HC Deb 27 June 1935 vol 303 cc1299-392

Again considered in Committee.

[Sir DENNIS HERBERT in the Chair.]

Question again proposed.

4.32 p.m.

Dr. ADDISON

I have no desire at all, in saying a little more on the question of Order, to be obstructive or to delay the proceedings of the Committee unnecessarily, but I would suggest that your interpretation of the Rule implies a very great extension of what we on this side of the House understood to be its meaning. In our Amendment we do not propose to increase the charge or to alter the purposes for which the money is to be given. We propose to alter the conditions which are to be complied with, and I suggest that the conditions do not in themselves necessarily increase the charge or alter the purposes and, therefore, that the Amendment is in order. If, however, after having given careful consideration to the matter you adhere to your ruling, I take it that we shall be at liberty to discuss, within your ruling, other matters which we think may properly arise. I hope, however, that you will allow us to proceed with our Amendment.

4.34 p.m.

The CHAIRMAN

I have given careful consideration to this matter, and my Ruling to-day, I hope, will not be so stretched as to be taken as a basis for a future Ruling in reference to less substantially different conditions to which I should not intend it to apply. Let me draw the attention of the right hon. Gentleman to one or two points in support of my Ruling, to which I must adhere. It would make a substantial alteration in the condition of the subsidy that there should be—as proposed by the Amendment—an amalgamation of all beet-sugar factories in Great Britain on terms to be approved by Parliament. That would alter the class of people to whom the subsidy would be paid in the event of the amalgamation being one which some of the present producers and beet-sugar factories felt that they could not come into. It would, in that case, substantially alter the class to whom the subsidy may be payable. May I also point out that later on the Amendment deals with the conditions which Parliament may determine for the purpose of a progressive reduction of the subsidy. That is contrary to the proposed con- tinuance of the subsidy for the fixed period of one year. Indeed, I am not sure what the Amendment means or what would be its effect but it would seem to me that if it is proposed to adopt methods of a progressive reduction that would require that we should continue the subsidy in some form beyond the present season. That would be out of order.

There is one other thing I want to say, and that is that in considering a question of this kind as to the conditions to which the King's Recommendation applies, where the conditions are by reference to something set out in existing and continuing legislation, I am fortified by the well-known limitation in regard to Rules which apply to legislation for continuing expiring Acts. In those cases, as the right hon. Gentleman knows, we cannot alter the provisions of the Act which is to be continued. As to what may be discussed, the right hon. Gentleman will realise from what I have said that to a great deal of what he may have proposed to say on the Amendment I should find no objection on the general Debate. I have no intention of confining or limiting the Debate so as to shut out constructive criticism and proposals as to different methods of dealing with the matter.

4.37 p.m.

Dr. ADDISON

I accept your ruling and I hope that when the Bill is presented it will be open to us in some form to move Amendments dealing with some of the matters indicated in our Amendment. This proposal is in line with the one we were discussing yesterday. That was a Resolution to give the Government more time for thought. This is for the same purpose. It is surprising, in view of the recent additions to the ranks of the Government, the fact that the Noble Lord the right hon. Member for Hastings (Lord E. Percy), as Minister without portfolio, is to help the Government with their thinking, and the further fact that they have had the Greene Report in their hands for some considerable time, that the Government have not been able to make some suggestions rather than come along and say "give us another year to carry on." We have to make the best of this unfortunate limitation while the Government consider their intentions, and we have to discuss the question now before the Committee.

The Minister of Agriculture, with his usual adroitness, took care to remind the Committee that we on this side have been participants in the business, in fact, that it was initiated by us. Everyone will agree that the way in which this policy has been worked out during the past 10 years, apart from what we have learned from the Greene Report, presents a warning to future Parliaments and is a conspicuous example of what should not be done when public money is provided in this abundance. The method of throwing a large sum at an industry, without proper conditions for seeing that the purposes for which the money is provided are safeguarded and promoted, and that it is not used for something else, is very conspicuous in this case. It is urgent, whatever is done, that steps should be taken to safeguard the position.

So far as the provision of the assistance is concerned, it is undeniable that it has led to a great increase in sugar-beet growing in this country and, as the report shows, the amount grown per acre has also been increasing. Methods of cultivation have improved slowly, so that we are not very far from the position of some other European countries which have been growing sugar-beet for a long time. We are up to the tonnage of Germany. It also appears from the report that the amounts which the factories have paid for the beet have progressively decreased. At the beginning of 1926 the farmers were paid 59s. 6d. per ton, which included a premium for beet of a higher sugar content. The figure was down to 41s. in 1934, which shows that beet can be produced at substantially lower cost.

The report also shows that something has happened in this matter which I am sure Parliament never intended should happen. A very large share of the public money which has been provided has been obtained by other persons. A figure given in this House on Monday last showed that the beet-sugar factories up to March, 1925, have taken £11,874,000, and since the Greene Report large sums have been distributed by the factories in bonus shares to their shareholders. It means that these bonus shares have, in fact, come out of the Exchequer subsidy, which we presume it was intended the agricultural population should receive but have not got. Whatever else is clear from this report, it is certainly clear that it is a matter of first-rate public importance that this diversion of money should stop. I suggest that it prejudices an impartial consideration of the realities of the case with which we have to deal to-day, both from the point of view of agriculture and from the point of view of the wise and sensible thing to do in the circumstances. As far as that is concerned, I make the right hon. Member for Darwen (Sir H. Samuel) a present of it. I have given up trying to follow the gyrations of his party. I was chided by his friend the Secretary of State for Scotland in most dignified terms in 1931 when after a great struggle I managed to get the subsidy reduced from 13s. to 7s. 9d. For the last four years he seems to have condoned these iniquities anyhow, and so far as I am concerned that somewhat mitigates the force of his censures, which will no doubt be forth-coming to-day. But still that does not in any way remove the exceedingly unpleasant effect that this report has upon a very large number of people. We have to consider the realities of the situation as they are made clear in the report.

Before I come to that point I would like to call the attention of the Committee to the opportunities that the report shows are available, if machinery were created to make use of them, for further economies which would lead to a reduction of the subsidy. The report shows that the refining costs, the factory costs, have fallen in the last four years from 15s. 7d. per ton of beet to 11s. 11d. There has, therefore, been a great reduction in the manufacturing costs, and the report encourages us to believe that it would be possible to continue this reduction still further. The report indicates another opportunity for economy. It appears that in 1928 there was a re-arrangement of the duties between the refiners and the national factories, a re-arrangement which indeed placed a premium upon the great refining corporations as against the national beet factories which had been deliberately called into existence to operate this industry. So much so, that by the adjustment of the duties then arranged, and a continuation of which I am afraid every party in this House has to accept some share of responsibility for, there was a premium placed upon the refiners, as against the factories, of at least 1s. a cwt.

It was a very improper bargain indeed. The result has been that the sugar factories are only allowed to refine rather less than half the sugar that they themselves produce. It means that the machinery installed for refining the sugar which they themselves produce is stopped in consequence of this arrangement, and that means that the overhead charges of the factories are unduly inflated. If they were allowed to use the machinery which has been paid for in this generous fashion, for refining the sugar that they themselves produce, they could proportionately reduce factory costs, and there would be a still further reduction of the subsidy.

We find, too, as affording some guide for the future, that the amount of assistance has been progressively reduced and that it now appears to stand at about 3s. 6d. or rather less a cwt. over and above the amount available under the Dominion preference. It would not be suggested that the home grower should be in a worse position than the Dominion grower. No party would suggest that. That amounts to 7s. 9d. out of 11s. 3d. per cwt., the remainder being direct subsidy, which will be somewhat reduced under the proposals now before us. The fact is that after 11 years this business has become embedded in agricultural practice until it involves the cultivation of some 400,000 acres of land, and, hateful as this waste of public money is, we as practical people still have to face up to the facts and to ask ourselves what would happen if the subsidy was suddenly stopped and brought about a great dislocation of agriculture.

I am not in the least minimising the urgent necessity of stemming this flow of waste, which is clearly going on. While the farmer has been generally pretty well able to see after himself, and has a good many very alert spokesmen in this House and a union of a singularly aggressive character to champion his interests, the agricultural labourer has been in a very different position. The wages paid to the agricultural labourers and the wages paid in the beet sugar factories are a disgrace, especially in view of the immense sums that have been paid by Parliament to this industry. Whatever may happen in the future, I am sure that no system would be tolerable which did not ensure that the agricultural worker shall receive adequate pay and a decent standard of living in return for his labour.

While I say that, I cannot escape another group of considerations. This industry places upon our home market some 600,000 tons of sugar, or about one-third of our supplies. During the continuance of these operations there has been a remarkable increase in the refining of sugar in Great Britain, in the refining not only of home-produced sugar but of imported sugar. The amount of sugar imported and refined has increased by nearly 900,000 tons. The increased refining which has taken place during the last 10 years has been much more than the increase which was contributed by the home product. At the same time I notice that we in this country enjoy a cheaper sugar than almost any other State in the world. In Britain the price is 2d. to 2¼d. per lb.; in Germany it is 4½d., and in France 3d. We have to remember that a penny a lb. increase means that the consumers pay about £20,000,000 a year. [HON. MEMBERS: "No!"] A farthing a lb. is £5,000,000, which is nearly twice the amount of the direct subsidy to which we are committed under these proposals. I must say that those who, with myself, have given most anxious consideration to this subject, are very apprehensive that the sudden withdrawal of the subsidy and the elimination of 500,000 or 600,000 tons of home-produced sugar from the market might easily have the effect of leading to an increase in the retail price of sugar.

Sir HERBERT SAMUEL

Does the right hon. Gentleman not know that there is an enormous glut of sugar in the world?

Dr. ADDISON

Yes, I have the actual figures here. But for all that, surely the right hon. Gentleman will admit that the sudden withdrawal from the market of 600,000 tons of sugar would deliver this country into the hands of the sugar refiners lock, stock and barrel, and that it would be a serious temptation to them to put up the price. If I know anything of the habits and the customs of those who control these great corporations, they would be different from their predecessors and fellows who run these concerns if they did not take some advantage of that glorious opportunity. I am as certain as can be that we have to take that into account—not only the dislocation of agriculture, but what would happen from the sudden withdrawal of 600,000 tons of sugar from the market.

Mr. HOROBIN

The right hon. Gentleman has made a rather damaging statement against the refiners. Surely, he will draw the attention of the Committee to the point that the refiners are not interested in the price of sugar. It is the refining margin that would affect them, and they would be losers rather than gainers by a rise in the price of sugar.

Dr. ADDISON

It would be the first time that the manufacturers of a product are not interested in what that product makes on the market. I am sure it would be very profitable to them, and they are doing extraordinarily well as it is. In this connection, I must draw attention to certain recommendations in the Committee's Report. They see how undesirable it is that there should be a continuance of this system, and they recommend that there should be a national sugar commission. The alternative is set out in great detail. We have come to the conclusion, taking the whole matter into consideration, that, with the safeguards that I am going to mention, the next step in this business is the amalgamation of all the factories into one factory corporation, as recommended by the Committee. We believe that is the only way in which you can achieve the economies which are clearly attainable and which in the course of a few years might well lead to the elimination of any subsidy over and above the preference given to the Dominions. The Committee makes certain recommendations which are of first-rate importance. In the first place, it says that this discrimination against the factories which prevents them being able to refine their own sugar should be brought to an end, and I suggest that this discrimination must have been imposed in the interests of the refiners.

Mr. HOROBIN

Surely the right hon. Gentleman is aware that it was done to benefit the refiners, because they were in the unfortunate position of being private enterprise competing with State subsidised activities. That is the only reason—to equalise the conditions.

Dr. ADDISON

These gentlemen in that unfortunate position seem to have distributed immense dividends, and I think the misfortunes of the refiners will be very hard to find. One very important concern, Messrs. Tate and Lyle, seem to be doing extraordinarily well, capitalising a very large mass of profits, creating 1,700,000 ordinary shares, and distributing 1,360,000 of them to existing holders of shares. I suppose those shares have come out of something. Of course, they have come out of profits, and the profit has been at the expense of the British sugar factories.

May I draw attention to another very important ingredient in this matter. It is another illustration of how the virus of Socialism is extending. Last night we had the right hon. Gentleman the Member for Ripon (Major Hills) prepared to set up a board—he did not call it an import board but it was a board—and here you have a body set up by the National Government not only recommending a national factory organisation but saying that the Sugar Commission should be given power to prescribe either a maximum or a minimum for a refining margin and to deal with prices. We regard that as an essential concommitant of any workable scheme for the future. That is to say, the labourer and the consumer must be safeguarded, and all those matters are dealt with in the Committee's report. You cannot stop this exploitation unless an organisation on these lines is brought into being. I believe that in the course of a few years it might be possible, with an organisation of this type operating with the powers suggested by the Committee, so to reduce costs, to eliminate waste and to get the beet delivered to the factories at a progressively lower price that we could eliminate the whole of the £2,500,000 subsidy altogether, and bring British sugar growing to as favoured a level as Dominion sugar is grown.

We regard the sudden cessation of this growing as a thing which would not be politically or industrially practicable or wise, but we object exceedingly to the continuance of this payment of public money, in the light of the valuable guidance that has been provided for us, without safeguards for the labourer and the consumer and for the progressive obtaining of economies and the progressive reduction of the subsidy which I have endeavoured to indicate. We do not worship at the shrine of cheapness to the extent of expecting that the British agricultural labourer shall have to compete with the Java labourer who works in the sugar plantations at 5d. a day. It is an absurd position. Here you have a commodity that is produced all over the world at a loss except when you have, practically, conditions of slavery. It is a crazy system. But there is no reason, for all that, that we can see why, if this is to be continued as part of a planned agriculture, it should not be associated in principle with a system which will improve the standard of life of the agricultural worker. We believe that he has been grossly neglected for all these years, especially in the districts where sugar-beet has been grown. For all that, for the reasons that I have indicated we are not prepared to recommend, coupled with the conditions that I have indicated, the abrupt cessation of the system. We believe that, coupled with the conditions that we suggest in our Amendment, time will show under proper organisation whether it is worthy of being continued as a part of British agriculture, and we believe, with the guidance that is now before us, that the wise and right thing in all the circumstances is to make that experiment.

5.9 p.m.

Sir FRANCIS ACLAND

We have spent a good deal of time in discussing what we shall discuss, and I had better begin by saying what it is that I want to talk about. If it is in order to argue the merits of the beet-sugar subsidy, that has been done before by my right hon. Friend the Member for Darwen (Sir H. Samuel). I regard that as his special province, and he will speak later. One might argue it on the quite narrow point as to whether it is right in the circumstances to continue to give a subsidy which would enable the contracts made with the growers to be carried out with reference to the crops they have actually now got in the ground. If it were that very simple and rather narrow question that was before us, I should be in favour of making such payments as would enable those contracts to be carried out, because there was an expectation existing when the crop was planted that there would be some assistance for it. I should be very willing to vote that money if I could be sure that the subsidy was not being given in a form which would give the beet-sugar companies the absurdly inflated profits that some of them have been getting at the taxpayers' expense and in a form which has enabled them to distribute that very large amount of bonus shares of which we have been already told and of which, no doubt, we shall hear more later. But the point that really strikes me as being at any rate a serious aspect of it is that we are asked to-day to continue this subsidy for a further manufacturing year without being in possession of the decision of the Government as to what their permanent policy is going to be. As to that, I think the position of the Government is wholly indefensible.

The Greene Report was published two and a-half months ago, and its main lines were, of course, known to the Government a good long time before that. The arguments on both sides of the main question are set out in the two reports with extraordinary clarity. No matter seems to me to remain which could have required further investigation. No primary matter is really left in doubt when one has read the two reports carefully. The majority report is perfectly simple as far as the subsidy is concerned, namely, that it should be discontinued, special assistance being given to growers to compensate for its sudden withdrawal. The minority report surely is equally simple and clear, that there should be a further long-term subsidy period, the money being found by remission of Excise and a small levy on imported sugar. It seems to me that those two opposing policies stand out quite clearly and present a simple issue. We know that both reports make recommendations as to the reorganisation of the refining industry, but that is not the major matter, for, as the majority report points out—and it is not traversed in the minority report—the subsidy does not depend on what you do with the beet. The majority report says that the same acreage of beet could, in fact, have been, and still could be, secured as cheaply by paying farmers to grow sugar-beet and not send it to the factory at all but keep it at home and do what they like with it—dig it into the ground again to manure a subsequent crop of beet which, similarly, would be made no use of.

It seems to me that on that simple question it is impossible to argue, as the Minister of Agriculture has argued to-day, that two and a-half months is too little to enable a decision to be formed if the Government had really wanted to come to one. There has been, of course, a change of Government during those two and a-half months, but the more it changes the more it remains the same. We have the same Minister of Agriculture and the same President of the Board of Trade, who are the two Ministers chiefly concerned, and the same Chancellor of the Exchequer, whose interests are sometimes ignored by some of his colleagues. No one can suggest that the same complete harmony which has doubtless always been found in the Cabinet on subsidy questions under the late Government is any less certainly going to be found under the present one. But I suggest seriously that though there will probably be very little difference in the treatment of these matters under the new regime as compared with the former regime, we have now a Prime Minister who, in a greater degree than any of his predecessors—not excepting himself when he was younger—is willing to take and sometimes does take an infinity of trouble to avoid the trouble of coming to a definite decision on an awkward question.

How long do the Government intend to continue not making up their minds? We have had the phrase which we have heard before, that if possible a decision will be reached before the Adjournment for the Summer Recess. That is what the Minister said before, but we are no further forward. There is no definite pledge. It took the Government, I think, two and a-half years to come to the point of deciding that they would have to come to a decision. Is it going to take another two and a-half years before they decide what they are going to do about it? The real issue involved is put with that clarity which one would expect from a report associated with the name of Mr. Greene in one sentence on page 102: Since, however, on a review of all the facts put before us we are unable to find positive justification for the expenditure of a sum of several millions per annum on an industry which has no reasonable prospects of ever becoming self-supporting and on the production of a crop which, without that assistance, would, at present sugar prices be practically valueless, we cannot recommend the continuance of assistance. I have to make this point, and I am rather sorry to make it but I think it is a point which ought to be made. That was not the way in which the issue was put by the Minister of Agriculture at the annual luncheon of the Sugar-Beet Society which he attended on 3rd May. Whether, when the matter was sub judice the right hon. Gentleman was wise in attending that function and making the chief speech at it, is not for me to say. He used many carefully balanced phrases and he stated the question at issue—and, therefore, presumably the question which I think the Government might have decided beforehand, and which they would have to decide in the future—in a very different way from the way in which it is summed up in the report. The right hon. Gentleman did not ask, "Can you justify a subsidy on an industry which will never be self-supporting and is not producing anything of positive value?" These were his words: If it could be shown that there was other employment in which these people could render greater services, they"— referring to his audience— would not stand in the way of a decision on the lines of the Majority Report. But if that is the basis on which a decision is going to be made, you can justify any sort of subsidy whatever.

Mr. ELLIOT

Those were the words of the report. I was quoting the report when I said that.

Sir F. ACLAND

The right hon. Gentleman may have been quoting a chance sentence of the report, but he was not quoting the sentence in which the Majority Report summed up the question which has to be decided. If the only question is whether you can under a subsidy, employ people who would otherwise be unemployed, then it is surely defensible to employ people in digging holes and filling them up again.

Mr. ELLIOT

I am sure my right hon. Friend does not wish to be unfair. The question was specifically raised, even in the Majority Report of the employment of these people on alternative crops, and my reference was to that question.

Sir F. ACLAND

The question is this. Is the issue which the Majority Report presents, that it is legitimate to discontinue the subsidy if other work can be found for these people, but that it is not legitimate if no other work can be found? That is not the question which the Majority Report asks and answers. On the contrary, they sum up the question which has to be decided in the words which I have quoted from the last page of their Report. According to them the question is this. "We are unable to find a justification for the expenditure of money on an industry which has no reasonable prospects of becoming self-supporting and is producing something which, at present sugar prices, is practically valueless." They do not present, as the issue which has to be decided, the question of alternative employment. They say that the question is whether the industry can be made self-supporting and whether the crop has any value. It seems to me, therefore, that while the Minister presented to those who heard him at that luncheon one aspect of the matter, which undoubtedly comes up for consideration, he did not present the question to be decided by the Government as it is presented by the Commission.

