§ 1.49 p.m.
§ Captain RAMSAY
I and my Friends wish to raise a subject of considerable importance, the removal of the Potato Duties. Although there are not many hon. Members present, that is no reflection as to the gravity of the subject. We make no apology for raising the question. The removal at such short notice of all the duties on potatoes other than new, has filled the whole of the agricultural community of this country not only with astonishment but with dismay. They have seen overnight, as it were, the processes which they have spent years in building up threatened, and threatened in the teeth of the advice not only of their own elected representatives but of the Potato Marketing Board, which the Government set up to advise on this 3006 subject. We contend that the two Orders annulling these duties are unnecessary, have been hastily issued and that they are unwanted by the state either of prices, of supplies, or of the quality of potatoes in the country at the present time.
The Import Duties Advisory Committee—I should be the last to criticise them whenever it can be avoided, because I have the greatest admiration for them—are servants of this House and we are bound to call attention to the fact that they did not place any advertisement in the newspapers of the intended removal of the duties. On the showing of the Potato Marketing Board the opportunities of consultation afforded were of the very slenderest nature. There are messages from people all over the country who say that they would have liked to have been consulted. They cannot understand why an advertisement was not put in the newspapers, so that they might have stated their views. In mitigation of this error on the part of the Advisory Committee in recommending the removal of these duties it might be said that they were possibly or probably misled by the quotas fixed by the Board of Trade, erroneously and in the teeth of the firm and clearly expressed opinion of the Potato Marketing Board, whose business it is to estimate the supplies available in the country.
To elaborate my point I must go back to December of last year, when these quotas were fixed. At that time the prices of potatoes had been rising for some weeks. At Perth the price since November had risen from 60s. to 90s. a ton and at Spalding from 85s. to 120s. There was a great difference of opinion between the Board of Trade and the Potato Marketing Board on two points. The first was that the Board of Trade were under the impression that this rise in prices was going to continue. The Potato Marketing Board took the very definite opposite view that the prices were somewhere very near the peak. The second point of difference was that the Board of Trade, or the authorities on the one side concerned with estimating supplies and fixing the quotas, believed or feared that the supplies might be short, while the Potato Marketing Board said that in their opinion supplies were adequate and the quotas did not need to be large. In the teeth of that 3007 advice, quotas were fixed for this month which in the opinion of the Potato Marketing Board were greatly excessive. The Potato Marketing Board is the authority set up by this House to find out what is the correct figure, and if they do not know, why should someone else be supposed to know better. In the teeth of this advice quotas were fixed in December last for the import of potatoes during these present months which, if the Board's opinion were worth anything, if fulfilled would produce chaos. Their opinion was that there would be shortage if the quotas were not fulfilled.
These excessive quotas so fixed have been used as one of the main arguments and one of the main levers used by the importers of potatoes in their representations to the Tariff Advisory Committee in order to persuade them that because of these monstrous duties, these reasonable quotas which had been fixed were not being complied with. The Tariff Advisory Committee on these false premises recommended the removal of the duties in order that the quotas might be fulfilled, but we are still of the opinion and the Potato Marketing Board is still of the opinion that if the quotas were fulfilled the result would be disastrous to the potato market. Take the position to-day. The people who champion the Orders removing the duties—and I have spoken to a few of them lately—have said, "You take your stand on supplies, but we cannot get potatoes, we cannot buy potatoes."
I have telegrams here from all over Great Britain from people who are prepared to sell 85,000 tons of potatoes here and now. [An HON. MEMBER: "What commission? "] No commission at all. I have a telegram from a firm in Boston, Lincolnshire, who are prepared to place 44,000 tons of potatoes for immediate delivery, and another telegram from a firm in Montrose offering them at £5 per ton. There is no foundation in the argument that there is any lack of quantity. Then we come to the question of quality. Several people have said to me: "You may be able to supply all these potatoes, but they are not worth eating." I have telegrams from the best authorities in the country on the subject of quality. I have one from the same firm in Boston which says that the quality of the 44,000 tons of 3008 potatoes is exceptionally good. It remarks:Winter storage conditions ideal, remaining stocks sound, dry and in good condition.Here is another telegram from Perth:I have made comprehensive inquiries regarding quality of potatoes offered by Scottish merchants. They comprise Spaldings, King Edwards, Majesties; approximately 80 per cent. are of first class quality, and 15 per cent. of second class.We, therefore, say that all the arguments of the Potato Board are justified, that there is not only a plentiful supply but that they are of good quality. And it must be remembered that the 85,000 tons of potatoes which are ready for immediate delivery are not the total stocks of potatoes in the country or anywhere near it. We are prepared to send these potatoes round to the Board of Trade in plain vans within four days. Then there is the question of price. In December the first sharp division of opinion was in regard to quantity and the second as regards price. The Potato Board believed that prices had reached the peak, or very near it. The importers—I should hate to suggest who they might be although some hon. Members might suggest names—insisted that the board should run the risk of prices going through the roof, and the apprehensiveness, which has led to the fixing of these high quotas, was allowed to gain the upper hand. We reached the peak of potato prices about 14th January last, and then Spaldings declined from 135s. to 122s. 6d.—I believe they are to-day at 120s. In Perth prices have fallen during the same period from 100s. to 90s.
Although there are plenty of stocks in the country, although the quality is good and prices are falling, the duty is suddenly removed. Is it any wonder that there is some apprehension in the country? People who would like to attack the board refer to the £5 per acre, and ask, "Why do you make this a close corporation? Why not reduce the amount of £5 per acre?" They evidently are unaware of this most important fact. The basic acreage was fixed at 671,000 acres in 1933; to-day we have only 595,000 acres under cultivation. It is not the £5 per acre that is keeping production back. It is nothing but the price. How can we expect the farmers of this country to increase production, 3009 if, the moment prices become remunerative and there is an opportunity of getting somewhere near our basic acreage, these duties are removed on the representation of the importers? At the moment we are engaged in a gigantic task, as far as the agricultural community is concerned, in trying to make potatoes a reliable and stable crop, which will be not only of financial benefit to the farming community but a food asset in times of stress and emergency. This kind of action at the moment when there appears to be profits is not likely to produce very satisfactory results. It must be remembered that the potato industry has been making losses for years. Is it never to be allowed to recoup itself for the lean years? It is not calculated to encourage an extension of our potato acreage if at the moment we are doing so action like this is taken.
