MILK (AMENDMENT) [MONEY]. (Hansard, 5 July 1937)

HC Deb 05 July 1937 vol 326 cc116-47 116

§ Considered in Committee under Standing Order No. 69.

§ [Captain BOURNE in the Chair.]

§ Motion made, and Question proposed, That it is expedient—

(1) to amend the Milk Acts, 1934 and 1936—

(a) by extending by twelve months the periods in respect of which sums are to be payable to boards administering milk marketing schemes, out of moneys provided by Parliament, under sections one, two and three of the Milk Act, 1934, as amended by the Milk (Extension of Temporary Provisions) Act, 1936 (which first-mentioned Act as so amended is hereinafter referred to as "the Milk Act");
(b) by extending by twelve months the period in respect of which sums are to be payable to the Exchequer by boards administering milk marketing schemes under section five of the Milk Act;
(c) by enabling the payments out of moneys provided by Parliament which may be made under sub-section (1) of section eleven of the Milk Act in respect of expenses incurred by boards administering milk marketing schemes, to be made in respect of such expenses attributable to any time before the first day of October, nineteen hundred and thirty-eight, and to increase the amount which may be so expended under the said subsection by five hundred thousand pounds;
(d) by providing for a butter-milk price, to have effect in lieu of the cheese-milk price mentioned in section four of the Milk Act, for the purposes of sections one, two, and five of the Milk Act, in relation to milk used in manufacturing butter;
(e) by providing for the certification of a cheese-milk price, to have effect in lieu of the cheese-milk price mentioned in the said section four in relation to milk used in manufacturing milk products other than butter;
(f) by providing for the interpretation of the reference in section one of the Milk Act to the net cost per gallon of milk;

(2) to authorise the payment out of moneys provided by Parliament of such sums as may fall to be defrayed by reason of the aforesaid amendments to the Milk Acts, 1934 and 1936;
(3) with respect to Northern Ireland—

(a) to authorise the payment, in certain circumstances, out of moneys provided by Parliament to the Government of Northern Ireland of such sums as the Treasury may determine in respect of milk produced in Northern Ireland which has, in the period of twelve months beginning on the first day of October, nineteen hundred and thirty-seven, been used in manufacturing cream or butter at premises registered under any Act of the Parliament of Northern Ireland relating to the marketing of dairy produce; so, however, that the sums payable in accordance with this sub-paragraph shall not exceed such amount as appears to the Treasury to be sufficient to secure that the sum per gallon payable in respect of such milk used as aforesaid in any of those twelve months to the respective producers thereof is not less than the standard price (as defined by the Milk Act) for that month;
(b) to extend by twelve months the period in respect of which sums are to be payable to the Exchequer under subsection (2) of section six of the Milk Act by the Government of Northern Ireland; so, however, that that Government shall not be liable to pay as aforesaid any sum in excess of the aggregate of the sums paid to that Government under sub-section (1) of section six of the Milk Act and in accordance with sub-paragraph (a) of this paragraph;

(4) to provide for payments by boards administering milk marketing schemes to registered producers in respect of milk sold at a reduced price;
(5) to make minor and consequential amendments in the Milk Acts, 1934 and 1936; and
(6) to provide for other matters connected with the matters aforesaid."—(King's Recommendation signified.)—[Mr. Ramsbotham.]

§ 8.4 p.m.

§ Mr. Ramsbotham
This Resolution contains no new question of principle at all. Its main purpose is to extend by 12 months the provisions of the Milk Act of 1934, as amended by the Milk Act of 1936, which would otherwise expire on 30th September next. To enable the Committee to judge the theme of this matter it might be advisable to give a short sketch of the events which led up to the present position. In 1930, and indeed up to 1933, when the purchasing power of people was very low, there was an unprecedented concentration of world exports upon the United Kingdom, and the result of that state of affairs was a very serious and drastic fall in the price of manufactured milk. When the difference between the price for liquid milk and manufactured milk was comparatively small, there 118 was no particular pressure of milk on the liquid milk market at cut prices. Furthermore, the disparity between the prices of liquid milk and manufactured milk was comparatively small. In 1913 it was about 6d. a gallon and in 1930 that disparity increased to 11d. a gallon. It rose further in 1933 to 1s. 1¼d. a gallon, and in 1935 it was nearly 1s. 1d.; to-day it is still over 11d.
The result, in those circumstances, is that the natural protection afforded to liquid milk was threatened by the competition of home supplies driven out from their customary manufacturing channels by the very large volume of imports of dairy produce from abroad. We must also take into account in this review of the situation the improvements in transport since the War, which enable supplies to be concentrated on big centres of consumption. The result is that in 1933 the collective system of bargaining between the producers and the distributors was unable to cope with the position, and beyond any question of doubt and as a matter of historical fact a crash in the liquid milk market was imminent. That crash was averted by the milk marketing schemes which came into operation just in the nick of time. There is no doubt that the liquid milk price in this country would have collapsed but for that. Consequently there would have been a disaster to the countryside, and although it is true that the consumers for a short while might have benefited by purchasing their liquid milk at practically bankrupt prices, the advantage could not have lasted long and must have been followed by a period of short supply and high prices.
The milk schemes, based as they were on the pooling system, although stabilising the liquid milk price, had little or no effect upon manufacturing milk prices. Those prices were still governed by the price of imported dairy produce, and a gap between the liquid price and the other price became apparent. By reason of the Ottawa Agreements and the foreign trade agreements, the Government at that time was prevented from helping the industry either by means of tariffs or by means of the regulation of imports, and accordingly it was decided in the spring of 1934 to make advances to the Milk Board by means of which minimum returns for manufactured milk could be secured, and those advances were to be repayable. The 119 Milk Bill of 1934 was tabled and passed and the policy endorsed by this House. Again, it is a matter of historical fact that that method unquestionably enabled the consumer to get very large supplies of butter and cheese at very low prices. The advantages under the 1934 Act were to continue until March of 1936.
In July, 1935, my right hon. Friend the Secretary of State for Scotland—then Minister of Agriculture—informed the House of the Government's intention to review the situation before March, 1936, in the light of our obligations under trade agreements and the recommendations of the Re-organisation Commission. That was in July, 1935, and it was then expected that this Commission would be able to report by Christmas, 1935. It became apparent later in the year that the report would not become available so soon, and as the advances under the Act of 1934 would expire in 1936 a Financial Resolution was passed on the 17th February, 1936, followed by an Act for the extension of the period of advances for another 18 months up to September next. At the time of the Financial Resolution, in February, 1936, the report was expected in May, 1936. In the Debate on the 17th February, 1936, the Minister of Agriculture expressed the hope that it would be possible to lay before the House a more permanent policy in the Autumn Session of 1936. I will admit that when in February, 1936, I was privileged to stand here and move that Financial Resolution, I thought it would be positively my last appearance as far as any extension under the Milk Act was concerned. I did not expect that the speech which I then delivered would be a sort of prima donna's goodbye. But sometimes Governments propose and Commissions and other circumstances dispose.
In this case the report of the Reorganisation Commission was in fact presented last November, and it then had to be carefully considered. The views of the Milk Board and other organisations concerned with this great industry had to be ascertained and studied by my right hon. Friend, and in pursuance of that very desirable and necessary procedure the following organisations submitted their views on the following dates: The National Farmers' Union and the Milk Marketing Board on the 25th February this year; the Milk Marketing Board sub- 120 mitted a further memorandum on 30th April this year; the Central Milk Distributive Committee submitted its views on the 14th May; the National Farmers' Union on the 26th May, and the Co-operative movement on 3rd June. I feel sure that the Committee will appreciate the soundness and wisdom of consulting these bodies, and they will agree that it would be extremely foolish for my right hon. Friend to do otherwise. It would not save time in the long run and it would definitely be asking for trouble. Indeed, I suggest that delay is not surprising and is inevitable when you are dealing with an industry so immense and complicated as this one is. Beyond any doubt, an ill-considered and precipitate action might do irreparable harm both to producer and consumer. We are dealing with an industry the value of whose output of milk and dairy produce is about £65,000,000 sterling in Great Britain. In the last financial year of the Milk Marketing Board the turnover was £48,000,000. The fixed capital in the dairy industry amounts to some £90,000,000. If you value the dairy herd at between £75,000,000 and £80,000,000 you have a total of £165,000,000 to £170,000,000 as the capital in this industry.
These are large figures, and the success or failure of a permanent policy would have meant repercussions on those engaged in the industry and on those who consume its products. One might compare it with the problem of electricity distribution. I doubt whether it is any less complicated and, indeed, if I were given a choice I would far sooner deal with the problem of electricity distribution than with the problem of milk. The report of the McGowan Committee on the distribution of electricity was issued in May 1936, 14 months ago, and I understand that the views of interested parties are still being sought by the Minister of Transport. Therefore, I do not think the Committee will blame the Government for giving careful and protracted thought to this difficult problem. At the same time I can assure the Committee that no time is being lost or will be lost, and although my right hon. Friend cannot pledge himself as to a date when he can make a statement, if he is able to make a statement before the House rises he will do so. At any rate he cannot give an indication of a more permanent policy on the proposals before us to-day. 121 Let me therefore go through the provisions of the Financial Resolution which we are asking the Committee to accept. Paragraph (1) (a) provides for an extension of Exchequer payments in respect of milk manufactured in Great Britain for a further 12 months, that is up to the 1st October, 1938. The effect of the paragraph is that on each gallon of milk sold at prices below the standard price—that is 5d. per gallon in the summer and 6d. per gallon in the winter—for manufacture into cheese, milk powder, condensed milk and cream, the Exchequer will pay a sum which will make up the cheese-milk price or the net cost per gallon to the purchaser, whichever is the greater, to the standard price. That, broadly speaking, is what was provided in the previous Act, but I would point out when I come to later paragraphs that there will be a new cheese-milk price.