This question has been put as well as it could be put before the country and before all who take an interest in these matters, by a very wise man, a countryman and the editor of that admirable quarterly which bears the name of "The Countryman." In order to present the argument as it appears to me, I cannot do better than describe how he has dealt with it. In the current number there are three pages in which this subject is considered under the title "Second Thoughts about Sugar-beet." The writer he recalls to his readers the fact that before the War he published a book urging the setting up of an experimental factory with enough State encouragement to give the whole thing a fair chance and he points out what has happened since. The experiment was tried, as we know, on a, large scale in 1924, with the confident expectation that the industry would soon be able to stand on its own feet. But the writer of the article goes on to point out what is also clearly indicated in the report, namely, that it has failed because the conditions which prevail to-day in the sugar world were not anticipated when that experiment was started 10 years ago. There has been an unlooked for development in sugar cane technique and it has been shown that there is a considerable power of expansion in the cane industry in the British Empire, if anybody fears that we shall not be able to get our supplies of sugar if we discontinue making it here. But the main point to which I wish to bring the attention of the House is that while the writer welcomes, as we all do, the increased attention now being given to the planning of agriculture and while he welcomes as we all do the good will now shown by the urban population to the well being of the countryside, he continues with these extraordinarily wise words: Planning involves the wise considered choice of the directions in which agriculture can best serve national interests. There is plenty of room for choice, for the country does not produce half the food it consumes. But the public may easily take alarm at the bills which some of the farmers' friends are asking it to meet. If farmers' leaders do not want to hear the towns saying that farming has become a form of out-relief, they will act prudently in this sugar-beet business. Sugar-beet has cost the nation an immense sum at a time when the outlay on running village schools has been scrimped. That statement, it seems to me, touches the central question which ought to have been considered and decided before to-day. Are the Government going to handicap their agricultural policy by linking it with a very expensive subsidy to an industry which, according to the Majority Report, has no reasonable prospects of ever becoming self-supporting, in the production of a crop which without assistance would be practically valueless. If they allow their agricultural policy to be linked to a subsidy of that kind, I believe they will fatally handicap that policy, which, from many aspects, was bringing back hope of better marketing and better business to our countryside. I hope they will hesitate much and ponder long before they ask the taxpayer to shoulder this burden to assist an industry which, in view of the developments in production in the last 10 years, cannot be expected to stand without very large sums in Government assistance.

5.25 p.m.

Mr. AMERY

With one statement of my right hon. Friend who has just spoken I entirely agree. I readily join in his appeal to the Government to let us have, as soon as possible, that definite long-term policy which, as far as I can see, we could have had months ago. We are dealing here with the perfectly simple, straightforward question of whether this product is worth protecting in this country—in which to-day we are protecting practically every agricultural product— and whether the amount of the protection required is not too great to justify its imposition, in the interests both of agriculture and of the consumer in this country. The trouble is that this perfectly simple question has been complicated and be-devilled in a whole jungle of mystifying make-believe ever since the day when we started protecting the production of sugar in this country and decided that we must pretend that we were not protecting it. Instead of imposing a straightforward duty, we levied an Excise charge and gave it back again and called it a subsidy. It is that fact which has underlain all the misunderstandings which have arisen on this subject and given rise to some of the absurd things which have been said even in this Debate. The right hon. Gentleman opposite spoke of a vast waste of the taxpayers' money and of vast sums that were being given in subsidies. There are no vast sums being given in subsidies. There is a very trifling sum being given in subsidies. Even on the Motion now before us, nobody has commented on the fact, not even the right hon. Gentleman who introduced it, that 11/12ths of this so-called 5s. subsidy is a fictitious and imaginary subsidy provided by the imaginary levy and return of 4s. 7d. of Excise. The real subsidy for which the right hon. Gentleman is asking, is a 5d. subsidy over and above the ordinary tariff protection of the 5s. 10d. per cwt. The simple thing would have been to have added that protective duty and then considered plainly on its merits, whether a protection of 4s. 7d. or rather 5s. 10d. per cwt. was sufficient for this industry and, if so, whether the results from the national point of view would not be worth it.

Sir H. SAMUEL

It is not 4s. 7d.—it is 12s.

Mr. AMERY

No, as against the Colonial duty the actual protection is very much less. The 12s., or to be exact the 11s. 8d., is the amount of protection which British grown and refined sugar gets as against the highest rate on foreign refined sugar and bears no relation whatever to the fact that as against Empire sugar the protection is something in the neighbourhood of 5s. 10d. and is nearly sufficient to enable the British sugar industry to continue. That is the simple problem which we have to ask ourselves. We have passed through the era where, to carry an industry through its experimental stage, we had to give assistance beyond any normal duty which you would impose on an agricultural product. We have to-day reached a period when what I would like to suggest, and will endeavour to show to the House, is that a perfectly normal and not immoderate duty does produce results which are of the very highest value to the country as a whole, to the agricultural industry and to the consumers. I would suggest that we deal with sugar, now that we are a Protectionist country, in the same way as we deal with any other agricultural or industrial product whose existence we want to ensure for this country. My right hon. Friend opposite stated what he rightly regarded as the conclusion of that amazing majority report of the committee of inquiry, where it says: We are unable to find positive justification for the expenditure of a sum of several millions per annum on an industry which has no reasonable prospects of ever becoming self-supporting. Let me examine that for a moment. If we are expending several millions per annum on beet-sugar, that is to say, by counting as a subsidy the giving back of an imaginary excise, at that rate we are spending many hundreds of millions of money per annum in subsidising all our industries. There is a protective duty on steel of some £2 a ton. Will anyone say we are wasting £18,000,000 or £20,000,000 a year in protecting the steel industry? If this argument is right, we have spent £200,000,000 in the last few years in subsidising the motor car industry. The whole idea that protection in the form of an imaginary Excise levy given back as a subsidy, really constitutes money taken out of the taxpayer's pocket is a sheer absurdity that would never have grown up in people's minds if it had not been begun by this fiction that we were subsidising an industry which in fact we were protecting.

With regard to the Committee's statement that sugar-beet has no reasonable prospect of ever becoming self-supporting, I admit that without any protection it has no reasonable prospect of becoming self-supporting. But neither has wheat or any other agricultural product in this country. To-day we have to realise that we cannot carry on under the old system of free imports, and it is simply an absurdity to describe the effect of a protective duty as being a subsidy levied upon the taxpayer or the consumer. Indeed, there is a very strong case, if you consider the whole burden of the taxation of this country which is borne by domestic production as entering into the cost of that domestic production, for saying that anything that comes tax free into this country is in fact subsidised, and that unless you impose a duty or give a protection equivalent to the average incidence of the domestic rates and taxes you are in fact subsidising your imported article. At any rate, on the perfectly simple basis of a very slight increase in the present duty, we could both have a beet-sugar industry at home and give more effective preference—and it is sorely needed—for the production of our Colonies.

An addition of a farthing to the basic duty, divided, say, as to one-half given in extra preference to the Empire and as to the other half in making good that very narrow margin of a few pence for which the Minister of Agriculture is now asking, would put the industry on a perfectly plain, straightforward basis. There would be no need for any elaborate questions as between refiner and beet-sugar miller, as to who was subsidised, and there would be no need for all these elaborate negotiations, still less for an elaborate scheme of amalgamation or combination of the whole industry or of strict restriction upon additional acreage or upon new persons coming in. There is no more reason for that because your sugar is protected than there would be for amalgamating all the millers in this country or all the producers of iron and steel, because wheat and iron and steel are protected.

Why not abandon all this complicated, hypothetical, unreal system? Why not scrap it all and have a perfectly simple, straightforward method of protecting this industry, just as you protect any other industry? I would suggest to my right hon. Friend that he should tear up all the documents he has in his office on this subject and simply say to himself, "Is sugar worth protecting? How much duty will meet the case? Then let us impose it, and if, as a result of that duty, there is too great an increase of domestic production in this country, or too high profits are made, then let us reduce the duty or take some of it off by an Excise, but let us work on the simple methods that work successfully enough in other industries."

Dr. ADDISON

The right hon. Gentleman should not forget that there is already a penny a pound on sugar.

Mr. AMERY

I am not sure that I quite appreciate the right hon. Gentleman's point. Is the protection which is now suggested in fact excessive? You might say that there is a protection of 100 per cent. or more on the price of sugar in this market. But according to the Committee itself this is clearly a dumped market, a market in which the price bears no relation whatever to the actual cost of production all over the world. Even if it were 100 per cent., we are at this moment protecting wheat to fully 100 per cent. of its price in the world market. But if you take the real world cost of production, which, according to the Committee, is 10s. to 12s. per cwt. in the case of cane sugar and 14s. per cwt. in the case of beet-sugar, asd see the protection that we are giving as compared with world production prices, it is a protection of only some 50 per cent., and for that we get results that are, after all, of immense value, not merely from the point of view of the actual crop produced, which is very substantial in itself, nor of the people directly employed, of whom some 30,000 are employed on the land and 85,000 are employed intermittently at any rate in the factories, but from the point of view of the effect on the whole balance of our system of agriculture.

This crop is immensely valuable to farmers, and it is not only the sugar; the by-products of every kind, and the effect of working this sugar on the soil, all enter into the farmer's budget over a period of years. The majority report of the Committee, which, to my mind, is one of the most astonishing documents I have ever read from people who in other fields are more or less intelligent, states that it would be unhealthy and undesirable to allow the rotation of agriculture to pivot largely upon a crop which depends on State assistance. They ought then to veto the pivoting of agriculture upon wheat, which enjoys a greater measure of State assistance than sugar. Those who produced that report seem to me to have been entirely unaware that we are living in a protectionist country to-day and that every agricultural product is protected and will in future be protected either by tariffs, as we would do it, or by some other method which may come into greater favour with hon. Members above the Gangway opposite; but certainly there is not going to be any support in this country, either now or in the future, for the policy of which hon. Members below the Gangway opposite are the slender remainder men.

At any rate it is not only the farmer's own balance of production that gives importance to sugar-beet; it has become of immense importance in the balance of production of the whole country. If the 400,000 acres of land under beet had to find an alternative crop, and if the 30,000 men employed in that production went into any other form of agricultural production in this country, whether meat, or dairy produce, or wheat, is it not obvious that that would destroy the whole present balance of agriculture? We know perfectly well how the whole dairy position has been weakened by the fact that the beef question has not been settled. Surely we are not going to add to the state of unsettlement at present created by the inadequate protection of beef a still greater and more serious unsettlement resulting from throwing these 400,000 acres derelict upon the cultivation of this country.

It seems to me to be an act of perfect insanity to scrap a most valuable new industry, built up over a number of years in this country, in which we are to-day as efficient practically as any other country in the world, and to do that contrary to the general policy of this country and contrary to the example of every other country in the world. The Committee points out that there is only 5 per cent. of the world's sugar which is grown under free trade conditions and that all beet sugar everywhere is highly protected. It has been a rather curious habit of this country to think that everybody else must be a fool and that we alone must be right. Is it not at any rate conceivable that if these countries do attach that value to the protection of beet-sugar, protecting it beyond the extent to which they protect most other industries and most other agricultural products, it is because they regard it as so important and vital an element in the whole balance and production of the cycle of agriculture, and that they are likely to be right, and we are not so likely to be wrong if we follow their example?

In conclusion, I would say a, word about this matter from the point of view of the consumer. I think the right hon. Gentleman opposite was quite right when he suggested that the effect of our policy in producing 600,000 tons of sugar in this country has been to lower the price of sugar. As the Committee points out, the free market in the world for sugar is less than 3,000,000 tons; that is to say, less than 1,000,000 tons outside the consumption of this country. To that free market of 3,000,000 tons, we, by our national and Imperial sugar policy in the last few years, have added 600,000 tons of homegrown sugar and some 750,000 tons of Empire sugar—1,350,000 tons in all. Does anybody suggest that in what is a dumped market the addition of something like 40 per cent. of the supply has not had a profound effect on the price? I think anyone who would say that would be talking sheer unreason. It is perfectly certain that our policy in regard both to Empire sugar and to home-grown sugar has led to a very substantial lowering of the price of foreign sugar in the British market. I do not believe I shall be at all far from the mark if I state that the whole of the subsidy that has been paid for the development of our home sugar industry has really come from the foreign producer.

But even if it were the fact that the policy I advocate, the policy of adding at most another farthing to the basic duty on foreign sugar, led to an increase of price, what would it really mean to the consumer? The price of sugar to-day is 2¼d. per pound, or a farthing more than the price in 1913. If you raised it to 2½d. per pound, that would only mean an increase of 25 per cent. on the 1913 price. The general average cost of living is, however, 40 per cent. up on 1913 prices. The general average of wages is more than 40 per cent. above 1913 wages. As compared with every other article of consumption, sugar, even if it be raised in price another farthing, would be disproportionately low. Therefore, whether we are dealing with the matter from the point of view of the consumer, or from the point of view of agriculture, which it is the deliberate policy of the Government to set on its feet, there is a perfectly clear case for dealing with this important industry in a simple and straightforward fashion. Let us protect it. Let us get away from all this make-belief and pretence of imposing an Excise levy and then giving it back again until no one knows what is being paid by the country and what amount that protection is. Let us have beet-sugar on the simple footing of an industry protected like any other. I think that it is well worth while protecting.

5.47 p.m.

Mr. LEONARD

I want to say a few words on the question of the delays that have taken place and the suggestion that we are coming to the end of the long wait. There can be no denial that for a long time some anxiety has been displayed in all parties as to what is to be the end of this question of the sugar subsidy. The Government now make a request not only for more money but for a further delay. It is right, therefore, to remind the Committee of the extraordinary delays that have already taken place. While the Minister of Agriculture has suggested to-day that we are coming near the time when the Government will display their attitude to this matter, we cannot forget that the Chancellor of the Exchequer stated in his Budget speech on the 19th April, 1932: The Government have further decided to appoint a Committee to inquire into the conditions of the United Kingdom sugar industry as a whole, including production, refining and distribution, and to ask this body to report to them before the present subsidy expires."—[OFFICIAL REPORT, 19th April, 1932; col. 1435, Vol. 264.] That announcement created great expectations, because we were informed without any qualification that the Government had decided upon this course. Notwithstanding that, it was apparently necessary to allow 15 months to elapse before the Minister of Agriculture, in reply to a question, stated that the Government had decided to introduce legislation to continue the Subsidy Act after its expiry on the 30th September, 1934. He went on to say: This decision is based on the understanding that the refining and beet-sugar manufacturing interests will co-operate in submitting as soon as possible a marketing scheme under the Agricultural Marketing Acts, and that they will be prepared to co-operate in due course with the growers of sugar beet in the promotion of a develop- ment scheme under which the operations of sugar manufacture, refining and processing may be rationalised in the interests of greater productive efficiency. He concluded by stating: The Government propose, as soon as possible, to appoint an impartial Committee to make recommendations of a long term character in harmony with the policy expressed in the Agricultural Marketing Acts."—[OFFICIAL REPORT, 27th July, 1933; col. 2774, Vol. 280.] That is a definite departure from the impression created by the statement made by the Chancellor as far back as 1932. A considerable delay has therefore taken place, and it is clear from the statement I have quoted from the Minister of Agriculture that conversations must have been indulged in with the producing interests concerned, notwithstanding the earlier promise that the inquiry would be one that was not associated with marketing. At long last we had the Greene Committee two years after the Chancellor's declaration, and we should have some explanation of the difference in the terms of reference, which was very significant. I think that the sugar marketing scheme which ultimately showed itself was not preceded by any reorganisation commission. On previous occasions a commission preceded the formulation of a scheme, but in this instance no such commission was set up.

A peculiar situation presents itself to those interested, because, simultaneously with the issue of invitations to give evidence before the Greene Committee, a public inquiry was held into the sugar marketing scheme promoted by the United Kingdom Sugar Industry Committee. The marketing scheme and this inquiry therefore were running concurrently, and it is obvious that that created difficulties for those interested properly to present their case. We should have some detailed explanation why the Government were in some way allied with the 22 companies which were promoting the scheme, the nationality of which I will not now go into, except to say that there is an old tag: In trading and commerce the fault of the Dutch Is giving too little and asking too much. I think that that sums up very well the situation that has presented itself. I feel that these two things should not have run concurrently—

Mr. ELLIOT

How does the hon. Member suggest that we could have prevented anyone using his legitimate rights under an Act which was passed by the right hon. Gentleman the Member for Swindon (Dr. Addison)?

Mr. LEONARD

I cannot say what steps would have been taken by the right hon. Gentleman to do that, but the interests could have been asked to stand aside while this inquiry was proceeding. If that were not possible, it might have been possible to have allowed the representative of the sugar marketing scheme who appeared before the Greene Committee to display some of the details of the discussion which the sugar interests had had with the Government. I happened to be present at the hearing on the occasion when that representative was pressed to give some indication of what arrangement was being discussed, and he refused to make any statement to the Public Inquiry into the sugar marketing scheme on the grounds that the conversations were confidential. Notwithstanding the confidential nature of the discussions, which he refused to display to the Public Inquiry, we find that the industry had no compunction on the 9th July, two months afterwards, in displaying the full details of those discussions in a full page advertisement in the "Times." The Public Inquiry missed the opportunity of placing the representative of the sugar marketing scheme under cross-examination. The details were given in the Press, where nobody could cross-examine. I feel that there is a legitimate complaint to be made because of that. I would have liked to hear before this to what extent the Government were involved in the suggestion of these companies to form themselves into what would virtually have been a monopoly, without any protection to the public against exploitation. It was seemingly quite within the Government's knowledge, if not with their connivance.

Now we have another request for a supplementary Estimate and a further delay. I happen, with other colleagues, to represent the Co-operative movement, which has not been unmindful of farming interests. There are plenty of illustrations to show that we have not been averse to their interests, but we have tried through the medium of the opportunities provided by public inquiries to get this question of subsidy and public interest brought into a domain where the country could readily understand where it was and where it was going. It is beyond me to understand how the Government can come forward to-day and suggest that there should be a further extension of the subsidy to the extent of £2,500,000. Recently four of the companies concerned have distributed to their shareholders no less than £2,100,000. It appears to me that if four units of the industry are in that condition, they could easily have carried on until the Government had made up their mind what they were going to do. If it he said that other companies were not so well placed, I was always led to believe from the early Debates on this matter that this was to be a great national scheme in which the farmers and everybody concerned were to be one happy family. If this big family has not been happy enough for the weaker brethren to be supported by the stronger brethren, they have had plenty of our money with which to do it, and I do not see why we should wait any longer. We are not justified in giving further public money to companies that have accumulated enormous reserves.

I agree with some of the points put by the right hon. Gentleman the Member for North Cornwall (Sir F. Acland) and some of the statements appearing in the Greene Report. It is called an impartial report, and I hope that the Government will look into it in the manner in which they looked into another impartial report. The report specifically stated that the present method was a haphazard and inequitable method of relief, and recommended its discontinuance. But even the present proposal, modified as it is, will give safeguards up to the extent of 100 per cent. of the value of the product. The reduced figure of 5s. per cwt. exceeds the market price of 4s. 6d., and even the safeguards as to a rise and fall keep the subsidy in excess of 100 per cent. of the value of the product. I am definitely opposed to the continuance of the subsidies. They have been going on sufficiently long, and if they were taken away there is, or there has been, sufficient reserve at the disposal of the industry at large in order to help those who are weak. The right hon. Gentleman the Member for Sparkbrook (Mr. Amery) talked about the farmer's budget. I do not know what farmers are getting out of it, but I know that one farmer wrote to the Press on 8th June: As I have grown part of my sugar-beet crop last season under the profit-sharing contract with the Central Sugar Company I was congratulating myself in anticipation of a share in the substantial dividends they have declared. The basis of the profit-sharing contract was that 80 per cent. of the whole net proceeds should be paid to the grower and 20 per cent. to the factory, with a guaranteed minimum of 35s. per ton for beet of 15½ per cent. sugar content. Your report states that the Central Sugar Company has declared a dividend of 15 per cent., tax free, and that in addition the company distributed to its shareholders in February last a capital bonus of three shares for every five held. Yet the announcement I received a few days ago from the factory with regard to my bonus as a grower under the profit-sharing contract informs me that I am entitled to the paltry sum of 6.401d. per ton on my crop. So that there appears to be some leeway to be made up before farmers receive justice from the subsidy. Because of that, we feel that the attitude taken by this side of the House is justified.

My final point is that I have always had a great regard for the desire which is felt that this Empire should have a thread of common interest running through it. The possibilities of the production of sugar within the Empire have been referred to. There are parts of the Empire where its production would not be so uneconomic as it is here, where it could be grown under natural conditions with much greater ease. In that way we should establish a bond of brotherhood within the Empire and be doing something of special benefit to certain parts of the Empire. I feel that the Government have not treated either the House or the country fairly in keeping us waiting so long as they have for a complete policy.