We have set up a Marketing Board, and it is not very encouraging for them to do their duty, or calculated to make them keen in the exercise of their duties, if they feel that His Majesty's Government will take action of this kind in disregard of their advice. The Government are like people who by an expensive dog and then insist on barking themselves, and, incidentally, up the wrong tree. We have established a whole system of agricultural marketing boards throughout the industry. Only a few nights ago we set up another one in Scotland —the Raspberry Marketing Board. What are these people going to think when they see the treatment which is meted out to this Marketing Board, which has been the first to make a success of its job? Will they be encouraged to make a success of their own job, or will they follow the example of the miners and ca'canny? Who is going to benefit? [An HON. MEMBER: "The landlord.] There is only one person who will benefit. The £1 per ton cannot be passed on to the consumer, and the only person who will benefit is the importer. I would not like to suggest who they are, but probably hon. Members will have an idea. I have heard that the Co-operative Societies are trying to get 26,000 tons of Polish potatoes cheap.
I hope the Minister is not going to say in the historic words of an historic Liberal, "Wait and see," because we contend that in this case all the arguments are clearly on our side as regards 3010 both quantity and price. If the Parliamentary Secretary declines to yield our point then we say that at least the case for the importers has not been proved. It is not a case in which those who represent the whole of the agricultural community, the marketing board system, the growers, producers and merchants, should be asked to wait and see how severe the fight is going to be. It is not very encouraging for the man behind barbed wire when he finds that the barbed wire has been cut to be told that he can just wait and see how deadly the coming attack is going to be. We shall not be content if we are told to wait and see. I would only say that although we be few here to-day and we come in peace, we hope my hon. Friend will not ask us to wait and see, because if he does I must inform him that we shall come again and push this matter to a Division at the earliest possible opportunity.
§ 2.6 p.m.
§ Captain W. T. SHAW
I would like to add my protest to that which has been made by the hon. and gallant Member for Midlothian and Peebles (Captain Ramsay). The producers of potatoes have not had a great opportunity of putting their case before the Import Duties Advisory Committee. I do not know when this advice came to the Treasury, and I do not know whether it was properly considered. I notice that the order is signed by two of the Junior Lords of the Treasury, and I hope they are not to be held responsible for the removal of the duty. From the Front Bench and from almost every platform in the country we have heard the principal Government speakers take great credit for the enormous return of confidence that has come in the country since the National Government took office. I hope they are not attributing that confidence to any great belief in the personal qualities of the Ministers. We do not treat them as, or believe them to be, supermen. This return of confidence is due in the main to the change that has been made in the fiscal policy of this country. It is upon that fiscal policy that this confidence rests. If we have an Order which indicates that that policy is insecure and may be swept away almost over-night, there will be a return to the conditions of 1931.
I cannot think there is any justification for the removal of this duty. The 3011 price of potatoes is certainly not excessive. In my county in Scotland, a county which I believe produces the largest amount of potatoes in Scotland, the price did not exceed £6 a ton and was usually between £4 and £5 a ton. I do not think that can be considered an excessive price. As far as I can see, the removal of this duty has not helped the consumer. I think the only people who have been or are to be helped by it are the importers and the middlemen. My domestic information is that the price of potatoes to the ordinary consumer has not fallen since the duty was removed. When I have my dinner in one of the dining-rooms of this House, I have to pay exactly the same price for potatoes as I did before. The whole benefit of the removal of this duty is to go into the pockets of the middlemen.
The removal of the duty has certainly had a disastrous effect upon producers in my constituency. In the market town of Angus, I am told it is practically impossible to sell potatoes at the moment, and it may interest the representative of the Board of Trade—I see there is no representative of the Treasury on the Front Bench—to know that in my constituency people are asking themselves whether, if potatoes had been as important to the trade and industry of Birmingham as they are to Angus, this duty would have been removed. In that case would this recommendation of the Import Duties Advisory Committee have been accepted with the rapidity with which it has been?
As usual the Scottish agricultural industry has suffered more than the English agricultural industry. Owing to climatic and other conditions the producers in Scotland are not able to market their potatoes as early in the season as the producers in England, so that the removal of the duty is hitting the Scottish producer far more in proportion than it is the English producer. I am very sorry no representative of the Scottish Office is present to-day, because I wanted to impress upon the Secretary of State for Scotland the necessity for treating this matter urgently, and I wanted to ask him whether he would not use his influence with the Government to have this duty reimposed at dm earliest pos- 3012 sible moment. I appreal to the Prime Minister, to the Lord President of the Council, and to the Home Secretary, whom I saw sitting here only a few moments ago, because in the Government Manifesto issued during the General Election we were assured that Scottish agriculturewill be the subject of special care and attention.I hope the Secretary of State for Scotland will bring this matter very prominently and urgently before the whole Cabinet, including the three right hon. Gentlemen to whom I have referred.
Within the last two months the Secretary of State for Scotland has set up a new committee to inquire into the labour conditions of agricultural workers in Scotland. There is no class of the agricultural community with whom I have greater sympathy than the agricultural workers in Scotland. They have suffered enormously, and for a long time. They have not had the rise in wages which has come to many agricultural workers in England. I think the Secretary of State for Scotland must remember that the first essential to an improvement in the conditions of the agricultural workers in Scotland, and the workers in any industry, is to see that the industry is put upon a profitable basis and upon a sound economic footing. I venture to think that the reimposition of this duty would do far more to improve the position of agricultural workers in. Scotland than would be done by 20 committees to inquire into conditions Therefore, I say that from the point of view of the Scottish farmers, the producers, and the farm workers, this duty ought to be reimposed at the earliest possible moment.