§ Mr. Hopkin
Is that really so? We have not heard a single word from the Minister about the effect of the new formula of the investigation committee. Is the statement which the Minister has now made really correct?

§ Mr. Ramsbotham
It is perfectly correct. This paragraph provides for a payment by the Exchequer in respect of any milk sold below the standard price at a rate which will make up the cheese-milk price or the net cost per gallon to the purchaser, whichever is the greater, to the standard price.

§ Mr. Hopkin
The Minister knows that the investigation committee made two new formulae, one for milk for butter and the second for milk for cheese, and both these formulae made a profound difference to the price paid.

§ Mr. Ramsbotham
I think I shall be able to make the position quite clear if the hon. Member will allow me to continue. I do not think he will find that there is any difference between us. Similar payments will be made in respect of milk manufactured into butter and the new butter-milk price, referred to in paragraph (d), will take the place of the cheese-milk price. The estimated cost of this extension will be £550,000. Paragraph (1) (b) extends for a further year, from October, 1939, to September, 1940, the period during which the Milk Boards are under a contingent liability to repay 122 the Exchequer advances. That provision is in conformity with the 1934 Act. Paragraph (1) (c) extends the period of grants to schemes for increasing the demand for milk, that is the milk in schools and publicity schemes, for a further 12 months, and will cost £500,000.
Now I come to paragraphs (d) and (e) in which the hon. Member is interested. These paragraphs provide for the calculation of a new cheese-milk price and a butter-milk price to take the place of the present cheese-milk price. This provision has been made to meet the complaint of the Milk Board that as a result of the cheese and butter prices awarded by the investigation committee to which the hon. Member has referred the payments under the Milk Acts have not been enough to bring their returns on manufacturing milk up to the standard price (5d. in summer, 6d. in winter). It provides for a new calculation of the prices for cheese-milk and butter-milk to take the place of the old formula as from next October.

§ Mr. Hopkin
In the meantime is it possible for the Minister to tell us how much the producers say they have lost under the prices given to them by the board?

§ Mr. Ramsbotham
I cannot give a close estimate, but I have heard it claimed that they have lost £1,000,000. However, as a result of this complaint and this decision it is proposed to amend the definition of the cheese-milk price as from October next in such a way that it will represent the price obtainable for milk manufactured into cheese, and it is also proposed to amend the calculation of butter-milk prices to represent the prices obtainable for milk manufactured into butter. Paragraph (f) is an interpretation of a phrase, "net cost per gallon of milk to the purchaser," which appears in Section (1) of the 1934 Act. It is in the nature of a drafting Amendment and is designed to remove an anomaly, and enable the intentions of the 1934 Act to be realised.

§ Sir R. Dorman-Smith
May I ask whether this involves any expense to the producer?

§ Mr. Ramsbotham
I think it breaks fairly evenly and that there may possibly be no expense or loss either way. Paragraph (2) of the Resolution authorises 123 payments consequent upon these Amendments and paragraph (3) applies to Northern Ireland and extends the period for payments for another 12 months, that is to 1st October, 1938. The estimated cost of that is £67,000. At the same time it extends for a year, that is up to the 30th September, 1940, the period during which there is a contingent liability for repayment. Paragraph 4 regularises the payments of the English Milk Marketing Board to producer-retailers who have taken part in experimental schemes for the supply of cheap milk for nursing and expectant mothers and children under school age in certain parts of the Special Areas. Some doubt has arisen as to whether it is within the legal power of the Milk Marketing Board to make these necessary rebates to the producer-retailers, and in order to remove that doubt and to make it beyond any legal question, this provision is proposed. It involves no extra charge on the Exchequer.
I think I have dealt with all the points in the Resolution. The position now is very much what it was in February, 1936, and the Committee has, broadly speaking, the same alternatives before it as it had at that time. The hon. Member for Don Valley is to-day in the same dilemma as he was 18 months ago. I very much regret that, for nobody dislikes more than I do putting the hon. Member in a dilemma; but the dilemma is there and I cannot help him. He is faced with two alternatives. The first is to allow the 1934 Act to lapse. As he knows, that would immediately have a disastrous effect upon the industry and indeed upon the consumers, and as he pointed out in the last discussion on this subject, it would bring to an end the milk-in-schools scheme.
The other alternative might be to adopt the suggestion that the assistance given to the manufacturers of milk should be diverted in order to cheapen the price of liquid milk. If hon. Members examine the figures, they will see that the difficulty is that the diversion would have very little effect, because it would mean spreading some £500,000 over something like 700,000,000 or 800,000,000 gallons, and the actual cheapening would be one of a number of decimal points. That suggested solution would not do much to cheapen the price of liquid milk. Therefore, the only course which I can suggest to the Committee at the moment is 124 to continue the 1934 Act, as amended by the 1936 Act, in accordance with the terms of this Financial Resolution. I think that is the only possible course, bearing in mind that a more permanent policy is to be introduced as soon as possible and that the case for insuring this industry against the depressed prices of manufacturing milk is just as strong to-day as it was in 1936 and in 1934.

