IMPORT DUTIES ACT, 1932.

HC Deb 07 July 1936 vol 314 cc1157-66

10.27 p.m.

The PARLIAMENTARY SECRETARY to the MINISTRY of AGRICULTURE (Mr. Ramsbotham)

I beg to move, That the Import Duties (Exemptions) (No. 4) Order, 1936, dated the twenty-ninth day of June, nineteen hundred and thirty-six, made by the Treasury under the Import Duties Act, 1932, and the Finance Act, 1932, a copy of which was presented to this House on the said twenty-ninth day of June, nineteen hundred and thirty-six, be approved. The effect of the two Orders on the Paper of which I am now asking the House to approve will be to restore the rate of duty on potatoes other than new potatoes, which was imposed by this House in May, 1933, under the Import Duties Act, 1932. The amount of the duty was a ton in July and August, and £1 a ton from September to June inclusive. These rates of duty were in force from 1933, without any alteration or modification, until last March. On the 26th March last, in consequence of a recommendation made by the Import Duties Advisory Committee, the duties were removed. The reasons for the removal are probably still familiar to the House. It was due to the exceptional conditions prevailing at that time, which were explained to the House in considerable detail by my hon. Friend the Parliamentary Secretary to the Board of Trade early in April. The reasons were briefly the shortage of supplies and the consequent rise in prices. The letter of recommendation from the Import Duties Advisory Committee was as follows: We fully anticipate that in a few months' time the exceptional conditions which have led us to make this recommendation will have ceased to be operative. We shall keep the matter under review, and, if and when our anticipations are realised, we shall recommend that the duty be reimposed. On the 12th June, the Import Duties Advisory Committee made recommendations in that sense, and they claim that the recommendation made by them in March and the decision subsequently taken by this House have been amply justified by the results. Prices might have been considerably higher but for that decision. In spite of the fact that the import of potatoes other than new potatoes in the months of April and May amounted to 50,000 tons as compared with 970 tons in the same period of the previous year, the general upward trend of prices still continued until about the middle of May, though since that time growers' prices have begun to fall. At the moment there is no shortage, nor is there any prospect of a shortage. In fact, there is every indication that the supply of our home-grown early potatoes will be ample, and the reports from the producing areas forecast a very good yield. In the "Times" report on the condition of crops on the 1st July it is stated that potatoes this year promise to be better than in any of the past six years with the exception of 1933, and appreciably better than the 10-years' average. It is obvious that we have got back to normal, and it is reasonable therefore to restore the normal procedure, and normal duties. The Import Duties Advisory Committee, having considered the whole circumstances, state in their recommendation of 12th June: The home market is, of course, now being supplied to a rapidly increasing extent by new potatoes and by the end of this month the trade in potatoes of last year's crop will be practically over. The exceptional circumstances which compelled the decision of last March will, therefore, be at an end, and accordingly we recommend that potatoes other than new should no longer he exempted from the general ad valorem duty. There may be two questions which hon. Members opposite will ask. It may be said: Why bring these Orders in when the season for old potatoes is over and when there is no produce on which to collect money? The answer is a very obvious one. It is most convenient for everyone concerned that they should be introduced now. For one thing, there are no merchants' contracts running which are likely to be upset. Another point is that growers, having to make their plans ahead, will know that, if they produce what we want them to produce, they can do so on a basis of security and on the footing of a stable market. There is another question that I may be asked. It may be said: Why two orders instead of one? The answer to that is that under the Import Duties Act, 1932, the free list is separate from that of additional duties. Consequently the first Order, Exemption, No. 4 Order, removes potatoes from the free list and the Additional Duties Order No. 13 reimposes the duties at the previous rate. In the Finance Bill of this year that rather cumbrous procedure will henceforth be obviated, as power has been taken to suspend duties for a definite period and at the end of that period, if so desired, they can be brought into force again. In a, normal season we produce practically all the potatoes we require. In a time of shortage we can draw, if necessary, on imports. We can, as it were, turn the tap on or off when there is need to do so. At the moment I think it will be clear that there is no necessity to keep the tap turned on. There are ample supplies in sight at reasonable prices, and I am asking the House to restore the position to what it was before March, 1936, and to approve these Orders.

10.34 p.m.

Mr. A. V. ALEXANDER

We are much obliged to the Parliamentary Secretary for the information he has given us in introducing this reimposition of duty. I think it would be unprofitable to have a lengthy Debate on it, having regard to the fact that the position of potatoes has been debated over and over again, but it is necessary to point out that, if it had not been for the pressure of certain trade interests, especially potato merchants and importers, there would have been a far more serious position in the last few months for potato consumers than has actually been the case, and there is certainly a great deal to be said about the tardiness with which the Government took the necessary action to remove the duties, they not having been removed until as late as March. It is true that even after they had been removed prices continued to rise. That of course is because the removal of duty was deferred till so late in the season, that the European crop, which was in itself comparatively short, had already been allocated to a considerable extent, and there was not, therefore, the possibility of making British contracts for imports that there otherwise would have been.