§ 2.13 p.m.
§ Major DORMAN-SMITH
I would like to add my voice to the contentions that have been made regarding this matter. It may be said that the growers are squealing before they have been hurt, and that since this duty has been removed for so short it Time, the moment has not yet come to make a protest; but I suggest that probably the boot is on the other foot, and that it is the importers who are shouting before they have been hit. In fact, the markets have been disturbed, and are at this moment 3013 very disturbed indeed. It is true to say that the market is almost stagnant at the present moment and that the sales are not going forward with anything like the frequency or the amount that they should be. The growers are profoundly disturbed and the buyers are waiting to see what will happen. I suggest that the growers have every reason to be disturbed. There could be only one valid reason so far as I can see for removing this duty, and that would be if there were, in fact, a genuine shortage which would be liable to raise prices unduly. If that were the case, I do not think there is a single grower who would make any complaint about the duty being taken off; but there is no shortage, and the Marketing Board, who ought to know, and whose prophecies so far have been very accurate—I suggest a little more accurate than those of one or two of the Departments concerned—are of the opinion that the normal supply in this country, plus the ordinary imports on which duty would be paid, would well meet all the demands of the consumer.
§ Sir FRANCIS ACLAND
Is it not the fact that in February, following a census, the board estimated a shortage of 63,000 tons? Was not that the estimate on which the authorities were going?
§ Major DORMAN-SMITH
That was for one week. After that ascertainment another was made and Northern Ireland came in with a substantial amount of potatoes. It was also found from the other returns coming in that there were more potatoes than the board had originally estimated.
§ Sir F. ACLAND
I only wanted to be sure that the fact should not be ignored that the Potato Marketing Board itself at one time estimated a fairly considerable shortage.
§ Major DORMAN-SMITH
That is really the whole point. If the Board of Trade had kept in closer touch with the Potato Marketing Board or had given more heed to what the board eventually ascertained, there would have been no need at all for this duty to have been taken off. What the board are frightened of at present is that, if there is a vast import of potatoes, there will be a glut. The potato is not a very romantic plant and one would not say that it is a very 3014 sensitive plant, but it does create a most sensitive market. In 1932, when there was only a surplus of some 9 per cent., prices to growers were reduced by 50 per cent. Over the last 12 years, when there have been small surpluses or small deficits, there has been a range of prices from £2 6s. to 7s., although production has varied only from 3.5 to 4.7 million tons. That shows that the market is very sensitive, and the utmost care has to be taken not unduly to disturb the market without very good cause. I am forced to wonder whether in fact the Import Duties Advisory Committee or those who have sponsored their report have gone fully into the matter or have taken all these facts into consideration. It is the violent fluctuations brought about by these disturbances which have been the bugbear of people in the potato industry, and it was in order to do away with the fluctuations that producers agreed to set up a Marketing Board. We did not set it up to try to hold consumers to ransom.
§ Mr. G. HARDIE
An admission has been made that there was a shortage for one week, and I accept the statement that it was only for one week, but it is said—and sometimes what is said turns out to be true—that there are attempts to hold up supplies or to hide supplies. Having taken great interest in the question of potato supplies in Scotland, I have taken trouble to make inquiries and I have discovered that in Glasgow, for instance, there was a hold-up, and when that was broken potatoes were sold at 30s. a ton instead of the previous price of £3 15s.
§ Major DORMAN-SMITH
Returns do not all come in at the same time. Farmers are getting more used to filling up forms, but they are not yet absolute experts. It was on later ascertainments that the board were able to make representations. As I was saying, this board was set up to try to maintain a steady flow of potatoes on the market at a level price, and those potatoes were to be grown on British soil. That was one of the important things. In order to maintain the acreage of potatoes there must be confidence in the future. If confidence is shaken there can be no doubt that we shall get back to the situation where the growing of potatoes will be just a gamble and producers will never know what they are going to get, so that we 3015 shall have to rely more and more on imported potatoes. That I think would be to the detriment of the country as a whole.
During the board's life it has been trying to create that feeling of confidence in the minds of the growers. It has been trying to persuade growers that the Government are in fact going to carry out pledges made to agriculturists. The board has been trying hard to do that and has been setting about its appointed task to try to correlate the supply with demand, which I think must appeal to all those who are thinking about import boards. Now it looks to the farmers of the country as if directly they get anything like a reasonable price and think they can look forward with confidence, the Government come along and take action to depress prices and to put farmers back in the old feeling of insecurity. I do not believe that prices are unduly high at the present time. If you compare present prices with prices which ruled before the board came into office—taking a similar year, 1931—you will find that potatoes now are some £2 cheaper than they were in that year, which was a year of more or less similar production. I think that that shows that the board is striving to keep a level price.
I do not want to criticise the Import Duties Advisory Committee, because I have the utmost respect for what they have done, but they have to deal with a variety of trades and a very wide variety of applications, and it may be that in some cases they will make mistakes and errors. This may be a case in which they were rather in error and were rather rushed over the applications. As far as the National Farmers' Union is concerned, we heard of the application on 2nd March, and the duty came off on 24th March. Action was taken after only an informal talk with those who represent producers' interests. There was no chance for them to give a considered opinion on the matter. Therefore I hope that some steps will be taken to put back the duty. If marketing boards are going to continue and if new boards are to be set up I think that those who are called upon to carry out that policy may find it very difficult if this is the type of action that is going to be taken. I hope we shall have some assurance that the Government will give adequate pro- 3016 tection and maintain conditions under which it will be possible for these boards to continue.
§ 2.24 p.m.