§ 8.29 p.m.

§ Mr. T. Johnston
As my hon. Friend the Member for Don Valley (Mr. T. Williams) indicated during the discussion on the previous Measure this evening, we had some difficulty in framing an Amendment to the Financial Resolution which would not lay us open to serious misrepresentation in the country. There is one part of the Resolution with which we cordially agree; that is, the part which provides for the continuance of subsidised milk to children from 5 to 14 years of age during their hours of school attendance. There is another part of the Resolution with which every hon. Member on these benches without exception is in complete disagreement. I trust this is the last occasion on which the Opposition may be called upon to object to a Measure of this nature and not be able to carry its objection to the length of a reasoned Amendment in the Lobby without laying itself open to misrepresentations of a political character.
I have great difficulty in finding appropriate and suitable language within the rules of order to describe the criminal follies of an organised high price for liquid milk against the poor consumer, and a subsidised and non-economic price for wealthy manufacturers. That is what is involved in the continuance of the milk scheme as at present organised: a deliberately inflated price to the poor, and a deliberately non-economic price to wealthy manufacturers. Even at the risk of being accused of having "a bee in my bonnet," I venture once again to ask the Minister of Agriculture, or whoever is to reply, how much longer is this to go on? Time and again we have given facts and figures on this milk business as at present organised, and nobody in the House has ventured to dispute them; but still the system goes on. We ask questions and we receive very polite replies to the effect that this is a matter that should be dealt with on the Ministry of Health vote. When we tackle the 125 Minister of Health, he refers us to the Minister of Agriculture; and when we ask the Minister of Agriculture about it, he assures us in a serious manner that it requires the attention of the Treasury, and the Cabinet, because there is a Milk Reorganisation Commission's Report to consider. Somehow or other, nothing is ever done.
What are the facts? The Minister of Pensions skated beautifully and politely over them this afternoon, but nobody knows better than he does that he did not face the realities. What are the facts? The Government are to-day subsidising milk in schools; school-children are being sold milk at 1s. a gallon. The Government say that it is necessary that that should be so, that children from five to 14 years of age must get milk at 1s. a gallon in the interests of the national health. Nobody objects to the Government doing that; everybody applauds them. Every medical officer of health in the country, every educationist and every nutritionist, says that in that respect the Government are on the right lines. But in the case of children who are four years old, three years old, two years old, the babies, the sick, and nursing mothers, the price is 2s. a gallon. Will the Minister of Agriculture tell us why the Government continue to charge 2s. a gallon for milk for the mothers, the babies and the toddlers in the distressed areas, or any other areas, when they say it is right and proper on public health grounds that children between five and 14 years of age should be charged only 1s. a gallon for the milk? We want an answer to that question. Further, why do the Government subsidise the chocolate manufacturers? Why should Frys and Cadburys and Rowntrees and the Horlicks Malted Milk people get their milk at 5d., 6½d., and 7d. a gallon when 2s. a gallon is being charged for milk supplied to mothers and babies? Why should the Government subsidise, as they did last year, the export of 12,000,000 gallons of milk in tins to Central Europe at 6d. a gallon? Why should Czechoslovakia get its milk in tins at 6d. a gallon, while we have to pay 2S. a gallon for milk for mothers and babies in the depressed areas of this country? Yet the Government can come here and ask the country to continue to subsidise a policy of that kind.
We have subsidised production long and long enough. The production of liquid 126 milk in this country has, I understand, been doubled since 1913. You are at your wits' end to know what to do with it, and you will do any old thing with it, except subsidise the poor consumers and enable them to make use of it. You will subsidise the producer, you will subsidise Czechoslovakia, you will subsidise the chocolate manufacturers—anyone and everyone to take this liquid milk off the market, but you will not subsidise the poor consumer except, as I have said, in regard to children between the ages of 5 and 14. I have said repeatedly that there is only one market left for liquid milk. It ought to go into the stomachs of the poor and it is a crime for the Government to divert the supplies that ought to be consumed by mothers and babies to other uses—to be converted into chocolate or cheese, or into umbrella handles, or put to any other use except that of satisfying the human needs of our own citizens. The Minister of Pensions seems to regard it as a joke. Where is the joke in it?

§ Mr. Ramsbotham
What I regarded as a joke was the right hon. Gentleman's reference to milk being made into umbrella handles. I was thinking of how little foundation there is for that allegation.

§ Mr. Johnston
Does the Minister mean to say that there is no milk converted into such things as combs, and umbrella handles and the like? I do not say it is a large quantity.

§ Mr. Ramsbotham
I believe a very tiny amount of the residual milk.

