taken out of the pockets of the taxpayers for the fat stock industry, prices, instead of rising, have fallen between that period and to-day. He does not even suggest—I did not detect any such suggestion in his speech—that the £1,000,000 which we are being asked to vote to-day will be instrumental in raising prices. He merely put it forward as a temporary measure while what the hon. Member for Thirsk and Malton and other hon. Members have described as the long-term policy is being worked out. The Government have been in office nearly four years, and they have had short-term and long-term policies being worked out all the time. When are they going to deliver the goods? That is the question we are entitled to ask. When are they going to deliver the goods to thy agricultural community?

I am glad to see the right hon. Member for South Molton (Mr. Lambert) has returned to his place. I know that I shall not be permitted to make any extensive reference to the subject, because the right hon. Gentleman was ruled out of order, but I want to say a, few words to him about the manner in which he referred to the coal industry. The whole of his speech purported to be made entirely in the interests of the producer. He was thinking of the actual working farmer, I take it, and the farm labourer and, therefore, the speech which he made to the Committee was intended to have an influence in moulding Government policy, in the direction of doing something for the actual producer of fat stock and all kinds of farm produce. In spite of the argument he put forward trying to convince the Committee that the coal industry had been in receipt of a tremendous subsidy, the actual producer of coal in this country, the working miner, is now producing more coal per shift than ever he did before, and his wages are tending to decline. If the right hon. Member wants to do something for the producer, and not only for the working farmer and the agricultural labourer, let him join us, because we seek to do something for the actual producer in the coal industry, the working miner. That is all that I want to say about the right hon. Gentleman's advocacy of a policy designed to assist the producer.

There are only two points that one need stress. The first point is, that the Government's policy so far has completely failed. They have failed to deliver the goods to the agricultural community, they have failed to raise prices, which was their announced policy, and now we have a phase of political bribery which has been carried on by this Government which is unexampled in the political history of the country. First, there was bribery in connection with wheat, then bribery in connection with meat and sugar beet, and now we have another instalment of £1,000,000. There is no other description of it than bribery by the present Government of their political friends.

Mr. HENDERSON STEWART

Will the. hon. Member define precisely what he means by bribery?

Mr. BROWN

Yes, and I will use the arguments which I have heard made by Conservative and National Liberal speakers. If Members of the Socialist party go to the country and suggest that pensions and unemployment benefit should be higher, we are invariably accused of bribing the electorate. It is described as political bribery, and that we are putting forward that policy in order to get votes. These subsidies by the Government are political bribery of their political friends. They are giving money ad lib from the taxpayers to the agricultural and farming communities.

Mr. STEWART

If that is my hon. Friend's definition, then every social or industrial piece of legislation by any Government at any time is bribery?

Mr. BROWN

I am thinking of the definition that is usually used by anti-Socialist speakers. I am retorting in the same coin, and I say emphatically that all these subsidies are deliberately designed to retain the support of a section of the community which invariably gives its support to a Government of this kind. The right hon. Gentleman comes forward with his various proposals and makes his speeches, and would make one think that he is readjusting the whole world economy, but, when we probe the matter to the bottom, he is really engaged in giving bribes to political friends in the country who support this Government.

6.5 p.m.

Major HILLS

The hon. Member for Mansfield (Mr. C. Brown) has no description of the policy of my right hon. Friend except that it is a policy of bribes given to his own political supporters. I think that if the hon. Member reads those words a few years hence and realises the immense reform that my right hon. Friend has started, he will want to with draw that statement. I do not think the hon. Member realises that what has happened is that a complete change has taken place in agriculture, and that change is due to the action of the Minister. The change is now being worked out. It has not achieved completion and, of course, it is very easy to attack a scheme which is in the course of formation. But the scheme is there, and I prophesy, with very great confidence, that when a general scheme of this sort has been started for the whole of agriculture it must go on upon the same lines as those which my right hon. Friend has laid down, and that no Government, even a Socialist Government, will change it. They may develop it, but they will find, if and when they come into power, that they cannot change it.

The right hon. Member for Swindon (Dr. Addison) started by saying, in contradiction of the hon. Member for Mansfield, that he wanted a fair price for the producer, but he went on to make the usual speech from the Front Bench opposite, and to destroy one by one all the means of getting that fair price for the producer. I put it to the hon. and learned Member for Bristol, East (Sir S. Cripps) that there are three means by which you can raise the price of an article like beef. You can restrict imports, you can put a duty on the foreign article, or you can subsidise the home producer. Outside these three courses I know of none whereby you can increase the price, if you assume, as I think the right hon. Member for Swindon did assume, that the price is now too low. But the right hon. Gentleman went on to gird against quantitative restrictions, and he is going to vote against this subsidy. If it were a question of a tax or an import levy on foreign beef, I am sure that he would vote against that. He wants to give a fair price to the producer, and admitted that the present price is not fair, but he destroyed one by one all the available means for producing that fair price. He took refuge in a cloud of words. He talked about an import board, which is to do something, not explained, to deal with the question of a fair price to the farmer, and yet not to raise the price to the consumer. I do not think that hon. Members opposite are half as fair to the producer as we on this side are fair to the consumer. I assure them that nobody can argue this question or do a service to the farming community unless he keeps in mind the consumers' interests. All the speeches from the benches opposite contain plenty of words in praise of the producer, but when the speech is developed, those benefits are taken away one by one.

Before I come to the main object of my speech, may I say one word on the debatable point of who gets the 5s. subsidy? The Minister has been very cautious. He said, if I understood him aright, that it partly went to the producer, partly to the butcher and partly to the consumer. I took some pains to ask the farmers, who would be the last people to admit that they had got the subsidy if they had not got it. I found very clearly that when the subsidy started, the farmers were convinced that the butchers were getting it, but, as time went on, I found some farmers who said that they got a part of the benefit while some spoke quite strongly of the advantage the subsidy had been. Since the latter statements were made at a time when the price was falling and the stock raisers' position was worse, I think it is very valuable evidence—of course, it is very difficult to ascertain, and it is a matter on which one ought not to dogmatise—that part of the benefit did go to the producer.

I welcomed the intervention of the hon. and learned Member for Bristol, East, with regard to what I think is the real problem. I believe we can, by means of controlled imports and home production produce just as cheaply, or nearly as cheaply, and yet give a good price to the farmer. The real contest is between the manufacturer here who wants a market in an agricultural country, and the farmer here, and also between the farmer here and the man who has invested money in railways, steamships or docks in a foreign country. That is the problem, and I suppose we shall solve it, not perhaps in the way the right hon. Member for South Molton (Mr. Lambert) advocated, by disregarding the fact that there is a problem at all, but by a compromise fair to the producer here, and giving such a fair return as will be a help to those workers who are out of work.