§ Mr. ORR-EWING
It was with some sense of alarm that I listened to the speeches which have been made by hon. Members on this subject. I am a very warm supporter of everything that pertains to the good of the agricultural industry, and in what I am going to say I do not want to seem to imply that there is any weakening on my part in supporting any steps that can reasonably be taken to improve the conditions of any branch of that industry. In spite of the fact that hon. Members have said they do not wish to attack the Import Duties Advisory Committee, and in spite of the kind words which have been said about that body, it appears to me that, in fact, an attack is being made on that committee and that the question which we are being asked to consider is one which ought to be considered by that committee and by that committee alone. As far as I know, there is nothing to prevent any body representing growers of potatoes from submitting new evidence to the committee and it seems to me that this House, having decided wisely some months ago to put this question of duties into the hands of the committee, it would be wrong for us to do anything this afternoon which would imply any lessening of, or any wish to lessen the powers of that committee which has to consider the case as it is submitted from all sides.
I believe that an even graver danger is involved in this matter. We see a battle of evidence between the Potato Marketing Board and other branches of the administration. The first duty of the Marketing Board is to represent the interests of the growers of potatoes. There need be no concealment of the fact that a body so representing the producers is bound to put forward the producers' case as strongly as it can be put forward. I would not accuse the hoard of ignoring the consumers' case, but obviously the board has not so much at heart the putting forward of the consumers' case as the putting forward of the producers' case. Again I would point out that it is open to other bodies representing the consumers and it may be representing other branches of the growers, to put forward evidence to the committee.
§ Mr. ORR-EWING
I think that bears out my first argument that evidence was not produced before the committee. We are informed that there was some gap between 2nd March and 24th March. During that period evidence might have been put forward, and if that evidence was not put forward, there is nothing to prevent it being submitted to the committee now. To claim that the Potato Marketing Board should have absolute power to over-ride any other evidence which is submitted by other bodies, would be a very dangerous claim indeed. Though I am strongly in favour of the setting up of these marketing boards and of the steps which have been taken to organise every branch of the agricultural industry, yet I shudder at the possible results of arguments such as those put forward by the hon. and gallant Member for Midlothian and Peebles (Captain Ramsay). What would be the result if his argument were carried to a final conclusion. It would be to give dictatorial powers to the marketing boards.
§ Captain RAMSAY
I am sure the hon. Member does not wish to misrepresent what I said. What I said was that in a period when the case was, at least, not proven, it is the importer, not the producer, who should wait and see.
§ Mr. ORR-EWING
With all due respect, I do not think that affects the argument. We come back to the statement that the case is not proven and again I submit that if new evidence exists, it is still open to those concerned to submit that evidence. We can only take it that the committee considered that the case had been proven. They are not going to take action on a case in which they have not satisfied themselves that there is sufficient evidence. But the evidence which they had they obviously considered sufficient. Therefore this is really an attack on the manner in which the committee has carried out its work. I fear the results of the carrying out of a policy such as the hon. and gallant Member indicated, and I feel certain that if this case is forced and if over-riding powers are claimed for these marketing boards, those who do so will deal a death blow 3018 to the prestige of the agricultural industry.
§ 2.30 p.m.
§ Sir RONALD ROSS
I think the hon. Member for Weston-super-Mare (Mr. Orr-Ewing) is under a misapprehension. I do not think that my hon. and gallant Friend the Member for Midlothian and Peebles (Captain Ramsay), who made such a closely-reasoned speech, for one moment claimed that the Potato Marketing Board should have dictatorial powers. Far from that, what he said was that on the merits of this case and on the facts of the situation there was no proper justification for taking off this duty. I speak not only for myself but for every Member from Northern Ireland who has taken his seat in this Parliament and who represent an agricultural constituency.
§ Sir R. ROSS
Yes, we in Northern Ireland are akin to our friends across the water in Scotland. Sometimes even our names are not dissimilar and certainly many of our problems are the same. I see with regret that we have here to-day representing the Government my hon. Friend who so ably and with such a versatility acts as Parliamentary Secretary to the Board of Trade. We all know of those articles with obscure names which are granted drawbacks or on which additional duties are imposed, and we know that my hon. Friend is conspicuously successful in dealing with them, but is he truly and at heart an agriculturist 7 I do not think the ordinary farmer or agricultural labourer, looking at my hon. Friend, would come to that conclusion, and I regret that we have not on the Front Bench to-day the Minister for Agriculture. This is not merely an Import Duties Order affecting a small sectional interest. It is a big question affecting agricultural policy.
As regards Northern Ireland we have a limited compass in agriculture. We cannot produce wheat though we pay the subsidy to the wheat-growing areas and do so -without complaint. We cannot grow sugar beet. We rely on oats and cattle and the position in regard to oats has been desperate. As regards cattle, trade has not been good and prices have been bad. I hear occasional murmurs from hon. Members opposite. I do not 3019 know what those murmurings are about but I would point out that in order to help the South Wales coal miners, cattle is being allowed into this country from the Irish Free State to the detriment of people who are trying to produce cattle and who have perhaps a lower standard of living than the miners. As regards potatoes this was the first year for many years in which we in Northern Ireland looked like being able to sell our agreed quota of 200,000 tons in the markets of Great Britain. That quota was agreed upon with the Northern Ireland Potato Marketing Association.
For a number of years we have been producing at a loss. Recently, as a result of the policy of the Government, growers in Great Britain have been producing more potatoes for their own countrymen, that is to say for the British market and the increase has gone far more in proportion to the English and Scottish growers than to the Northern Ireland growers. But we had one function. We provided the reserve. We provided a large quantity of potatoes as a pool which could be called upon, in the event of a shortage and, as I understand it, an undertaking was given that, if there was a shortage, then Northern Ireland would be asked for more potatoes. I hesitate to use the term "breach of faith" until I have heard an explanation, and I must say that I regret that we have only the technical side of the Board of Trade represented here to answer this question, because it is a big question, and we understood that we had an undertaking that we were to be called upon to see what we could do before any steps were taken to increase supplies from abroad.
