HC Deb 04 May 1937 vol 323 cc1062-8

7.27 p.m.

Mr. T. Williams

I beg to move, in page 34, line 4, to leave out "five," and to insert "four."

This Amendment would reduce the sum of £5,000,000, stated in the Clause, to £4,000,000. It was originally put on the Order Paper for the purpose of hearing what the Minister has to say with regard to the rising prices of British beef. We had a fairly long Debate yesterday on the prices in 1934 and in 1937. I must confess that we were very disappointed at the reply of the Ministers and their refusal to do anything with regard to examining the costs of production or the variation in prices as between town and town, and their unwillingness to fix a standard price so that any subsidy could have a relation to the difference between the cost price and the market price. They therefore left us with no option but to vote in favour of our Amendment and to express our dissatisfaction with this very crude method of subsidising an industry without any knowledge of the right or wrong of what the Government are doing.

Up to now the Ministers have given us not the faintest information as to their mathematical calculations, if any—I doubt whether there have been any at all —or as to what helped them to reach the conclusion that a subsidy of £5,000,000, when the price of fat cattle is at a certain point, will just leave the producers of fat cattle with a price that will not only cover their outgoings but give them a profit for their investment and labour. We have had no sort of information yet as to the basis upon which past and present Ministers have made their calculations, and this Amendment to reduce the subsidy to £4,000,000 is a further expression of our desire for some statement from the Minister as to why he thinks now that a subsidy of 7s. 6d. per live cwt., with an average price of 44s. 6d. ruling throughout the country, is just the right figure to provide an economic price for the producer. Will he tell us what his calculation is based upon, and go a step beyond what he said last evening, namely, that when the price of fat cattle was round about 37s. the then Minister gave a subsidy of 5s., which he thought would put cattle producing just on the shelf? We want to know how many more shillings beyond 42s. are required before the cattle producer is safely home and fully rescued. If the Minister will tell us just when the cattle producer is landed happy and content, we shall know what to do with regard to this Amendment. In the absence of some more comprehensive and logical statement about the steps which the Government have taken and are taking, we shall have no alternative but to register our protest once again against the Government's refusal to tell the nation what they are doing and why they are doing it.

7.30 p.m.

Mr. W. S. Morrison

The hon. Gentleman asks on what calculations we arrive at the figure of £5,000,000. There has been no meticulous calculation of costs of production. Attention was drawn last night to the many unsettling factors which complicate such calculations in this industry. One factor to which reference was made, namely, the weather, is one with which we are all thoroughly acquainted whether we are farmers or not. It was the idea that with the assistance of this £5,000,000 the industry might be rescued from a dangerous state of collapse, and that the subsidy might tide it over an extremely difficult time. It is not an exact calculation of the gap between costs of production and prices. We have never gone on the assumption that costs of production can be accurately estimated, but we think that with this assistance there is some hope of restoring this vital branch of the industry to its proper state of prosperity. The £5,000,000 is put into the Bill as the maximum sum for which Parliament is liable, and that is how the House ought to regard it. The actual way in which it will be spent is a matter which will be determined each year by vote in the House, and the White Paper made it abundantly clear that the market situation will be carefully considered in our determination of the subsidy arrangements.

I feel sure that the hon. Gentleman has been to some degree prompted to move the Amendment because of recent improvements in the prices of fat cattle. He has himself drawn attention to that welcome feature once or twice, and he, no doubt, thinks that as there has been an improvement since the Bill was introduced, it is perhaps not correct in its estimation of the requirements of the industry. But I would ask him to bear in mind the various factors which must be offset against the present improvement. In the first place, a rise in spring and early summer is a seasonal and normal happening, and it is required by the industry, because it has to repay the cost of feeding not on grass but indoors throughout the winter. That is a more expensive process than feeding outside, and unless you get a rise at this time of the year, you are unable to make ends meet for the increased cost of winter feeding. Last year it happened that stores were dear, and store cattle, being the raw material for the fat stock industry, must be taken into account before you can estimate any return of real prosperity to the industry. I mentioned that there was a sharp rise in the cost of foodstuffs. How sharp it is is not perhaps always recognised. In March, 1936, the index of foodstuffs was 85, and in March of this year it was 118. That is a very sharp rise which must be offset against the improvement in price. The improvement comes after a long and severe period of depression which has exhausted the financial resources of many farmers and has exhausted their fields because they have not been able to replace what should have been replaced in the way of fertility.