I gather that the final long-term policy of the Government will be an import levy on foreign imports, such levy to be used to subsidise the home producer, and I should like to tell the Committee why I think that is the right policy. Will it raise the price to the consumer unduly? Will the Liberal doctrine, which is so often urged but which is never proved in practice, operate, namely, that any duty always brings with it a rise in price of the home produced article, and that the home produced article is invariably raised in price, plus the duty? Except on the Liberal benches opposite I do not think that that theory is believed. It is too general a statement. I question whether a duty does raise the price of the article by the amount of the duty. In the first place, if it were a small duty, it would not raise the price. A duty of 6d. a ton on coal would not raise the price here. Secondly, the competing interests that try to keep our market have a very important effect, because the more they are able to send in the more they will compete in price, even while paying the duty themselves. In the third place, we have to bear in mind the cheapness of production in the country which exports to us.

If we look at the question all round, believe that we can, subject to the consumers' interests, impose a levy on foreign meat which will subsidise a sufficient quantity of home-grown beef at a reasonable price. It is impossible to say at the moment what the levy would be, but I think it is conceivable, and that it can be worked out, that we could put your levy at such a figure as would bring into consumption the quantity of home-grown beef that you want to bring into consumption. It does not mean an unlimited quantity of beef. It might be an extended quantity of beef. Just as in the wheat subsidy there is a limit to the amount of wheat which can earn the subsidy, so in this case a certain maximum quantity of home-grown beef only would earn the subsidy. It might be a rising maximum. I believe it is theoretically and practically possible to work out a scheme on these lines which would not hurt the consumer. Seeing the great attraction of our markets and the interests abroad who are anxious to send supplies here, I think you could get an import levy down to quite a small amount, and an increasing subsidy on home supplies could fill the demand for home beef at the cost to the consumer which would be partly be paid out of the subsidy.

It would not help the home producer of beef to put the levy too high. If it is too high, up goes the price here. That is the effect of a high duty, and then the foreign importer can jump over the bar and pay the duty. If it is kept at a reasonable height, a, comparatively small percentage, I believe a scheme of that sort can be worked out. I wonder if hon. Members opposite would accept something of that kind? If they had only taken their courage in their hands, they could have claimed that the whole of the quota system and restriction of imports was really their scheme worked out—Socialist import boards. It was, but they are so unkind as to disown their own child. An import board must sometimes restrict; it cannot always increase the supplies of the imported article. I suppose that political agreements between two opposing parties are difficult, but I think we should try to get as much assent as possible from hon. Members opposite.

6.18 p.m.

Mr. McKIE

I am glad to be the first Member from Scotland to take part in this Debate, and in the few moments I propose to occupy I want to make one or two observations with regard to the details of the proposals now before us as they affect agriculturists in the northern part of the Kingdom. As is natural in a Debate of this kind, we have had some discussion on the principle of subsidies in general, and also as regards the way in which the subsidy of July, 1934, has worked out. Some hon. Members think it indicates the way in which the subsidy we are now considering in this Financial Resolution will also be applied. This Resolution is a sequel to our action of seven months ago. It is, perhaps, a somewhat unwelcome sequel. But I must qualify that adjective by saying that those who are intimately connected with the livestock branch of agriculture are eager and willing to grasp this or any other straw which seems to afford us any hope of winning through a difficult situation. The farming community have long been renowned for their independence, and their dislike of anything in the nature of State aid or doles.

Mr. C. BROWN

Does the hon. Member call £1,000,000 a straw?

Mr. McKIE

I am not going to be led away, but having regard to the peril to the livestock industry this sum of money, although it is large, is but a straw, at which we grasp in order to help us out of a very difficult situation.

Mr. BROWN

Will the hon. Member tell us how much he would like?

Mr. McKIE

I am not going to be led away into giving details of the amount which I consider to be adequate for providing help for the livestock producers. I would merely say this—and the hon. Member can draw what deductions he likes—that I hope this will prove to be adequate. The right hon. and gallant Member for Ripon (Major Hills) has said that the conversations he has had with members of the agricultural community in Yorkshire have led him to suppose that they are in favour of the way in which the subsidy of last July has been applied.

Major HILLS

It was not only in Yorkshire. I have talked to farmers in other parts of the country.

Mr. McKIE

I can corroborate what the right hon. Member has said, but there have been agricultural voices who have not spoken in such glowing terms of what the subsidy has accomplished for them. It has been my fortune, or misfortune to encounter many such voices in my peregrinations in the agricultural areas in Scotland. It has been said that the subsidy has not accomplished the marvellous things for the beef section of the farming community which were anticipated. I have done my best to point out that prices, although they have not shown such a marked increase as we would have liked, would have fallen much lower but for the fact that this temporary assistance was available. I congratulate the Minister of Agriculture in having carried us over a very difficult period indeed. There is no saying to what low depths agriculture might have sunk by now but for his courage and the activities of those connected with the working of the scheme. I hope that the money we are voting to-night will during April, May and June prove to be a valuable boon, and will carry us up to the moment when the long-term policy, about which the right hon. Gentleman spoke with such vigour and so definitely, will have been initiated. I hear voices behind me, some times raised in our agricultural Debates, saying "Another subsidy." I hope there will not be another subsidy. I go further and say there cannot be another subsidy if we are going to retain—that is the great party which is supporting the National Government—the full confidence and support of the agricultural community. I suppose my hon. Friends opposite would call that a bribe, but I could not possibly agree with them in the truth of any such assertion, even if they made it.

There is a strong feeling among farmers that the livstock branch of farming should have been the first to have been tackled by a National Government possessing the doctor's mandate. It is often unwise to go back over past history, and it is certainly unwise in such a case as this for agriculture does not want a great amount of talk and discussion, but prompt and vigorous action. The Minister referred to the size of the livestock branch of agriculture; 37 per cent. of the industry in England and 53 or 54 per cent. in Scotland. Those figures illustrate, if any illustration be needed, the importance of preserving the rightful place of the livestock industry in our agricultural body politic. It is essential if the welfare of the workers in agriculture is to be preserved. Many questions have been asked by those who earn their daily bread by toiling upon the land as to where they come in in legislation as it affects the farming industry. As the livestock industry is the largest branch of farming so it is the branch which is going to call, directly and indirectly, for the greatest numbers of men and women.