§ Mr. Johnston
Does the Minister regard it as a joke that liquid milk should be diverted to Central Europe or made into chocolate by wealthy manufacturers who pay fabulous dividends and that they should get the milk at cheap prices while the poor have to pay 2s. a gallon for it? If that is a joke, the sooner the joke is stopped the better. For my part, I am rapidly coming to the conclusion that mere argument in the House of Commons on this matter is no use. Something more spectacular is required. Members will have to adopt Irish tactics here to draw public attention to what is just about the greatest scandal of our time. Not only in the case of milk, but in the case of nearly every other necessary foodstuff is this kind of thing going on at present. Last Friday 13,500,000 herring came into the 127 port of Lerwick and the port had to be closed. While our fishermen are in starvation we throw away herring. It is no wonder that I feel annoyed when I find this matter being treated as a joke.
I know that in Sweden last year the average citizen consumed 420 pints of milk, whereas in this country the average consumption per head was 150, or about one-third that of Sweden. But the price in Sweden to the consumer was only 1½d. per pint, while here it runs from 3d. to 3¼d. per pint. Thus milk is three times the price to the consumer here compared with Sweden, and the consumption is only one-third that of Sweden. Then we have a continual outpouring of expenditure on public health in a frantic endeavour to undo the harm that we have been doing by preventing mothers from getting the milk which they so much require. I am tired of quoting the results of investigations in Cardiff, in Durham, in Oxford, and other places showing the results of the present policy. I am tired of quoting what has been said by Sir John Orr and other authorities, by the Government's own advisory committee, and by their committee on nutrition. I am tired of quoting the Government's own documents. Nobody disputes the facts and figures. Nobody denies that the more children there are in a family the less milk they get. Nobody denies that the Oxford investigation proved that a family of six children only get, per head, one-third of the quantity of milk available where there is one child in the family. The reason is obvious. The more units in a family the less the parents can afford.
There is a simple way out. Why cannot the Minister of Health and the Minister of Agriculture go together to the Treasury and say, "There is going to be pandemonium and there can be no united front of any kind, sort or character as long as this goes on. There must be food for all. There is no justification for starvation in the midst of plenty. There is no justification for the destruction of good food until everybody has been fed"? Why cannot the Government say to every medical officer of health in the land, "As long as a mother with young children cares to go or to send to any authorised distributor of milk she shall get milk at the same price as that at which it is supplied to the schools"? If 128 it pays the farmers to sell milk to the schools at 1s., it will pay them equally well to sell it at 1s. for the benefit of children under four years of age, and they will be delighted to do it, I know.
It only requires a new vision and energy, a new view of their responsibilities by the Minister of Agriculture and the Minister of Health, in order to put an end to this scandal. We have had promises galore. We were told over a year ago that the question would be re-examined. We were told over a year ago by the Minister of Health that his sympathies were with us. We can quote election pledges against the Government. We can quote statements to the effect that this milk was to go to the people first. Why have they not carried out those pledges? Why continue this insane system of diverting an absolutely necessary foodstuff from the homes of the poor? In the Cardiff investigation it was proved that 26 per cent. of the poor class families bought no milk at all in liquid form. Whatever milk supplies they got was tinned. In the municipal housing schemes, when investigations were made, it was found that the people were so hard put to it to pay the rents that they, too, could not get liquid milk.
Here we have a situation in which the farmers are in distress because they cannot sell their milk, and the poor are in distress because they cannot buy it, while the Government stand in between doing their utmost to divert the liquid milk supplies as much as they can into manufacturing processes. I do not deny that one part of this policy has made cheaper butter and cheese. It may, for all I know, have made for cheaper chocolate, but I beg the Government to face the conclusions arrived at by every nutrition committee, national and international, that the fundamental essential to good health is plenty of milk for babies, the sick, nursing mothers and toddlers. If we do not do that, if we do not insist upon it, the armament programme is going to defend—what? It will defend a nation in disease. The hon. Member for St. Albans (Sir F. Fremantle) publishes a book with a preface written by the Prime Minister to prove that it is costing £300,000,000 in an attempt to eradicate disease. Nobody disputes the facts, and while we do not propose in existing circumstances to divide against this Money 129 Resolution, I hope that it is the last occasion upon which any Minister will come to the House and defend a system which means the perpetuation of hunger and starvation in the midst of plenty. If he does ever attempt it, I hope that it will be met with hoots of derision and the most strenuous attacks from these benches. I hope that this is the last time upon which it will be said that the British Government deliberately acquiesced in the destruction of a valuable and necessary foodstuff for the poor of this country.

§ 8.49 P.m.

§ Sir Francis Acland
The Minister makes it a little difficult for us to continue with another instalment of subsidy in the hope that before this new instalment is extended something may at least be done to put our milk house in order. I will give three reasons for the difficulty that I feel. The first is that we do not seem to be yet within reasonable reach of a policy which will strike at the root of the milk difficulty, namely, the tendency for the amount of factory milk steadily to increase in proportion to the liquid milk. Whatever we do in the way of subsidies to try to mitigate that fact, it has an unfortunate influence which is more and more severely felt on the price that the average producer is receiving, because, of course, the larger the proportion which goes to the factories, the larger must be the levy in order to enable the producer who sends his milk to the factory to get the same price for it as the man who sends his milk into the market for liquid consumption. I believe that there has been a temporary improvement in the figures, due largely to the shortage of hay in the last season, but if we look through the different years published partly by the Minister of Agriculture and partly by the Milk Marketing Board, we see this steady tendency of the proportion of factory milk to increase. As long as that is happening things are getting worse and more difficult rather than better.
It is very difficult for the ordinary person to understand why there should be so great a difference between the two prices, and why factories should be able to get milk at ¾d. a pint or less, while, if you or I buy it, we have to pay 3d. a pint or more. Until we can hear that something definite is being done to increase the consumption of liquid milk, apart from pious aspirations as to the 130 increase of the milk-in-schools scheme, which seemed some months ago to have reached a pretty definite level, above which it refused to increase, it is difficult to vote for these subsidies. That increase surely could be obtained at some price which would give the farmers a better return that the 5d. a gallon, or whatever it may be, which is the lowest price he gets for some proportion of the factory milk. We feel that, although we agree with what has been said by the Minister in presenting this Financial Resolution, that care has to be taken in these difficult matters, the period of eight months—and it will be 11 or 12 months before we get any solution—is rather long after the Reorganisation Commission has made the careful report that it has made before the Government can announce any policy arising out of that report.
The third point I want to make is in regard to butter and the price which the butter factories have been paid for the milk they have been receiving. I believe that it has been the lowest figure of all, and that the milk powder makers, the milk chocolate makers and the cheese makers have paid better prices than the butter factories. The prices they have paid has tended to pull down the average price received more than any other factory price. I believe that that is partly due to the fact that a bad bargain was made as to the price. It ought to be possible to get better butter factory prices, as far as the farmer is concerned, either by a subsidy, which is the worst way, or by getting a better demand for English butter, which does not seem yet to have come above the horizon of practical politics. Ask an ordinary householder what butter she gets, and she says, "Do you mean New Zealand, or Danish, or Canadian?" She will never dream of saying she gets English. It is not yet marketed, or standardised, or graded, or advertised in the same way as it is in other countries. In fact, we do not seem to be yet within reach of really treating it as other countries treat their butter. In that connection I want to call attention to a few sentences spoken by two hon. Members on this subject in March of last year. The hon. Member for Barnstaple (Mr. R. Acland), speaking on the Extension of Temporary Provisions Milk Bill, said: The most essential part of an efficient butter and cheese industry depends upon the 131 existence of graders of butter, who must be as skilled in the performance of their task as the most expert wine tasters in their particular task. I ask the Minister whether such people exist. Then he said: My anxiety is that when, in the course of 18 months, we come to the working out of a long-term policy, those of us who will then be pressing for a more efficient industry will not be met by the answer that an efficient milk-using industry depends upon the existence of a corps of butter graders, and that it is practically impossible to produce those butter graders in the twinkling of an eye. The then Minister of Agriculture replied to him that he wanted general support for the agricultural policy of the Government and added: I give the hon. Member all the assurance in my power that from the point of view of efficiency and quality what he said will not be lost sight of in preparing the long-term policy during the interim period."—[OFFICIAL REPORT, 2nd March, 1936; cols. 1149–51, Vol. 309.] We have had an interim period of 15 months since March of last year, and as yet we have heard nothing about the inclusion of butter grading, butter production and the better standardising of our butter as part of the long-term policy. That is another reason why it is difficult for us to vote for the continuance of these subsidies. I am hoping that the largest of the three points I have raised, namely, the continued inability of all the powers-that-be connected with milk to find some means of getting more liquid milk consumed at a price which will be fairly remunerative to the farmer will be tackled. I hope the Minister will be able, without in the least telling us what may be the scheme for re-organisation—we cannot expect that to-day—to give us some assurance that when that scheme comes we shall get the present tendency for a proportion of milk to go into factories really tackled and put right by some scheme for increasing liquid consumption.

