HC Deb 25 February 1936 vol 309 cc357-70

7.48 p.m.


I beg to move, in page 1, line 15, to leave out "eighteen," and to insert "six."

We do not desire to take much time on the Committee stage of this Bill. We recognise that we had a considerable discussion on the Money Resolution and on the Second Reading of the Bill, but for the purpose of the point which we desire to raise we have put down our Amendment. If we can get some assurance with regard to the long-term policy of the Government on this question we shall not press the Amendment to a Division. The Minister of Agriculture in dealing with the Bill on the Money Resolution and on the Second Reading said that he required the period of 18 months in order that he might prepare something more in the nature of a long-term policy. It is about time that we knew what the long-term policy is going to be. The public is very anxious that there shall not be a reptition, at the end of the current. milk year in September, of the threatened breakdown which came in September, 1935. We heard a great deal at that time about what was called a threatened milk strike, and we are very anxious that what happened then shall not be repeated, especially in the case of a scheme which is largely subject to the granting of public funds.

We think that it is incumbent upon the Minister, in considering the report of the Committee of Investigation under Section 9 of the Marketing Act, which he will be receiving shortly, and also in receiving the report of the Reorganisation Commission, which I think is still in session—it might be gingered up a little, for it has been sitting a long time—that he should seriously reconsider some of the main constitutional provisions dealing with the present control of the milk industry in this country. Our experience from the distributive side goes to prove very conclusively the wisdom of what was in the mind of the hon. Member for Altrincham (Sir Edward Grigg) when he presided over the first Reorganisation Commission and, with a considerable amount of vision led his commission to report that it was essential, in building up the control of this industry on a permanent basis, that there should be cooperation and good will, and that for that purpose there should be some form of joint control.

If we are continuing the granting of public money to this industry it is essential that in the public interest and not in the interest of one section only control should be made efficient and of such a character that it is not likely to break down, as it threatened to break down last September. Let me say at once, in fairness to the Minister, that I recognise that it was probably largely his own action as Minister in September, 1935, which prevented a final breakdown, but it ought never to have happened in such a great industry that it was necessary for the Minister to intervene. There ought to have been machinery for dealing with the situation. If the Milk Marketing Board had agreed at once to arbitration there would have been no difficulty. May I say, from very painful personal experience of 36 days sittings that I am anxious to avoid a repetition of that proceeding? I hope, therefore, in consideration of the long-term policy, that we may have a little more stability in the arrangements than we had on that occasion.

We regard it as fundamental, if you are to go on granting public money for the purpose of reorganisation this industry, that that reorganisation should include a reorganisation of milk production itself. If we take the actual facts during the period, say, of the last three and a-half years, that is, the year antecedent to the operations of the Milk Marketing Board and two and a-half years after the beginning of the operations of the Board, we see a considerable increase of the gallon-age of milk produced in this country.


The right hon. Gentleman is using this Amendment as one on which to hang a substantial argument. I am prepared to agree that he should do so, but on the understanding that the argument shall not again be raised when I put the Question that the Clause stand part of the Bill. I want to make the position of the Chair quite clear.


That is very reasonable. I have no intention of delaying the Committee at any length, and I should not think of referring to this matter again. The fact is that milk production has increased. It has increased in spite of what has been termed by the milk producers themselves low contract prices. On the other hand we have to remember the statements made in "The Home Farmer," the Milk Marketing Board's own journal, that there are numbers of farmer-producers—I use the word from the editorial comment—who are "dazzled." by the present high contract prices. We shall not get stability and ordered progress in the industry if we arc to get a considerable increase in the production of milk, whilst retaining the present amount of restriction on the distribution of milk at a price which the people can afford to pay. We shall have not only dissatisfaction in the public mind with regard to the price that they have to pay for liquid milk, but we shall give no satisfaction to the producers themselves in the final net return of their farms, because of the pooling of large surpluses of milk which are put into manufacture at a loss. There is no reason to take a long time to produce a constructive policy of reorganisation. Therefore, I beg the right hon. Gentleman to look at this matter from the information which will be available to him in the report of the Committee of Investigation shortly to be laid before him.