Let me refer to one or two points regarding general policy and the prejudicial manner in which the Ottawa and Argentine Agreements are claimed to have operated, particularly as to livestock farming. All I can say about that is that those actively engaged on the soil do not quarrel with the principle of the Ottawa or the Argentine Agreements. It is not the principles that are wrong, but the way in which they have been applied. Members of the Opposition have said that this is a policy of bald restriction, but the Minister has emphatically denied that he is out on any such mission. He has said that nothing in the Ottawa Agreement or in any other agreement ties his or the Government's hands, and that, if necessary, he can go behind the back of these agreements and inaugurate drastic restrictions and control of imports. But he thought there was a more excellent way, that of voluntary persuasion. The Government have said over and over again that they are going to let nothing stand in the way of bringing about such a state of affairs, that the home producer shall have the first preference in our own domestic market, that the second place is to be reserved for the Dominions and colonies, if there are any colonies that wish to have agricultural trading relations with us, and that then, if there is any place left at all, it is for foreign countries. That is where the Argentine comes in.

The Under-Secretary of State for Dominion Affairs heckled in the Ottawa Agreements Debate, agreed that that was the policy of the Government two-and-a-half years ago, and I have no reason to suppose that they have departed from it, judging from the Ministerial announcement this afternoon. The Under-Secretary went on to say that the figures laid down in the Ottawa Agreement were maximum figures, and that the Government at any time could reduce them if they wished to do so. The right hon. Gentleman the Minister was to-day a little apologetic, but he showed great firmness at the same time. Of course there are difficulties in the way of action, and I am sure that Liberals will agree, though they might try to make the point that the Government have been lost in a maze of vagueness during the past few months. It seems as though some Conservatives are taking the same point of view. The Conservative party, no doubt, is supporting the National Government by an overwhelming majority.

The doctor's mandate certainly included any and every policy which it should seem good for the Government of the day to pursue with regard to industry in general, and agriculture in particular. The public mind had advanced very rapidly before the 1931 General Election with regard to operating some form of protection for the great basic industries, and the public mind has not remained stationary, as perhaps the mind of this House has done since that great and critical election. I seriously suggest to members of the farming community that in the time between now and the next general election they should get together and inform their representatives exactly what policy they think should be employed and offered to the electorate.

I shall support this Financial Resolution, not because am in love with the spirit of a dole to a section of the community which has always been very proud indeed of its independence, but because it is meant to carry us over while we use that spirit of sweet reasonableness and persuasiveness with the representatives of the Dominions, and Mr. Lyons in particular, before we take a firm hand with them, and with anyone else who comes in the way, and give the country at long last the benefit of the long-term policy about which we have talked so much and up to the present have awaited somewhat in vain.

6.35 p.m.

Sir FRANCIS ACLAND

First of all, I would like to apologise to the Minister of Agriculture for not having been able to hear his statement. I looked forward to hearing him, as I always look forward to any speech from him, but I was summoned suddenly to the Central Criminal Court, where I had to appear, not as a prisoner, I am glad to say, but in the witness box. I was glad to get away from that atmosphere, but I was too late to hear the statement of the Minister. I imagine he must have told the Committee how very badly the industry had been doing for many years, and especially in the last few months. Nothing that he could have said in that respect could have been an exaggeration, because the industry has been hoping, hoping, hoping against hope for some improvement from all the efforts which those in the industry believe that the Minister has been making on their behalf. Somehow or other, so far, the effects seem to be that prices which seemed all the time to be as low as they possibly could be, have tended to go even lower still. The figures of the Exeter market given to the Committee to-day are a dismal result of all the effort that has been made. It must be recognised that these men cannot turn from their stock production to any other class of agriculture. They cannot lay aside their farms, as the owner of a factory can close his factory if he loses money. Farmers must continue, whatever the price is, and the price is perfectly deplorable, of course.

I gather that the Minister made it clear that the subsidy given a few months ago had not had quite the effect that he had hoped. That is generally recognised. There is a puzzle in the minds of everyone as to where the subsidy has really been going. I shall not attempt to analyse that point. But there is another disadvantage of these continuing subsidies. Perhaps the Minister did not mention it and I would like to refer to it. In people's minds subsidies are becoming steadily and more and more identified with marketing schemes. People say, when one talks about a marketing scheme, "Where is the subsidy? We do not call it a. marketing scheme unless it has a subsidy." I have noted the authoritative criticism of the policy with regard to eggs and poultry which has been brought out by the Commission over which the right hon. Member for Swindon (Dr. Addison) presided so well for some time. The agricultural correspondent of the "Times" said, in effect, that it would be much better to let the industry go on without doing very much in the way of reforming or improving its methods, but just to give it a subsidy or some sort of protection or limitation of foreign supplies, and that that would be enough.

The other day, in discussing subsidies in my division, I said that I thought they were tending to grow, that they were in the long run bad, that the appetite grew by what it fed on, that everyone was always asking for more, and that I wished they could all be abolished. I was challenged the next night, at another meeting, for having desired to abolish all agricultural marketing schemes. I was asked whether I had voted for the egg scheme, the milk scheme and the bacon scheme when they were brought forward. My questioners thought that because I disapproved if subsidies I had denounced everything in the way of marketing schemes. Certainly there are two disadvantages in these continued applications for subsidies. First, as people get them their mouths open wider, and more and more people connected with other industries or other branches of the same industry expect to be subsidised in their turn. Secondly, the more that happens, the more disinclined people are to any reorganisation of their methods or any real improvement of their marketing, which after all is the core and centre of the Act of 1931 passed by the Labour Government and of the later Act passed by the present Government. It seems to me that that is a bad tendency. Unless the centre of these schemes is, not a subsidy, not direct or indirect attendance on the taxpayer, but a real improvement of marketing methods, they will in the long run fail.

My second point is that we ought to draw this moral from these continued Debates—that none of these schemes of quota or tariff or duty has much effect in the long run on the raising of prices, and that the only hope for the farmers' prosperity is the prosperity of their customers. I have said that for many years, in season and out of season, like a voice crying in the wilderness. I was interested therefore to see these words in a leading article in. the "Times" this morning: It will be admitted generally that, to quote from a recent letter from a British Farmer, published in these columns, the real problem is to reduce unemployment and to raise the standard of living of those whose food consumption, both in quality and quantity, is below that of the ordinary household. I believe that that is the core and centre of the whole position, and that however well-meaning these schemes may be, and however many forms they take, in the long run the farmers' main interest is not in tightening up these schemes of restriction of foreign supplies for this country, but in the wider object of greater freedom of trade and commerce all round, on which alone revival and prosperity depend.