§ 8.58 p.m.

§ Mr. Croom-Johnson
I hope the Committee will think that the time has now gone by when I ought any longer to abstain from taking part in the Debates on this topic in this House. The Committee knows that for a very long time, some three or four months, I was engaged professionally in the investigation into the milk industry which ended some time in the Spring of last year, and I thought that 132 in the circumstances it was my duty not to take a part in any Debate in his House. But, after all, I represent a constituency which is in the heart of the milk-producing country. My constituents have been extremely kind to me. They have told me on many occasions that they would not ask me questions on this particular topic by reason of the particular position in which I stood, and I hope that having behaved myself in this way for a period of at least 15 months I may now be permitted to resume my duties as a Member of Parliament. The speech from the right hon. Member for West Stirling (Mr. Johnston) was to a very large extent, if he will forgive my saying so, a speech in which he was thrusting at an open door. I do not think any one in this House would contest the greater part of what he said as to the desirability of increasing the consumption of liquid milk, not only by children but, if I may venture to speak to him personally and to other grown people in this House, by the adults of this country, who do not, I am satisfied, drink half enough of it.
In the course of repeated visits to the United States of America I have been struck by the health and by the size of the young people of all classes in the schools, and I am satisfied that their condition has been brought about by the fact that for some reason or other there is in the United States of America a very large and a very excellent supply of liquid milk for human consumption available at almost every place to which one goes. And there, by reason of I know not what method of propaganda, when you go to take your ordinary meal either in a railway train or in a restaurant, you are offered a sealed bottle of milk, containing approximately one-third of a pint, without any question at all. Speaking for myself, I drank it constantly, and I hope derived sufficient benefit therefrom.

§ Mr. Johnston
How does the price compare with this country?

§ Mr. Croom-Johnson
It is more expensive than in this country, as, indeed, most things are more expensive in the United States. I do not know, but I think the quality may be said to be a little better; perhaps it was due to my unaccustomed taste, but it certainly seemed a little richer than the milk which on more rare occasions I consume over 133 here. But I am satisfied that great steps are being taken in the United States to encourage people to drink milk—I brought the matter to the attention of the late Minister of Agriculture some time ago—and there is no question that in all classes of schools in that country the scholars are encouraged, if not directed, to consume milk with regularity, so that all young people and middle-aged people are quite accustomed to it as a perfectly natural and ordinary beverage. I cannot help wondering what would be the effect if I invited one of my friends in this House to come to another part of the House to drink let us say, a pint of milk instead of some other beverage which is perhaps more often drunk.
The difficulties of the problem are the difficulties which have been pointed out by the right hon. Member for North Cornwall (Sir F. Acland). The real difficulty is that, over and above the amount of liquid milk which can be used for human consumption, the herds of the country are producing more and more milk which cannot be absorbed in that particular way. It is, no doubt, a Gilbertian situation that as a result of years and years of organisation of the industry, long before the Milk Board had anything to do with it, a great deal of the milk surplus to liquid requirements is being used for so-called manufacturing purposes, for making into butter, cheese, milk powder, cream and a variety of other things; but I would venture to point out to the Committee, after a very close association with this problem almost ever since the Milk Board came into existence, that it is a good deal easier to state the problem than to find a solution for it.
People point out over and over again that there has been an apparent increase in the amount of milk which is being produced in the country, but that increase is very often more apparent than real. There is no doubt that a great deal more milk is now coming on to the market and being made the subject of contracts by the Milk Board than ever left the farms in the old days, when a great deal of the milk was consumed on the farm or turned into butter and cheese on the farm by the farmer's wife and daughters, who are no longer able, or perhaps sometimes no longer desire, to carry on what used to be one of the most attractive of the activities on the dairy farm. That is the problem which has to be faced. I think it is un- 134 reasonable to say, as the right hon. Gentleman the Member for West Stirling said earlier this evening, that the Government are trying to divert milk into manufacturing. The whole policy of the Milk Act of 1934, and the whole policy of the Government and of the Milk Board in recent years, has been the direct opposite. The right hon. Gentleman the Member for North Cornwall refers to the low price of butter, and says that the low price for milk manufactured into butter must have been the result of a bad bargain. I can only think that he has not followed exactly what took place with regard to that matter, and I am sure that, if he refers back to the report of the Committee of Investigation which reported rather more than a year ago—

§ Sir F. Acland
I mean since then—a bad bargain this year.

§ Mr. Croom-Johnson
After all, those who are responsible for making these contracts are bound to be guided to a very great extent by what happens to them when they try to make a good bargain on behalf of the milk industry, and, as the right hon. Gentleman knows, the Milk Board are not altogether masters in their own house with regard to these matters. That is one of the difficulties of this problem. Of course, we want to see schemes introduced which will have the effect of increasing the consumption of liquid milk. A scheme was proposed some time ago—I do not quite recollect what happened to it—for the provision of milk in the distressed areas to those who were most in need of it at specially low rates. As I have said, it must not be thought that those who are interested in the milk problem—and, after all, it is the farmer, at the root, who is interested in this problem—are oblivious either of the needs of the poorer section of the community or of the desirability of increasing the market for liquid consumption, and I am sure that my right hon. Friend the Minister of Agriculture will welcome any suggestions from any quarter of the Committee which have for their object the increase of the consumption of milk and the decline, so far as may be, in the proportion which goes into the manufacture of milk products.
There is one other topic in connection with this problem which I desire to bring to the attention of the Minister himself. 135 In the Milk Act, 1934, there are provisions for something in the nature of a subsidy for milk that goes into liquid consumption. The effect of that, of course, is that, the more milk that goes into manufacture, the lower becomes the pool price which eventually the farmer receives. That is one of the difficulties of the problem. But I would ask my right hon. Friend, in the interests of the farmer, to examine again the method by which this subsidy is calculated. I suppose that the calculations come from the Treasury. Of course, if you take the right sort of figures and the right sort of averages, you can produce one result, while if you take what you think is another right set of figures, and produce another right set of averages, you can by calculation produce a totally different result. So far as the farmers in my own county of Somerset are concerned, some of them are under the impression that the calculations which have been made—based of course, under the Act of 1934, on the cheese milk price—have been done by taking a series of prices in the markets which do not reflect the true average.
A little time ago there was a discussion in the Court of Appeal, in which the Court of Appeal had to consider whether the figures which had been put into the calculation of averages were the right figures or the wrong figures for the determination of a particular dispute between a wholesaler and the Milk Board, and in that connection they examined the method of the Ministry of Labour. As I was professionally engaged in that case, it would be wholly wrong for me to communicate to the Committee anything which I learned in connection with my work in that case, but the Court of Appeal expressed in public their view as to the particular calculations which had been made, and I think I am doing nothing which I am not entitled to do when I ask my right hon. Friend the Minister of Agriculture to read what the Court of Appeal said in that case, if I send him the reference and all the particulars, with a view to seeing whether the calculations are really being made in the sense in which the House meant those calculations to be made when it was a party to the passing of the Milk Act, 1934.
Unfortunately, the subsidy is based on the cheese milk price. I do not want to 136 enter into technical details this evening, but it is an unfortunate fact that the butter price, which is responsible for a good deal of the milk that is sold surplus to liquid requirements, has been, certainly until lately and I believe still is, considerably below the cheese milk price. The result has been most unfortunate from the point of view of the Milk Board, and the Milk Board, after all, represents, not the Government, but the farmers who produce the milk in constituencies such as that of the hon. Member for Carmarthen (Mr. Hopkin), whom I see sitting opposite, and the various divisions in the county of Somerset. I beg my right hon. Friend to look into this matter of the calculations from the point of view of this proposed extension of the Act, and see whether what, I suggest, was really intended to be the basis upon which this subsidy should be granted—that is to say, the levelling up, as it were, of the price of milk used for manufacturing purposes—is really being implemented, having regard to the fact, which I admit to some extent, that the butter price is so much lower than the cheese price; and I would also ask him to look into the other matter to which I called attention earlier in my remarks.