When this matter came up Northern Ireland at once said that, without decreasing the normal quota which they were sending across, they could immediately supply a further 25,000 tons to this country. Nevertheless, the duty was taken off, and it is a position which is very hard to understand. Who asked for this duty? Not the consumer, so far as I know. The Committee were approached by a group of importers, but those importers have been buying potatoes at less than the cost of production from my constituents for the last three years, and they have got the duty taken off foreign potatoes. On what ground? On the ground that when they were buying 3020 potatoes at from £5 to £6 per ton from the producer, they could not sell them at anything less than £12 to £14 a ton on the retail market. Hon. Members opposite are always poking for opportunities to denounce the excess profits on various forms of capitalist enterprise, and here I am handing them something which may be of use to them.
§ Sir R. ROSS
There is an opportunity especially to the hon. Member for Spring-burn (Mr. Hardie), who seems to be as voluble on this subject as on the subject of unemployment. Let him and his friends look into this matter and see if they can get any charges of profiteering or exploitation out of it.
§ Sir R. ROSS
The hon. Member has been fairly lively to-day, and I will not give way to him, as I think we have had quite enough from him for to-day. The suggestion that there was a shortage of potatoes is entirely unfounded, because in December the shipments from Northern Ireland were 28,000 tons a month. In February they had fallen to 24,000 tons a month, and that was at a time when there is generally a seasonal increase, a time when we expect the supply which we send over the water to increase. The drop was not due to lack of supplies, because we had plenty of supplies, lots of potatoes. It was due to lack of orders, and it is astonishing to me, in the face of those facts, to see this duty taken off at this time.
The potato producers, not only from my constituency and my country, but from Scotland and England as well, are exposed to subsidised competition. We know that heavy subsidies are paid, for instance, on Dutch potatoes. There is another consideration. As regards the Irish Free State, they have had a fairly heavy subsidy on their own potatoes. What is the result of this Order? They are reducing it proportionately, and so the money which was put on as an export bonus and which went, very appropriately, to the British Treasury, is now merely being saved to the Irish Free State Treasury, which does not have to put it on. It puts on just enough to see 3021 whether it can get in on our market and undercut the home producer, who gets no subsidy.
As soon as the duty came off, there was a falling off of orders. The retailer is only human, and if he thinks he can get cheap potatoes from abroad, he will wait a bit. The producer has not held up any potatoes. Certainly ours never held up potatoes, but were only too eager this year, after about three years of producing at a loss and having great difficulty in selling any potatoes at all, to get an opportunity of selling their crops. This whole question shakes the confidence of people connected with agriculture to a very serious extent. It goes further than the mere question of potatoes; it affects the whole basis of agriculture, and I hope my hon. Friend—and I have heard him deal so well with so many subjects—will treat this matter as broadly as he can, but I regret that it is being treated purely as a Departmental matter and not on the wide, broad basis of the general agricultural policy of this country.
§ 2.41 p.m.
§ Mr. BARCLAY-HARVEY
I should like to associate myself with many of the remarks which have fallen from the hon. Member for Londonderry (Sir R. Ross). I should like to see this matter treated as one of the broader questions of agriculture, for reasons which I will deal with in a minute or two, but before I come to my main point, I would like to say to the right hon. Member for North Cornwall (Sir F, Acland), on the subject of the 60,000 tons shortage, that I understand that that was the position as estimated in February, but at that time there was an import of 5,000 tons a month coming in, which it was anticipated would take care of that shortage, and if the present rate of imports was maintained at 5,000 tons, there would actually be a surplus. Therefore, that makes it all the less a reason why it should be necessary to take off the duty.
What I really wanted to say was once again to call attention to some of the rather peculiarly Scottish aspects of this question, because in this case Scotland is getting more hardly hit than England. Let me remind the House that the potato crop is of the very first importance to Scotland, but it is also of very great importance to English growers, because they draw one-third of their seed 3022 from Scotland, and this year they have drawn about two-thirds. It has been the habit of Scottish potato producers to market their crop later than the English growers, that is to say, from March till May, and the result is that they suffer from a shrinkage and from disease, and they naturally expect, when the time comes, to get better prices. That is partly done by arrangement with English growers, so that the Englishmen can get their crop cleared off the market, and the Scottish people hold off so as not to make a glut in the earlier part of the season. Therefore, it is all part of one general scheme and not merely a piece of Scottish grab and waiting to get the best prices.
What happened on this occasion was that this duty was taken off at the very time when the Scottish people were going to begin to bring their crop into the market. There is no shortage—I am assured of that—but since this duty has been taken off there has been a stoppage. People have stopped either buying or selling, and it is particularly hard on Scotland, because, like the Northern Ireland people, we depend very largely on cattle and on oats, both of which, particularly oats, are suffering from a very serious depression. We were really hoping we should make a small profit out of potatoes this year, but at this critical moment this blow falls on us, and it will be an extremely serious matter. I should be the last ever to desire to see prices forced up against the consumer above a reasonable limit. As has been pointed out, potato prices this year have not been high, and this year is one which follows on a series of very lean years for potato growers. Potatoes were actually being given away a few years ago in the streets of Aberdeen because there was no market for them at all and the growers could not get any price of any sort for them.
When this duty was taken off there was a drop in prices of between 5s. and 7s. 6d. a ton. That will be a very serious thing for Scottish potato growers. Another point I should like to emphasise is that potato growers, while they contain a certain number of big men, are largely small men growing less than five acres. Therefore, we are not here to plead the cause of the big men but to try and plead the cause very largely of 3023 the small people who deserve a great deal of sympathy.