Let me turn to one quite different point. I know that the Minister must have been having extremely difficult negotiations. Otherwise he would have 'brought forward a reorganisation scheme before now. I do not know how the negotiations have been going, but one does know that the Minister must get an agreement with the Argentine and with the Dominions before he can put on a limitation of imports. I believe that the present agreements hold in the case of the Argentine until November of next year and in the case of the Dominions till August, 1937. Whatever the Minister does now, therefore, will have to be done by agreement. I would express the hope that, whatever that agreement may be, it will not include, as the Dominions may be likely to ask that it shall include, any system which involves having to arrange a quota here. I can imagine that the Dominions might not unreasonably say that if anything is to be done which will indirectly limit what they can send us, we in our turn should limit what we are going to produce here, and not go in for a policy of restricting them while we ourselves expand beyond certain limits.

The danger is this: The present tendency to regulation and regimentation of our agriculture may increase. That is very much to be feared. If you have anything like a quota here you would have a definite amount fixed annually for production in each part of the United Kingdom, in each county and parish, and on each farm. That is not the sort of thing that can be done in connection with farming, for the industry varies from farm to farm, from season to season and from market to market. You cannot tell off a man at the beginning of the year, and tell him what amount he may produce and when he may send it to market.

I do hope that in this matter we shall call things by their proper names. A duty on imports is no less a duty even though the amount got from it is to be repaid to a certain class of the community. There is nothing to be lost by being honest about these things. If the Government try to wrap them up in some other way, say in the case of a duty of a 1d. or 1½d. a lb. on meat, they will only excite more anger rather than less. It is a duty, whatever you do with the money, and I hope that that is what we shall call it.

6.45 p.m.

Sir EDWARD GRIGG

It is clear that the Committee is generally agreed as to the urgent need for the Vote which the right hon. Gentleman is asking it to concede and that interest centres not so much upon the Vote itself as upon the long-term policy which, in the second and more interesting part of the speech, the right hon. Gentleman adumbrated. He told us that the long-term policy which he had in view was the imposition of a levy upon imports of meat into this country with a view to assuring to our own producers a reasonable remuneration. I agree strongly with my right hon. and gallant Friend the Member for Ripon (Major Hills)—who made a most interesting speech—that a great deal will turn on the size and extent of the levy and that it is vital, if we are to secure stable prosperity and as I hope expansion for the industry in this country, that the levy should be as low as possible.

I cannot understand why we should always proceed on the assumption that production in this country must be so much more expensive than production elsewhere. One or two hon. Members in this Debate have spoken about the cost of labour. It is ridiculous to talk of the cost of British labour as a high element in production cost when we are discussing comparisons with New Zealand and Australia. It has no bearing whatever on the question. The elements of cost in this country are not seriously affected, in my opinion, as regards our main competitors by the cost of labour. On the other hand, it is obvious that the cost of production in this country will have to be carefully studied if the levy which the right hon. Gentleman has adumbrated is to be reasonably low. It is to that aspect of the long-term policy which has been discussed from various aspects this afternoon that I should like to direct attention for a few moments.

We ought to be able to compete on fairly good terms with most of our competitors. Our land is as good as theirs; we have proximity to the market and we enjoy a natural preference. Most consumers would buy English stuff in preference even to Dominions stuff if they can afford it. All these things are very much to our advantage and I can see no reason, except some fault in the organisation of our farming, which makes it necessary for us, if we are to compete at all, to subsidise farming in order to secure higher prices. Obviously we are not going to get stable prosperity for the industry on that basis. In the first place, high subsidies to maintain high prices are an infraction of the Ottawa principle. We are saying to the Dominions, "By all means protect industries which you can protect on a reasonable basis but do not exclude us by high and unreasonable protection for industries of your own which could not exist otherwise." If we take that line with regard to their manufacturing industries we have to accept it with regard to our agriculture. I do not believe that we can ever arrive at a reasonable agreement with the Dominions except upon the Ottawa principle, clearly laid down, that on both sides protection is to be moderate and reasonable and is not to extend to industries which require very high protection.

The other objection, of course, to high subsidies and high prices is that undoubtedly they limit the extension of the home market for our own produce and seriously antagonise the consumer. It is, then, vital to examine the reasons which necessitate or seem to necessitate this high level. The right hon. Gentleman the Member for Swindon (Dr. Addison) gave what is, in my opinion, one of the reasons when he referred to the high cost of distribution in this country. I was delighted to hear him refer to it and I hope that he will be a strong reinforcement to those who call attention to that aspect of our agricultural troubles. It is not that I believe that I shall be able to go very far with him in the remedies which he proposes, but I am glad that at any rate he should call attention to the evil.

It is not however of the cost of distribution that I wish to speak at the moment. It is about another and, as I think, the chief aspect of the cost of production in this country and that is the cost of capital. I believe it is keeping up the cost of production in this country in two ways. In the first place there is the case of the owner-occupier who now represents over 35 per cent. of the farmers of this country. More than 35 per cent. of our producers, I think, now own their farms. Many of them bought those farms in the boom which followed the War at inflated prices. Most of them borrowed the money and are still paying interest on that money at rates which are much too high at the present time. That is a burden upon agriculture which necessitates high prices and prevents our producers from competing at a lower price. I do not think that any policy which ignores that factor in agricultural costs, which does not deal with the high cost of capital but tries to meet it by offering subsidies in one form or another, can be a stable policy which will give agriculture real prosperity.

The Conservative Government which fell in 1929 attempted, as I was glad to observe from a distance, to deal with this subject by passing the Act which established the Agricultural Mortgage Corporation. For some reason, however, that corporation has not done very much to reduce the cost of capital to Agriculture. It has only, I believe, so far managed to lend under £10,000,000. I beg the right hon. Gentleman and the Government to give attention to this aspect of the subject because it is being dealt with at this moment by all our competitors. Legislation for this purpose is going through in New Zealand at present. In New South Wales, if it is not going through, it is certainly predicted and promised, and it has been carried in Canada—and that on the top of existing legislation which makes capital much cheaper to the Dominion farmer.

That is one aspect—the cost of capital—but there is another. I believe that our farmers are paying far too much also for working capital, and that is one further reason why they have to be subsidised And why this levy of which the right hon. Gentleman spoke may have to be higher than it would otherwise be. How does our farmer now get working capital? In most cases by selling his produce to a dealer and because he needs money with which to carry on he sells on unfavourable terms. That is happening throughout the country. Again the Conservative Government of a few years ago attempted to deal with that question by means of the Agricultural Credits Act, but for some reason that Act has not brought very much help to the farmers. I must confess I think there is a strong case for investigation into the working both of the Agricultural Mortgage Corporation and of the Agricultural Credits Act. I dwell upon this subject because I do not believe that we can have any effective or satisfactory long-term policy until the question of credit has been thoroughly tackled. At present the heavy cost of capital is not only stopping all possibility of improvement, but is actually causing deterioration and is leading to further unemployment on the land. There are many farmers who know what they would like to do but cannot afford to do it, The research institutions are constantly making admirable suggestions which cannot be adopted because there is no capital available at a reasonable cost for the purpose. The same consideration applies to vital matters like an easy supply of water and drainage and a hundred other matters of that kind.