§ 9.14 p.m.

§ Mr. Hopkin
I have the honour to represent the county of Carmarthenshire, which produces 20,000,000 gallons of milk per annum, and this proposed extension of the Milk Act will affect the intimate lives and fortunes of about 26,000 people in my constituency. I hope to argue and to prove that by this extension of the Act it is the Government who will benefit, and the Government only, to the disadvantage of the producer. The Minister, in introducing the Money Resolution, argued that there was no question of principle. Perhaps there may be no question of principle here involved, but there is somethinǵ more, and that is the method which the Government have seen fit to adopt in the introduction of the Money Resolution. May I remind the Committee of the Preamble of the 1934 Act, which says: An Act to provide for temporarily securing to producers of milk, by means of payments out of moneys provided by Parliament, a minimum return in respect of milk. I desire to emphasise the word "minimum" and the minima which we resolved upon in Sections 1 and 2 were 137 respectively 5d. and 6d. The Committee will not have forgotten that the then Minister of Agriculture in introducing the 1934 Act, said: The definition of cheese milk in this Clause represents what the board actually receives for milk used for cheese making."—[OFFICIAL REPORT, 13th June, 1934, col. 1856; Vol. 290.] It seems to be quite clear that what he had in his mind was a figure, namely, 5d., which would represent what the board would actually receive for milk. I am surprised that the Minister should come down to the Committee and keep in the two figures of 5d. and 6d. If 5d. and 6d. were the appropriate and proper sums in 1934, seeing that the cost of feeding stuffs, that is, of barley, oats, maize, meals, milling offals, oil cake and brewers' grains have increased by at least 20 per cent., then 5d. and 6d. cannot possibly be to-day the right and the proper prices, which ought to be 6d. and 7d. or more. It is true that in Sections 1 and 2 the figures which are named are 5d. and 6d., but it is a popular fallacy that the farmer has always had those figures, or indeed that he still gets them. I was astonished at the way the Minister so lightheartedly introduced this Money Resolution to-day. As my right hon. Friend the Member for West Stirling (Mr. Johnston) said, he skated over all the difficulties; he did not face up to and tackle a single difficulty. I was astonished at the way that he thought that it was sufficient to explain the Measure. He could not possibly have forgotten that as a result of the Investigation Committee two separate formulae were used—one was a formula for milk for cheese and the second was a formula for milk for butter—and both these formulae were lower than the Milk Act formula. The result was that in working out these formulae, the price which came to the producer was a grave injustice to him.
If the Committee will bear with me for a minute or two I propose to prove that statement. I will give, as a simple example, the price in March, 1937. I am sorry that my right hon. Friend is not here, because this statement simply puts the bottom into his argument upon which he built the case for a lower price to the consumer. The price of milk for butter from the buyer was 3.43d., the Milk Act formula was 4.90d., and the Milk Act standard minimum was 6d. What did 138 the producer receive? He received 3.43d., plus the difference between 6d. and 4.9d. That is, he got 4.53 pence per gallon, which meant that he received 1.47 pence less than this House intended him to get. This House passed by the Act of 1934 that he should not get less than 5d. in the summer and 6d. in the winter, but here in March, 1937, the producer is not getting one penny more than 4.53d. per gallon. If my figures are wrong, I know that I shall be corrected. I will give the Committee another example, the price in June, 1937, and I desire that the Committee should notice the first figure—milk under the Milk Act formula, 6.26d. The price of milk for butter from the buyer was 3.96d. The producer had to pay back that .26 of a penny because it was 1d. over the standard price. But notice this, that the milk for butter was 3.70d., much lower than what this House has laid down it should be. This House said that they should have a minimum of 5d. Here the milk for butter was 3.7d. per gallon, but in spite of that the .26 was taken off the milk price. The result was that the producer got 1.3d. per gallon less than this House intended he should get.
If that is right, it seems to me that it is altogether contrary to what this House ever intended regarding the price for manufacturing milk, and if these figures are true—and I ask the Minister frankly to tell the Committee, if they are not true, where they are wrong—quite obviously this is a most serious matter because the House has passed, and it is down in the Act, that there should be a minimum of fivepence and sixpence which the producer, I will not say has never received, but certainly has not received since the formulae of the Investigation Committee.
May I ask the Minister for his views on the question of repayments? As the Committee know, repayments are made when milk for manufacturing is more than the standard price by 1d., that is when the standard price in the summer is 6d.; anything more than that, as I have just shown the Committee, must be repaid. The Minister of Agriculture, in introducing the Milk Bill in 1934, said: If prices rise the Board certainly could commence to repay some of the money which they have been borrowing, but if prices do not rise it is difficult to see how it will be possible for them to repay these advances, and I am very anxious not to put the nation or the boards into a position where it was actually desired to screw up the price of milk so that 139 a very large area of consumers should be drawn upon in order to repay the relatively small advances made to guarantee the producers against disaster."—[OFFICIAL REPORT, 31st May, 1934; col. 380–81, vol. 290.] Can the Minister stand up in his place and say that the price of milk for butter has risen? He knows himself that it has not and, that being so, following the clear intention of his predecessor it is my submission to the Committee that no repayments ought to be made on milk for butter. I desire to make two suggestions. The first is that the Government should waive any repayments of the first £1,000,000 of which the Board are deficient in grants. I do that on the understanding that the producers under this formula have lost about £1,000,000. I understand the Minister said that a figure of £1,200,000 has been mentioned. Is that figure right, or is it £1,000,000? My suggestion is that no demand should be claimed until £1,000,000 or thereabouts has accrued as a liability, and then repayment should commence. The Minister could quite easily put this matter right by the insertion of these words: "It is also proposed" and now add these words, "from the 1st July of this year," "to amend the method of determining the cheese milk price," and so on.
In this memorandum on the Financial Resolution the Minister declared that the present method is wrong. If it is wrong now, why not put it right now? Why is it right to put the formula as it was intended it should be in October? Is it not right now? If it is right now, why should not the date be put in as 1st July? The situation is getting worse. The July price is 6.46 pence. That means that a repayment of .46 pence must be made on every gallon, although the price of milk for butter is far below 5d. Is it not possible for the Minister to increase that standard price not of a penny, but of 2d. over and above 5d. and 6d.? I heard the earlier answer which the Minister gave to my hon. and gallant Friend the Member for Petersfield (Sir R. Dorman-Smith). I presume that he was referring to the last sentence in paragraph 2 of the Memorandum on the Financial Resolution. As I understand it, the trouble that has arisen about the interpretation of the words, "the net cost per gallon of the milk to the purchaser," is divided into two parts: First, the difficulty of the one-eighth penny for publicity purposes. 140 There is the second part about what is meant, and how far must it be taken into consideration of collecting charges. Is it not a fact that the producer has a claim of anything from £100,000 to £200,000?
If that is so, it seems an extraordinary thing for the Minister of Pensions to come down to the Committee without knowing that important fact, because the attitude of the Government is summed up in this way. There is no retrospective effect to the benefit of the producer by amending the formula by which he may have £1,000,000. In fact, the Government will not even meet him half way. The Government could say, "We will go back to the day that the price started against you under the formula." Not at all. The Government will not even go so far as to say, "Let these prices be calculated from 1st July." On the other hand, where the producer is to lose a possible £200,000 retrospective effect is given to the advantage of the Government by wiping out the existence of £200,000. It seems to me that any benefit that may inure under the extension of this Act will inure to the Government, and is completely unjust to the producer. Can the Minister justify to the Committee what he is doing now? Carl he say that he is giving the Board and, therefore, the producers a fair deal? Can he say that the figures I have given are wrong? If they are right, how does he justify the fact that where this £1,200,000 is considered and made no account of the effect of this is not made retrospective, but when it is to the advantage of the Government and against the producer he makes the effect of the legislation retrospective? I ask him to give the Board and the producers that fair play which will give the Board an even and a fair chance to make this great experiment, which affects the lives of many thousands of people, a success.