6.16 p.m.

Marquess of TITCHFIELD

I welcome this debate for two reasons, first because you, Sir Dennis, have allowed us to discuss this question on very broad lines, and, secondly, because I hope that it will dispose of the grave anxiety which the industry feels at the present time. I was glad to hear from my right hon. Friend the Minister that he will announce the long-term policy of the Government before we rise in July. The proposal before us is only the short-term policy, perhaps I may call it the gap policy, and without doubt there will be great anxiety among those connected with the sugar beet industry until my right hon. Friend has announced the long-term policy. Anxiety is a bad thing in any industry, because when the people are anxious the industry in which they are employed may easily become inefficient. The right hon. Member for Swindon (Dr. Addison) poked fun yesterday and to-day at my right hon. Friend for having a stop-gap policy for meat as well as for sugar beet. I am sure he will not mind me saying that that is a case of the pot calling the kettle black. He was a distinguished member of the late Government. That Government set up an absolute record in the appointment of royal commissions and committees; during their two years I think they appointed something like 30 or 40 to advise them what to do; but the peculiar thing was that, having appointed those commissions and committees of wise people to advise them what to do, when they got their advice they did nothing at all.

I have in my constituency the first sugar beet factory to be built in this country, I believe, and I think it is no exaggeration to say that that factory has been an absolute life-line to the farmers living in the neighbourhood. It has saved many of those farmers from bankruptcy. It has provided an alternative crop that pays the farmers, and, in addition, the growing of sugar beet benefits the land on which it is raised. If we read the Greene Report we find the same story from every part of the country where beet sugar factories have been established. We read that the sugar beet industry since its inception has employed about 85,000 people on farms and in factories—a great deal of it part-time employment, I admit; but in difficult times an industry which can employ 85,000 men is one which it is well worth while to keep in being. The northern part of my constituency is mostly devoted to mines, and for many years past the factory in my constituency has placed large orders with local collieries, which have proved most helpful in providing employment for the miners. The Greene Report states that the sugar beet industry has consumed about 3,000,000 tons of coke and coal, and has added about 35,000,000 tons of freightage to rail and road transport. Much of that freight has been carried by rail and that has given a good deal of employment to railwaymen and miners.

I am one of those who believe in land settlement, and there is no doubt that the sugar beet industry is peculiarly suitable to the small farmer. He gets from it a quick return and a guaranteed payment, and his land is greatly improved by growing sugar beet, and if he has cattle he also secures a valuable fattening food. The Government are planning schemes of land settlement in Durham and in the other special areas, and we all pray that those schemes will be a success, but let us be quite honest with ourselves. Although I welcome those schemes of land settlement I feel that they are experiments—experiments well worth carrying out—and we must be careful that while we are putting a few men from Durham and the other special areas on to the land in an experimental way, we do not take tens of thousands of men off the land in those districts where the sugar beet industry has been a proved success. To do that would be colossal folly. It is said by those who do not understand that if the sugar beet industry were allowed to pass out, the farmer could grow alternative crops. The truth is that there are no alternative crops which pay, and which he could grow in the soil in which he raises sugar beet.

There is one word I must say on what is the most important factor in the whole question. Large sums have been spent on the industry in the last 11 years, but I am certain that if we allow the industry to lapse we shall lose far more than we shall gain. As my hon. Friend the Member for St. Rollox (Mr. Leonard) has said, the factories have made some goodish profits in the last 10 years. Among my hon. Friends opposite there is an idea that it is really wicked for anyone outside the co-operative societies to make a profit at all. I welcome the fact that the beet sugar factories have made profits, although I have no money in them. When I see a company making money I feel that it is a company which is an asset to this country, as these beet sugar factories have been. Hon. Members may say that the factories have been making too much profit, but that is not really their fault; it is the fault of the position in which they found themselves in the last 10 years. It cost a lot of money to put up the factories and they had only 10 years in which to make any profit, and naturally they went while the going was good; but if we can get a really long-term policy I believe it will be possible to arrange that less profits will be made by the factories and more benefits will go to the farmers and the farm labourers. We shall never achieve that, however, without a really long-term policy.

The Greene Report suggests that the machinery of the long-term scheme should be on the lines of the machinery under the Wheat Act. Wherever one goes in the countryside every farmer says that the Wheat Act has been a very successful one indeed. It has been quite the best thing that my right hon. Friend has done for the farmers, and I should like to see the sugar beet scheme run on somewhat the same lines as the Wheat Act. I believe it could be made successful in that way. Finally, I believe that this industry is one which is well worth carrying on and which can be carried on, as the right hon. Member for Sparkbrook (Mr. Amery) said, by a small tariff, a straight tariff, on all sugar coming into the country. The industry ought to be supported, and I would ask all my colleagues to support this Resolution, and at the same time to urge my right hon. Friend to bring forward his long-term policy at the earliest opportunity. It is only under a long-term policy that we can carry on this industry, which I am certain is one which is absolutely essential to the prosperity and the health of this country.

6.20 p.m.

Colonel Sir EDWARD RUGGLES-BRISE

I entirely endorse all that has fallen from my noble Friend the Member for Newark (Marquess of Titchfield). Of all the speeches to which I have listened this afternoon the one which has really been the most valuable, if I may make so bold as to say so, is that of my right hon. Friend the Member for Spark-brook (Mr. Amery), and for this reason, that he alone really made an endeavour to pierce the gloom and fog which surround not merely the minds of the public outside, but unhappily the minds of a great many hon. Members inside this House. He distinctly showed that there has been great misapprehension as to the actual amount of money provided by the taxpayer for the support of the sugar beet industry. He alluded to the fact that the Minister, in introducing this Estimate this afternoon, did omit to make any reference to the amount of the excise.

In reply to a question put to him earlier in the day by the hon. Member for East Fife (Mr. H. Stewart) he said that the amount of subsidy to be found under the Estimate we are now discussing for the coming year was £2,850,000. In reply to a question as to the figure received by the Exchequer from the Excise Duties, he stated that it would be in the neighbourhood of £2,280,000—I am leaving out the odd pounds. While the Committee are being asked to vote from the Exchequer a sum which appears to be nearly £3,000,000, the net amount that the Exchequer will, in fact, be asked to find, after deducting the Excise, is quite small, and is something like £570,000.

The taxpayer will not have to find that sum in the direct taxation which will be imposed upon him, because the amount of revenue which will accrue to the Exchequer in the ordinary way of duty on foreign sugar and, allowing for the preference, on Empire sugar, will amount to at least ten times such a sum. It may be suggested that the consumer will be asked to pay indirect taxation, thereby making sugar very much dearer, but does any hon. Member suggest that sugar at 2¼ per lb. is a very dear commodity? I cannot think that any hon. Member would dare to make such an assertion, in view of the fact that before the British Sugar (Subsidy) Act was passed in 1925, the price of sugar to the housewife was over 5d. per lb. I hope, therefore, that we shall not loosely bandy about great figures running into tens of millions of pounds as representing the truth of the amount of subsidy which the beet-sugar industry has received in the past 11 years.

I would like to refer to two remarks made by the right hon. Gentleman the Member for North Cornwall (Sir F. Acland). He said that any industry which is not directly self-supporting should be given up. Let me refer him to paragraph 34 of the Greene Report: To-day, therefore, practically the only countries which are producing sugar without State assistance in one form or another are Java, Peru and Santo Domingo, and these together provide not more than five per cent. of the world's current output. If the theory of the right hon. Gentleman the Member for North Cornwall were put into practice, 95 per cent. of the beet-sugar producing industries of the world ought to go out of business. What then about this essential foodstuff for the housewife? What would she have to pay for the luxury article which sugar would then become? The theory is absurd. The other observation which fell from the right hon. Gentleman was that, instead of fostering a struggling industry, we should encourage the expansion of sugar-growing in the Empire. The answer is two-fold. First, we are already taking from the Empire the whole of the surplus sugar they can sell us, and, secondly, such expansion cannot take place without State assistance, because nowhere in the Empire is sugar being produced except by some form of State assistance.

I would now direct the attention of the Committee to one or two broad considerations in support of the continuance of the beet-sugar industry in this country. The first is that sugar is a foodstuff of universal consumption, found in every household, however humble, throughout the length and breadth of the land. On that primary ground it surely ought, if possible, to be grown in this country. Secondly, it is definitely proved, without challenge, that we can grow this valuable, primary and necessary foodstuff on the soil of England. Last year, we grew an average of over 10 tons of sugar-beet per acre, with a sugar content of over 17 per cent. per ton. From each acre under sugar-beet last season, we extracted nearly 1¾ tons of sugar. If we can do that, why should anyone suggest that we should give up the industry? As regards the yield per acre or the percentage of sugar per ton, it is proved that we have reached the level of the best producing Continental countries. The poor old British farmer, who has had the mud flung in his face from so many quarters in this House in the past as being out-of-date and only fit to be put out of business, has shown that, with only 10 year's experience, he has been able to reach the level of the best Continental producers who have had not less than 100 years' experience of sugar-beet growing.

Not merely has the British industry justified its existence from a national as well as from an agricultural point of view, but it has justified itself as an employment-giving industry. The production of sugar in England last year kept 18 factories going full blast, through the whole of a long campaign. Is that not worth something? It must be. The sugar which resulted from the operation of those factories provided this country with no less than 30 per cent. of its total consumption of sugar. What was the result of that? Nearly one-third of the money which this country had to spend in sugar was kept at home. How has it been spent? Where did that money go which the consumer spent on sugar? Most of it provided work and wages for our own people. It is wrong to suggest that this industry should be reduced by even one acre, when the proof of its many virtues and advantages are so positive.

Let us not be unmindful of the great difficulties with which this country was faced some four years ago, in trying to correct its adverse trade balance. Every new industry which has been proved as great a success as the beet-sugar industry, which means that money for an essential commodity is kept here instead of being sent abroad, helps to fulfil one of the main objects which the National Government were elected to fulfil, namely, correcting, at least in part, the adverse trade balance. There is no question of the Empire suffering because of the establishment of a home sugar industry, since we take all that they can afford to send us. They send us only 35 per cent. of our total consumption. The cut in our sugar supplies has not been made against the Dominions, but at the expense of the foreigner. Incidentally, the countries who have had to suffer a reduction in the amount of sugar sent to this country are mainly Cuba and Java, and neither of them is in the habit of buying any appreciable amount of goods from Great Britain.

The effect upon employment in this country has been very real. Very much more than the money which we are asked to vote this afternoon will definitely go out in work and wages to those who produce sugar in the fields and in the factories. The workers are definitely advantaged by the continuance of the industry. From the speech of the right hon. Gentleman the Member for Swindon (Dr. Addison) it is clear that he is under no delusion as to the importance of that aspect of the matter. He sees quite well that the reduction or the decay of the beet-sugar industry would create appalling dislocation in the labour market, and that point is appreciated in full in every quarter of the House. If it be said that the beet-sugar industry is merely a help to the larger farmers, the reply is that nothing can be further from the truth. While the larger farmers might have been assisted by the growing of sugar-beet, the smallholder has thriven in a much larger proportion than the larger farmer. County councils who have smallholding estates upon which sugar-beet is grown, are in considerable alarm lest the industry should be allowed to lapse, because most of their tenants would be unable to carry on their small-holdings.

We are producing wealth from the soil, and whenever that is done there is a gain to the whole of the nation. National wealth is definitely added to, and the reactions which this industry has upon urban industries make the sum total of the benefits of the sugar industry very great indeed. We must remember the coal, limestone and chemicals consumed by the beet-sugar industry in one year, and the work done by the railways and the haulage contractors. We must consider the total turnover of the producer on the farm, and of the factories, railways and the ancillary trades which are affected. When we consider all the money that is set in motion through the extraction of sugar-beet from the soil, we run into very large figures, beside which those mentioned as the cost of the subsidy pale into insignificance. It is, therefore, the duty of every hon. Member to support the beet-sugar industry.

This afternoon the Minister has promised us an early decision in regard to the future. I would beg that there shall be no niggardliness in that decision. I am not asking for a large subsidy: on the contrary, I trust that the subsidy as such will completely disappear with the Excise, and that so long as the price of world sugar remains at an utterly uneconomic level, it will be adjusted in the ordinary way—I agree with my right hon. Friend the Member for Sparkbrook—by means of a tariff. I hope that the National Government will not treat the industry in a niggardly spirit with a view to closing down certain factories, or anything of that sort. On the other hand, I think there is such justification for this industry that the National Government, if it takes a national view of the subject, will make its plans so that there may be an increase rather than a decrease in the number of sugar factories in this country.

6.30 p.m.

Mr. HOROBIN

I had not, when this Debate began, intended to trouble the Committee with any observations on the subject, and I rise now to deal with two points only. In the first place, an attempt was made by the right hon. Gentleman the Member for Sparkbrook (Mr. Amery), which at first I thought to be a joke, but, as it was taken seriously by the last speaker, I think it would be just as well to deal with it. The right hon. Gentleman attempted to minimise the extent of the persistence of this industry—for the sake of argument we must go on calling it an industry, but it is really a charitable endowment. If my right hon. Friend's argument meant anything, it meant this, that an Excise is not a tax. I would put this very simple question to the Committee: If, in the case of the brewing industry, the whole of the proceeds of the Excise on beer were handed over to the brewers, would that industry be subsidised or not? That is exactly what is happening in the case of the beet sugar industry. It is entirely preposterous to suggest that, because there is—

Mr. AMERY

May I take another simple case?

Mr. HOROBIN

Take that one.

Mr. AMERY

I will take the other first. If an Excise equal to the duty were collected upon iron and steel, and given back to the iron and steel industry, would it be said that the iron and steel industry was subsidised? In the case of beer, if the Excise Duty were handed back to the industry, it would be a protected industry, but not a subsidised industry. It might not be desirable to protect it to that extent, but certainly a remission of the Excise Duty on beer would not constitute a subsidy.

Mr. HOROBIN

That is not the question; my right hon. Friend cannot get away with it like that. My question was quite specific, and I am not altogether surprised that he did not answer it.

Mr. AMERY

I answered it quite clearly. The answer is that to remit or give back the Excise is not giving a subsidy.

Mr. HOROBIN

The situation is not whether, if there were no Excise on beer, beer would be subsidised. I only wish there were no Excise on beer; I am entirely with my right hon. Friend there. But my right hon. Friend attempts to show—I do not think that the Government themselves will attempt to ride off on his argument—that, because a considerable amount of the money used to support the industry is raised by an Excise and handed over as a subsidy, it does not really constitute a subsidy.

Mr. MACQUISTEN

Supposing that the Government took the hon. Member's income from him, and then gave it back to him, would he be subsidised?

Mr. HOROBIN

That is no analogy whatever, because the Excise is not paid by the factories; it is paid by the consumers of sugar, and the Excise upon sugar is a tax upon sugar. I am certain that the Minister of Agriculture will be in complete agreement with me on this point, because the Government have not attempted, and I think that nobody, until the right hon. Gentleman the Member for Sparkbrook intervened in this long series of Debates, has attempted to deny that the figure which represents the support given to the industry must be taken to include the subsidy which is given back to the factories after having been raised by the Excise on sugar. It would be equally a subsidy if it were raised by an Excise on beer, or on any other commodity produced in this country. The figures given in the Greene Report, and the figures hitherto given in all informed discussion on this subject, stand. They show that from £40,000,000 to £50,000,000 of public money has been given to this industry. For the moment I am not arguing whether that is desirable or not, but these are the facts, and any attempt by supporters of this subsidy to pretend that it does not exist, or that it is really very tiny, must not be allowed to confuse the issue.

The other point that I wish to deal with arises out of what was almost an invitation from the Minister of Agriculture. I should not like it ever to be said in the future that in this Debate it had been said that the Government were considering their long-term policy, and would be guided, or at any rate influenced, by the views expressed in the Debate, and that, as no views of any sort have been expressed except a chorus of desire for public money, they felt that the House had justified them in continuing in one form or another to distribute it. Therefore, I do not think it will be beside the point if, as one of those who have consistently opposed this subsidy, I make a few observations in response to that invitation. I do not propose to argue the general merits of the Beet Sugar Subsidy at all at this stage; I prefer merely to remind the Committee of some words uttered, perhaps incautiously, by one of the applicants for this money before Mr. Scholefield's inquiry. I have already published them in a recent book but I think they cannot be too often repeated. The following are some questions and answers before Mr. Scholefield's inquiry into the Sugar Marketing Scheme: Question: You know that the Government aid to sugar beet production in this country amounts to £42,000,000? Answer: Yes. Question: And you do not see any prospect of the Chichester factory being able to continue unless a similar rate of help is forthcoming? Answer: Yes. Question: Do you want to get your factory—I am not objecting to it—into the scheme? Answer: Yes. Question: So that the farmers and growers of Sussex may share in the plunder of the taxpayer? Answer: Yes. Nothing that I can say can add very much to that. I associate myself with one observation which fell from the right hon. Gentleman the Member for Swindon (Dr. Addison). I believe that the whole discussion of this matter has been considerably influenced by what—it is no use disguising it—is a justified feeling in the country that, whatever the merits of the assistance to the agriculutral growers of beet may or may not be, it has in fact attained the dimensions of an exceedingly unpleasant public scandal, when we take into account the close connection of politicians with this subsidy, the nationality of a considerable number of the beneficiaries in the factories, the enormous profits, and the enormous sums put to reserve by a considerable number of these factories. The truth is, and I believe that a great many of the agricultural Members will agree with me in this, that, if we had to spend all over again nearly £50,000,000 for the benefit of agri- culture, this is about the last way in which we should have spent it.

The point that I particularly wish to put to my right hon. Friend is this: It apears to me that two separate efforts have been made to meet that rapidly growing public disgust in a way which has at least very considerable disadvantages. A great deal of the troubles of the world in recent years appear to many of us to follow from the fact that we are always, in politics and in Governments, endeavouring to be, if I may say so without offence, too clever, too ingenious. To that extent I agree with my right hon. Friend the Member for Sparkbrook. May I remind the Committee of what was the first reaction of the Government when it became evident that they were wanting to get rid of the subsidy? They enleavoured by exceedingly devious ways, which I will not weary the Committee by going into in great detail—they were all dragged out at Mr. Scholefield's inquiry—to set up, under the procedure of the Agricultural Marketing Act, a most extraordinary Sugar Marketing Scheme, a scheme so extraordinary that, the moment it began to be examined in public, it became obvious that the country simply would not tolerate it. I think we may take it that it has seen its last day. Faced with that position, and faced with the desire on the part of the Government to discontinue calling this a subsidy because the country does not like it, I very much fear lest we may be pushed into something which is only a degree less objectionable. Those who have read, as I am sure every Member of the House has, the Greene Committee's Report, will remember that, although they said that they thought the whole subsidy ought to come to an end, nevertheless, as they had been asked to produce a scheme on the assumption that it did not come to an end, they proceeded to endeavour to work one out, and I believe that, if hon. Members consider that scheme carefully, they will be as determined that nothing like it should get on to the Statute Book as we should all, I hope, have been determined that the happily defunct Sugar Marketing Scheme should never see the light. I am glad to see that on this I have the agreement of my right hon. Friend the Member for Sparkbrook. I will read one sentence from the Greene Committee's Report: We have indicated that, in order to meet the numerous complications of the situation, we consider that any plan of reorganisation designed to carry on the industry on a more or less permanent footing must itself be extremely complicated, and must contain provisions to empower a central authority to exercise control in the public interest over the monopoly which we feel must be a feature of any such plan. We have thus set out a far-reaching system of control, which to a greater or less degree affects the entire industry. I intervene in this debate from quite a different point of view from that of most hon. Members opposite. My main desire is to urge upon the Minister that, if this support must be continued, we should not endeavour to burke the issue. Do not let us endeavour to hide from the country what we are doing; do not let us endeavour to build up some complicated monopoly, some extremely complicated control scheme, calling it by quite a different name and hiding it from the country. If we decide against the Report of the Greene Committee, and against what, in my humble opinion, is the clear weight of evidence—if we decide that it is worth the country's while to spend in some form or other £2,000,000, £3,000,000, £4,000,000, £5,000,000, £6,000,000 or £7,000,000—at present it over £7,000,000—in growing in this country dear sugar which could be grown much more cheaply in our own Dominions, at least let us put that money, as it is put now, into our annual accounts, and pay it as a subsidy, so that we know what we are doing. Do not let us endeavour to pretend that we are not paying £7,000,000 in order to grow beet sugar, so that we may get it off the Budget and hide it by a levy or some ingenious machinery of that nature, so that neither the taxpayer nor the consumer knows what is happening. Experience with other marketing schemes shows clearly that we are rapidly turning towards straightforward tariffs; and it appears, from recent speeches of the Prime Minister and the Dominions Secretary, that the levy and the tariff are the order of the day. If we have to choose between these methods and the strict quota marketing scheme, I am heartily in favour of the tariff. But, if we are going to endeavour to avoid being honest with ourselves and the country, and to get this £7,000,000 out of the pockets of the consumer and the taxpayer—and it has to come out of their pockets—without letting them know, we shall only find that we have built up some dangerous bureaucratic monopoly, interfering with the great industry of sugar refining and doing a great deal more harm than we should do by being frank about the matter. If we decide—I hope we shall not—to continue to spend this money, and if, when we have to foot the bill, it appears, as it has hitherto appeared, in the Budget, the country will then be able to make up its mind and will know exactly what it costs, without any further complications of any sort.