No one likes the idea of large loans being raised for the assistance of agriculture or anything else. But let us remember that the cost of the subsidies or repayable advances which are at present being made, is in the neighbourhood of £25,000,000 and that that represents interest at 5 per cent. or interest at 3 per cent. and a sinking fund of 2 per cent. on a loan of £500,000,000 to agriculture. I am convinced that the money could be better used in that way than in doling out these subsidies, which are necessary, I agree, as emergency measures but which produce a rather dangerous atmosphere in English farming and make it more difficult to arrive at a satisfactory long-term policy. I have spoken in haste, and I hope the right hon. Gentleman will not think that I have been either critical or dogmatic. I have not meant to be. Nobody appreciates more than I do how hard the right hon. Gentleman has worked and the courage and resource which he has shown. I am convinced that no one has done so much for English agriculture in any time that we can remember as he has done. These suggestions are made solely with the idea that they may be helpful. They are made in no dogmatic spirit, but I beg of the right hon. Gentleman, that before he establishes a long-term policy in respect of beef or anything else, he will have adequate investigation made into the question of agricultural credit in this country.

6.57 p.m.

Mr. DAVID GRENFELL

The right hon. Gentleman who has just spoken presented the Committee with a very clear alternative to the Measure which the Minister is about to propose and I congratulate him upon the very comprehensive plan which he has laid before us for the reconstruction of our agriculture. I hope he succeeded in impressing his neighbours upon those benches below the Gangway, but I imagine that their minds work on entirely different lines from his and that his conclusions and their are as far apart as the Poles. But the right hon. Gentleman was not dealing with the question before the Committee. He raised questions coming under many heads, such as the nationalisation of land and the planning of industry, but while his speech was very interesting and valuable, we have to come back to our muttons and I propose to address myself to the question before the Committee.

The Minister asks for an extension of time in order that certain payments may be made while he is making up his mind on a long-term policy—if there is any such policy in prospect. We have long waited for such a policy. We have pleaded for one in vain and apparently the Minister has not yet made up his own mind upon it and has not yet obtained agreement with those other people with whom he must, at some time or another, come into agreement upon this subject. We have still to be content with what is admittedly merely an expedient. The Minister gave us some explanation of why this temporary Measure is to be continued for a further period. He referred to the serious effect which any real change in policy might have on foreign trade or upon Imperial relations. I think he spoke what was in all our minds when he reviewed the possibilities of a complete change of policy as regards the relations between ourselves and producers abroad. The producers who come into competition with the agricultural industry of this country are those very people with whom we wish to remain on the best terms of friendship and mutuality. It is the people in the Dominions with whom we are most concerned when we come to deal with Measures of this kind and we can excuse the right hon. Gentleman's lack of haste in coming to a final decision. We hope he will seriously consider all the things to which he referred this afternoon before doing so.

My right hon. Friend the Member for Swindon (Dr. Addison) rightly pointed out the possible effects of this kind of legislation which is only a patchwork and piecemeal interference with the activities of a very great industry. He rightly referred to the failure to safeguard the consumer, and we on this side always stress that hon. Members opposite in their concern for the producer are apt to neglect the other party to the transaction, who is the consumer. The right hon. Member for Swindon quite rightly referred to the failure of the Government, so far, to safeguard the right of the consumer in any way. Nor have we heard anything to-day to suggest that there is any prospect of a reorganisation of the wasteful and inefficient marketing methods from which the producer suffers so much. Neither is there any machinery for securing that the farmer and the farm labourer shall get the benefits of this scheme. The right hon. and gallant Member for Ripon (Major Hills) estimated, I think, that the farmers would get about one-half of this subsidy and that the other half goes somewhere else.

The hon. Gentleman who spoke last rightly spoke of the enormous burden of capital charges on this industry. He made reference to the very high rents. I think some £37,000,000 or £38,000,000 is paid every year in rents, and these are very heavy charges on the working capital of the farmer. I have no reliable estimate to guide me in this matter, but it is clear that an enormous burden is carried by agriculture for the use of capital by the agriculturist. This is a matter which should not be lost sight of in dealing with these matters. The Government must find itself in great difficulties—for it is a heterogeneous lot that we oppose day by day in this House. The right hon. Member for South Melton (Mr. Lambert) seems now to be the most rabid Protectionist in this House. He insists on more and more duties and expresses his conviction that he is now right where all his life he has been previously wrong. He is now a, full-blown Protectionist and wishes to see tariffs rigorously applied. Strangely enough he seems in this matter to side with the right hon. Member for Caernarvon Boroughs (Mr. Lloyd George). They agree on this although they parted political company long ago. The facility with which people appear to reconcile their differences and persuade themselves and people outside that their differences have been successfully reconciled is the miracle of politics in these days.

The right hon. Member for South Molton is now such an ardent Protectionist that he is prepared to sacrifice everybody to raise prices higher and higher. It does not matter a bit, he says, whether food becomes dear or not; the industrial consumer must be made to suffer for the benefit of agriculture. He is turning a blind eye to all the possible evil consequences which may ensue from that course, and he wants the Minister to declare for just the kind of policy which will suit him and which will also mean high prices and a high measure of Protection. The hon. Member for Maldon (Sir E. Ruggles-Brise) spoke of quantitative restriction as if it had not been adequately used. He said he desired that method to be applied with the utmost rigour. In addition to tariffs, he would use restrictions or quotas. He would use every weapon in our armoury in order to achieve the end of higher prices and better returns to the agricultural industry.

Sir E. RUGGLES-BRISE

I must protest against the hon. Member's interpretation of what I said. What I did say was that in so far as quota restriction had been employed it had been employed only in part and that it had not been employed with the full rigour with which ft might have been applied.

Mr. GRENFELL

If that was not the hon. Member's meaning, I will withdraw it. At least, he urged the Government to use every weapon in their armoury and to take off the gloves to fight some imaginary enemy standing in the way of the progress of agriculture. I now come to the speech of the right hon. and gallant Member for Ripon who said, I think, that we on this side of the House showed no indication of any desire to assist the producer. Really, he is not entitled to charge us with that. There has been no evidence in this or any other Debate that we are not concerned with the prosperity of agricultural producers. But we do say that agriculture cannot be organised on these simple lines and that this is not a sufficient remedy for the evils of the industry. We urge that you cannot divide consumers from producers in a community like this, and that our interests are one and indivisible. The person who is a consumer of one commodity is a producer of another; and we say, therefore, that it is wrong and invidious to draw a. comparison between consumer and producer in this way.