I would stress the point that I or my hon. Friend the Member for the Don Valley (Mr. T. Williams) made in the previous Debate, that in the case of those producers who are registered in what is called the accredited milk scheme there are any number of them whose returns show, according to the evidence submitted to the Milk Investigation Committee, that they produced milk at as low as 61½ to 7½ a gallon on the average all the year round. I recognise that because of difference in the conditions of the farms, the soil, rent, many of them being contiguous to industrial areas, other costs of milk production may be much higher, but in this House it would be difficult for us to be convinced that if in some parts of the, country accredited milk can be produced at 6½d. or 7½d. gallon it should be necessary for it to cost as much as 1s. 3d. a gallon in other parts of the country. That side of the industry wants very careful attention and reorganisation, and none of the negotiations that the Minister or his advisers may have with the overseas market authorities and the Ottawa countries concerned, can put this matter really right unless you are prepared to get real, basic efficiency in the industry itself in production and distribution.

I feel that on the very important question of the social distribution of this important foodstuff we have put our views at length before the House, but on this question of a long-term policy and the efficient organisation of the industry, we feel that we must be insistent. Therefore, we ask, first, that there should be a reconsideration by the Minister of the constitution and that it, should be made of a joint character, so that it should be communal in outlook and in management, instead of having a monopolistic, sectional control, and, secondly, that the Minister should give urgent and immediate attention to the question of the efficiency of home production and distribution, and not rely solely upon further protective or restrictive measures in regard to dairy products from overseas.

8.2 p.m.


I want to ask one question of the Minister. Parliament is asked to continue these payments for another 18 months, and I would like to know why it is that at the same time there are allowed to come into this country vast quantities of skimmed milk, which must compete with the milk which is being produced in this country. I have been looking at the Board of Trade returns for the month of January last, and I find that sweetened or skimmed milk coming in for the month of January alone amounted to 92,000 gallons. This is not a question of food, because that skimmed milk, I believe, has to be marked, "Unfit for children." Really it is therefore unfit for food, but undoubtedly it is bought by the very poor and extensively used by them, and I want to know why that importation is being continued while at the same time we are encouraging the production of milk here. We are voting money for the production of milk and allowing in this sweetened, skimmed milk, which is not milk at all, and it seems to me that the two policies cannot be logical and that one of them must be wrong.

8.4 p.m.


I want to ask my right hon. Friend the Member for Hillsborough (Mr. Alexander) if he can give me some information following on what he has said. I understand that evidence was given to the Investigation Committee to show that when you take, all through the country, the amount of profit per gallon that is left to the farmer, it is not, as I understand my right hon. Friend said, over 3d., taking the basis of 6½ as the price of production, but 0.66d. I shall be glad if it is possible for my right hon. Friend to inform the Committee if that is so, because, if it is so, was this 0.66d., which is a little over a halfpenny, fixed giving the farmer a wage of 31s. 6d. and not allowing anything at all for his profit as a manager of an industry?

8.5 p.m.


I do not think my hon. Friend has quite got the argument. I made no reference at all to the net profit per gallon of the farmer out of production, but I commented upon the extraordinary spread between the cost of milk production as between 6½d. and 1s. 3d., and I am only asking that the Minister, in his consideration of a long-term policy, should see what can be done to improve the efficiency of production and to avoid that wide spread between the 62d. and the is. 3d.

8.6 p.m.


I wish to support the Amendment, because I feel that 18 months is an unnecessarily long time to allow this subsidy to continue. I would like to put forward one suggestion, which has not, I think, been brought out so far—one reason why I suggest that six months is long enough for the operation of the present Act. The Minister, in his speech the other day, suggested that the industry of manufacturing dairy products was an important industry, and I think we are all agreed with him on that matter. It represents in gallonage one-third of the total production of milk on British farms, but this subsidy is being given entirely without any respect to the quality of the produce. I suggest that within six months it might be possible for the Minister to devise some scheme by which the subsidy would only be paid on dairy produce manufactured in this country of a high quality.

At present the manufacture of creamery butter in this country is a relatively new industry. Hitherto the butter which has been made in England has been mainly made on the farm itself and has considerably varied in quality, which has given a real advantage to some of our competitors, both in the Dominions and in foreign countries, who have marketed here butter of a high standard of quality, and of a quality which has appealed to the palate of the British consumer. It seems to me that there is an opportunity now of developing in this country a butter industry which will be in a position to compete with those overseas supplies. I think it would be possible so to frame the subsidy for dairy manufacture, if that is desirable, as to encourage a standardised article. It has been done in every country which supplies butter and cheese to this country. To take one example, no butter may be exported from Denmark unless it carries the Government hallmark of quality, and the same is true of New Zealand cheese, which at present commands, I believe, a higher price than cheese made and marketed in this country.