There is only one other matter which is worth mentioning at the present time. Although personally I should not divide the House to-night on the Order which the Parliamentary Secretary has introduced, there is certainly a case to be made against the very early reimposition of the duty, because there is a certain class of users of potatoes in this country who ought to be considered. There is a very extensive body of traders called the fish fryers, who are very wide users of potatoes and who serve them at convenient times and in a convenient form to a very large number of working-class customers. There is also the industry with which some hon. Members in the House, I believe, are acquainted, known as potato crisps, which is a modern and convenient form of food. I am sure that the Parliamentary Secretary will recognise that in the actual presentation of these two uses of potatoes to the public, it is a very valuable thing to have old and main crop potatoes.

If you take the statistical position, as far as I know it to he, at the early part of last month—I have not the latest statistical position for this week—the total quantity of last year's main crop remaining in the country was only 98,000 tons. That means, at the ordinary rate of usage in the month of June, that we probably have very little left at all of these particular classes, and that those who are fish fryers and who turn potatoes into potato crisps may be severely handicapped in their business by being able to take nothing but new crop potatoes. The position will ease in a few weeks. Therefore, I think that it would have been wiser, though committed to the principle of imposing the duty, to have waited until there was a real and absolute necessity to do so.

No doubt at the moment the position of the home crop is promising. No one wants to deny the fact that, with the moist weather we have had in the summer season, there is no danger at present of a shortage from drought, but there are dangers yet to be faced in the last part of the growing season of the main crop, especially because of the wetness of the season. I hope that, though we do not raise any further objection to-night to this Order, the Government will see to it that, if there is any shortage of crop later in the season, they will not be so, tied as they were last winter in dealing with the removal temporarily of the duty. It was really quite unreasonable that the working-class housewife should have had to pay right through the main part of last winter 1½d and more per pound for main crop potatoes.

10.39 p.m.

Mr. R. ACLAND

I agree with the right hon. Gentleman the Member for Hillsborough (Mr. Alexander) that it is perhaps unnecessary to have a. prolonged discussion on this Order now, as we shall be dealing in general terms to-morrow with some of the questions this Issue might raise in the smaller field now. We should realise that we have a close corporation of potato growers and that no one can come into the trade except on payment of something like £5 per acre, and although we are promised a very plentiful crop this year, we have a corporation which is capable by regula- tions, even in spite of a plentiful crop, of keeping up the price to the consumers. There is the machinery for restricting output and the number of sellers, but the price is fixed by the home crop, which satisfies 90 per cent. of the home market, and it seems to me that one safeguard against abuses by this close co-operation is the possibility of imports. This ought to be taken into account, and I hope it will be taken into account to-morrow in connection with the problem of nutrition. There have been very strong recommendations that the protein foods, such as starches and sugars, should be left out, and foodstuffs such as potatoes should take their place, with a view to better dieting of the nation. In view also of the reports from the League of Nations it seems to me to be a wrong step to put a tax on potatoes which amounts to 10 per cent. of their retail price.

The Minister might have given us a little fuller detail of what is happening at the moment in regard to the prices of potatoes. He says that there is a fall. Can he be a little more specific? He says that it is going to be normal that potatoes should be taxed £1 to £2 per ton. Is that the view of the House? Is it not the fact that in 1933–34 the prices of potatoes fell very low and £1 and £2 duties were put on, because it was stated that conditions were abnormal? Are the wholesale or retail prices of potatoes falling now so as to come even so low As in 1929? Can the Minister tell us that? I understand that in May of this year the price was 8d. per seven pounds, and that in May of 1929 it was as low as 6¾d. per seven pounds. Can the Minister say whether the prices are in danger of coming down as low as they were in 1929? If not, it would have been better to delay the reimposition of these duties until the prices were getting something lower than in 1929 or something like the prices in 1933–34, which were abnormal.

10.43 p.m.

Sir RONALD ROSS

The hon. Member who has just spoken, to whom we always listen with pleasure, is a distinguished survival of the doctrine of the pure Free Trade method of thought. He has described potato growers as a rather sinister body of people, who like to screw or wring the neck of the poor. That is rather what I suspect he meant, I can assure him, having a very large number of potato growers in my constituency: that they have a very much lower standard of life than many people. They are very poor and very hardworking. What the Government are trying to do in to get stabilised prices; to try and get prices remaining at a level which is reasonable. I think that in the present year there is a very grave risk of there being a complete glut of potatoes. The potato grower may find himself in the position of being faced by tremendous production, and it will be frightfully hard to keep prices at an economic level, without any foreign imports.