We would rather say that we do not regard this and all other problems in the light of their effect on the individual producer. If the agricultural producer is to be benefited, he can only benefit to the extent to which he shares in the general prosperity of the country. It is no use stressing the occasional differences between consumer and producer. It is much wiser on the part of all of us to stress the interdependence of all sections of the people. We would welcome recognition by this House that the farmer as a producer of food depends as much upon the prosperity of those concerned in the coal industry as on any other section of the people. Those two industries both provide commodities fundamental to the life of the nation. I claim first place for the mining industry, which provides the foundation upon which the whole superstructure of our industrial life is built. On that foundation all our industries have been founded, and, if we cease to be a coal-producing country, we shall cease to be a great industrial country, and we shall also cease to be a populous or powerful country.

We must not neglect the claims of the producer in other industries than our own. Those who wish to serve the cause of agriculture must find some means by which prices can be raised without making prices too high for the industrial consumer to make his due quota of purchases. One of our main criticisms is that this is a subsidy for the production of more beef, although the consumer of home-produced beef is not the coal miner or the men and women who work in our textile factories but the person who is rather better off and can afford to pay higher prices. Poorer people, because of their lower purchasing power, are compelled to buy foreign beef. It is no advantage at all to raise these prices so high as to confine the opportunity of consumption to a smaller and smaller class of people. What we need is to make it possible for a larger proportion of our population to buy and consume this class of goods.

I have a strong instinctive liking for the profession of agriculture, and I would warn my hon. Friends who speak for agriculture in this House to realise that it is a great mistake to imagine that it will be an advantage to raise these prices without raising the purchasing power of the masses of the people. If prices are raised too high, our industrial workers will be inevitably compelled to buy less and less quantities of these giods. There is no advantage to be got from high prices with a smaller volume of production. That will not help agriculture in the long run. I look forward to the time when we shall grow at home not from 35 to 38 per cent. of our food supplies but from 60 to 70 per cent. of our total requirements. I should like to see that and I think it is a possibility, but before that can be done a higher standard of purchasing power must be provided for the masses of the people not engaged in agriculture.

I would ask the Minister to tell the House how we are to escape from this dilemma. Does he propose that prices shall be raised to any appreciable extent? And in that event how can we escape from this dilemma upon which we find ourselves impaled? How, if prices rise, will he maintain the volume of purchasing power and consumption? That is our main ground of criticism. I should also like the Minister to answer a communication which has come to us this afternoon and which affects people directly concerned in the industry. We have heard about benefit to the two classes of producers—the farmer and the man he employs on the land. Here is a telegram which has come from Airdrie in Scotland. It says: Debate on beef subsidy. Secretary for Scotland has repeatedly refused meet representative Scottish Farm Servants' Union which has asked opportunity lay before him facts about drastic reduction farm workers' wages. Farmers refuse meet farm workers to consider collective wages agreement for next year. Neither subsidies nor tariffs brought any advantage to workers. Farmers still taking advantage unemployed farm workers to reduce wages. What is the reply to that? It is not a question which I have propounded, but one which has come from people who are as much interested in this problem as any hon. Member who sits here—people who are directly interested in the welfare of the actual producers of agricultural commodities. I shall-be glad if the Minister will give us a reply on these two points—as to how the Government will safeguard the consumer against unduly high prices and how they will protect the interests of the workers in the industry, both the farmer and the farm labourer.

7.15 p.m.

Mr. ELLIOT

I am sure that no one in any part of the Committee will complain of the tone and temper of this Debate. It is true that, owing, I think, to the kindliness of the Chair, the Debate has been allowed to range a little more widely than within the narrow boundaries of the Financial Resolution. It is impossible that it should not, for the very purpose of this Debate is that we should obtain time for further negotiations, and unless the Committee was seized of all the considerations that arise, it would be wrong for it to entrust the Government with the large sum of money for which we are asking to-day. The tone of the Debate was almost summarised by the speech of my hon. Friend, if I may so call him, the Member for Gower (Mr. D. Grenfell), who has just sat down. He recognised in the Committee the remarkable fact of the difference in attitude towards agriculture which has come over the city representatives and the representatives of industry compared with that which existed only a few years ago. I cannot say how strongly I agreed with the hon. Gentleman when he said, "You cannot divide the interests of the producer and those of the consumer nor can you divide the interests of the producer of one kind of produce in this country from those of the producer of another kind of produce." It is true that all of us stand or fall together, and we in agriculture recognise that as much as anyone else. You cannot have a prosperous agriculture founded upon the ruins of other industries in this country, nor can you have prosperous industries founded upon the ruins of agriculture.

There were two specific questions which were put to me by the hon. Member for Gower. There was the telegram from Airdrie, complaining that farmers have refused to meet the representatives of the farm workers to discuss agreements. If he does not know already, it will be confirmed to the hon. Gentleman by all Scottish representatives in this House that when the original Agricultural Wages Act was drawn up, the representatives of all sections in Scotland, employers and employed alike, desired to be left out, and consequently the reason why there is no wage agreement in Scotland is the direct desire of the employed persons themselves. It may be that now a change of opinion is taking place, but it would be a little unreasonable to suggest that that change of opinion should not receive a certain amount of consideration and cogitation before it is acted upon. It is certainly a matter which is receiving the attention of my right hon. Friend the Secretary of State for Scotland, but I am sure that all parts of the Committee will agree that the workers themselves, who desired to stand out from the Wages Act system which holds throughout England, would not think it fair to reproach any section of the House with regard to it.

The hon. Member for Gower came to a fundamental question when he said, "How are you to solve the dilemma that if you raise prices too far, you bring down consumption and thereby defeat your own object? "I would say that if we look at these things in a commonsense manner, I do not think we shall find these logical dilemmas so inescapable. The hon. Member belongs to the great mining industry, which secured an Act in this House for the very purpose of regulating consumption and production and held up prices. My right hon. Friend the Chancellor of the Exchequer, backed by Members who sit above and below the Gangway opposite, put through a budget which raised the tariff on competitive fuel to 200 per cent., and that I call a fairly restrictive tariff. It was said that it was only for revenue purposes, but it has no corresponding Excise levy, and if we could get something approximating even the half of that, we should not be coming to this House for temporary Votes for small subsidies. If competing foodstuffs were subjected to anything like the same duty as competing fuels, as in the case of oil, I do not think we should be coming on this occasion for any Vote for some small sum, such as £1,000,000, from the taxpayers' pocket. The difficulty of the producers in this country lies in the fact that we are a world State desiring to maintain a world trade, and we cannot simply take an axe and chop off any great section of our imports. I know that to be true, and I was glad to find one or two hon. Members opposite admitting that in my opening remarks I had done my best to grapple with that position. They say, "How do you think that these negotiations of yours will come to anything? Can you give us any reason to believe that these negotiations are proceeding successfully? Is there any hope that this is not simply a series of temporary subsidies, and that that series of temporary subsidies is not itself the long-term policy?"