6.45 p.m.

Mr. J. JONES

I have listened to the Debate this afternoon with a great amount of interest, and as I sat and listened I was reminded of Sydney Smith, who once said that most people have a marvellous capacity for exhausting the possibilities of error. They will try 99 ways that are wrong before they accidentally find the one that is right. We have heard speeches all delivered from the standpoint of the national interest, but nearly all of them very much biased in the personal or vested interest. If this industry is in such a condition that it cannot live upon its own legs, and cannot maintain itself in the ordinary way of industrial life, then it is not a question of subsidising by spoon-feeding it with money out of the National Treasury, but it should be a matter of taking over the industry and working it nationally in the interests of all people. It might be called Socialism, or something approaching it, and I do not suppose that there are many in this House as it is at present constituted who would subscribe to that doctrine. As far as we on these benches are concerned, that would not matter. We are used to people who do not agree with us. It is that which makes us so affable. The more opposition I encounter, the better I like it, and I feel happy when I am in a row. Frankly, I am one of those who say, "If you will not give us what we want, we will take all we can get."

This industry is in a bad condition. I remember a time in my experience when the labourers worked in the sugar industry of this country for firms that are now very famous, such as Tate and Lyle, and Fairrie and others in Liverpool, Scotland and London, for 18s. a week under terrible conditions, largely due to the fact that they had to compete against coolie labour not merely from outside the Empire but from inside it. What becomes of those who talk about the Empire? They imagine that the Empire is circumscribed by the River Thames. But, as a matter of fact, they know that we have slavery in the British Empire. There are Chinese coolies working in the sugar plantations of Queensland.

Mr. MACQUISTEN

No, not now. I think that has all been dropped.

Mr. JONES

It has not been done away with entirely, and the conditions under which people work there are disgraceful.

Mr. MACQUISTEN

They pay high wages now, and sugar is very dear there.

Mr. JONES

We know that there are parts of the British Empire to-day where workers have to labour under disgraceful conditions in the production of sugar. What about the East African sugar plantations, and about West Africa and the West Indies? You know as well as we do that it is semi-slavery, and that the conditions under which the people work are a disgrace. This is not the kind of thing against which we want our workers to have to compete in the factories of this country. As far as I am concerned, whether it is a question of free trade or protection, I shall not vote for going back to those conditions, or support a system that might re-introduce them. I am opposed to the subsidy business. I believe in the public ownership of all public necessities, and in the organisation of the industries in the national interest on the basis of production for use as against production for profit. Therefore, all this talk about how much the farmer and the individual producer may get leaves me absolutely cold. As long as we have to work our industrial system for profit, the workers will always be the sufferers, and we say that that system cannot continue. Subsidising industry. Who are you subsidising? I can speak for my own division of Silvertown. A large number of the people making money out of it have never seen Silvertown, and do not know where it is. They do not live anywhere near it, or even live in London, but they get their regular dividend cheques of 25 per cent., with a bonus occasionally on top of it. They have no more to do with the production of sugar than they have with the provision of fountains in hell, and yet they draw more money from the sugar factory in Silver-town than the workers employed in them.

Hon. Members opposite can do what they like with this matter. It is their jib, not ours. We are only a handful of Members in this House. They may argue about the relative merits of subsidies and no subsidies, but we say that industries ought to be organised for the good of all the people, and not for the advantage of shareholders and other people who speculate not in money, but in the lives and welfare of the people. I do not know what may happen, or what ought to happen, but if it is a matter of trying to preserve an industry and giving a chance to people to find employment, I do not care which you vote, I know who will pay at the finish. The man who will pay will he poor old Phil Garlic, the man who pays for everything. Whatever you do about it, and however you ring the changes on the situation, the worker at the finish will have to pay for the lot. As has been said, the King rules over all, the parson prays for all, the soldier fights for all, but the worker pays for all.

6.53 p.m.

Mr. HENDERSON STEWART

The hon. Member for Central Southwark (Mr. Horobin) always speaks with great glibness on these occasions of attempts to obtain "something from the public purse," "plundering the taxpayer," and "a public scandal." I do not know what the hon. Member does in his spare time, but he seems to be burrowing into all the shady transactions of the City and supposes, on account of his discoveries, that what happens there, happens and must happen, elsewhere. The hon. Member objects to the State initiating or supporting any industry in any circumstances in which private individuals cannot support themselves. He is opposed to marketing schemes of all descriptions and to subsidies of all kinds. It is a very attractive theory, and it reads very well in a spirited pamphlet, but if the hon. Member had the responsibility of representing an agricultural division, and what is still more important, had the responsibility of the Minister of Agriculture, I think he would change his views. He would know, for example, that but for the subsidy for livestock we should to-day have had thousands of farmers bankrupt. But for the Milk Scheme, with all its imperfections—and I have criticised it as much as most people—I cannot imagine the mess in which we should have been at the present time. But for the Wheat Subsidy and the many other unusual methods of State assistance, the hon. Gentleman and his constituents would not have been in as fortunate a position as they are at the present time.

He challenged us at the end of his speech to be perfectly frank and honest with the country in future about this particular form of State support. He wants us to say frankly that it has cost £50,000,000 up to now, and that it is going to cost £5,000,000, £6,000,000 or £7,000,000 this year, and we ought to tell the country. I accept the challenge of the hon. Member at once. The question has been mentioned twice already, but I beg leave of the Committee to deal with the point of finance of the hon. Gentleman in slightly more detail. What he has said is an echo of charges which have fallen from the lips of the right hon. Gentleman the Member for Darwen (Sir H. Samuel) on many occasions, and I am very glad of the opportunity to reply to the fantastic figures which have been mentioned. According to the hon. Gentleman £47,000,000 has been spent—he was careful to use the word "spent"—upon the beet-sugar subsidy in the last 11 years, and this year there is to be an additional £5,000,000, that is to say, £52,000,000. The right hon. Gentleman the Member for Darwen has used that massive figure, and dividing it over the production of the industry has produced pictures for us that would make us ashamed of our country were they indeed real. If the figures of the hon. Member were the actual figures, I should not be here to defend this subsidy as I am tonight. Like other hon. Members of this House, I disliked the subsidy when it was introduced, and although I was not then in this Chamber, I did what I could outside to speak against it. But I submit to the Committee and to the hon. Gentleman that this thing has been established so long that it has taken root in the soil, and has had built round it a whole social structure. The Noble Lady the Member for the Sutton Division of Plymouth (Viscountess Astor) will understand when I say that in my Division a whole set of houses, with the whole of the social services surrounding them—some of the services for which the Noble Lady pleads so eloquently—the whole structure has been built up around that subsidy, and to attempt to destroy it now is sheer madness.

I want to deal with the figure of costs. I contend that the figures of £40,000,000, £50,000,000 or £60,000,000 are quite fantastic. I put a question to the Minister to-day, and from the answer he gave it was obvious that it is not one figure you must consider as the cost of the subsidy, but three figures. There is the subsidy itself, there is what is called in some of the returns "duty abatement," and there is the Excise Duty paid by the industry. There is no difficulty at all in understanding what the subsidy is. For the last 11 years it has amounted to £34,500,000, and this year it is to be £2,750,000. But there is a great misunderstanding throughout the country, and, I believe, still in this House, about the other two items, Excise Duty and duty abatement. In order to arrive at that figure of £47,000,000 it is necessary, and it has been necessary for the hon. Member, to add to the cash figure of the subsidy paid an entirely theoretical figure which is called "duty abatement." I call it a theoretical figure because it is the production of Treasury accountants. It is not a cash figure; it is a figure of book-keeping.

I will tell the Committee how it is arrived at. The Treasury calculator says that if all sugar produced in Great Britain had been imported from foreign countries, the Customs revenue accruing to the Treasury would have been, shall we say, X thousand pounds. Because that amount of sugar did not come in from abroad, therefore the Treasury loses X thousand pounds. To make up for that loss, the Treasury imposes an Excise Duty upon the industry. That Excise Duty, which the industry has to pay back to the Treasury, in the last 11 years has amounted to over £15,000,000. This year it is going to amount to £2,280,000. Even that £15,000,000 was not enough to make up the whole of the deficiency of which I have just spoken. The balance is what is called "duty abatement," and that duty abatement has amounted in the last 11 years to £13,350,000. This year the duty abatement will amount to £2,900,000. The right hon. Gentleman the Member for Darwen adds that figure of duty abatement—a purely theoretical, book-keeping figure—to the cash figure of the subsidy, and he gets £47,000,000.

My first charge, therefore, is this: I charge him with adding to the subsidy a figure which he has no right to add. I am going to charge him in a minute with failing to subtract a figure which he ought to have subtracted. I make two observations upon this duty abatement—this theory that you must assume a certain amount of money is lost because imports were not coming in from abroad. I cannot see the justification for basing calculations upon foreign imports. Why not base the calculations on Dominion imports of sugar, or upon Colonial imports of sugar? Half the sugar we get in this country comes from the Empire, and it pays considerably less duty than foreign sugar. If these figures of the right hon. Gentleman the Member for Darwen and the hon. Member for Central Southwark were based on Colonial imports—and surely this country is part of the Empire—then the right hon. Gentleman's theoretical figure would be reduced from £13,000,000 to something like £6,000,000 or £7,000,000. I make this further observation: I cannot, as a practical man, see any justification for using this theoretical figure at all. This rigmarole of Excise Duty and duty abatement, this method of paying in with one hand and taking out with the other from the same fund might have been all right in the days of Free Trade, when the bulk of our import duties were for revenue purposes. It pleased Lord Snowden, who introduced this rather complicated system, because he was able by that means to crush an hon. Gentleman who interrupted with a whisper "That is Protection." It is a useful thing to regard duties upon sugar as revenue duties. They have always been so regarded, and I suppose from a Treasury point of view it is right. But the fiscal conditions of this country have changed considerably since 1924 and, indeed, since 1932. We are no longer a Free Trade country. Broadly speaking, everything that comes from abroad—certainly most of the foodstuffs—is taxed, and the proceeds of these taxes go to swell the same Treasury fund that is served by these sugar duties.

From the practical point of view of the sugar beet industry at home, the duties imposed on overseas supplies of sugar are no different, from the farmer's point of view, from taxes paid on imported potatoes, tomatoes, motor cars, or steel. Whatever may have been the original form of these Sugar Duties in relation to the home sugar industry, they have become in reality part and parcel of our general protectionist system. I am not here to argue the pros and cons of Protection. That is not the business of this Debate. All I ask is that the Committee will recognise, what is a fact, that these Sugar Duties are now a part of our protectionist system. That being so, why should you debit the beet sugar industry at home with book-keeping liabilities with which you do not debit other industries? You do not say, for example, that because over £100,000,000 worth of motor cars are manufactured in this country behind a tariff wall, therefore the motor industry costs the State £30,000,000 or £40,000,000 a year. The hon. Gentleman does not say that, nor does he say that because we have given protection to iron and steel, behind which we are producing something like £250,000,000 worth of manufactured steel, therefore the Treasury is losing £80,000,000 a year in Customs revenue. These are absurd figures. No one suggests using that kind of argument. Then why use it for sugar beet?

I go to a farm in my constituency and find three fields—a 10-acre field of wheat, next door a 10-acre field of potatoes, and next door to that, shall we say, a six-acre field of sugar beet. They are all on the same farm; they are all the same land, all worked by the same men, with the same machinery. The potatoes are allowed to grow without any liabilities of charges of scandalous costs, from the hon. Member for Central Southwark, and the wheat may rise, but sugar beet cannot be planted, even, without incurring the liability of £2,000,000 of Excise Duty and the additional charge on the ledger of the hon. Member of £3,000,000 duty abatement. Does not that seem absurd? It certainly seems absurd to practical farmers, and it is no wonder, when you use these fantastic methods of boosting up the figures, that you are able to scare and terrify the country. The truth is that what anxiety the country feels now is due very largely to these rash statements made by hon. Members like the Member for Central Southwark. If the finance of sugar beet is examined by the same standard of net cash cost to the State as is applied to other industries, we find a very different picture. The total sum paid by the State in subsidies from the beginning of the subsidy to this year is £34,500,000, but the industry itself has paid back in Excise Duty in cash £15,100,000, so that instead of these accountants' monumental figures of £47,000,000, the maximum payment by the taxpayer has been only £19,000,000 in the last 11 years. This year's comparable figures amount, not to £7,000,000, but to less than £500,000. It is a very different problem that the country has to face when it realises that these are the real facts of the situation. We have to decide in this Committee whether it is worth while giving £500,000 to the home beet-sugar industry for the next year to keep it going. It is the proposal of some hon. Members, I understand, to vote against this extension of subsidy. It is certainly the view of some hon. Members that the whole idea of this subsidy is bad, and that it ought to be abolished.

Mr. MACQUISTEN

If the industry employs 40,000 people, would not the dole at £1 a week be £2,000,000, which we do not have to pay?

Mr. ANEURIN BEVAN

Leaving £1,500,000 actually to the good.

Mr. STEWART

I would like to reply to the hon. Member in a slightly different way. I understand it is the policy of some hon. Members in the Liberal party, and certainly it is the policy of the Labour party, to use public funds for great works of national development. The hon. Member says that some 40,000 people are given employment. Is there any scheme of which Members of the Committee can think which for £500,000 can give permanent employment to 40,000 people? That is the real problem. I took some part in gathering together information on proposals that were put forward a year or two ago, and I remember being amazed at the very small numbers of men who can be employed for an expenditure of £1,000,000 or more; and here for £500,000 you are giving work to at least 40,000 men and, according to one Member of the Commission, something approaching 80,000 men. Often charges are flung at the Government in respect of continued unemployment, and it is stated that great schemes of public works are wanted. If these proposals are real proposals, and hon. Members are sincere about them, then I cannot understand what justification they have for voting against the continuance of this industry.

I finish on this note: On Saturday, in my constituency, there gathered at Coupar one of the largest meetings that has ever been known in that town. Men came not only from all parts of Scotland and the far north, but from the north and south of England. There were gathered there something in the region of 1,000 farmers and farm workers, townspeople, representatives of local authorities, or railway companies, the mines and other interests—a great meeting of people making a livelihood in a rural and agricultural district. That great meeting pledged itself to support the continuance of this subsidy. Most of them do not gain very much out of it; there might be a halfpenny or two for odd men there, but that representative meeting expressed the view that in these difficult times it would be folly—criminal almost—to end this measure of State assistance. I was not one of those who liked this subsidy when it was started, but as a practical man I must recognise what the Minister recognised in a very fair and practical speech at the beginning of the evening—that is, you have created a new enterprise, and it is the State's responsibility to maintain that enterprise.

7.17 p.m.

Sir H. SAMUEL

The House of Commons is having yet another interim Debate on the beet-sugar subsidy, and the Minister of Agriculture has made what may be described as an interim speech. He said nothing on the merits either of continuance or discontinuance of the subsidy. The whole matter is still—to use the sacred phrase—under consideration. The subsidy was first begun in 1924, and was for a statutory period of 10 years, terminating, therefore, in 1934. The right hon. Member for Swindon (Dr. Addison) said that I and some of my colleagues were responsible for the continuance of the subsidy for the reason that we were Members of the Government in 1932, and the subsidy was being continued by that administration. I would point out to him, in the first place, that the question did not arise in 1932. The Act was on the Statute Book, and there was the pledge to the factories and to all those who had provided funds for their erection that it should continue at a certain scale until 1934. Secondly, when we were in the Government the Chancellor of the Exchequer in his Budget speech in 1932 gave a pledge that the whole matter should be thoroughly investigated by an impartial tribunal which would report in time for Parliament to have all the facts before it when the subsidy came to an end in 1934. I think, therefore, my right hon. Friend will agree that his accusation was ill-founded and that my reply is complete. Possibly he may feel disposed now or on some future occasion to withdraw it. Certainly it has no substance.

But the Government have been continually delaying this matter. The promise was made in 1932. No Committee was appointed in that year. No Committee was appointed in the next year, and in March, 1934, the Minister of Agriculture used this language. He said: The negotiations with which the Government were concerned, first, in connection with the Lausanne discussions and subsequently with the Ottawa Agreements, precluded the possibility of personal attention being given by the Chancellor of the Exchequer and other Ministers to the problem of the beet-sugar subsidy."—[OFFICIAL REPORT, 6th March, 1934; col. 1760, Vol. 286.] Ministers were busy day after day, hour after hour, with Lausanne and Ottawa, and this matter had to be postponed until some other time.

Mr. ELLIOT

The right hon. Gentleman was a Member of that Cabinet when I was not. It might have been more valuable had he made his protest inside the Cabinet rather than to me when he was outside.

Sir H. SAMUEL

We resigned a very few months after that Budget statement was made, but my views on the matter were very well known, and this statement about Ottawa and Lausanne was made in March, 1934. I was complaining about this. As a matter of fact, the present Government are in a most awkward dilemma on this question of the beet-sugar subsidy. On the one hand, are they to abandon and injure the vested interest that has now been established and which has considerable electoral force in certain districts, as the speech of the hon. Member who has just spoken clearly indicates, or, on the other hand, are they to continue mulcting the taxpayer of vast sums in defiance of all sound principles of public finance? I was reading of an international conference which took place in an earlier century and at which there was an awkward question for Austria. It was stated that the Emperor of Austria thought it best to send to the conference "his skilled procrastinators." The Government have had on hand very skilled procrastinators. They are still procrastinating. But at last a committee was appointed. It issued its report in April, 1935. We are now at the end of June, 1935, and yet we have still another interim policy. The matter is still "under consideration." The Minister of Agriculture can tell us nothing at present of what the ultimate proposals of the Government are to be.

The first question which arises in this Debate is what in fact is the cost of this industry to the nation. We have had a case made out by the right hon. Member for Sparkbrook (Mr. Amery), the hon. Baronet the Member for Maldon (Sir E. Ruggles-Brise), and now by the hon. Member for East Fife (Mr. H. Stewart), who say that you may take into account the subsidy as an expenditure but that you ought to set off against it the Excise Duty and that in no circumstances ought you to add to it the rebate of duty which is allowed compared with foreign sugar. I will endeavour to give to the Committee the reasons why we do not accept that view and why we stand by the figures which have been given by Governments of all parties. The reason is very simple. The price which is ultimately received by the industry is the retail price which is paid by the consumer and that retail price is the world price of sugar—that is to say, the price of foreign sugar plus the duty on the foreign sugar. That is what the industry received in the way of price. That is clearly stated in the report of the Greene Committee: The United Kingdom is the most substantial element in the world food market, for, although about 25 per cent. of its requirements is obtained from home production and approximately 35 per cent. from Empire sources, some 40 per cent., or 850,000 tons a year, is still required from foreign sources. It is the price of these foreign supplies which governs the prices of all sugar in London, and it is with that price that a comparison has to be made of the price to be paid for home produced sugar. The price paid by the consumer is that foreign price plus the duty which is collected by the Board of Customs and Excise, 11s. 8d. If they did not have to pay the whole duty or if they did not have to pay any duty, they would get the same amount but the Treasury would get less. Suppose, for example, we were to abolish altogether the Excise Duty on British sugar and collect nothing. They would be receiving on their profits 11s. 8d. on every cwt., which would have gone into the Treasury if it had been foreign sugar. The "Times" newspaper in a leading article wrote these words last year: If the sugar had been imported, the Exchequer would have received considerably more in duties and would not have had to pay out any subsidy at all. That is the difference. Take, for example, a ton of foreign sugar and a ton of British beet-sugar. On the one the Treasury receive 11s. 8d.; on the other, it receives half that sum. The other half goes into the pockets of producers of beet-sugar. It is perfectly right to say that the country is poorer by the amount of the subsidy and by the rebate allowed to British sugar. If you were to abolish the whole of the Excuse Duty the Treasury would receive so much less and the beet producers would receive so much more, and the taxpayers generally would have to make good the difference to the Treasury, if the Budget were to be maintained at the same figure, in Income Tax, Death Duties, and from other sources.