§ 9.35 P.m.

§ Mrs. Tate
I am sure no one regrets more than the Minister that there has been so much delay in bringing in the long-term policy, but the Committee realises the great difficulties with which he has been faced. No one realises more than he himself the urgency to the farming community that the long-term policy should be brought out as soon as possible. The hon. and learned Member for Bridgwater (Mr. Croom-Johnson) has said how very much more milk he saw 141 drunk in America, and hon. Members opposite have said how much more is drunk in the Scandinavian countries. A great deal more milk would be drunk in this country if the price were lower. That is the first essential. The farmer is now being faced with greater instead of less difficulties. He pays more for his labour and has far more difficulty in getting it. He will not be able to produce milk at a lower price, and that difficulty has to be faced. But think there is another reason for the small amount that is drunk in this country. Probably the climate of America is one in which one wishes to drink both more milk and more water than is drunk here.
I have constant complaints from mothers of the children in the schools in my constituency that one of the reasons why they do not care for the milk is that it is pasteurised, and I think it is time we had a real impartial inquiry as to the relative value of pasteurised and unpasteurised milk. I notice with very great concern that the Minister frequently makes remarks tending to stress the value of pasteurised milk, but I cannot help thinking that that is very largely an organised campaign on the part of the distributors, because there is no possible doubt that they cannot keep their milk fresh unless they pasteurise it. That is because the milk is not really clean. If you produced really clean milk—anyone can make the test for himself—it does not go sour under at least 48 hours, but the milk that we are supplied with in London is sour within a very few hours.
Some very careful inquiries should be made as to the relative nutritive value of pasteurised milk, and also as to whether that is not one of the factors tending to make milk an unpopular drink. We have now had the milk-in-schools scheme for three or four years, and there should be leaving school a generation of children who have acquired a taste for it, but if inquiry were made I think it would be found that very few children who have left school have continued with the milk habit. We are spending some £60,000 a year in advertising milk, and on the "Drink more milk" campaign, £30,000 of which is supplied by the Milk Marketing Board. It is about time some of that money was spent on advertising the right way in which to serve milk. The hon. and learned Member for Bridgwater wondered 142 what the reaction would be if he were to ask a Member of the House to go out and have a glass of milk with him instead of some other beverage. If he went downstairs and asked for a glass of milk, he would get it served in a jug, and it would be a miracle if the jug was clean. I do not wish to comment on the excruciating and expensive food that we are given here, but all over the country milk as a rule is served in an unappetising way. Where it is served in a more appetising way, for instance in the milk bars, it is beginning to be a very great success. But we should spend more money on advertising the right method of serving it and on an impartial investigation as to the relative value of pasteurised and unpasteurised milk.

§ 9.40 p.m.

§ Mr. Quibell
We have just heard an interesting speech, with most of which I agree. Speaking with experience in the management of a dairy, I have come to the conclusion that it is very doubtful what the advantages of pasteurisation are, and I can echo the hon. Lady's sentiment that it is high time that some competent committee or commission inquired into its merits. I believe its greatest advantage is that it takes out the dirt that never ought to have been in. I think opinion on all sides of the House would be that the value of milk is very largely reduced as a consequence of pasteurisation. I met a small producer on my way to the House to-day. Although he has been a very ardent supporter of the party opposite he has a very distinct grievance against milk marketing. He has eight cows and, if the scheme continues as it now is, he will have none left in three years. The Milk Marketing Board levies have nearly put the small producer out of business. The whole scheme ought to be very radically reconsidered.
The disparity between the amount that the small producer gets and the amount that the consumer pays will not bear examination. The producer gets 9¼d. a gallon and the consumer pays 2s. I know of an actual case of an agricultural organisation which is a large distributor of milk and takes the surplus from the producers of the area and makes it into butter, cheese and ice cream during the summer season. That organisation has, 143 been enabled to pay several pence more per gallon—6d. in one case—to its own farms, than it has paid to the other producers of milk in that area; and it goes to show that, so far as the commercial side of milk is concerned, the distribution is a more profitable business than the production. I would like to draw the attention of the Minister to this fact, and ask him to see whether something cannot be done to narrow the margin between the price that the producer of milk is receiving as the net amount and the price that the consumer is paying for his milk on the doorstep.

§ 9.46 p.m.