I call in aid my hon. Friend the Member for Leith (Mr. E. Brown), who sits beside me on this bench. We have been called by the hon. Member a heterogeneous mob who could reconcile the most opposing policies. Well, we have reconciled fairly opposing policies, not merely in the long struggle between Liberal and Conservative, but in the more immediate struggle between the coal industry and the cattle industry, of which we are two examples. Is it not a fact that Members for Welsh mining divisions have every reason to be satisfied at the recent conclusion of a coal agreement with the Irish Free State, and that the agriculturists themselves were willing to sink their prejudices against the admission of any further cattle to this country because they realised that unless a man had a job of work to do, he was unable to buy a good pound of beefsteak when his task was over? I have had to defend that bargain on many platforms, and doubtless shall have to do so on many more, but the fact that we were able to make it, the fact that statesmanship was not so entirely bankrupt, the fact that the prolonged negotiations came to fruition, is to my mind, an evidence that in future our long negotiations here will come to a similarly happy end.

So much for the task of bringing about, by negotiation, agreements with these great suppliers to us, whose trade in turn we desire and whose friendship we vehemently desire to retain. There were other big questions of policy which were raised to-night and which will have consideration. We were told by my hon. Friend the Member for Altrincham (Sir E. Grigg) that we should turn our attention more closely to credit, that high charges on capital, high charges for the use of capital, as in rent, are heavy burdens on the producer. We shall certainly give these matters our closest attention. Whether these charges do more than replace the capital which is being used in agriculture I sometimes doubt. I do not think the charges are exorbitant for the replacement of the equipment of farming, and if we gave capital under that rate, we should in effect be giving a subsidy which would be almost as frank a subsidy as if I were to come here, as I am coming here, and ask the House to vote me £1,000,000. If there were any foundation for the proposition that a greater supply of capital at better rates would lead to an improvement in the condition of agriculture, we should be most foolish if we did not give that proposition our closest attention.

The right hon. Member for Swindon (Dr. Addison) indicated that all would be well if we had a good Import Board. I do not know any more fertile ground of friction than to refuse a man an order which he thinks he has a perfect right to give and when he cannot argue about the refusal. My fear of an Import Board is that, if we order in large quantities from abroad, we cannot buy all the supplies brought to us, and that the will of the board in accepting certain orders and rejecting others will be interpreted as a most drastic kind of quota and a wretched interference and will, I fear, lead to even greater friction than we may get at the present time. I was glad to find that the hon. Member for South-West Bethnal Green (Sir P. Harris) had correctly grasped the import of the declaration of July, 1934, and the numerous speeches which we have since made, that if we can change from a system where the whole odium of regulating supplies falls on us to a system whereby they can be regulated among the various suppliers of this market, where we insulate our home producer and release him from the full weight of world conditions, we shall be satisfied. That is our policy, and he correctly expressed it. We are not asked, however, to compete on equal terms, but on terms not merely of depreciated currency and subsidy abroad,

but very often of world prices far below the cost of production even in the cheapest countries which are producing now; and it is no help to this country or any other country to allow all the countries concerned to rattle themselves into bankruptcy.

I think it would be a pity if the Committee were not now to come to a decision. The right hon. Member for North Cornwall (Sir F. Acland) will, I am sure, pardon my not going at length into his remarks, the more so as he said himself that he had not the advantage of being present during the earlier stages of this Debate. As I said, none of us can complain of the reception which the Committee has given to this Vote, and if we can sustain the same temper in other agricultural Debates that are before us, we shall go far, here in this House, towards framing the long-term policies for agriculture which we all desire.

Question put.

The Committee divided: Ayes, 196; Noes, 37.