All of us have taken into account, (a) the subsidy, and (b) the rebate. In a report issued in 1931 by the Board of Agriculture there are tables showing the cost to the State; and the value of State assistance per cwt. of white home-grown sugar is given as preference to homegrown sugar so much, subsidy so much, total State assistance so much. The Greene Report has a table on page 21 which is in exactly the same form: The direct, indirect and total assistance per cwt. of white sugar provided for the beet-sugar industry. It gives the subsidy as so much, the duty preference as so much, and the total as so much. Every Minister of every Government year after year when he has been asked questions in this House as to what is the amount of the State assistance given to the beet-sugar industry has always stated quite frankly that the amount of the subsidy was so much, the rebate of duty so much, and the total so much. So that I trust my right hon. and hon. Friends will accept the total figure as previously stated.

Mr. AMERY

I am afraid that I could not possibly accept that. The argument which the right hon. Gentleman uses would imply equally that every ton of steel manufactured in this country was receiving a subsidy of a pound or more. It is perfectly true that the Treasury, for purposes of its own calculations, likes to treat as revenue lost revenue which it has not got and might have got if the things had been imported from abroad. But that does not alter the fact that if this matter had been treated by duty instead of by the pretence of levying an Excise duty, which could not have been levied if it were not to be given back, none of this vast sum of subsidy would ever have arisen. It has not arisen in connection with wheat or iron and steel. It has been purely a make-believe, and the trouble has arisen from a make-believe way of handling the problem.

Sir H. SAMUEL

The right hon. Gentleman is still in a state of some intellectual confusion. As far as steel is concerned, what he said would be true if the price of British steel were in fact fixed by the price of foreign steel. In so far as it is fixed by the price of foreign steel, it is the case.

Mr. MACQUISTEN

We should produce nothing in this country. We should tax everything that comes into this country, produce nothing, and then we should all be wealthy.

Sir H. SAMUEL

The hon. and learned Member's interruptions are often amusing but never convincing. For the reasons given, I propose to follow the course which has always been taken by the supporters and opponents of the subsidy, a perfectly sound and absolutely fair course, that the State assistance is of the two kinds I have mentioned and that the amount which has been paid to the industry in that way is £53,000,000; and I say that if there had never been a beet-sugar subsidy, if we had imported all this sugar from foreign countries, the Treasury would have been £53,000,000 richer and the beet-sugar industry £53,000,000 poorer.

Mr. H. STEWART

That is what I said. My case was why should you apply this strange method to sugar-beet if you do not apply it to other agricultural products? You do not apply it, for example, to tomatoes or any other agricultural products.

Sir H. SAMUEL

In so far as the prices of the articles are determined by the foreign price, the same argument applies. If the hon. Member says that the State is the poorer because it does not collect the duty on home-grown produce and collects it on foreign produce, the same argument applies. If you charge Excise Duty on these things the Treasury will get the money and the present producers will not get it. Whether that be right or wrong is another matter, but that is the economic fact. The hon. Member will agree that if there had never been a beet-sugar industry and we had imported all our sugar the Treasury would have been richer by £53,000,000 and those in the industry £53,000,000 poorer. With regard to this year, an answer given in the House to-day shows that the subsidy is £2,750,000 and the rebate on taxation £2,900,000. This year, therefore, the sum that is to be paid is just about £6,000,000. Let the Committee realise the magnitude of these amounts. Suppose when the subsidy was first proposed, in 1924, the Government of that day had said that they wanted to establish an industry for sugar growing from beet in England and the House had said: "How much will it cost," and that in reply the Government said, "In the long run between £50,000,000 and £60,000,000." Do you think for a moment that Parliament would have looked at such a suggestion? But that is what it is. Last year we have been paying in this way, £20,000 every day, and this year the amount will be slightly smaller, about £16,000 per day. For all purposes of industrial and scientific research, of immense importance to this country—our industries and agriculture depend on scientific research—we spend large sums of money, but for every £1 we spend on research we are spending £5 for the pleasure of having the beet-sugar industry. That is not all. Under the Trade Facilities Act about £2,000,000 has been advanced to this industry of which £1,000,000 is in default, and in all probability the Treasury will have to make good that loss also. Further, there is the loss to the shipowners. The Shipowners Parliamentary Committee recently approached Parliament and sent in a memorandum in which they said: The minimum direct loss to shipping cannot be less than £500,000 every year. These estimates are based on average production, prices, and freights for 1933 and 1934. That is the loss to shipping through sugar not being imported. The Mercantile Marine Services Association in a more recent memorandum say: Already £47,000,000 of the taxpayers' money has been recklessly poured into an industry which has given no evidence of ever becoming a self-supporting one. Sugar is not any cheaper than if all our supplies were obtained from abroad, indirectly the public is paying more, and our sugar producing colonies have been deprived of business. The shipping industry has been deprived of a considerable volume of business, it being estimated that at least 14 ships are in permanent idleness as a result of decreased sugar cargoes. Those are the facts with regard to the present situation. What have we obtained for this expenditure? No one will suggest that someone has not obtained advantages. You cannot spend £50,000,000 or £60,000,000 without someone benefiting. The advantages are of two kinds. There is the advantage of employment, to which hon. Members have referred and to which very properly great importance is attached. The Minister of Agriculture, speaking at a luncheon of the British Beet Sugar Society a few weeks ago, said that this was a question which affected the livelihood of 40,000 men, from which anyone would naturally assume that 40,000 men derived their livelihood, their income, their wages or their salaries, from this source. That is not so. It is true that there are 40,000 men who derive something from this business. The additional number of people employed on the land part-time or whole-time is 32,000, and in the factories 9,000, which makes a total of just over 40,000. But the Committee have some pertinent observations to make on this head. They say: It is important to observe that the result of the above calculation is expressed as men and not in man-years, for it includes casual workers. Calculations on the basis of the data given suggest that of the gain to employment in the selected areas at least two-thirds is represented by casual workers. No information is available as to the length of employment of these casual workers, and we do not propose to attempt to be more precise. Everyone knows that in the factories the greater number are employed for a few months in the year. The actual number of those employed for the whole year is 2,200, and for the campaigns, as they are called, that is, one-third of the year, 6,830. If you take that in man-years it is not 9,000 men but 4,477. Everyone knows that in agriculture at the time of harvest a large number of people are employed and that for the rest of the year comparatively few. Therefore, it is absurd to take the figure of 40,000 as the number of people whose livelihood is involved. If you take a figure of 16,000, which would be far more of a reality—even 16,000 is unduly favourable to the claims of the industry—and then add 4,477 in the factories, you have a total of just over 20,000, not 40,000.

Mr. ELLIOT

Does the right hon. Gentleman deny that their livelihood is affected?

Sir H. SAMUEL

Affected to some degree, but there is a difference in using the figure of 40,000 which gives the impression that if you were to stop this subsidy 40,000 people would be thrown out of work. Half of them would lose their employment for four months or for such period as the beet harvest occupies. I trust the right hon. Gentleman, if he quotes figures again, will not speak of 40,000 man-years as being lost—

Mr. ELLIOT

The figures will show that the number affected is infinitely greater, as I hope to show.

Sir H. SAMUEL

"Affected." I dare-say there are a number of smallholders and farmers who may have a patch here and there who will be adversely affected, but I suggest that the words of the right hon. Gentleman were not chosen carefully enough to avoid misunderstanding. Everyone at the luncheon and the public at large were led to believe that the livelihood of 40,000 men would be affected; that 40,000 men would be unemployed throughout the year.

Mr. AMERY

In the minority report it is stated: The total additional direct employment in field and factory (exclusive of the indirect employment given in supplying coal, limestone, etc.) is therefore, at least, 30,000 man-years.

Sir H. SAMUEL

That statement was not accepted by a majority of the Committee. There are a number of statements in the Minority Report which in my view are not to be accepted. But still it is a serious matter if 20,000 man-years are affected. Here, again, the Committee have some observations to make. They say: We have had no evidence to suggest that the additional employment provided, directly or indirectly, through the beet-sugar industry is any greater than would have been provided by the devotion of the money involved to some alternative purpose, or that the employment afforded is of a specially desirable quality. The direct employment both in factories and on the farms is predominantly casual, although we appreciate the different views that may be held as to the weight to be attached to this consideration. The question of employment, I agree, is important, but at what cost? These 20,000 man-years involve an expenditure to the State of something like £6,000,000, and it is an exorbitant sum to pay; in addition to which there is no reason to suppose that a similar expenditure of money in other directions, or a remission of taxation, would not have constituted a demand which would have given an equivalent amount of employment. The other advantage which has been derived from the expenditure, apart from employment, is that which has been derived by those who have been fortunate enough to invest in the more successful of the companies which were formed for the purpose. Some companies have not prospered. But that must be due to mismanagement. If it has been possible for others to prosper exceedingly, there is no reason why they should not have done the same. Take the dividends for this year given in answer to a Parliamentary question on the 24th June. I will give some figures, but it is not right to give them free of Income Tax. Why should they not pay Income Tax like everybody else? You must add a corresponding amount to the dividend. The Ipswich Beet-Sugar Company paid 7 per cent. free of Income Tax, which is equivalent to 9 per cent. The. Ely Beet-Sugar Company paid 15 per cent. tax free, equivalent to 19 per cent. The King's Lynn Beet-Sugar Factory paid 8 per cent., equivalent to 10 per cent. The English Beet Sugar Corporation paid 20 per cent., equivalent to 25 per cent. But that is not all. As the right hon. Member for Swindon said, they have distributed enormous sums this year to their shareholders in bonuses. Let me quote the "Daily Telegraph" of 17th May: In the case of the English company the bonus is equal to 12s. per £1 share. Not only was there this enormous dividend of 25 per cent., but in addition 12s. per £1 share was given back as a free gift of repayment of capital.

Colonel BALDWIN-WEBB

I am afraid that the right hon. Gentleman is quite unintentionally misleading the Committee. He has not told the Committee that for many years many of these factories have not been paying any dividend at all. We ought to have a full picture of the last seven years.

Sir H. SAMUEL

I do not think that any of these companies has not paid a dividend. So far as I remember, they have all paid dividends continuously. I have a list of 15 companies, and in six years they have had profits equal to over 90 per cent. of their capital. I was quoting from the "Daily Telegraph" of 17th May when I was interrupted: The Ely company's bonus equals 13s. 4d. per £. The Ipswich company is paying 7s. per £. A total sum of £740,000 is involved. The English company in the seven years:1928 to 1934 has paid dividends totalling 115 per cent. on the whole of its capital. Those are the facts with regard to certain of the companies. My Noble Friend the Member for Newark (Marquess of Titchfield) said that these companies which made profits and distributed them to their shareholders were assets to the country. Well, they are also debits, for after all this is our money. But even that is not all. The vast enterprise which has almost a monopoly of the sugar refining in this country, Tate and Lyle, as a result of arrangements made by a previous Government, especially in 1928, giving various preferences to the British refiners, and as a result of understandings arrived at between them and the beet-sugar companies, have obtained enormous profits. The Greene Committee in their report say that in their view the arrangement allowed was "unduly favourable" to the refining industry; the consequence has been that they too have been able to distribute large capital bonuses, and this year they distributed a dividend of 22½ per cent., after placing to reserve an amount equal to another 5½ per cent. They earned 28 per cent. on their £1 shares. Anyone who was fortunate enough to invest £1,000 in Tate and Lyle now has securities worth five times that amount, for the £1 shares stand at £5. This is a new kind of alchemy, which turns sugar into gold.

The simple fact of the matter is this: We have here this industry, which has to be compared with both the Continental beet industry and with the cane sugar industry of tropical countries. As the right hon. Member for Swindon said, the farmers here have made considerable progress. They have taken great pains to improve the industry, and have done so. But he said that our industry was now comparable with that on the Continent and was not much behind that of Germany. He did not mention that in Holland 50 per cent. more sugar is produced from the same area of land, and in Belgium very nearly the same. We, of course, the taxpayers, have to make up the difference. But the comparison ought not to be made with the Continental beet-sugar industry, because the Continental industry is exceedingly costly and has to be enormously subsidised. Is that a reason why we should be foolish enough to do the same thing? The fact of the matter, given in the Greene Report, is that the amount of sugar which can be produced from cane in tropical countries for the same expenditure is twice that which is produced on the Continent from beet. It costs us twice as much to obtain beet sugar from Europe instead of cane sugar from the Colonies—our own Colonies, or Java and Cuba.

Colonel BALDWIN-WEBB

Where wages are 5s. a week.

Sir H. SAMUEL

It is not merely what the wages are there. It is a competition between the sun and the subsidy. It is a question of climate, and beet sugar cannot compete in the presence of cane sugar. In the year before the War the total world production of beet was 8.8 million tons, and last year it was 8.6 million tons. Cane, pre-war, was 10,000,000 tons, and last year it was 16,000,000 tons. Cane sugar is knocking out beet sugar, and we are pouring out floods of money in order to counter the surplus of sugar. The consequence is that the amount of subsidy and rebate of duty is such that, as shown in the Greene Report, we have to pay the whole value of the raw material and give it free to the factories in order to enable them to carry on the industry at all.

The hon. and gallant Member for Maldon, said "Whenever you produce wealth from the soil you add to the assets of the nation." Yes, but the question is, at what cost? The illustration has often been given of the oranges or bananas or pineapples. You may produce them, and if you do you add to the wealth of the nation. But at what cost? You give employment to the miners who produce the coal that heats the glasshouses; you give employment to the glasshouse makers and builders, and to the people maintaining the glasshouses, and you can sell your bananas or oranges or pineapples at the same price as the imported ones if you choose to make up the difference from the pockets of the taxpayers. When it is said that what is produced from the soil adds to the wealth of the nation, you must ask at once at what cost it is to be done.

Naturally in this House to-day there has been strong opposition to any suggestion for the termination of this subsidy. That is not surprising. If any industry consisting of comparatively small numbers of people can take £50,000,000 to £60,000,000 from the public purse, naturally there is strong resistance to any attempt to discontinue it. I am not surprised that the hon. Member for East Fife had a large and enthusiastic meeting at Cupar, which said "By all means let this go on." But when we discuss economic questions generally, the Chancellor of the Exchequer, and sometimes others, say that they are not fanatical protectionists and that they see the evils of extreme economic nationalism. We see the follies produced in other countries. When we ask "what do you mean by extreme economic nationalism?"the reply is "What is meant is when a country endeavours to produce from its own soil products for which it is not naturally fitted, and when it can only continue to do so by a great protective tariff or subsidies amounting to perhaps 100 per cent. of the value of the products." That is precisely our case here. You have to subsidise, in one form or another, more than 100 per cent. of the value of the produce in order to enable Norfolk to compete with Java or Mauritius or any other tropical country.

Colonel BALDWIN-WEBB

Why does Europe go on producing beet-sugar?

Sir H. SAMUEL

Partly for strategic reasons. Germany and France, for instance, are thinking of possible war and wish to make themselves as self-contained as possible. It all dates from the action taken by France at the time of Napoleon. We here must keep open our sea routes for the sake of our food supplies. We have to maintain a Navy and an Air Force which will keep open our sea routes, and that strategic consideration does not arise.

Colonel BALDWIN-WEBB

Since the subsidy we have been able to cultivate an export trade, with the result that British shipping has been helped.

Sir H. SAMUEL

Our export trade in sugar is exceedingly small. At all events the shipowners do not agree with the hon. and gallant Member; they do not regard that business as a set-off. Further, let me point out to the hon. and gallant Member that if the sugar beet were not grown in this country the refined sugar could be exported to an equal extent. It is true that the cheap sugar which is now available has enabled manufacturers, confectioners and others to develop their trade, and perhaps to increase their exports, but it would have been exactly the same if they had bought cane sugar at the same price.

What is the attitude of the various sections of the Committee on this issue? What is the present position of the Labour party? It is indicated by the Amendment on the Paper. The Labour party would turn this uneconomic and costly industry into a quasi-national institution. They would make it into a public corporation and tie this millstone around our necks in perpetuity. If that is a specimen of what Socialism is to be, it is a very bad example. The Labour party could not have chosen a worse industry. If they had their way every un- economic industry which is being run at a heavy loss would be nationalised, the losses would be concealed, and the country would bear the brunt. I do not know really what the view of my right hon. Friend the Member for Swindon is on this matter. When he sat down I felt inclined to ask him: "Are you in favour of the subsidy, or against it, or neither, or both?" As for the Government, we have yet to hear what is their pronouncement. The Prime Minister, in his first speech as such, at Himley Hall, on 8th June, said this: In agriculture we have made many experiments. We do not say that every experiment is going to be the last word or that it is going to do all we hope. We are not afraid to cancel an experiment if it fails. We are not afraid to alter it, however much my agricultural friends may feel inclined to grumble at this or that. Those are brave words. Are the Government not afraid? We shall see. By this subsidy and other such methods we have engaged in schemes of mass bribery. These millions distributed among thousands and tens of thousands of electors have constituted a powerful force. Will the Government not be afraid to cancel the experiment now that it has clearly failed, in the sense that it is not self-supporting, as was intended from the beginning, and in the view of the majority of this Committee has no prospect of ever becoming self-supporting? We shall watch whether the Government are strong enough to do their duty to the taxpayer and to cut themselves free.

8.0 p.m.

Mr. LENNOX-BOYD

There was only one passage in the right hon. Gentleman's speech to which I can give my concurrence, and that was when he chided the Government for their procrastination in coming to a decision on some permanent long-range policy and uttered a plea that this interim policy which has been introduced to-night might be the last of the series of interim policies and that we might very shortly hear from the Minister of Agriculture exactly what the intentions of the Government are for a permanent policy towards the whole sugar-beet industry. The right hon. Gentleman put forward certain views about the loss to the shipping industry. I should like to refer him to a statement on page 113 of the report of the inquiry, certainly a statement under the signature of the minority member, but one none the less which can scarcely be questioned. He said that the freight from Cuba is 12s. per ton for raw, say 13s. 6d. for refined sugar. The average rate for carriage here is 5s. a ton on beet, say 35s. per ton on refined sugar. He drew the inference that the loss of shipping freights is certainly no more than a third of the gain in freights to the road and rail transport industry of this country as a result of encouraging home production. He added, what is true, that, as a very large quantity of the imports that are now replaced by home production came from foreign countries and were often carried on foreign ships, the loss to home shipping is even less than the figure that his first argument would suggest.

The right hon. Gentleman also made reference to agricultural employment and suggested that, as so much of the work was casual, the employment given by sugar-beet production really was not of the same advantage to our agriculture as the Minister's statement at the sugar-beet luncheon would suggest. I do not know whether he has read the report of the inquiry organised by the Oxford Agricultural Economic Research Institute into the 10 years' working of the sugar-beet subsidy, but on page 34 there are some interesting figures showing the extraordinary amount of labour that the production of sugar-beet requires. In my constituency to plant and reap one acre of sugar-beet demands some 209 working hours, and in other parts of the country, Yorkshire for example, over a period of six years the labour requirements of sugar-beet were only exceeded by those of potatoes and carrots. I know perfectly well, representing a constituency where casual labour is very important—a market gardening area where the number of casual labourers in 12 years has dropped by 45 per cent.—that many thousands of agricultural workers would rather be confirmed in their casual employment than, in the name of economic purity, threatened with the loss of livelihood which the right hon. Gentleman's proposals would bring. His argument left out of account altogether the amazing results in rural Britain, particularly in East Anglia, of the one paying crop in the last eight or nine years. I suppose he knows that it is possible in East Anglia and elsewhere to get advances from the factories in the summer which have enabled many farmers and smallholders to keep going when, if there had not been this quick paying crop, they would not have had the money with which to pay the wages of their men.