My hon. Friend the Member for Weston-super-Mare (Mr. Orr-Ewing) took a point of view with which I could not agree. It is that we want to see some of these boards given dictatorial powers. That is not my desire, for I think the House has a right to bring forward a Prayer or by some other means be able to call attention to the Import Duties Advisory Committee. While I have the greatest respect for that committee, I cannot admit that it should escape criticism from this House. I have no desire to see the Potato Marketing Board set up as a dictatorial body, but we ought to be allowed to call attention to a mistake that has been made by the Import Duties Advisory Committee. That is the duty of every Member of Parliament. I want to make a plea that this sort of thing should not happen quite in this way. An hon. Member explained that the object of this board is to try and get stability. If we are to have duties taken off as soon as prices reach a reasonable position, it will shake the confidence of every producer in the country. Not only the producers of potatoes, but producers of every other agricultural product will have their confidence shaken, because it is only natural that farmers who are growing oats, wheat, cattle or pigs will say that if this can be done in the case of potatoes it can be done with other things as well. I think that this Order will create an unfavourable impression throughout the agricultural industry. That is why I regret this decision and hope that if an application is made to the Import Duties Advisory Committee, as I think it has been, to get this duty restored, the committee will not hesitate to restore it because by their present action they have struck a serious blow at agricultural prosperity which we have been struggling so very hard to build up.
§ 2.49 p.m.
§ Mr. LENNOX-BOYD
I would like to supplement the eloquent plea which was advanced by my hon. Friend the Minister for Midlothian and Peebles (Captain Ramsay). I am sure that I am speaking on behalf of everybody in the House when I say that we are glad that the eloquence which he always displayed in the agricultural cause in the past will be supple- 3024 mented in future by his membership of the Potato Marketing Board. I should also like to refer to the speech of my hon. Friend the Member for Weston-super-Mare (Mr. Orr-Ewing)—an amazing speech which amused, but did not surprise agricultural Members. He speaks for the industrial and agricultural centre of Weston-super-Mare and never loses any opportunity of telling the House what a good friend of agriculture he really is.
§ Mr. LENNOX-BOYD
We have hon. Members on the other side of the House who never lose any opportunity of decrying the agricultural cause. We know exactly where we stand with them: all farmers are profiteers. Whenever farming issues are discussed we are told, when we try to put the case for the primary producers of the land, that they are endeavouring to exploit the poor consumer. We do not expect to find this kind of criticism from our own side of the House. We are used to open enemies, and I hope I shall not be considered impudent if I quote the prayer of Canning, which we might apply to agriculture, to be saved from our candid friends. My hon. Friend said that he was in favour of the Potato Marketing Board, but the very fact that the board was set up by this House and secured the friendly acceptance of the producers throws the obligation on the House and the Government to see that the Government part of the bargain towards the producer is fulfilled. I much regret that the Parliamentary Secretary to the Board of Trade, whom I am glad to see here as a fellow Member from my own county of Bedfordshire, who knows something of our agricultural problems, is not backed up by the Minister of Agriculture because I feel strongly that what is at stake to-day is not so much this Import Order, but the good faith of the Government in the eyes of the mass of agricultural producers. It would be difficult for us to put the case for the control which nobody likes among our agricultural constituents if this question goes unchallenged and no remedy is forthcoming.
All sorts of queer stories are going about in Covent Garden and some agricultural districts, and I should be glad if my hon. Friend could make some reply 3025 to the observations I am going to make. It is being said, I do not know with what truth, that importers a few weeks ago, believing that there would be—and wrongly believing—a considerable shortage of home supplies, bought up all the import licences that they could buy up, hoping to corner the market when the shortage became acute; that licences changed hands only a few months ago at £1 and 25s. a ton; and that when the shortage did not in fact occur the importers, with these charges on their hands, took steps to see that the Import Duties Advisory Committee were acquainted with the loss that they might suffer. As a result, the tariff has been scrapped with these rather absurd results. The importers have got back the £1 and 25s. a ton that they paid for the licences; the Treasury has lost the £1 Import Duty; the consumer is no better off, because there is still a charge upon the consumer; the importers who sold their right to import have got their £1 and 25s., and are happy because, as in the N.B.A. system of America, they are being paid for producing nothing; and the home producers have seen their own prices slump, in many cases by 15s. a ton.
My hon. Friend the Parliamentary Secretary, who will reply for the Government, knows Bedfordshire problems as well as I do, even the agricultural problems, and if I cite one or two local instances, they will, I think, appeal to him in particular. He knows that in Bedfordshire, owing to the drought, the size of potatoes is not as large as usual, with the result that in those areas a considerable proportion of the crop was not put upon the market until the period beginning the 1st February. He knows also that in Bedfordshire that the high December and early January prices were largely due to the bad weather which made loading difficult. He knows too, I believe, that the fears entertained by the Board of Trade towards the end of last year, which fears were followed by the quotas being fixed, have not been fulfilled, that wholesale prices in our country have been falling, that supplies are quite adequate, and that towards the end of January in Bedfordshire and elsewhere there was even a small surplus. I took steps to find out the retail prices, because I agree with an hon. Member opposite that, if there is a real threat of an unfair burden to the consumer, 3026 growers have no right, being a minority of the nation, to hold up the consumers to ransom. I found that at the beginning of this year King Edward potatoes were selling in my constituency at 10 lbs. for 1s. and Whites 12 lbs. for ls.—not an iniquitous price at this time of the year especially seeing that it comes after a series of bad seasons. As Spanish and Channel Island early potatoes are coming earlier than usual (it is a very good crop from the Channel Isle), there is little fear that the consumer will be exploited. As was pointed out by an hon. Member, the increase in ordinary licensed imports is quite adequate without the remission of duty to meet any possible shortage.
There has been a passage of arms between the right hon. Baronet for North Cornwall (Sir F. Acland) and hon. Members on this side, and I think he may be interested to know that in February this year, under the ordinary licensing system, imports have averaged about 80,000 cwts. a week, whereas in the corresponding month last year the imports were round about 9,000 cwts., showing that the shortage, if there was a shortage, is being more than made up by the increased imports from abroad. Losses may well be heavy. In my own constituency there has been a drop of 15s. a ton in the wholesale price. The figure in Bedfordshire on 3rd March was 135s. a ton—growers price—for King Edwards, and it has been replaced by the figure yesterday of 115s., and the price of the other crop grown very largely in my county, the Doone Star has fallen from 130s. to, 112s. 6d. In the price list issued to growers to-day in my county the minimum price at which they can sell to the shops shows a very substantial slump. I am afraid that a great many small samples grown under a form of contract between the board and the producers in my county will not be saleable, and when I see that in London to-day the prices, ex wharf, of imported potatoes are in some cases £3 15.s. to £4 a ton I am very much disturbed as to the effect on my own constituency.