Before we come to the conclusion that these prices show anything excessive in the way of profit, let us cast our minds back over a longer period and see what they were before the slump. In the first three weeks of April of this year the average for first and second quality cattle, all breeds, was 40s. 7d. per live cwt., or, with the subsidy, 45s. 7d. For the corresponding weeks of the years 1927 to 1931 the average price was 50s. 5d. without any subsidy at all. The truth is that, in spite of this recovery, livestock prices are still lagging behind the general agricultural recovery. If you take the pre-war index of prices at no, in March, 1937, the index for fat cattle was 102 and for stores 105, whereas the general index for all agricultural commodities was 130, showing that while there has been some recovery in the agricultural world as a whole it has not been shared, in spite of the events of the last few weeks, by the livestock industry. I would put these considerations before the House as a justification for what I said last night, that we should not shout until we are out of the wood. We have to take a long view of all these agricultural movements. The hon. Gentleman probably moved the Amendment in order to get information rather than with the intention of actually reducing the amount, but nothing could be worse, from my point of view, for agricultural prosperity and revival than that we should come to this decision on the experience of a few weeks of better prices after a long reign of depressed and poverty-stricken conditions. I hope that with that explanation the hon. Gentleman will trust to the mechanism that exists in the Bill and the financial control of the Government Departments to see how much of the subsidy should be spent, and leave it as the figure stands in the Bill until we are more clear about the future prosperity of the industry.

7.39 p.m.

Mr. Price

I cannot let the Minister get away with the statement that you cannot estimate the cost of production of livestock. The agriculural research stations have been working at this for some time, and it is only because they have not got sufficient financial support that they have not yet produced an average figure which would give us an idea of what the costs of production of fat cattle are. If we cannot know that now, the Commission should at least take steps to ge the facts upon which the subsidy should be based. [Interruption.] I gave a number of facts when discussing the matter in Committee and I pointed out that there are places where, in spite of the difficulties of recent years, it is still possible for feeders of fat cattle to cover their costs of production, where it is possible to feed them without much cake. There are also those who, if they had a subsidy of 10s., could not make it pay. What we require is a survey over the country and, when we get the facts, we shall know very much more than we do at present. I admit they would only be average figures. It is impossible to say that the cost of production is so much, but it is possible to say that within certain areas the average is so much and, as far as I can see, there is no guarantee that under the Clause we shall have it.

I agree that the rise that has been taking place in the last few weeks is partly a seasonal rise, but not entirely. It is due also to the fact that there has been a shortage of stores. Owing to the very bad conditions of the last year or two, breeding has not been going as it does normally, and that has largely reflected itself in the fat stock prices. That confirms my view that we are for the next year at least likely to have somewhat higher figures. We are not going to get in the immediate future prices which will make the subsidy unnecessary but who can say, having regard to general world conditions, that in a year or two prices may be such as to render a subsidy unnecessary? Who would have thought a year ago that wheat prices would now be up to 10s. a cwt.? Who would have thought that the milk subsidy would be altogether unnecessary? It is quite unsafe for the Minister to argue that prices are still so low that we can avoid dealing with a matter of this kind in the Bill. It may be a long time before we shall be able to discuss matters of this kind again, and now is the time to make what provisions are necessary in view of uncertain world conditions.

Therefore, although I wish to make it quite clear that I do not think the subsidy will be unnecessary in the near future, yet owing to the considerable rise in prices I do think that the House should make provision in case such a situation should arise. We have to consider the interests of the taxpayer, and that we must get the general sympathy of the public and convince them of the necessity of assisting agriculture if we are to avoid making assistance of this kind unpopular. For that reason we are entitled to protest that no sufficient care has been taken to provide for a sliding scale, or a standard price, or to provide the necessary means whereby we can get information about general costing figures.

7.46 p.m.

Sir Ernest Shepperson

The hon. Member for Don Valley (Mr. T. Williams) has moved to reduce the figure from £5,000,000 to £4,000,000, but the Minister has made an excellent, unanswerable Case for British agriculture that the figure should remain at £5,000,000. My doubt is whether we are going to get the £5,000,000. We fear that for some reason, because of rising prices, the amount of the subsidy paid will not be the figure put forward in the White Paper, but that there will be a less sum provided out of the Exchequer and that we shall only receive that less sum. I should like an assurance from the Minister that the £5,000,000 will be paid from the Exchequer into the fund at all times and on all occasions.

7.47 p.m.

Mr. Adamson

We cannot accept the assurance of the Minister in the form that he has given it, because although there may be continual fluctuations in the prices of fat cattle and the whole tendency of prices is to rise, we are left to assume that the subsidy will also rise, on the basis of previous years, when the maximum was £4,000,000. With the present rising prices we have the recent estimate of £5,000,000. There is another factor in regard to which no satisfactory statement has been made, and that is that the Government have no intention of stating what would be termed the standard price on which the subsidy should be paid. It means, therefore, that with the fluctuations and the continued rise there will be no change in the subsidy. For these reasons we are bound to make our protest in the direction of opposing the amount of subsidy that is proposed.

Mr. T. Williams

Might I, with the permission of the House, say that we have expressed our point of view, we shall have a. further opportunity of expressing our point of view on the Third Reading, and we have no desire to force a Division, which would be merely a waste of time. I much prefer that the time should be Utilised in giving reasons for the action we shall take on the Third Reading. Therefore, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.