It is an admirable employment, and the home industry in the last nine years has made such amazing strides in the amount and quality of home production that, given a rise in the world price of sugar, we may one day eventually come to a situation when no further subsidy will be required. I very much hope that the Government will very shortly cancel the subsidy system and replace it by a further tariff on imported sugar and the abolition or a big decline in the rate of the Excise Duty. If they do that, no longer can the charge be made against the beet-sugar industry that it is a pampered and subsidised trade. It will be on precisely the same footing as any other industry enjoying protection and, if the factories succeeded in making very big profits, they will be no more unpatriotic than other factories which are to-day paying 15 per cent. under the shelter of a British tariff. I speak more particularly for a county which grows only, a small quantity of sugar-beet 1,300 to 1,400 acres, because we view with the greatest disquietude the prospect which will probably not arise, of the abolition of artificial help for sugar-beet, knowing well that hundreds of thousands of acres which are now devoted to the growing of sugar-beet would immediately be brought into competition with those crops which are now just beginning to pay as the result of the careful work and progress of the last few years. Twelve thousand acres of potatoes, 12,000 acres of brussels sprouts and many other market gardening products of immense importance would certainly not pay in the future, as some of them are just beginning to pay now, if this vast volume of sugar-beet land was released in competition with them.

Many of the people growing sugar-beet, in fact the vast majority of them, are smallholders. I know well that my own smallholders would suffer severely if the sugar-beet smallholders—the average holding of sugar-beet is only eight acres—were compelled to take up some alternative crop. The majority of the Committee suggested that it was perfectly simple for the old-fashioned crops once more to be grown. All the experience of practical agriculturists—one cannot help feeling that on the Liberal benches there are very few practical agriculturists—is of the contrary opinion. I will not stress the enormous increase in railway freights and the production of coal, coke and limestone, but I should like to suggest that a rise of ½d. per lb. in the retail price of sugar would cost probably £9,000,000, very much more than the maintenance of the subsidy for a further period, as the Committee I hope will do. I hope the Government, relying as they can on the loyal co-operation of their supporters, will not think that Conservative Members who vote for the extension of the subsidy are in the least happy at the mode of treatment the Government are employing towards the sugar-beet industry. We are deeply concerned that the subsidy should be brought to a conclusion at the earliest possible moment and that the beet-sugar industry will be treated as agriculture in principle has been, and as we hope meat will shortly be treated, as a vital form of national activity which should be protected in precisely the same way as other forms of the agricultural industry.

8.9 p.m.

Sir ERNEST SHEPPERSON

I make no apology for asking the Committee to listen to me for a few minutes, because I have for a great number of years been closely connected with the industry in one capacity only—that of a grower of sugar-beet. I grew sugar-beet for years before the War, when there was only one factory in the country. The War came and sugar-beet and everything else went west for the time. At the expiration of the War I approached the controllers of that factory as to whether they could start again. They held that they could not commence operations unless they had some State help. I informed them that they could not ask for State help unless it was for the purpose of helping British agriculture, and I spent some considerable amount of time in impressing on my fellow agriculturists the necessity and the usefulness of this sugar-beet crop for agriculture. Eventually, I had success in my efforts. I say this, because the right hon. Gentleman the Member for Darwen (Sir H. Samuel) rather implied that I may be to some extent responsible for this throwing away of £40,000,000 or £45,000,000 of public money. If I am responsible for it, I make no apologies.

Notice taken that 40 Members were not present; Committee counted, and, 40 Members being present—

Sir E. SHEPPERSON

I and others in the House have acted for many years in every possible way to maintain this industry, and we have done it in the interests of the producers and not of the factories. I welcome this opportunity of speaking because I am interested in this industry as a producer, but I do not propose to vote, because that might possibly not be correct Parliamentary procedure. We hold that the initiation of this subsidy and its continued application was in the interests of agriculture and not of the factories, though the factories were essential.

It is not necessary to enlarge upon the importance of the industry to agriculture but I would like to point out the extent of the acreage under cultivation. There are 400,000 acres under this crop or an acreage nearly equal to that under potatoes. The Greene Report suggests that the farmers should attempt to devote their land to some other crop but that Committee, composed of lawyers and others, very wisely refrained from suggesting an alternative crop. If it is suggested that the farmer should grow potatoes instead of sugar-beet the answer is that we already have a surplus of potatoes and that to increase the present acreage would only be to create difficulties. What other substitute crop is there? An hon. Member has suggested tomatoes, cauliflowers, and Brussels sprouts but these suggestions are absurd. There is no alternative. Sugar-beet is a root crop and must take its place as a fallow crop in the rotation followed by the farmer. Its place cannot be taken by a corn crop. Wheat could not take the place of sugar-beet and it is true to say that in many parts of the country hundreds of acres are being kept in cultivation, solely because the farmers find in sugar-beet a fallow crop which gives him a financial return. It is equally true that if the industry goes out of existence in this country many thousands of acres of land which is at present arable will go back into grass.

What is the opinion of other countries, of Germany for instance? Whatever our views of Germany may be, we must all agree that she has generally some reason for any activity which she undertakes. Germany owes her agricultural development to the establishment of the sugar beet in that country, many years before we started to cultivate it. What action is she taking to-day? She produces 95 per cent. of the sugar consumed by her people whereas we only produce 30 to 35 per cent. of the sugar consumed in this country. So much value does Germany attach to sugar production that she gives State assistance to the extent of 21s. per cwt. whereas in this country, at the outside figure given by the right hon. Gentleman opposite, State assistance amounts to no more than 12s. per cwt. Apart from the purely agricultural advantage of this crop, I would emphasise its value in regard to the employment of labour. I do not propose to enter into a detailed discussion with the right hon. Gentleman the Member for Darwen (Sir H. Samuel) as to whether the number of men employed is 20,000, 30,000 or 40,000. I approach the question from another point of view. It will be agreed by growers of sugar-beet that, from the time the land is prepared for growing the beet, throughout all the processes of sowing and drilling and hoeing and singling and harvesting until the crop is put on the rail, the labour costs come to about £10 an acre. There are 400,000 acres under the crop and an expenditure of £10 an acre represents £4,000,000 or £100 a year to 40,000 men. Viewed from that angle, it would appear that the figure of 40,000 is nearer the mark than the right hon. Gentleman's figure of 20,000.

The British sugar industry now takes an important part in the national life. Even according to the Greene Report, it has proved to be efficient and every year it is producing wealth from the nation's own soil. Why then, it may be asked, is it necessary for us to come to Parliament time after time to ask for State assistance? It is simply because our labour costs are higher here than the labour costs in those countries with which we are in competition. This is a comparatively wealthy country and rightly we desire for our workers a higher standard of life than that which exists in many competing countries. Because we require that higher standard of life for our workers, a higher labour cost is involved in the production of this crop, and that is the justification for asking the State for assistance. Hon. Members opposite argue that we are not justified in seeking such assistance because sugar production in this country must be uneconomic owing to the climate and other conditions. They argue that we are spending £5,000,000 on an uneconomic proposition. But is it true that the climate and conditions in this country make the crop uneconomic?

If we were asking for State assistance for the growing of oranges under glass at great cost when we could get oranges from Spain which had been grown in the open, such a criticism as that might be justified. But the proof of whether sugar-beet growing in this country is uneconomic or not, is the number of tons of sugar per acre per year produced in this country. The right hon. Gentleman opposite said that sugar cane produced more sugar per acre than sugar-beet. In the "Daily Telegraph" a week or so ago I read that in one of the countries mentioned by the right hon. Gentleman, namely, Mauritius, cane produced 1.41 tons of sugar per acre per year, whereas in England, in 1934, beet produced 1.58 tons per acre. We produced from sugar-beet in this country a greater amount per acre than was produced in Mauritius from the cane. In those circumstances I submit that it cannot be argued that sugar production in this country is uneconomic.

Another argument is that the sugar production in this country prevents our purchases of sugar from abroad and thus prevents oversea countries from buying our manufactured goods. Is that true? In 1910 we produced no sugar at all in England and in that year we imported from abroad 1,750,000 tons of sugar. In 1934 we produced here 420,000 tons of sugar and we imported over 2,000,000 tons of sugar. I therefore submit that the importation of sugar has gone up since we have grown sugar beet in our own country. But even if it were true that by producing sugar in this country we had deprived ourselves of purchasing it from abroad and had thus deprived the foreigners of buying our manufactured goods, if we bought sugar from abroad and paid money to the foreigner for it, what guarantee have we that the foreigner would buy our manufactured articles? We have no guarantee, but if we spend money on the purchase of British sugar, it goes into the British farmer's pocket and the British labourer's pocket, and we do know that that money will circulate in this country and will be spent for the good of the people of this country.

Our opponents use one other argument. They say it has not been worth the cost of £40,000,000 or £50,000,000. I am prepared to admit that in the early stages the subsidy was high, the price of sugar was high, large profits were made, and factories were able to accumulate great reserves. But I think we must deal, not with the past, but with what is happening to-day. Last year the subsidy was 7s. 4d. per cwt., but the proposal before us to-day is for a matter of 5s. per cwt. I cannot see where there is any justification for the right hon. Member for Darwen adding, as he does, duty and calling it a subsidy. It is not, to my mind, a fair way of arguing. The world cost of production of sugar is, according to the report of the Committee, 12s. per cwt., but we are buying sugar in this country at 4s. 6d. per cwt. Why are we buying sugar here at 4s. 6d. when the world cost of production is 12s.? It is due to there being a world surplus of sugar and to our being the only consuming country which will accept that surplus. Therefore, the consumers here have had the advantage of buying their sugar at 4s. 6d. instead of paying the world price of 12s.

The amount of world surplus is almost equivalent to the British production of sugar, and therefore, we may hold that, the surplus being due to the British production, it is the British industry that has created the surplus and enabled the consumer here to get his sugar at 4s. 6d. instead of at 12s. per cwt. Therefore, the consumers of sugar in the urban areas have benefited, and the right hon. Gentleman himself, instead of rather cursing the industry, should to-day be blessing it. If it were not for the industry, very probably the price of sugar would have been a penny a pound more than it is now, and that would have cost the consumer £20,000,000, so that even if the right hon. Member for Darwen's figures are correct and it does cost some £5,000,000, I think it is sound business to spend £5,000,000 of the taxpayers' money in order to save the whole community, in its position as consumer, the sum of £20,000,000. The industry is justified from that point of view, and in the national interest and in the interests of the consumer we are justified in asking the Government to continue this industry, which is so essential to the country.

I want to make an appeal to the factories to play the game. We talk in this House and out of it, and we find that among our fellow Members there is very little opposition to keeping this industry going, but the objection generally is to supporting an industry which produces such large profits for the factories. Undoubtedly in the past the factories were able to put huge sums to reserve, and to make large returns upon their capital, but I want to be fair to the factories. They had to attract money to their concerns. The investor must be attracted, and unless they could show that there were some fairly quick returns on their capital, the investor would not have let them have his money. Therefore, there is some justification for the large profits that have been made in the past by these factories, but I would like to appeal to the factories to act in the future in a more generous way to the industry than they have done in the past.

An hon. Member opposite a little while ago made one statement with regard to a factory, and I can substantiate that statement. He stated that a certain factory had disbursed in profits something like 13s. 4d. on every £1 share, that they had said to the growers, "We will give you 35s. a ton and a share in the profits which we make to the extent of 18 or 20 per cent." The growers took the whole of the risks of production, wire-worm and so on, and produced the beets. The beets were delivered to the factory, and 35s. a ton was paid, but when it became a matter of participating in the profits of the factory, there was nothing whatsoever for the grower of the beet, and within three weeks of the Ely factory notifying the growers that there were no profits to share, it was announced, as stated in the "Times," that they were paying to their own shareholders, who ran no risk whatever, a sum of 15 per cent., free of tax. I think that is unjustifiable, and on behalf of British agriculture I venture to make an appeal to the factories that they should look upon this as a national interest and should come together and join up with the growers in making it possible, with the smallest possible assistance from the State, for this industry, which is so essential to British agriculture, to continue. I finish my speech by making that appeal.

8.35 p.m.

Captain HEILGERS

I should like to echo to a certain extent the appeal which has just been made by the hon. Member for Leominster (Sir E. Shepperson). I agree with the right hon. Gentleman the Member for Swindon (Dr. Addison) that we cannot part with the beet-sugar industry, but there is undoubtedly need for better Government control of the finances that are paid out to the factories. That, however, is no excuse for the right hon. Gentleman the Member fo Darwen (Sir H. Samuel) and his supporters making allegations such as they have made, and using such phrases as "mass bribery," "public scandal," and so on. The dividends paid by the factories have not been excessive up to the present, and the reason they are giving bonuses is that they are afraid that the industry will come to an end and that their assets will go down to nothing. I also object to the capital made by the right hon. Gentleman the Member for Darwen out of the total amount of the beet sugar subsidy up to the present. He may have been in Palestine at the time, but his supporters were here when the subsidy was started, and I would remind him of what Lord Snowden said: I am confident … that the areas devoted to sugar-producing purposes will expand until this country is in a position to produce a great part of the sugar which it requires. It was recognised by the House of Commons at that time that we were aiming at producing a great part of the sugar that this country needed. Everyone must have recognised that it was going to be a costly business, and a much more extensive business than the 30 per cent. at which we have arrived to-day.

One of my complaints is the limitation of this Resolution to 375,000 acres. I have not heard any hon. Member comment on that. I believe that it is a very serious matter. I would like to quote what was said by the present Prime Minister in December, 1930. It may not be fair to quote against him what he said when he was out of office, but it shows what was running in his mind then, and it is in my mind to-day: Sugar I regard as a very important crop. It is important to have it as part of your agriculture. The sugar subsidy or bounty is drawing to a close, and the whole situation wants the most careful examination to see what assistance is necessary to make sugar a prominent crop in Great Britain. At present the acreage is something like 300,000. I think that acreage might be double.… Whether it will be better to do that by a bounty or an arrangement of duties, I cannot yet say, but by one or another it is a thing that ought to be done, and shall be done. I hope that that view continues in his mind. There was vision in what he said, and any limitation of acreage is bound to cause discouragement and uncertainty, and be extremely prejudicial to the industry in general.

I should like to make this case for the beet-sugar industry in general. The industry has done every one of the things that it was asked to do when it was given the subsidy in the first place. Every side of the industry has become more efficient, and there has not been a year when the industry has gone back. Manufacturing costs have gone down progressively every year. They started at 31s. 6d., and to-day they are 11s. 11d. The farmer's technique has improved to the extent that he can accept 35 per cent. less for his beet than he could accept only five or six years ago. I would emphasise that there is only one thing that has beaten the industry and which has made it come back to the House and ask for a subsidy once more. That is the fact that the price of sugar has fallen during the 10 or 11 years of the subsidy to one-fifth of what it was. Had the industry not had that handicap, it could have carried on independently, because no industry in England has shown such efficiency and gathered efficiency so quickly as the sugar-beet industry in the last 10 or 11 years.

The limitation of acreage is undesirable for another reason; that is, that the real salvation of the beet sugar factories is as efficient and as large a through-put as possible. The through-put of the factory in my town is the largest in the country, and the costs are 10d. less per cwt. than anywhere else. The trouble is that other factories have not the through-put that this factory has, and there is undoubtedly some need for greater co-ordination. I cannot agree with the suggestion put forward on the other side that we want to go in for very elaborate re-organisation. What is needed is something in the nature of sugar commissioners, who would have functions somewhat related to the functions of the development board which is to come into being for the pig industry. Their functions, above all, should be three: there should be co-ordination of the through-put of all the beet in the country so that each factory gets an adequate supply; there must be a flat rate for rail traffic throughout the country; and, finally, the relations between the factories and the refiners must be co-ordinated in a much better fashion than they are at present.

I have no compunction in accepting the beet-sugar subsidy as it is given to-day. After all, it is a much smaller thing than it was, and this year it is only 9s. 9d., or, put in another way, a protective duty of 4s. 7d. and a subsidy of 5d. I have no compunction in accepting that relief. When the Greene Committee say that the relief was extravagant, inequitable and haphazard, they were going far beyond the truth. In fact, I believe that their reports, both majority and minority, are not satisfactory. I would like to quote an instance which comes within my knowledge, namely, that they do not mention in their report one of the most valuable attributes of sugar-beet, which is the fact that we feed our sheep on the beet-tops after the beet has been carted to the factories. That is one of the most important sides of the industry, and the Committee were so slipshod in their methods of inquiry that they never found that out.

I accept the relief because we cannot help ourselves. We have been forced to accept relief because in this country we have had 100 years of Free Trade, and there is no alternative. I would beg hon. Members to realise that there is very strong feeling throughout the country on this subject. The right hon. Gentleman the Member for Darwen referred with scorn to the meeting at Cupar. Obviously, he said, it is easy to have a meeting in support of getting more money, but there was more in it than that. He comes from the west of England, and I come from the east. If you motor from the Thames to Tees-side, there is hardly anywhere where you would be out of sight of a field of beet. Equally, if he went from Norwich to Nottingham and then to Shrewsbury he would find the same thing—always a beet field within sight. That shows the tremendous development of the industry. A remarkable feature of the series of meetings which have been held to ask for a continuation of assistance to the sugar-beet industry is the fact that the most enthusiastic meetings were not in East Anglia, curiously enough, but north of East Anglia. In Lincolnshire 5,000 people went to Lincoln; at Spalding there was the same number. At York there were 3,000 people. Overflow meetings were held in all those places. The spread of sugar-beet all over the country shows that it is a crop which is capable of unlimited expansion.

I do not care what form of assistance is given, as we get more efficient in the industry and we do so every year—less and less assistance will be needed. One thing I do urge and that is that we have done our job. We have carried out everything that the sugar-beet industry was asked to do. Agriculture has done its part, so that by now sugar-beet has become one of the great crops of the country, the factories have done their job, and we have only been beaten by world circumstances. The net cash cost of this subsidy to the country will not amount to very much, only some £560,000 this year; and when we can find £16,000,000 a year for housing and spend £7,000,000 on building a ship, if we cannot spare that small sum to bolster up agriculture and to keep sugar-beet going, we cannot possibly have the interests of agriculture in this country at heart.

8.48 p.m.

Lord WILLOUGHBY de ERESBY

I hesitate to rise now, because I know that the time of this Committee has already been fully occupied, but I am tempted to do so as I am extremely anxious to express not only my own gratitude but the gratitude of many in South Lincolnshire to my right hon. Friend the Minister of Agriculture for bringing forward this Money Resolution. In South Lincolnshire last year we grew approximately 30,000 acres of beet, and this meant about £300,000 distributed among field labour alone, with the remainder of the subsidy circulating in a part of England which has suffered very severely from the recent depression in agriculture. In discussing this Resolution we ought to remember that we are not considering a new industry; we are not, as the right hon. Member for Darwen (Sir H. Samuel) said, about to consider initiating the cultivation of bananas or oranges, but considering an industry which, as the result of the action of successive Governments, has now become, as the right hon. Gentleman the Member for Swindon (Dr. Addison) said, firmly embedded in agriculture. It is, moreover, an industry which affects to a far greater extent than is generally realised many other industries throughout the country. Where sugar beet is grown to-day the farm rotation has turned round; in fact, arable farming has been educated by successive Governments to rely on sugar beet as an alternative crop. Where sugar beet is grown we also find a demand from the factories for coal, machinery and many other products of our industry. Therefore, I do not hesitate to say that if this Money Resolution failed to obtain the necessary majority to-night the consequent end of the sugar beet industry would do away at one fell swoop with all that the Minister of Agriculture has done for arable farming since he has been in office, and that the evil effects would be felt far beyond those districts where sugar beet is grown.

There are two other considerations which I would like to bring to the notice of the Committee. During the coming year many of us on this side of the House, as well as many hon. Members opposite, both above and below the Gangway, who are now opposing this Resolution, will be urging the Government to settle on the land men and their families from the distressed areas. Many smallholders and allotment holders at present eke out a somewhat precarious livelihood almost entirely by growing sugar beet. In fact, I know of a parish near my own home within whose boundaries there are no fewer than 200 beet growers. Surely none of those who see in land settlement a possible chance, possibly the only chance, of giving a better life to those who have little likelihood of finding employment in their old industries, would wish wantonly to ruin all those already settled on the land and to make more difficult the task of land settlement in the future. Many Members on both sides of the House rejoiced when we heard recently that the Government had accepted the principle of an insurance scheme for agricultural workers.

Mr. T. WILLIAMS

Only the principle.

Lord WILLOUGHBY de ERESBY

I said the principle. Now that the principle has been accepted we are anxious—at least I am anxious—to see that insurance scheme take a concrete form with the least possible delay, but the unemployment on the land which would result from a withdrawal of the beet subsidy this year would break down, in its early and most difficult stages, any scheme of agricultural insurance which this or any other Government could devise. The withdrawal of this subsidy would delay the very introduction of the scheme for many years, if not indefinitely. For these and many other reasons with which I will not weary the Committee I whole-heartedly support the Resolution, and I am at a loss to understand the attitude of hon. Members opposite in opposing it. Their last period of administration was remarkable for one thing only, the enormous sums of public money spent with the least appreciable benefit to any one. At least this money which is now being voted will give employment; although there may be some doubt as to the actual numbers employment will be found for a very considerable number of men throughout the whole of the Eastern Counties and many other parts of this country.