Above all, there is the psychological reaction on the whole mass of the agricultural population. With immense difficulty, but loyal to the spirit that the Government have shown and to the scheme they put forward, we have won 3027 round a very conservative part of the population to the idea of rigorous control. There were not wanting people who said "Once this control is planted on you the Government will go back on the bargain." We have always said the Government would not, and we still believe the Government will not, if they rid themselves of the complex of my hon. Friend the Member for Westonsuper-Mare that they must not interfere with the Import Duties Board. I do pray my hon. Friend and neighbour in the representation of this hard hit agricultural county to realise the obligation there is on the Government and to give us a satisfactory answer this afternoon.
§ 2.57 p.m.
§ Mr. AMMON
I wish to emphasise one point made by the hon. Member for Mid-Bedfordshire (Mr. Lennox-Boyd), in order that the Minister may deal with it. If there is any foundation for the statement which he made it raises a very serious question, and does point to a possible danger which many people said long ago would arise under Protection. The hon. Member said that as far as he could gather there had been a trafficking in licences.
§ Mr. LENNOX-BOYD
All I said was that that is being widely stated, but I did not make myself responsible for the statement.
§ Mr. AMMON
I was not saying that the hon. Member did make himself responsible for it. All I said was that he understood there had been a trafficking in licences. If that be true, obviously there has been gambling going on among potato producers and sellers at the expense of the consumers, and they are now coming to this House and asking us to do something whereby they shall be able to make good what they have lost in a gamble. If that be the case it is a very serious state of affairs, and I hope the Minister will not overlook that statement.
§ 2.59 p.m.
§ The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Dr. Burgin)
This is a day on which the House adjourns early, and I think there must be a number of hon. Members who desire to raise other points. I have been asked to make a reply to the case which has just been put forward, and as I shall be brief 3028 in doing so I hope that none of the hon. Members who have taken part will feel that I am lacking in courtesy if I do not refer in detail to their speeches. We are discussing the propriety of the recommendations made by the Import Duties Advisory Committee o a 11th March, which were incorporated in the Order made by the Treasury- on 23rd March, 1936, to suspend the duty on potatoes other than new potatoes coming from abroad. The Import Duties Advisory Committee, in making this recommendation, expressly stated that it was not intended in any sense to be anything other than a temporary Measure, that they proposed to keep the whole of the factors of market supply and prices under review, and that if their anticipations were realised they would recommend that the duty should be reimposed. Therefore, I am not called upon to give any assurance to the House of this n being a permanent measure. On the face of it it was a temporary device to deal with what was conceived to be a temporary shortage and as exceptional set of conditions. I say that in order that there may be no question about it at all.
I share the view of the hon. Member who represents Londonderry (Sir R. Ross) that possibly a broad, general agricultural Debate could arise on what has taken place to-day. I think the House will appreciate that the putting of a duty on a foodstuff or the taking of a duty off a foodstuff is a matter which primarily is the concern of the consumers' Ministry, which is the Board of Trade, and it was in that capacity that I was asked to attend to-day to deal with this question purely from the consumers' point of view. Let the House understand one or two facts which, I am sure, are present to the minds of agriculturists but which I may be forgiven for repeating. Potatoes are an important item in the diet of our people, particularly among the working classes. If potatoes exceed a certain retail price the demand falls off, because the working classes are not able to include so many potatoes in their normal diet if the price is above that figure. Broadly speaking that figure is one penny per pound retail, and it is a matter of concern to the Board of Trade if the retail price of potatoes exceeds it.
There is no dispute that in this country, where very large quantities of potatoes are consumed every year, the quality of 3029 the home-produced potato is considerably above that of imported potatoes. I am not referring to new potatoes or luxury brands but to main crop potatoes. The British main crop potato is of considerably higher quality than the imported varieties. There is, therefore, always a large import of foreign potatoes at a lower price than British potatoes, and those cheap potatoes find a ready market. I could indicate the areas where they find a market, though I do not think it is necessary to do so, but they go in a particular form of consumption which is quite widespread. The object of this Order may well have been to make large supplies of cheap foreign potatoes available in order that the retail prices of those potatoes might come below the penny, and it may well be that no effects whatever by way of loss will be caused to a British producer or a British merchant.
I am going to suggest to British growers, to British merchants, to everybody handling British main crop potatoes, that on the information at present available to His Majesty's Government there should be an outlet for all the potatoes they have got, at the normal prices of the season, if they are marketed in the ordinary way. I have no recommendation to give to growers and merchants that they should hurriedly launch their stocks on to the market for fear of a fall in prices. On the contrary, I believe that the potato demand in this country is adequate to absorb the stock of homegrown potatoes at normal prices provided there is normal and orderly marketing.
§ Dr. BURGIN
Yes, including Northern Ireland. When I come to Northern Ireland I must just refer to figures. It is a comforting thought that whereas last year 65,000 tons were imported from Northern Ireland, in the current year the imports have risen to 150,000 tons.
§ Dr. BURGIN
Yes, the maximum is 200,000, but there has been an increase from 65,000 to 150,000 in a period of 12 months, and that is gratifying, as far as it goes. In the operation of a tariff, a body like the Import Duties Advisory Committee acts as a sluice gate. When 3030 produce is coming in quantities from abroad, there is a possibility of an instant application to that body for the putting on of a duty to check it; when imports are coming too slowly and prices are maintained at too high a level in this country, up comes the sluice gate, the duty is taken off or reduced, in comes the foreign produce and down come the prices, or the goods are made available, as the case may be, according to whether you have been dealing with high prices or with a shortage.