Speaking for many potato growers and for a large number of people of an industrial population I can assure hon. and right hon. Members opposite that I and certainly the Government have no intention or desire to put an unreasonable price on potatoes. We have always been able to send potatoes from the North of Ireland at a price which works out at one penny per pound, but the difficulty is that you may have the price dropping down to a wholly uneconomic level and ruining the people who grow potatoes. The principle of the Government's proposal is the same as that of the Assuan Dam, which is to keep the level of the Nile. I appeal for people who work very hard in a very hard trade, and I ask that there should be regulations which will regulate their crop and make it economic.

10.45 p.m.

Mr. FURNESS

I should like to reinforce the appeal which has been made for a little more explanation on this matter. Some of us approach with some uneasiness this taxation upon foodstuffs which are very essential to a large number of our people. I should be the last person to want to deny to our farming community a fair price for potatoes, but it is difficult for some of us to follow these matters, and I hope that the Minister will tell us something about the relation of the price obtainable for potatoes with the cost of production. We are willing to grant them a fair and reasonable margin, but at the same time hope that the Minister is keeping this margin under close consideration. The hon. Member for Barnstaple (Mr. Acland) said that there is considerable difficulty about increasing the production of potatoes in this country, because there is what is called a fine levied upon those who increase their acreage of potatoes. It is impossible for some of us to keep track of the multitudinous regulations which are introduced for the growing of potatoes or the production of any other farming commodity, but we hope that this matter is being kept under the most careful consideration. It is a big responsibility for bon. Members to consent without a full explanation to anything which does increase the cost of living to the poorest of our people.

There is one other point I must mention, because I was pressed very hard upon it in the Election—the condition of the fish fryers, They have put it to me that they are one of the biggest consumers of potatoes in this country, and they feel that there should be closer consultation between them and the Minister of Agriculture when these duties are being discussed. As they are large consumers of potatoes, they say that they should have some say in the matter when these Orders are introduced.

10.48 p. m.

Mr. RAMSBOTHAM

The hon. Member for Barnstaple (Mr. Acland) showed a certain amount of apprehension as to what might be the retail price as a result of this Order. I think I can give him a few figures to show that what really governs the retail price is the amount of the annual crop: whether it is high or low. Take the years 1929–30, 1930–31 and 1931–32. The production in the year 1929–30 was: home production 4,743,000 tons, shipments from Northern Ireland were about 62,000 tons, and imports, main crop, 28,000 tons, the total being about 5,000,000 tons. The growers' price at Wisbech was 49s. per ton. The following year the total supply was 4,257,000 tons, and the price rose to 106s. 6d. per ton, the rise from 49s. to 106s. was simply the result of a smaller crop. In the following year it was worse. In 1931–32 the total supply was 4,407,000 tons, and the growers' price rose to 162s. I can assure the House that the duty itself is a negligible hardship on the consumer, and it is a hardship that is not likely to occur except in times of abnormal shortage, and in such times as that we can follow a procedure similar to that which was taken last March. The figures make it plain, therefore, that it is the size of the crop which affects price, and that the duty plays a very small part indeed. The hon. Member asked me what the future price would be. If I could forecast what the price would be I should be able to make a large sum of money. But knowing what past experience has been, and knowing the prospects of this year's crop, I do not think that we can anticipate any hardship to the consumer.

Mr. ACLAND

Has the Minister got the retail prices for June this year?

Mr. RAMSBOTHAM

No, I am afraid not. In regard to the point raised by the hon. Member for Sunderland (Mr. Furness) relating to fish fryers, I can assure him that the Ministry is frequently in consultation with them, not only in connection with potatoes but also in connection with fish, and that we shall continue to be in frequent consultation with them.

Question put, and agreed to.

Resolved, That the Import Duties (Exemptions) (No. 4) Order, 1936, dated the twenty-ninth day of June, nineteen hundred and thirty-six, made by the Treasury under the Import Duties Act, 1932, and the Finance Act, 1932, a copy of which was presented to this House on the said twenty-ninth day of June, nineteen hundred and thirty-six, he approved. Resolved, That the Additional Import Duties (No. 13) Order, 1936, dated the twenty-ninth day of June, nineteen hundred and thirty-six, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said twenty-ninth day of June, nineteen hundred and thirty-six, he approved."—[Mr. Ramsbotham.]

The remaining Orders were read, and postponed.

ADJOURNMENT.

Resolved, "That this House do now adjourn."—[Sir G. Penny.]

Adjourned accordingly at Eight Minutes before Eleven o'Clock.