8.55 p.m.

Mr. HENRY HASLAM

As a Lincolnshire Member, representing a part of a county which is almost wholly agricultural, and in which a great quantity of sugar-beet is grown, I desire to make a few observations on this very important subject. In Lincoln city there was a very important demonstration attended by nearly 4,000 persons, including landlords, farmers and agricultural workers, who were whole-heartedly united in desiring the continuance of this industry. In Spalding there was recently a similar demonstration. I should like to emphasize the benefits which labour obtains from the cultivation of sugar-beet. No crop, with the possible exception of potatoes, employs more labour per acre. Another advantage is that it gives employment at a time of year when employment is most needed by the agricultural worker. After the harvesting of the wheat and other cereals, the beet crop is lifted, in October, November and last year these operations were continued into December and even January. The industry thus employs a number of men whom otherwise the farmer would be compelled to stand off. The number of agricultural workers employed in the industry is usually given as between 30,000 and 40,000 men. That is one reason why, in Lincolnshire and in the eastern counties, probably for the first time, landowner, farmer and working man are united in support of the continuance of the industry. There has been some controversy as to Excise. The subsidy to be paid is estimated this year at £2,859,562. The Excise paid by the factories who receive the subsidy is estimated to be £2,280,000. The difference between those two sums is £579,562. It therefore cannot be argued, although hon. Members may indulge their fancy, that many millions will have to be paid by the taxpayer, because the Exchequer only pays out the sum which I have last mentioned.

A feature which has escaped attention is the close connection between the production of food in this country and our Navy Estimates. We produce 30 per cent. of the sugar we require, and a fair and a growing percentage of other foodstuffs. We must continue to maintain our Navy because, although we all desire peace, the old Adam has not yet been exorcised. Now the strength of the Navy must have some relationship to the amount of foodstuffs we are obliged to import. If we gave up the beet-sugar industry, threw out of work nearly 40,000 men, and put out of cultivation about 400,000 acres, it would make little difference whether the sugar we imported came from foreign or from Dominion countries because the Board of Admiralty would be responsible for the safe conduct of the ships which brought it here. If the Committee refuse to grant the comparatively small sum of £500,000 to carry on the industry for another year, the result may well be that we shall have to pay a considerably larger sum in in- creased Navy Estimates to protect our trade routes in time of trouble.

After 10 years' experience, during which all branches of the industry, agricultural worker, farmer and particularly smallholder—often an ex-service man—have shown increased efficiency, we are as efficient as France, Germany, Belgium, Czechoslovakia or any other country in producing sugar-beet. Hon. Members may be interested to know that the United States, where both sugar-beet and sugar-cane are produced, gives equal protection to both. I hope the Committee will support the proposal to keep the industry alive, and that at an early date the Government will be able to reassure the agricultural population that this most important industry will not be allowed to lapse.

9.4 p.m.

Major BRAITHWAITE

First, I would offer the thanks of the Yorkshire growers of sugar-beet to the Minister, who is proposing to give them an opportunity of carrying on for another year. Great uneasiness has been engendered in the industry during the past six months since the presentation of the report. Everybody, from farmer to factory hand, has been wondering whether the industry was going to continue or to die out, and we are glad that the Ministry propose to see the job through until the Minister produces a long-term plan for the carrying on of the industry in the future. It is, of course, for the Government to decide whether or not they wish to carry on the production of sugar in this country in this way. Certainly it cannot be done without some measure of protection. Sugar can never be grown in competition here without adequate protection or some form of State help, and we have to decide whether this form of arable cultivation is worth while, and whether in the long run it will pay us to spend State money upon it. I do not think that anyone who has watched the growth of the industry during the past 10 years can complain that those who have been engaged in it have not improved in every way in the development of the industry. We have now a better knowledge of how to deal with this matter from the farming point of view, and the farmers and their workers have taken a great deal of trouble to learn how to deal with and manage the crop under all sorts of conditions. I am satisfied that, on the 30,000 acres that were grown last year and are being grown this year in Yorkshire, an improvement will be found even on the wonderful results achieved last year.

We cannot expect to compete with labour that is only paid at the rate of 5d. a day, and I cannot imagine how the right hon. Gentleman the Member for Darwen (Sir H. Samuel) can contemplate forcing our people, if the industry is to be carried on without State aid, into competition with sugar grown under those conditions. I cannot understand why the Liberal party cannot give a fair deal to agriculture in that way. They have always been out to buy in the cheapest market, irrespective of whether anyone got a job in this country or not. It is time that the country was made fully aware of the policy they would pursue if they ever got the opportunity. This branch of farming has given great encouragement to our farmers, and, much as I admire many of the plans of the Minister of Agriculture, I should like him and the House to know that sugar beet has been one of the crops that has paid the farmer a profit on his work.

Sir H. SAMUEL

At whose expense?

Major BRAITHWAITE

An industry cannot be carried on without some remuneration; you cannot, if you are losing money constantly, expect to employ vast quantities of labour. We have in this country to-day an unemployment roll of people who are wanting to get jobs, and responsible people up and down the country are suggesting that numbers of these men should be employed on the land; but you cannot expect them to go there unless there is some possibility of their being able to make a living when they arrive. It has been shown that sugar-beet under these conditions can be grown at a profit. I am satisfied, and I speak with full knowledge of the subsidy that is being paid and the Excise Duty that is being remitted, that in growing this crop it has been possible to employ a great deal of labour and to improve the balance of agriculture. In my constituency it has vastly improved the growing of wheat. As a fallow crop it has been of great benefit, and has been followed by an increased yield of wheat when the time came round for it in the rotation. If it were taken away, we should find great difficulty in substituting a crop for it.

There have been to-night some justifiable criticisms of some of the factories, but not all the factories have behaved in the way that has been suggested. We have a factory in Yorkshire, belonging to the Yorkshire Sugar Company, which has made a tremendous acreage available to the farmers in my constituency. That company has been administered wisely and carefully and well, and can compare with any other industrial undertaking in the country. When I hear criticisms of that kind in general terms, I think they ought to be contradicted or individual companies ought to be pointed out, because it is not the case with the whole of the beet sugar factories in this country at the present time.

One of the things that have been exercising the minds of leading statesmen here and in other parts of the world is the low level of commodity prices, and the general trend of economic events in other parts of the world is to raise the level of commodity prices. Legislation has been directed, both in the United States and in other countries, towards achieving a new level of prices, with the idea of getting rid of the terrible depression which has hung over the world for so long. If any results are achieved by the measures which are now being put into operation, surely sugar should have some benefit, because it is a commodity which has dropped very much in price during the past eight or nine years, and could reasonably stand a little increase from the producer's point of view. Therefore, when we take into account all these factors, and weigh them up carefully in the national balance sheet, I do not think we shall have wasted our money in fostering this industry.

I was glad to hear the remarks of the right hon. Gentleman the Member for Swindon (Dr. Addison). At any rate, he is not like the Liberal party, who are willing to throw over the agriculturist at every turn. He is willing to carry on and help until a satisfactory solution of the problem has been found. I hope that the Labour party will remember, when they vote to-night, that many thousands of agricultural labourers have enjoyed work because of the money which has been provided by the Government for dealing with this industry. In conclusion, I would like again to thank the Minister for bringing forward this Resolu- tion, and to tell him that the farmers have the greatest possible confidence in him, knowing that they will get a fair deal in any new long-term policy that he brings forward.

9.13 p.m.

Mr. T. WILLIAMS

It is always very interesting to listen to hon. Members representing agricultural divisions telling us of the woes and troubles and trials and tribulations of agriculture, and that, unless the last few millions are handed over to that industry there will be only death and glory for agriculture. I wish the workers of this country could plead their case as successfully as agricultural representatives can in this House. To-day it is sugar; yesterday it was beef; the other day it was milk; and earlier it was wheat; but they always seem to be successful in satisfying whatever Government happens to be in office, and in obtaining just what they set out to get. They are going to be no less successful this afternoon. They always express sympathy with the workers, as the hon. Member for Rutland and Stamford (Lord Willoughby de Eresby) did this afternoon. I am happy to think that the Government have accepted the principle of unemployment insurance for the agricultural worker, but the hon. Member knows that the Government have made up their minds that that is all that they are going to accept, and, whatever he may say—

Lord WILLOUGHBY de ERESBY

I have no reason to suppose that that is the case, and in fact I do not know it. If the hon. Member has any evidence, I shall be extremely anxious to hear it.

Mr. WILLIAMS

When the hon. Member has been in this House a few years longer, he will be able to make his own deductions, and he will not be very far from being correct. I am afraid that, despite all the statements which have been made here to-day about combines, and mass meetings from Land's End to John o' Groats, about unity in one great demand for the preservation of the sugar-beet industry, the workers are merely acting unconsciously as the agents of what, after all, has proved to be the common enemy of the State during the last 30 years. I do not want to refer to the profits mentioned by the right hon. Gentleman the Member for Darwen (Sir H. Samuel) or my right hon. Friend the Member for Swindon (Dr. Addison), but I may make some reference to them before I sit down. If the hon. and gallant Member for Bury St. Edmunds (Captain Heilgers) had been in his place perhaps one would have had something to say about his reference to the profits not having been excessive. I rather think that they have not only been excessive but something in the nature of a public scandal, and Tammany has characterised the proceedings from the very commencement. When the sugar-beet subsidy commenced in 1925—not 1924, I understand—the idea was that such funds as were made available should be for the purpose of helping agriculture, that the effort would be in the nature of an experiment, and that the experiment was expected to conclude in a period of 10 years. It is only 11 years, one over the odds as it were, and a set of international complications can be called in by the Minister to justify his action here this afternoon, if justification is necessary. But the real facts and figures as drawn out by the inquiries of the Greene Committee have not been dealt with very effectively or very fully this afternoon.

The right hon. Gentleman the Member for Sparkbrook (Mr. Amery) had a very simple means of dealing with the sugar problem. He said that all you need do is to abolish the factories, abolish the farmers almost, abolish everything, but establish tariffs, and that we might do infinitely worse than follow the example of foreigners, Germany, America or any other country. Presumably he thinks that we ought not to potter about with sugar at 2¼d. a lb.; that we ought to charge about 5d. a lb. for it, and everybody in the country would be prosperous as a result. That is what the right hon. Gentleman stands for, and not this method introduced by the Minister in 1925. The hon. Gentleman the Member for East Fife (Mr. H. Stewart) who, I regret, is not in his place at the moment, manipulated figures this afternoon with such facility that at the end of the time I almost began to believe that the sugar factories were subsidising the State. Instead of the State having to subsidise the factories and the farmers, he almost made me believe that the factories were subsidising the State. The hon. Member is rather good at manipulating figures. He referred in the course of his speech to a great mass meeting held in his Par- liamentary Division last Saturday, and there, I observe, he was also manipulating figures. Some reference has been made to the number of workers now employed in the factories and in ancillary trades who may be affected to some extent if the subsidy ceases instantaneously. The figure of 30,000 has been mentioned—the figure of 40,000 was mentioned by the Minister—and hon. Members who were a bit more venturesome even suggested that it might be in excess of 40,000, but the hon. Member for East Fife does not stop at an ordinary 30,000 or 40,000. The hon. Member, speaking to his constituents and wanting to impress the meeting as to how he would fight the battle of the farmers in East Fife, told them this: Secondly, they had in it a mighty instrument of employment which had given, and still did give, work directly and indirectly to well-nigh 100,000 people. The hon. Member ought to have a post in the Treasury, or go to the Treasury to give Treasury officials a course of what can be done with figures. I imagine that if the hon. Member makes another speech on the beet-sugar subsidy he will abolish unemployment altogether. That seems to be a logical deduction to be made from the speech of the hon. Member for East Fife. The right hon. Gentleman the Member for Darwen can claim to have been thoroughly consistent throughout the passing of the years in his attitude towards the beet-sugar subsidy. I do not recollect a single instance when he has not attacked the subsidy as an uneconomic proposition and one which no Government ought to tolerate, and to-day he pursued that line equally effectively, and I am bound to confess that with a great deal of what the right hon. Gentleman said I had to agree. But it is very unfortunate that the very person who introduced this subsidy, one of the savers of the nation in 1931, a colleague of the right hon. Gentleman in the National Government when they combined to save the nation, also combined apparently to preserve the sugar subsidy at that period.

Sir H. SAMUEL

When?

Mr. WILLIAMS

In 1931. I refer, of course, to Lord Snowden who, it has been suggested, was the person responsible for initiating the beet-sugar subsidy. Lord Snowden was the person who gave the National Government 200 members more than they would have had otherwise, and he became one of the closest comrades of the right hon. Gentleman the Member for Darwen within the confines of the National Government, and they worked very harmoniously together until a certain situation arose. I do not want to chastise the right hon. Gentleman for his inconsistencies, but it would not be out of place if I were to recall that in 1932 the Government passed the Wheat Act, which was designed to exact £6,000,000 per annum from the consumers of bread. It was not in the form of a subsidy drawn from the Treasury; it was a subsidy indirectly drawn from the consumers of bread. The right hon. Gentleman did not oppose it. He did not say that it was whittling away Government resources merely because of the marvellous bit of machinery produced for that Measure, and I can hardly imagine the late Minister of Agriculture having produced such a wonderful piece of machinery without the assistance of the right hon. Gentleman.

Sir H. SAMUEL

The hon. Gentleman does me too much honour.

Mr. WILLIAMS

The Wheat Act was supported by the colleague of the right hon. Gentleman, the right hon. and gallant Member for Caithness and Sutherland (Sir A. Sinclair), and I sat upon this bench almost mesmerised listening to the right hon. and gallant Gentleman the Member for Caithness and Sutherland when he made such a marvellous speech justifying the exaction of £6,000,000 per annum in the form of an indirect subsidy. If that particular Act remains on the Statute Book for 11 years, and I fear that if the present Minister is in his place—God forbid that he should be—it will be on the Statute Book at that time, it will have cost the consumers of bread £66,000,000, actually more than the beet sugar subsidy has cost already. The right hon. Gentleman supported that project. I do not know whether he supports it to-day, but, in any case, it really indicates a certain inconsistency on the part of the right hon. Gentleman, and while I give him full marks for his consistency over beet-sugar, I am afraid that I cannot give him full marks for his whole-time political activity when a Member of the National Government sitting above the Gangway.

The right hon. Gentleman asked my right hon. Friend what was the policy of the Labour party in this matter. He noted the terms of our Amendment, characterised the sugar-beet industry as a bankrupt concern, and suggested that the Labour party wanted to take over a bankrupt concern as a quasi-national institution. I am not going to argue that point at length at this moment. I would put this to the right hon. Gentleman: In the absence of the beet sugar industry, would he have deemed it wise, expedient, or of national importance to have attacked in any way the monopoly of Tate and Lyle? I am not attempting to justify the sugar-beet industry at the moment, but at least I have always been consistent in this respect, because in 1924, when the scheme was first mooted, I said that if there had to be an experiment in the interests of agriculture exclusively, such factories as did come into existence ought to be State-owned and run as public services. In that event the only people who would have received subsidy would have been the producers of sugar beet on the basis of ascertained costs which could have been obtained on an experimental farm. A decent Government ought to have such a farm, so that neither the farmer nor anybody else could exploit the situation. This has always been my point of view.

In the absence of this sugar beet industry—which I do not attempt to justify, and certainly not on the present basis—we should have been entirely in the hands of this sugar monopoly of Tate and Lyle? Is that firm a body of benefactors? I notice that, despite their hostility to the sugar beet industry in its initial stages, they have deemed it wise to get inside it now. I understand that they are financially interested in four of the beet sugar factories. I think I read a short report of the trading results of this company of sugar benefactors when I was somewhere in the Red Sea, and it announced they had just returned their record profit of £1,200,000 this year. They had just distributed 1,360,000 bonus shares to their shareholders. It seems to me that this monopoly would have full power—in the absence of any other organisation or any Government control—to exploit the situation at its will. That is not a quasi-national institution of the sort to which the right hon. Gentleman referred, but an example of glorious individualism. What would the right hon. Gentleman do to suppress that particular organisation, which would exploit the consumers as they have exploited them in the past? [An HON. MEMBER: "Question!"] Well, the record of this company goes to show that they are in business, like any other body of business people. I do not suggest that they are either better or worse than anybody else. They are in business to make the maximum amount of profit for themselves—and the service they give to the public is incidental. They can control the profit to be obtained, the shares to be given to themselves and the prices charged. But that is merely by the way.

I have never been convinced that this experiment that has been made over a period of 11 years has been a wise one. Certainly, in the light of what has happened with the factory owners, I am convinced that any Government after 1926, or certainly after 1927, ought to have taken over such factories as were in existence; and if they desired to continue any subsidy at all the subsidy should have been paid only to the people who produce sugar-beet; and they should have had to justify themselves on the basis of efficiency. Neither have I been carried away by the ramping, raving campaign conducted during the past two or three weeks. I know that Noble Lords have gone to street-corners to address meetings. I was in Lincoln a few days ago, and I understood that there had been a great meeting there, 3,000 strong, where one Noble Lord had presented himself as the saviour of the beet growers in Lincolnshire. These Noble Lords are always there for the "early doors" if there is anything to be obtained, but I never could imagine a Noble Lord being present if it was a question of giving unemployment insurance to agricultural workers.

I am always suspicious of these mass meetings on special occasions for special purposes such as this one was. I am not at all impressed by this ramping, raving campaign entered upon by Lord Cranworth, or Lord Bledisloe, or any of their colleagues. I learn, on fairly reliable authority, that this particular organisation, the Home Sugar Beet Defence Committee, are so well off, and have done so well out of beet-sugar subsidies in the past, that for every one of these meetings during this ramping campaign of the past month, they have put down £40 for the organisation and carrying through of the meeting. We have to carry through many Socialist meetings without four pence. I am a little suspicious. At least, if there is to be any continuance of the beet-sugar subsidy, I shall certainly never give it my support as long as factory owners can take 2¾d. out of it more than they have taken already.

I recognise that the sugar-beet people—in the eleventh year of a subsidised industry—and the refiners have been to the Chancellor periodically, and that he has granted them this and that concession until it may be argued as a result of the concessions made to the importers of raw sugar, which give them a preference over even the beet-sugar factories, they have been able to build up an export industry in refined sugar, thus further increasing their profit. Some hon. Member may tell me that they have increased the amount of Income Tax they pay; but for every 5s. paid in Income Tax they take 15s. for themselves, and, according to their balance-sheets, they have been taking a lot of fifteen shillings in the last year or two. It may be argued from the agricultural point of view, and from the factory point of view, that in the course of 11 years certain economies have been effected. That factory costs have been reduced from 32s. 8d. to 11s. 11d. per ton seems very complimentary to them. I attended one of these meetings in a room at the House of Commons presided over by Lord Cranworth, and after speeches had been made certain questions were put. Would the factory owners, it was asked, be willing to accept the recommendations of the Greene Committee with regard to all the factories being combined? The reply was very ready. A shareholder in one of the factories said that whereas the average factory costs might be 11s. 11d. per ton, you might have an individual factory where the costs were only 10s. 11d., and another where they amounted to 14s. 11d., so that the subsidy must be large enough to enable the least economic factory to continue. That was a very plain statement and a very characteristic one of the individual, and it is one reason why the right hon. Gentleman—who claims persistently to have one idea and one desire in mind, and that is to help agriculture and nothing more—should not for another year continue the subsidy in circum- stances similar to those in which it has been paid during the past 10 or 11 years.

I agree that something can be said for the workers whose livelihood is involved in this industry. I do not want 20,000 or 15,000 or 10,000 men out of work if they can be employed in some useful occupation, but, as the right hon. Member for Darwen said this afternoon, if we desire to give money exclusively for the purpose of finding work, there are bananas and many other agricultural products which can be produced in large quantities if we can get anybody to buy them at the price. It has been argued by one hon. Member that £2,500,000 is not a lot of money. It would, however, do many things of real social value if it were available for certain purposes. I know the position of the agricultural worker or his representative when they go to mass meetings on this question. Of course, he has an interest at stake, because he may lose his occupation. If he loses his occupation he will be faced with the position of not having any unemployment insurance and be instantly driven to the Poor Law authorities. That is not a very good prospect for men whether they number 5,000, 10,000, 15,000 or 20,000. They have a personal interest at stake, and one can well imagine why they demand the preservation of the subsidy, if the preservation of the subsidy means the preservation of their job.