Division No. 49.]	AYES.	[7.29 p.m.
Acland-Troyte, Lieut.-Colonel	Croom-Johnson, R. P.	Hellgers, Captain F. F. A.
Agnew, Lieut.-Com. P. G.	Cross, R. H.	Henderson. Sir Vivian L. (Chelmsford)
Allen, William (Stoke-on-Trent)	Cruddas, Lieut.-Colonel Bernard	Herbert, Major J. A. (Monmouth)
Assheton, Ralph	Davidson, Rt. Hon. J. C. C.	Hills, Major Rt. Hon. John Waller
Atholl, Duchess of	Davies, Edward C. (Montgomery)	Hore-Belisha, Leslie
Baldwin, Rt. Hon. Stanley	Davies, Maj. Geo. F.(Somerset, Yeovil)	Hornby, Frank
Barclay-Harvey, C. M.	Denville, Alfred	Horsbrugh, Florence
Barrie, Sir Charles Coupar	Dickie, John P.	Hume, Sir George Hopwood
Beaumont, Hon. R.E.B. (Portsm'th, C.)	Donner, P. W.	Hunter, Capt. M. J. (Brigg)
Bennett, Capt. Sir Ernest Nathaniel	Drewe, Cedric	Jones, Sir G. W. H. (Stoke New'gton)
Blinded, James	Duckworth, George A. V.	Kerr, Lieut.-Col. Charles (Montrose)
Boulton, W. W.	Dugdale, Captain Thomas Lionel	Kirkpatrick, William M.
Bowyer, Capt. Sir George E. W.	Duncan, James A. L. (Kensington, N.)	Knox, Sir Alfred
Boyd-Carpenter, Sir Archibald	Dunglass, Lord	Lamb, Sir Joseph Quinton
Braithwaite, Maj. A. N. (Yorks, E. R.)	Eden, Rt. Hon. Anthony	Lambert, Rt. Hon. George
Brass, Captain Sir William	Elliot, Rt. Hon. Walter	Latham, Sir Herbert Paul
Briscoe, Capt Richard George	Elliston, Captain George Sampson	Law, Sir Alfred
Broadbent, Colonel John	Eimley, Viscount	Leech, Dr. J. W.
Brocklebank, C. E. R.	Emrys-Evans, P. V.	Lees-Jones, John
Brown, Ernest (Leith)	Everard, W. Lindsay	Leighton, Major B. E. P.
Brown, Brig.-Gen. H. C.(Berks., Newb'y)	Fielden, Edward Brocklehurst	Levy, Thomas
Buchan, John	Ford, Sir Patrick J.	Liddall, Walter S.
Burnett, John George	Fox, Sir Gifford	Lindsay, Noel Ker
Campbell, Vice-Admiral G. (Burnley)	Fraser, Captain Sir Ian	Llewellin, Major John J.
Campbell-Johnston, Malcolm	Fremantle, Sir Francis	Lloyd, Geoffrey
Caporn, Arthur Cecil	Fuller, Captain A. G.	Lockwood, John C. (Hackney, C.)
Carver, Major William H.	Ganzonl, Sir John	Loftus, Pierce C.
Cautley, Sir Henry S.	Gilmour. Lt.-Col. Rt. Hon. Sir John	Mabane, William
Cazalet, Thelma (Islington, E.)	Gluckstein, Louie Halle	MacAndrew, LL-Col. C. G. (Partick)
Chamberlain, Rt. Hon. Sir J.A.(Birm., W)	Glyn, Major Sir Ralph G. C.	McEwen, Captain J. H. F.
Chamberlain, Rt. Hon. N. (Edgbaston)	Goff, Sir Park	McKie, John Hamilton
Chapman, Sir Samuel (Edinburgh, S.)	Goodman, Colonel Albert W.	McLean, Major Sir Alan
Chorlton, Alan Ernest Leofric	Gower, Sir Robert	Maitland, Adam
Churchill, Rt. Hon. Winston Spencer	Graham, Sir F. Fergus (C'mb'rl'd. N.)	Makins, Brigadier-General Ernest
Clarry, Reginald George	Gretton, Colonel Rt. Hon. John	Margesson, Capt. Rt. Hon. H. D. R.
Colfox, Major William Philip	Grigg, Sir Edward	Martin, Thomas B.
Conant, R. J. E.	Gunston, Captain D. W.	Mason, Col. Glyn K. (Croydon, N.)
Cook, Thomas A.	Hamilton, Sir George (Ilford)	Mayhew, Lieut.-Colonel John
Courtauld, Major John Sewell	Hanbury, Cecil	Meller, Sir Richard James
Courthope, Colonel Sir George L.	Hannon, Patrick Joseph Henry	Mills, Major J. D. (New Forest)
Craddock, Sir Reginald Henry	Harbord, Arthur	Mitchell, Sir W. Lane (Streatham)
Croft, Brigadier-General Sir H.	Harvey, Major Sir Samuel (Totnes)	Monsell, Rt. Hon. Sir B. Eyres
Crooke, J. Smedley	Haslam, Henry (Horncastle)	Morris-Jones, Dr. J. H. (Denbigh)
Crookshank, Capt. H. C. (Gainsb'ro)	Haslam, Sir John (Bolton)	Morrison, William Shepherd
Muirhead, Lieut.-Colonel A. J.	Rutherford, John (Edmonton)	Train, John
Munro, Patrick	Rutherford, Sir John Hugo (Liverp'l)	Tree, Ronald
Nation, Brigadier-General J. J. H	Samuel, M. R. A. (W'ds'wth, Putney).	Tufnell, Lieut.-Commander R. L.
Nicholson, Rt. Hn. W. G. (Petersf'ld)	Samuel, Sir Arthur Michael (F'nham)	Turton, Robert Hugh
O'Donovan, Dr. William James	Sanderson, Sir Frank Barnard	Wallace, Captain D. E. (Hornsey)
Peake, Osbert	Shaw, Helen B. (Lanark, Bothwell)	Ward, Lt.-Col. Sir A. L. (Hull)
Pearson, William G.	Shepperson, Sir Ernest W.	Ward, Irene Mary Bewick (Wallsend)
Peat, Charles U.	Shute, Colonel Sir John	Wedderburn, Henry James Scrymgeour
Petherick, M	Skelton. Archibald Noel	Williams, Charles (Devon, Torquay)
Peto, Geoffrey K.(W'verh'pt'n, Bllst'n)	Somervell, Sir Donald	Williams, Herbert G. (Croydon, S.)
Procter, Major Henry Adam	Somerville, Annesley A. (Windsor)	Willoughby de Eresby, Lord
Raikes, Henry V. A. M.	Sotheron-Estcourt, Captain T. E.	Wilson, Lt.-Col. Sir Arnold (Hertf'd)
Ramsay, Capt. A. H. M. (Midlothian)	Spencer, Captain Richard A.	Wilson, Clyde T. (West Toxteth)
Ramsay, T. B. W. (Western Isles)	Spens, William Patrick	Wise, Alfred R.
Ramsden, Sir Eugene	Stanley, Rt. Hon. Lord (Fylde)	Wolmer, Rt. Hon. Viscount
Reed, Arthur C. (Exeter)	Stanley, Rt. Hon. Oliver (W'morland)	Womersley, sir Walter
Remer, John R.	Stewart, J. Henderson (Fife, E.)	Worthington, Dr. John V.
Rickards, George William	Stuart, Hon. J. (Moray and Nairn)	Young, Rt. Hon. Sir Hilton (S'v'noaks)
Ropner, Colonel L.	Sugden, Sir Wilfrid Hart
Rosbotham, Sir Thomas	Thomas, James P. L. (Hereford)	TELLERS FOR THE AYES.—
Ross, Ronald D.	Thomas, Major L. B. (King's Norton)	Sir George Penny and Sir Victor
Ross Taylor, Walter (Woodbridge)	Thomson, Sir Frederick Charles	Warrender.
Ruggles-Brise, Colonel Sir Edward	Thorp, Linton Theodore
NOES
Addison, Rt. Hon. Dr. Christopher	Hall, George H. (Merthyr Tydvil)	Rathbone, Eleanor
Brown, C. W. E. (Notts., Mansfield)	Harris, Sir Percy	Rea, Walter Russell
Cocks, Frederick Seymour	John, William	Salter, Dr. Alfred
Cripps, Sir Stafford	Johnstone, Harcourt (S. Shields)	Samuel, Rt. Hon. Sir H. (Darwen)
Daggar, George	Jones, Morgan (Caerphilly)	Smith, Tom (Normanton)
Davies, Rhys John (Westhoughton)	Lansbury, Rt. Hon. George	Strauss, G. R. (Lambeth, North)
Edwards, Charles	Lawson, John James	Thorne, William James
Foot, Dingle (Dundee)	Lunn, William	Tinker, John Joseph
Gardner, Benjamin Walter	Macdonald, Gordon (Ince)	White, Henry Graham
Greenwood, Rt. Hon. Arthur	Maclean, Neil (Glasgow, Govan)	Wilmot, John
Grenfell, David Rees (Glamorgan)	Mainwaring, William Henry	Young, Ernest J. (Middlesbrough, E.)
Griffiths, George A. (Yorks, W. Riding)	Milner, Major James
Grundy, Thomas W.	Nathan, Major H. L.	TELLERS FOR THE NOES.—
		Mr. Groves and Mr. Paling.

Question put, and agreed to.

Resolution to be reported To-morrow.