Attempts are being made to standardised various grades, and in that connection I would like to compliment the Scottish Milk Marketing Board on their new brand of butter, which, I believe, will find a popular and ready market. But I suggest that the principle that only the highest quality produce should receive this Government subsidy, that if the taxpayers' money is to be directed towards the encouragement of manufacturing dairy products, that money should be used to ensure that a standard graded article is put on the market—I feel that that is a general principle with which the Committee generally must agree. It is for that reason that I support the Amendment, in order to give the Minister, not 18 months, but six months in which to produce a policy.

With regard to cheese, that also is to some extent an industry which is being carried on newly by the Milk Marketing Board, and in my part of the country we have a cheese factory run by the board, to which I for one wish the greatest success. We producers have not been told exactly what the position of that factory is, and there is among farmers in that district considerable doubt as to whether the factory is running successfully or not. In developing cheese-making by the board, again I suggest that the proper procedure is only to reward with a subsidy that cheese which is of a grade and quality which does justice to home produce. There is the framework in the national mark, the basis of a graded article, and the machinery necessary for inspection of a graded and standardised article. There is a butter scheme, which I believe has been working now for about a year, and there are national mark cheese schemes of various sorts, and it is not asking too much of the Minister, I feel, that these schemes, which are already there in embryo, although they are at present only voluntary, should be developed in the next few months, so that if, at the end of six months, a subsidy is still necessary, that subsidy should be directed only to the encouragement of quality produce. It is for these reasons that I support the Amendment.

8.13 p.m.


I recognise that the Committee, knowing that we have had an exhaustive discussion on this subject already, does not desire that we should have a similarly exhaustive discussion on this occasion. I readily recognise also the brief and businesslike manner in which up till now all the speeches have been made, and I will do my best to be equally businesslike in reply. The right hon. Member for Hillsborough (Mr. Alexander), speaking of the long-term policy, said that the country desired no risk of any breakdown in the arrangements such as might have taken place last September, but I am sure he will see that a very short term, such as six months, would be just the sort of thing which would keep the industry in a constant turmoil and, I think, greatly raise the risk of another breakdown in the following autumn. It is desirable that we should have time to consider both the report of the Committee of Investigation, which I may say has not yet been received, but which will need a great deal of consideration both by myself and by others, and the very important report of the Reorganisation Commission, which also we have not yet received.

The right hon. Gentleman said that the Commission had been a very long time. It has taken its time to consider this very important problem. Experts of the highest repute are silting upon it—Sir John Orr is a member of it—and I am sure the right hon. Gentleman would not desire either that that Commission should be hurried in its conclusions or that we should be hurried in our consideration of those conclusions, for it may well be that legislation of a most important character may have to be drafted as a result of the various deliberations which are going on at the present time on the milk industry. As a practical man he knows that the prospect of framing and passing a major measure between now and the end of the Session or betwen May and the end of the Session is practically negligible.

If the industry is to have an opportunity of considering these important matters, and if the country also is to have an opportunity of considering them, clearly we cannot attempt to begin to sum up and bring together the result of all these deliberations before next Autumn, and then we have to begin drafting legislation to be presented to this House for its consideration. To say that we should bring all these proposals to an end in July would clearly be telescoping the consideration which ought to be given into a very small compass indeed. I am sure the right hon. Gentleman does not wish me to defend the proposal of 18 months as against six at any great length. He himself said that he was doing this more for the purpose of eliciting information and, if possible, a declaration from the Minister rather than with any desire to press the Amendment to a Division. The right hon. Gentleman said that we ought seriously to consider the constitutional position of the industry and mentioned that the Grigg Commission had reported in favour of some form of joint control. I would point out that joint control would involve important legislation. I shall take into consideration the recommendations of the Grigg Commission which were put into practice and also those which were not put into practice when I am considering the reports of the Committee of Investigation and the Reorganisation Commission. I hope he will be satisfied with that assurance so far as the question of the constitutional position of the industry is concerned.