I suggest that the factor which should determine the policy of such a Department as the Board of Trade is price. When there is a shortage in potential, in growth, or in quantities withdrawn from the market, the policy would be determined, broadly speaking, by the prices that are ruling. If prices are abnormally high, the irresistible inference is that there is a shortage, and if prices are abnormally low, the almost irresistible inference is that there is a great excess of supply over demand. I shall show in a moment that prices are most remunerative, and that the price levels are better than they have been for some time. They compare in an extraordinary manner with the prices that have ruled in previous years. Apart from evidence as to shortage, we have reference to the Potato Marketing Board, mentioned by the hon. and gallant Member for Petersfield (Major Dorman-Smith) and there is, of course, the Market Supply Committee set up under the Agricultural Marketing Act. There are a great many sources available to the Government, apart from the Potato Marketing Board, to show that there is a very considerable shortage. Quite apart from the shortage, I am prepared to leave to the good sense of the House the question whether price is a determining factor and signifies whether or not there is a shortage.
§ Captain RAMSAY
I accept the contention of the hon. Gentleman that price is the determining factor, but when you have a wholesale market in which the price is falling, your case ceases to exist. The contention of my hon. Friend is that this permitted inflow of foreign potatoes may be a device in order to keep down the retail price of potatoes, but what is really suggested is that this action of removing the duty is not primarily concerned with the wholesale price or the supply of potatoes, but is a device to keep down the retail price, and 3031 the person who is to suffer by this device is the producer who is to receive the wholesale price at a lower rate.
§ Dr. BURGIN
I want to deal quite fairly with any argument that is put, but I want some basis of fact. It is not the fact that prices are falling. I have the weekly average prices per ton for King Edward VII and for Majestic potatoes over a long period of time, this year and last year and for any time that one likes to take, and so far from there being a fall of price—the fall in the principal markets since the withdrawal of the duty is something insignificant, like 2s. 6d. a ton, which makes not the slightest difference—
§ Dr. BURGIN
I am giving the price for King Edwards and also for Majesties. I am taking two specimens of prices. I have only a certain limited number of statistics. It is a delusion to imagine that the prices to growers are not completely remunerative at the present time and that they are falling. That is the information of the Ministry of Agriculture, which I have had checked from all the markets to-day. With regard to the point as to slowness of movement and lack of orders to take up growers supplies, the House is probably aware that the price of potatoes abroad has been very high. Consequently, the imports have tended to be a good deal less, and one of the reasons for taking off this duty of £1 a ton was to make possible a higher price to an exporter of foreign potatoes to this country, in order to compensate him for not selling them somewhere else. I think the House will find that that is one of the reasons; and the main reason why there has been a relative slowness of movement is attributable to the main cause of the necessity for this Order, namely, the maintenance of an unduly high price.
§ Captain RAMSAY
The hon. Gentleman says that he takes price as the chief factor. I state here categorically, on the information of the Potato Marketing Board, that between the 18th January and 3032 the 7th March the prize of first quality Majesties—which is supposed to be a very good guide to the market—fell at Spalding from 135s. to 122s. 6d., and at Perth from 100s. to 90s. Therefore I say that a time when the price was falling, if, as the hon. Gentleman says, and as I agree, the ultimate guide to the supply is the price, is no time to remove the duty.
§ Dr. BURGIN
I am much obliged to my hon. and gallant Friend. We must go into those facts again. On my basis the price of Majesties was from 136s. to 142s. in England and in Scotland the average price for certain selected varieties including Majesties was 120s. We seem to have got some differing figures. Mine are the average figures from the four principal markets, and were checked this morning.
With regard to the point that there was no advertisement, the object of advertisement is to ensure that the Import Duties Advisory Committee can procure before them all the information that they want relating to the problem which they have under review; it is not intended as a warning to merchants that there may be some variation in the price, but to enable the tribunal which is investigating the matter to be familiar with the whole problem. There was not much difficulty in ascertaining the whole potato problem. The committee called a meeting at which, if my information is correct, the Potato Marketing Board, the National Farmers' Unions of England and Wales, Scotland and Northern Ireland, and the principal industrial consumers, were represented, and were all able, therefore, to make their representations to the Import Duties Advisory Committee—
§ Dr. BURGIN
I do not mind how they did it; the point is to convey to the mind of the tribunal any representation that they desire to make. My hon. and gallant Friend says that it was informal. I have no means of determining whether it was formal or not, but there was a meeting for a joint discussion of the issues involved, and I am not sure that it makes any difference to one's state of mind at the end whether one's information is obtained formally or informally. At any rate, that is the information that I have.
A question was asked as to whether there was some traffic in licences. I can 3033 answer that question in a second. It cannot be true, because these licences cannot be dealt with in that way. Licences are not sold. The Board of Trade issues a licence to the Importers' Association and also licences to individuals. The licences are not sold. The certificates received by members from their own association are transferred by sale or otherwise from one member to another, but the certificates cannot total more than the covering Board of Trade licence which has already been issued. I may perhaps add, for the benefit of the House generally, that since this duty was taken off there has been no abnormal demand for an increased issue of licences. There is therefore no foundation for any fear that there is going to be such an inrush of imports that there will be a glut. There is, on my information, and I have had it checked by the Ministry of Agriculture and the Scottish Office during the afternoon, no indication of a fall in price. I believe that the prices at present prevailing are remunerative to the growers; I believe that the removal of the duty is going to help the consumers; I believe that the supply of cheap foreign potatoes will be adequate; I believe that they will be sold at prices which the working classes can pay, and that the sale of these cheap potatoes will not affect the disposal of the main crop of British varieties.
§ Sir R. ROSS
My hon. Friend, of course, has given us a departmental answer which did not cover the whole ground, but there is one serious matter which I put to him. We understood that there was an undertaking that, if there was a shortage, Northern Ireland, which has always more than it can sell, would be called upon to make up the shortage. Was that undertaking given and, if so, was it honoured?
§ Dr. BURGIN
It was a slip on my part that I did not mention that. It is obviously a matter on which I should have to be informed. Perhaps my hon. Friend will allow me to communicate with him?