§ Mr. W. S. Morrison
We have had a very interesting debate on this Resolution. Some of the subjects have been referred to by the hon. Member for Brigg (Mr. Quibell) in his concluding remarks on the problem of distribution. Also we have had such questions raised as the pasteurisation of milk, and in general many other aspects of the general economic question which are all of great interest to me in attempting to formulate a Government policy in this matter. But all I am asking the Committee to agree to to-night is to extend the existing provisions for another 12 months, so that I may get some other opportunity of laying before you legislative proposals of a more permanent character. The right hon. Gentleman the Member for West Stirling (Mr. Johnston) dwelt in a familiar theme on the disparity existing, in his words, "between the high price to consumers and the low price to manufacturers." But the real reason for a great deal of the disparities in this respect arises from the fact that we import an immense quantity of milk products into this country at a very low price. That is really the root fact which makes our milk problem different from that of any other country.
The right hon. Gentleman instanced the case of Sweden, where he said they drink 420 pints of milk at 1½d. whereas we drink 120 at from 3d. to 3¼d. I am glad that he mentioned Sweden, because it gives an admirable example of the extent to which our economical disposal of milk here is affected by a cause of which the Swedes have no experience. They have in Sweden a very interesting scheme whereby the price of milk is stabilised on the price of butter and cheese, and they 144 are able to sell liquid milk at a low price because they charge a high price for butter and cheese. The fact is that if we had followed the Swedish plan, and had by a similar scheme reduced the price of our milk to 1½d. a pint by charging a high price for butter, we should have had to ask the butter consumers in this country during 1936 to pay £11,000,000 more than they did for this commodity. The truth about this problem, as about many others, is that it is difficult to have it both ways. I do not mind the Committee making strenuous efforts to have it both ways—to have cheaper butter, cheese and milk—but one should realise what is the root factor in the economic position of the industry. If you were to take the immense amount of milk imported in the form of milk products and reduce that to a gallonage figure, you would find that the average price of milk in this country is extremely low, lower than that charged over the whole range of products in most other countries in the world. When hon. Members seek to increase the amount of liquid milk consumed I am with them.
I do not think the right hon. Gentleman the Member for North Cornwall (Sir F. Acland) meant what he said when he stated that the producers are endeavouring to encourage the consumption of manufactured milk. If so, they have been unsuccessful because the consumption of liquid milk rose by twelve million gallons. The right hon. Gentleman the Member for North Cornwall was wrong when he said that the proportion of milk consumed by manufacturers was rising. Last year that was so but this year it is not so; many things have gone to bring about this change. We are desirous to see more milk consumed, but when we are considering ways and means to this end let not hon. Members forget the custom of the people. We are by custom a butter and cheese eating people and not a milk drinking people to the extent that we ought to be, and a good deal of education will have to be conducted if we are to increase the consumption of this nutritious fluid, which has no substitute in the world.
The right hon. Member for North Cornwall seems to imagine that the Milk Board must have made a bad bargain with its customers in fixing a low price, and another hon. Member pointed to the same question, though he did not make that 145 assertion, when he asked what the House intended in 1934 and what has happened. In 1934 there was incorporated into the Act what was called the cheese-milk price, a certain formula taking into account the price of cheese of Canadian and New Zealand origin. Those words in that formula were inserted in the Act because they had formerly been in the current contract of the Milk Marketing Board by which they were charging for milk to be used by manufacturers. When my right hon. predecessor said this would be what the board would get for their milk, he was entitled to say so because it was embodied in the contract between the board and the manufacturers. But an unforeseen thing happened when a complaint under the Agricultural Marketing Act was made to the effect that the price charged for manufacturing milk was too high, and under the machinery of the Agricultural Marketing Act it was referred to a committee of investigation. That committee delivered its report in April, 1936. What happened after that was that that committee, having decided on purely commercial grounds that in spite of the immense production of manufactured milk the price was too high, the price was reduced. But the Minister of Agriculture and the Treasury were still bound by the Act passed by the House as to the amount of money which could be paid under the Act, although in fact the Milk Board were no longer getting what it was confidently expected they would get from the manufacturer for their milk.
We are now taking the first opportunity to put that right, and the new formula will to this extent improve matters. It is really an attempt to give effect to what Parliament really intended in 1934. The hon. Member for Carmarthen (Mr. Hopkin) wishes to ask me a question and perhaps I can answer it before he asks it. The Committee would like to know what would be the effect if we did not revise the cheese-milk price and what would be the effect it we do?

§ Mr. Hopkin
May I ask this, if the Minister then did not have the option either of adopting the formula about which he was warned or leaving it as the House had intended it should be left?

§ Mr. Morrison
I would like to explain to the hon. Member that the cheese-milk price actually received by the board was reduced as a consequence of the com- 146 mittee of investigation's report. The only payments which could be made under the Act proceeded on the assumption that the board would in fact continue to get the original price for its manufactured milk. and we are proposing the only way in which the matter can be put right to give effect to the intention of Parliament, which is that the payments should represent the difference between the standard price of 5d. and 6d. and what the board can obtain for manufactured milk. Let me put it this way: Under the cheese-milk price in the 1934 Act, the gross payments estimated for the next 12 months to the Milk Boards would be £68,000, but as we propose to alter it in this Financial Resolution and in the Bill which will follow, the boards will be entitled to a gross payment of £550,000, providing the conditions as to price and so on are fulfilled. If the payments had been left as provided in the 1934 Act there would have been due to the Exchequer from the Milk Boards a net sum of £1,000, but as a result of the proposed arrangement there will be a net payment by the Exchequer of £540,000.
The hon. Member also asked me a question to which I will endeavour to give an answer, because it was one on which he lays some stress. He drew attention to paragraph (1) (f) of the Financial Resolution, which provides for the interpretation of the reference in Section (1) of the Milk Act to the net cost per gallon of milk. What has happened there is simply this, that a legal interpretation of the words in the 1934 Act has been given which nobody ever intended should be given to them and on which nobody has ever rested a claim. In other words, although this legal difficulty in drafting has arisen subsequent to the Act, everybody has been of the same mind that that interpretation was never intended and nobody has attempted to enforce it. What we are doing is simply a drafting Amendment to the words in the original Act. It may be true to say, as the hon. Member said, that if the meaning in the interpretation were adhered to people might have a legal claim to a larger sum of money. That claim has not been made, and nobody has ever thought that such a claim would be well founded. That is a very different thing from altering the cheese-milk price formula which has come about not because of an error in the Act but as the result of a change in circumstances, 147 and the report of the investigation committee. That is a different matter, and we can deal with it only in the way we have done.
I can only say, as my hon. Friend the Minister for Pensions has said, that our proposal in the Resolution is to carry on for another 12 months, but that does not mean that we shall do nothing for 12 months. I hope that well before the 12 months period is over we shall see permanent proposals if not on the Statute Book at any rate brought forward. Therefore, the Committee will be well advised to pass the Resolution to-night.

§ Resolution to be reported To-morrow.