He further pointed out that the money spent by the public in promoting the milk industry might lead to an unlimited expansion of the industry leading to a weighing down of the pool price by masses of manufacturing milk and consequently an automatic lifting up of liquid milk prices so as to put them out of the reach of the general public. He said that this was a problem which the Minister would have seriously to consider. Already suggestions have been proposed by the Milk Board to deal with the matter. I agree that it is an important question and will require close consideration, and it is one of the matters which we shall take into thorough review when we are considering the character of the long-term legislation which is to be laid before the House in due course. He quoted some figures as to the costs of production but he will adroit that the figures he gave were admittedly the minimum, and it would be hopeless to expect one thousand million gallons of milk to be produced at anything like that figure. We must have a figure which is sufficient to keep production going. The main object should be to secure a good supply of milk at a reasonable price rather than an over supply of milk which does not make milk production remunerative for the average producer.


That is the whole trouble. The present contract prices as fixed by the board are so high that the prices to the consumers prevent the expansion of liquid consumption.


The hon. Member will agree that no producer at 1s. 3d. per gallon, the present pool price, is likely to stay indefinitely in the business of production. The right hon. Gentleman asks me if I would consider the constitutional position of the industry in any legislation. I can give him that assurance, and also that I will consider the question of home production. The hon. Member for Montgomeryshire (Mr. C. Davies) asked why the imports of skimmed milk were allowed to come into this country. I do not think we can say that they are unfit for food; it is food of a kind which it would be quite wrong to bar on the ground that it was unfit for human consumption, but the whole question of imports must be considered under our trade agreements. The hon. Member for Cumberland (Mr. W. Roberts) dealt with the question of quality, with which I have great sympathy. I hope he will excuse me if I do not deal with that matter now because he will be raising that matter on the next Amendment.


It may be well for the right hon. Gentleman to know that that Amendment will not be called.


No doubt the hon. Member for Cumberland acquainted himself with your probable decision, but his hereditary Parliamentary instinct allowed him to make a speech which was not quite in order. The question of quality will receive our careful consideration, but in a Bill of a temporary character we cannot make amendments such as he has in mind. Improvement in quality is very important, and the industry is taking steps to organise and improve the quality. I prefer that improvement should come through the industry itself rather than be forced from the industry by amendments to a financial arrangement of this kind.

8.24 p.m.


We do not desire to press the Amendment to the Division, and we are obliged to the right hon. Gentleman for the promise he has made to give serious consideration to the report of the Reorganisation Commission and the report of the Committee of Investigation. We recognise the extreme difficulty of extracting order out of the existing chaos, and when we remember that the committee sat for 26 days and that when they have made their report there is a multiplicity of problems, Dominion and consumers problems, and all the rest of them, we should not expect the right hon. Gentleman to be able to provide us with a long-term policy in a very short space of time. But what we want to impress on the right hon. Gentleman is that for two years this subsidy has been available. It was hoped that during that period the consumption of liquid milk would increase and that a large amount of milk would be consumed by those in whom a milk consciousness had been created. Now, at the end of nearly two years, the right hon. Gentleman finds that instead of about 192,000,000 gallons being sent for manufacture, there are 301,000,000 gallons available for manufacture. This involves two things. In the first place, there is a tendency to reduce the full price paid to the producers; and, secondly, there is a tendency to create a factory capacity for the manufacture of cheese, butter, dried milk, condensed milk and so on, which will be out of all proportion to the amount of milk sold at the smaller price which ought to be available if the full price is going to be a reasonable one for the producer, and if liquid milk is to be sold at a reasonable price to the consumer.

I want the right hon. Gentleman to bear in mind two things in all his deliberations. First of all, there is need for a greater consumption of liquid milk. Whatever may be the Government's long-term policy, it must largely be based upon the consumption of liquid milk as distinct from milk which is sent to the factories for manufacture into any one of the other dairy products. It is to that end that we have on previous occasions submitted our proposals with regard to the free supply of milk to elementary school children. The organisation for all this will not be easy, but it is not beyond the bounds of possibility. It would be far better in the end if we could devise a scheme—even though it cost a few million pounds—than it would be if we concentrated merely upon extreme efficiency at the factory end.