But having said so much, I am satisfied that the whole scheme from beginning to end has been one long ramp. It has reached the stage of being a public scandal and one that ought to be closed at the earliest possible moment. The continuance of the beet sugar industry really constitutes a Debate entirely on its own. So far as the mere extension of the subsidy for 12 months is concerned, I do not think that it quite involved the final, definite, conclusive position which was argued by the right hon. Member for Darwen, but I would say that when the final policy is forthcoming, whether it is to be a quasi-national institution or not, if the beet sugar industry is to be continued, I shall be ready and willing to vote against any subsidy being granted to any section of the community other than those for whom the subsidy is designed, until we see the adoption of our general policy, and that is, an import board to deal with all the raw sugar, to work in conjunction with allied industries at home, as one unit acting as it were as a national service, I shall not be willing to cast a vote at all. For these reasons, and because of my knowledge of what has happened in the past, I shall not support the Motion this evening.

9.40 p.m.

Mr. ELLIOT

We have had an instructive Debate, and not the least instructive part of it has been the remarkable and ingenious speech of my hon. Friend the Member for the Don Valley (Mr. T. Williams). It was obvious that his party had put down an Amendment which involved the continuance of assistance, but it was also clear as the evening wore on that certain allies of the hon. Member such as the hon. Member for St. Rollox (Mr. Leonard), were by no means desirous of maintaining the assistance. The hon. Member for St. Rollox declared in the most uncompromising terms that he was against the continuance of the subsidy in any form whatsoever. Therefore, the hon. Member for the Don Valley had to square the circle, and most ingeniously did he accomplish it. He declared that the scheme was an absolute ramp, and that it ought to be closed down as soon as possible, but the continuance of the beet-sugar industry was quite another matter and he did not hold with the uncompromising attitude of my right hon. Friend the Member for Darwen (Sir H. Samuel). It was ingeniously done. We owe my hon. Friend the Member for the Don Valley many compliments because, quite apart from his remarkable skill as an agricultural expert—we can sincerely compliment him on the mastery that he has attained in the last three or four years in agricultural affairs—he has shown a diplomacy and a Parliamentary humour with which I could scarcely have credited him. He has graduated in that direction, and we shall watch with interest his further developments.

The really interesting part of the Debate has been the rallying of the Labour party to the desire of the country to see further consideration given to the beet-sugar problem. I would not put it any further than that, but I would put it as high as that. The uncompromising executionary aspect of the right hon. Member for Darwen and his friends found no reflection in the attitude of hon. and right hon. Members above the Gangway opposite. That is the very justification for the continued consideration which we have given to the problem over the years which have passed, and the further consideration for which we are asking the House to give us time to-night. What we are considering is the extension of the subsidy under this Financial Resolution. I do not wish to go at length into all the arguments as to the continuance or the discontinuance of the industry itself, because that is exactly what is being weighed, and it is certainly necessary for every Member of the Cabinet to maintain an impartial attitude upon that question.

The only practical agriculturist who spoke from the benches below the Gangway opposite, the right hon. Member for North Cornwall (Sir F. Acland), quoted with great approval the words of "The Countryman," and said: "I hope that the Government will hesitate much and I hope that they will ponder very long before taking any decision in the matter." That was not the attitude of the right hon. Member for Darwen. His attitude was: "Off with its head! It has been weighed in the balance and found wanting. It has drawn enormous sums from the State. It has incurred the condemnation of shipping companies and, worse than all, it is a sin against the sacred principles of free trade. Therefore, let it be done away with. Give it short shrift." But there is division among Members below the Gangway opposite. I have often watched for the powerful advocacy of my hon. Friend the Member for the Isle of Ely (Mr. de Rothschild), but in vain. However, there is a band of brothers there which still maintains its opposition to this project, and that is, as far as I can see, the only Parliamentary reason why they still maintain a corporate existence. There is a certain amount of dubiety as to whether the policy which they so vigorously advocate could be carried out in practice.

The arguments that a decision should have been come to earlier are arguments which I have met in the past, and which I am prepared to meet in the future. The issues at stake are tremendous, because they affect not merely the beet sugar industry itself, but the industry of agriculture as a whole. Any estimate as to the number of persons who will be directly or indirectly affected is beside the point. It is not the number of persons who will be directly or indirectly affected in the sugar-beet industry itself, but the discontinuance of this element in the rotation of farming, and all the more do I have to look at this aspect of the question when I am told by the majority report that the assistance should continue until farmers have been able to find an alternative crop. I am willing to accept the majority report of the Greene Committee, as I think every hon. Member would, if there were an alternative crop which would provide an equal amount of employment and which could be sold and consumed in this country. My fear is that the alternative crop may prove a great deal more difficult to find in practice than in theory.

If I were to accept offhand the majority report I might easily say to the right hon. Member for Darwen six or eight or ten years afterwards: "I am only carrying on this subsidy on the bargain I struck with you that until I could find an alternative crop we agreed that this assistance should go on." We must look at it with open eyes. It is because of the difficulty of finding alternative crops that it is impossible for me to accept offhand the ready-made solutions of the right hon. Member for Darwen. He had something to say to my right hon. Friend the Member for Sparkbrook (Mr. Amery) and the hon. Member for East Fife (Mr. H. Stewart) as to what extent an Excise Duty could or could not legitimately be charged against a subsidy, to what extent money recovered by the Treasury by taxation could be charged against a subsidy which they were paying out. It is no doubt difficult for the Committee to follow the figures. Let me put it in a simple and easily grasped fashion. If the Committee votes this £2,750,000 for which I am asking to-night, I give it my word not to go in for extravagant adventures, not to give it away to great companies, to Tate and Lyle or to the beet-sugar factories, but I will promise, so far as £2,280,000 is concerned, to go immemiately round to the Treasury and hand it to my right hon. Friend the Chancellor of the Exchequer. I cannot say fairer than that. That leaves about £470,000, and it brings down the figure of £20,000 a day considerably; it brings it to a figure of £40,000 a month. There is a great difference between the two—

Sir H. SAMUEL

Does the right hon. Gentleman seriously contend that that is the burden on the State of this beet-sugar subsidy?

Mr. ELLIOT

Certainly. In a Free Trade country a remission of the Excise is a subsidy, because it is an exception; in a Protectionist country remission of Excise is not a subsidy because it is not an exception. Surely the right hon. Gentleman will agree to that.

Sir H. SAMUEL

It is a new revelation of the meaning of the word "Protection."

Mr. ELLIOT

I have often wondered why my right hon. Friend was not a Protectionist, but the idea seems to be dawning upon him, and I am sure that he will come round to our point of view as time goes on. Under a protective tariff moneys are not charged in the form of Excise. Let me give a simple example, and one which the right hon. Gentleman himself has constantly pressed on the attention of the Government—the case of oil from coal, home-produced petrol. Hon. Members of the Liberal party have urged that it is possible to produce petrol from our own fuel resources. Does anybody suggest that we should put an Excise Duty on that petrol equivalent to the enormous protective duty on foreign petrol coming into this country?

Mr. BUCHANAN

I say that that would be equivalent to a subsidy.

Mr. ELLIOT

The hon. Member for Gorbals (Mr. Buchanan) will contend with the right hon. Member for Darwen that all protective duties are subsidies. All I say is that nobody can say that it is paid out to the industry in question. If the motor car industry had had an Excise Duty laid upon it equivalent to a tariff of 33⅓ per cent., it would have meant a levy of between £100,000,000 and £200,000,000 on the motor car industry, and the engineering trade union and the labour movement would suffer severely indeed.

Mr. BUCHANAN

We are dealing with sugar-beet now.

Mr. ELLIOT

The hon. Member was arguing the general case. If a tariff is applied to anything coming into this country and a corresponding Excise Duty is not levied on the home produced article, the home-produced article is enjoying a subsidy to that extent. The hon. Member is not willing to apply it to engineering, although he is willing to apply it to agriculture. The right hon. Member for Darwen touched upon a difficult matter—the sums which have been distributed by beet-sugar factories. It is interesting that both the majority and the minority report indicate that some steps will have to be taken with regard to the factories if the subsidy is to continue. It is with that in mind that the Resolution does not continue the assistance in the form in which it has been granted for the last 10 years. All it covers is the bare working costs of the factories. The interest on capital and depreciation of plant are reserved, and, in addition to the careful examination which was held for the purposes of the report, there is another examination going on in order to gain still more information for the Government before we come to a decision.

It is true, as the right hon. Member for Swindon (Dr. Addison) said, that the whole situation is to some extent fogged by the existence of the factories, the dividends and bonuses which certain factories have paid, but hon. Members must remember that that was done, as the Noble Lord the Member for Newark (Marquess of Titchfield) said, because they came into existence on a short-term basis with a high subsidy being paid in the initial stages. Some factories got away with a flying start, and were receiving a subsidy to cover construction costs and equipment. During that time there is no doubt that certain enterprises were able to make very considerable profits. If we can work out the long-term policy, these difficulties can be obviated, and it is with a view to examining these points as well as others that we ask the Committee for the extension of time. We ask it with the more confidence since many of the accusations brought against us do not hold water. We were told that the beet-sugar subsidy had incurred the condemnation of a committee of shipowners. Why should my right hon. Friend the Member for Darwen be so willing to deny what is said by another committee and so willing to accept the verdict of a com- mittee of shipowners. Let us look at this with an open mind. I find that in 1913 before there was any subsidy, there was paid to shipowners for carrying sugar £916,358 and in 1934 after the operation of the subsidy for many years there was paid to them £1,971,850. A greater freight was paid for carrying sugar from abroad last year than before the subsidy began. How is it fair to say that the beet-sugar industry is directly damnifying the shipowners to the extent that was alleged.

Sir H. SAMUEL

Why not?

Mr. ELLIOT

The right hon. Gentleman asks why not? Whenever a shipowner says anything to him he thinks it must be true, but whenever a sugar-beet grower says anything to him he thinks it must be inaccurate.

Sir H. SAMUEL

The right hon. Gentleman's argument is clearly a non sequitur. If there were no beet-sugar produced in this country, and an equivalent amount came from abroad, obviously there would be the same freight.

Mr. ELLIOT

If more were imported from abroad. The right hon. Gentleman's argument is a non sequitur. Why does he suppose that if sugar were not produced here more would be brought from abroad?

Sir H. SAMUEL

Because of the demand.

Mr. ELLIOT

Does the right hon. Gentleman really think that if the industry of agriculture were to collapse there would be more food imported into this country for the people who were not growing food here? Is it not possible that there would be a general diminution in the standard of living which would bring all the consumption down? If it were possible to follow the right hon. Gentleman's argument to its logical conclusion, it would show that if we shut every field in this country and brought all the food from abroad, there would be a great increase in the amount of freight brought in. Does the right hon. Gentleman suppose that that would be the best thing for this country? If you shut down every coal mine and carried all the coal from abroad, rates would, of course, bound up, but does the right hon. Gentleman think that he would get any support for a policy like that from the Labour party? Not at all. The matter is not as simple as that. It is true that the sugar industry in this country requires assistance, and to that extent the experiment has failed. The countries of the world are filling this country with sugar below the cost of production just now. It is not to be supposed that that will go on indefinitely. I will call the right hon. Gentleman to my aid in this matter. Precisely the same position occurred a few years ago with regard to wheat. The assistance given to wheat is assistance of a very substantial kind. It is equivalent to very nearly 100 per cent. So strong were the arguments for that assistance that the right hon. Member and his party supported it. The right hon. and gallant Member for Caithness and Sutherland (Sir A. Sinclair) in a most eloquent peroration convinced the House not merely of the desirability of a subsidy, but of the desirability of people making a profit out of it, which I understand is the very point to which the right hon. Member for Darwen so largely takes exception. The right hon. and gallant Member for Caithness and Sutherland said, in winding up the Debate: The hon. Member asked me what safeguards there were to ensure that farmers employed modern methods. An incentive is far better than safeguards. The Bill calls out all that is best in the farmer. There is the greatest possible incentive in the Bill to progressive farmers to use up-to-date methods, to reform their systems of farming and to get the greatest amount of profits possible out of the Bill. The right hon. Member for Darwen wholeheartedly approved of that. I do not wish to attack him as to the schemes of mass bribery which he said we had originated and from which he begged us to cut ourselves free. The Wheat Act was an Act which he supported and helped to put on the Statute Book, and I am sure he would not wish us to repeal legislation for which he fought shoulder to shoulder with us. The assistance of the beet-sugar industry is necessary, and will undoubtedly be to the benefit of the country as a whole. We have very substantially advanced during the course of the Debate to-day. We have found assistance in a quarter from which we scarcely expected it. I refer to the Labour benches above the Gangway. There has been a remarkable change of heart on the part of right hon. and hon. Gentlemen who tabled the Amendment which is on the Paper but was not called. There is only one frag- ment of a party which is opposed to a continuance of the subsidy on any terms and for any reason whatever and that is the party led by the right hon. Member for Darwen. As the Government have gone so far to persuade the Opposition of the necessity for this proposal, I beg

Resolution to be reported upon Monday next.

the Committee now to let us have the Resolution.

Question put.

The Committee divided: Ayes, 167; Noes, 20.

Division No. 251.] AYES. [10.5 p.m.
Acland-Troyte, Lieut-Colonel Glossop, C. W. H. Percy, Lord Eustace
Agnew, Lieut.-Com. P. G. Gluckstein, Louis Halle Perkins, Walter R. D.
Amery, Rt. Hon. Leopold C. M. S. Goff, Sir Park Peters, Dr. Sidney John
Apsley, Lord Goodman, Colonel Albert W. Petherick, M.
Assheton, Ralph Gower, Sir Robert Procter, Major Henry Adam
Baldwin, Rt. Hon. Stanley Gretton, Colonel Rt. Hon. John Radford, E. A.
Baldwin-Webb, Colonel J. Grimston, R. V. Raikes, Henry V. A. M.
Beauchamp, Sir Brograve Campbell Hales, Harold K. Ramsay, T. B. W. (Western Isles)
Beit, Sir Alfred L. Hamilton, Sir George (Ilford) Ramsbotham, Herwald
Benn, Sir Arthur Shirley Hannon, Patrick Joseph Henry Rhys, Hon. Charles Arthur U.
Blaker, Sir Reginald Harvey, Major Sir Samuel (Totnes) Rickards, George William
Bower, Commander Robert Tatton Haslam, Henry (Horncastle) Roberts, Sir Samuel (Ecclesall)
Bowyer, Capt. Sir George E. W. Headlam, Lieut.-Col. Sir Cuthbert Rosbotham, Sir Thomas
Braithwaite, Maj. A. N. (Yorks, E. R.) Hellgers, Captain F. F. A. Ross, Ronald D.
Braithwaite, J. G. (Hillsborough) Heneage, Lieut.-Colonel Arthur P. Ross Taylor, Walter (Woodbridge)
Briscoe, Capt. Richard George Hope, Capt. Hon. A. O. J. (Aston) Russell, Alexander West (Tynemouth)
Broadbent, Colonel John Hore-Belisha, Rt. Hon. Leslie Russell, R. J. (Eddisbury)
Brocklebank, C. E. R. Howard, Tom Forrest Rutherford, John (Edmonton)
Brown, Rt. Hon. Ernest (Leith) Howitt, Dr. Alfred B. Rutherford, Sir John Hugo (Liverp'l)
Brown, Brig.-Gen. H. C. (Berks, Newb'y) Hudson, Capt. A. U. M. (Hackney, N.) Samuel, M. R. A. (W'ds'wth, Putney)
Browne, Captain A. C. Hudson, Robert Spear (Southport) Selley, Harry R.
Burghley, Lord Hurd, Sir Percy Shaw, Captain William T. (Fortar)
Burton, Colonel Henry Walter Hutchison, W. D. (Essex, Romford) Simon, Rt. Hon. Sir John
Butler, Richard Austen Jamieson, Rt. Hon. Douglas Smith, Sir J. Walker- (Barrow-in-F.)
Campbell, Sir Edward Taswell (Brmly) Kerr, Lieut.-Col. Charles (Montrose) Smith, Louis W. (Sheffield, Hallam)
Campbell, Vice-Admiral G. (Burnley) Kerr, Hamilton W. Somervell, Sir Donald
Campbell-Johnston, Malcolm Kimball, Lawrence Somerville, Annesley A (Windsor)
Carver, Major William H. Leckie, J. A. Sotheron-Estcourt, Captain T. E.
Cayzer, Maj. Sir H. R. (Prtsmth., S.) Leech, Dr. J. W. Southby, Commander Archibald R. J.
Chapman, Col. R.(Houghton-le-Spring) Lees-Jones, John Spears, Brigadier-General Edward L.
Christie, James Archibald Lewis, Oswald Stanley, Rt. Hon. Oliver (W'morland)
Cobb, Sir Cyril Lindsay, Noel Ker Stones, James
Conant, R. J. E. Lloyd, Geoffrey Strickland, Captain W. F.
Cook, Thomas A. Loftus, Pierce C. Sugden, Sir Wilfrid Hart
Cooper, A. Dull Lovat-Fraser, James Alexander Summersby, Charles H.
Courtauld, Major John Sewell Lumley, Captain Lawrence R. Thomson, Sir James D. W.
Courthope, Colonel Sir George L. McCorquodale, M. S. Titchfield, Major the Marquess of
Craddock, Sir Reginald Henry McEwen, Captain J. H. F. Todd, A. L. S. (Kingswinford)
Croft, Brigadier-General Sir H. McLean, Major Sir Alan Touche, Gordon Cosmo
Crooke, J. Smedley Macquisten, Frederick Alexander Turton, Robert Hugh
Crookshank, Capt. H. C. (Gainsb'ro) Margesson, Capt. Rt. Hon. H. D. R. Wallace, Captain D. E. (Hornsey)
Crossley, A. C. Mason, Col. Glyn K. (Croydon, N.) Ward, Lt.-Col. Sir A. L. (Hull)
Cruddas, Lieut.-Colonel Bernard Mayhew, Lieut.-Colonel John Ward, Irene Mary Bewick (Wallsend)
Davidson, Rt. Hon. Sir John Meller, Sir Richard James (Mitcham) Ward, Sarah Adelaide (Cannock)
Davies, Maj. Geo. F. (Somerset, Yeovil) Mellor, Sir J. S. P. Warrender, Sir Victor A. G.
Dixon, Captain Rt. Hon. Herbert Mills, Major J. D. (New Forest) Watt, Major George Steven H.
Drewe, Cedric Morgan, Robert H. Wedderburn, Henry James Scrymgeour-
Duncan, James A. L. (Kensington, N.) Morris, John Patrick (Salford, N.) Wells, Sidney Richard
Eillot, Rt. Hon. Walter Morris-Jones, Dr. J. H (Denbigh) Williams, Herbert G. (Croydon, S.)
Eills, Sir R. Geoffrey Morrison, William Shephard Willoughby de Eresby, Lord
Elmley, Viscount Muirhead, Lieut.-Colonel A. J. Windsor-Clive, Lieut.-Colonel George
Essenhigh, Reginald Clare Nation, Brigadier-General J. J. H. Womersley, Sir Walter
Flelden, Edward Brocklehurst Nicholson, Godfrey (Morpeth) Worthington, Sir John
Fox, Sir Gifford Nicholson, Rt. Hn. W. G. (Petersf'ld)
Fuller, Captain A. G. Palmer, Francis Noel TELLERS FOR THE AYES.—
Ganzoni, Sir John Pearson, William G. Mr. James Stuart and Lieut-Colone
Gault, Lieut.-Col. A. Hamilton Penny, Sir George Llewellin.
NOES
Bernays, Robert Janner, Barnett Stourton, Hon. John J.
Buchanan, George Leonard, William White, Henry Graham
Evans, David Owen (Cardigan) Llewellyn-Jones, Frederick Wood, Sir Murdoch McKenzie (Banff)
Evans, Capt. Ernest (Welsh Univ.) Mander, Geoffrey le M. Young, Ernest J. (Middlesbrough, E.)
Griffith, F. Kingsley (Middlesbro', W.) Mason, David M. (Edinburgh, E.)
Hamilton, Sir R. W. (Orkney & Zetl'nd) Pickering, Ernest H. TELLERS FOR THE NOES.—
Harris, Sir Percy Samuel, Rt. Hon. Sir H. (Carwen) Sir Walter Rea and Mr. Harcourt
Horobin, Ian M. Sinclair, Maj. Rt. Hn. Sir A. (C'thness) Johnstone.