The second thing I want the right hon. Gentleman to bear in mind is that if the quantities available for factory purposes continue to increase, even for a temporary period, and if new factories continue to spring up, as apparently they are doing at the moment, we shall be left in the end—perhaps at the moment the right hon. Gentleman produces his long-term policy—with a factory capacity greater than the quantity of milk that the right hon. Gentleman wants to see sent to the factories for manufacture. In that case we shall find ourselves in the same position as we are now in with regard to the sugar beet factories. The sugar beet factories' capacity increased and measures were introduced to allow the people owning refineries and factories to cancel off so many of the factories by means of quotas and so on. I do not want to see the right hon. Gentleman allow new creameries and new factories to be erected only to find that when he produces his long-term policy he. will have to introduce a further Bill to permit of the buying and selling of quotas and the compensating of factories out of existence.

We think that at all events the policy of the country—as distinct from the policy of the right hon. Gentleman, or my own policy, or that of any political party—ought to be concentrated on the consumption of the maximum quantity of liquid milk, and that only such quantities as may remain available after the liquid milk requirements have all been supplied should be diverted to factories. As this Measure is to last for 18 months, I hope the right hon. Gentleman will not only warn the Milk Marketing Board of the dangers that lie ahead, but will warn other would-be erectors of factories that the policy of the country when it ultimately emerges will be concentrated upon the consumption of liquid milk and not upon manufacture. If the right hon. Gentleman will bear those facts in mind during the next 18 months, I am quite sure it will ultimately redound not only to his credit but to the health and wellbeing of the industry and the consumers of liquid milk.

8.33 p.m.


I would like to ask the right hon. Gentleman to tell us specifically whether the Government's long-term policy has in view the problem of making an increasing supply of liquid milk available for consumption. In the Debates which took place last week and on previous occasions on the question of milk policy, I think it became more and more apparent that one of the big problems involved within the milk problem is the step that should be taken, in dealing with the increasing capacity for production, to place that production at the service of the people who require it. I have in mind in saying this—and it is a point I want to press on the Minister—some specific cases. Only yesterday I was assured by the chief officer of the West Riding County Council that within the jurisdiction of that council there are over 80 villages in which not a single school has the daily ration of milk for children. The reason given by the officer was that the terms on which the milk is available are such that in these villages nobody will take on the distribution. For instance, the chief officer said that the terms are that the producer-distributor or distributor alone is allowed under the scheme 6d. per gallon. Each gallon has to be put into no less than 24 separate bottles. Consequently the producer-distributor or distributor who undertakes to supply schools on the terms laid down has to make a capital outlay for bottles in the first place. Then he has to bottle the milk, 24 bottles to the gallon; he has to provide each bottle with a straw and a cap; he has to collect the bottles afterwards and to sterilise them; and for all that he gets 6d. per gallon of 24 bottles.

That is the practical difficulty, and where there are small villages the question of transport is also involved. Where there are comparatively small attendances in schools the present system does not afford the supplier an economic basis on which to work. We have to bear in mind that, despite all that is being done, out of 6,000,000 children of elementary school age, less than 3,000,000 have available the daily ration of milk. What are the Government going to do in their long-term policy? The Committee is entitled to know specifically what the Government visualise in that direction because it is in that direction that the solution of the milk problem lies.

8.37 p.m.


The hon. Member will not expect me on this occasion to go into details about the long-range policy of the Government. We are asking for an extension and I realise that he wants to know whether it is our desire to ensure the maximum consumption of liquid milk in this country. I can assure him that such is our desire and I think the Parliamentary Secretary, in his references to this problem of the supply of milk to schools, made the position clear. It is a subject which has also received a great deal of consideration from the right hon. Gentleman the Member for Hillsborough (Mr. Alexander) and he, no doubt, will be able to give the hon. Member a great deal of information upon it if they discuss it outside after our debate. But, as I say, he will not expect me to go further to-night than to say that that is strongly our desire, and that it is with the object of working out such a policy to the full that we ask for this extension.


In view of the undertaking which I gave to the Chairman and to the Minister I do not wish to prolong this Debate, and having heard the Minister's statement, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clauses 2 to 6 ordered to stand part of the Bill.

Schedule agreed to.

Bill reported, without Amendment; to be read the Third time upon Thursday.

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