WHEAT OFFALS. (Hansard, 19 December 1938)

Mr. De la Bère
I desire to raise the question of wheat offals. Last Tuesday I asked the President of the Board of Trade whether he will consider introducing legislation to ensure that all offals relating to imported flour are also imported; (2) whether he will consider introducing legislation to ensure that all wheat imported into this country should be imported whole to ensure that all the flour is milled in this country? The right hon. Gentleman held out no hope of adopting the suggestion. We all know the plight of the farmers in all parts of the country to-day. Many of them are grievously put to it and some have reached a state of absolute desperation. I have myself during the past fortnight spent a great deal of time at the Board of Trade and the Ministry of Agriculture going into these matters. It is necessary to go to both Departments, because they overlap to a large extent. In 1937 a scheme was put forward to the milling combines, or, rather, which the milling combines were prepared to accept, to reduce the price of offals by 2s. per cwt. or £2 a ton. At the last moment the combines suggested that the only way in which they could agree to this was that there should be a rise in the price of flour. This would have been inequitable, since the prosperity of the milling combines during the past few years has been very great indeed. Not only have they made substantial dividends but they have issued bonus shares; and they have issued these bonus shares at substantial premiums. I, therefore, feel that some inquiry is absolutely imperative in the interests of all stock-raising farmers—and indeed in the interests of all consumers.
This is the more necessary because in 1925 a very sound inquiry was made, regarding all these matters, into the cost of milling. In that inquiry very definite 2633 findings were set forth. It was found that it was absolutely essential that from time to time these inquiries should be held in order to prevent unnecessary profits being earned by the big combines, which to-day are virtually a monopoly. I have repeatedly asked questions regarding the importation of Rumanian wheat. I have asked whether this wheat would be available to the millers in the country districts. My right hon. Friend the President of the Board of Trade did not hold out any hope that this would be the case; rather he suggested that the interests concerned would work, as they had done previously, in close harmony with the Government.
I have never understood why the Government had this warm affection for these three unnamed milling interests. It seems to me that really behind the scenes they have very much their own way. I do not want to say anything which would suggest that I wish to discredit these interests, because to-night I want to be peaceful with the President of the Board of Trade. I have a warm affection for him personally, but I cannot agree with the way he has tackled this matter. I cannot get to the bottom of it. Throughout the country this unrest goes on and on. The farmers feel that they have not had a square deal, and frankly I entirely agree with them. They have not had a square deal.
There could easily have been an inquiry into this. If there is nothing to hide, why does the President of the Board of Trade seek so diligently to divert all attention from this and prevent an inquiry being held? There seems to be no possible reason for that. The very fact that they do not want an inquiry is a very sound reason for an inquiry to be held. If they wished they could have an inquiry, but for some reason best known to themselves they seem to wish to avoid this inquiry. It is for that reason that I have raised the issue to-night, and I shall continue to raise it when the House reassembles in February. I conclude by saying this: I shall go on, and on, and on until we do get to the bottom of this unhappy business.

§ The President of the Board of Trade (Mr. Oliver Stanley)
If the House will permit me to go on, and on, and on until half-past II, I should like briefly to answer my hon. Friend's speech. Anybody who listened to my hon. Friend may 2634 have gathered that the questions which he addressed to me, and the answers with which he disagreed, had something to do with an inquiry into the milling industry. That is not the case. The questions which he asked me had nothing to do with an inquiry. Two of the questions suggested specific pieces of legislation. He asked me whether I would consider introducing legislation to ensure that all offals relating to imported flour were also imported. Then he asked me whether I would consider introducing legislation to ensure that all wheat imported into this country should be imported whole to ensure that all the flour was milled in this country. The answer I gave was that I could not accept either of his suggestions.
The reasons are these. The first reason is one with which the right hon. Gentleman the Member for Gorton (Mr. Wedgwood Benn) will be in the fullest agreement. [Interruption.] I am sure the right hon. Gentleman never allows personal affections to over-ride his principles. Let us take the second question first. The hon. Member asked me to forbid all wheat to be imported into this country unless it was whole. To start with, that is contrary to a number of trade agreements, including trade agreements with Canada and Australia. I do not know whether the hon. Gentleman would desire us to tear up the Ottawa Agreements. Secondly, it would have a very disastrous effect upon the bread consumers of this country; thirdly, it would prevent the importation of a certain amount of cheap flour from the Continent which is used not for bread but for the raw material of our biscuit manufactures, and, fourthly, it would be if not actually inconsistent with the terms of the Anglo-American Treaty entirely inconsistent with its spirit. We had considerable discussion about flour, and the duty will remain as it was. To prohibit now the entire importation of flour from all sources—Canada, Australia, the United States and the Continent would be quite unjustifiable.
The other question which he put to me was whether I would introduce a Bill to ensure that all the offals relating to imported flour should also be imported. I gave the answer that I could not, because I think any legislation of that kind would be entirely ineffective. I have made a calculation and I find that the amount of offals which could be directly related to 2635 the amount of flour imported here is something like 3,500,000 cwt., and I should have to pass legislation to say that those 3,500,000 cwt. must come into this country. But as a matter of fact our imports in 1937 amounted to 12,500,000 cwt. It is clear, therefore, that legislation of that kind would have no effect in increasing the total of the offals coming into this country although it might he extremely inconvenient for certain countries, especially Australia and Canada. Those countries would find it difficult directly to relate the amount of offals imported into this country with the amount of wheat which they export. Then the hon. Gentleman makes the complaint that in 1927 when he put forward a scheme—

Mr. De la Bère
I did not say that I had put it forward. I said it had been put forward.

§ Mr. Stanley
I understand that it was put forward and that the hon. Member approved of it. That was a scheme by which it was proposed that the price of offals should be reduced by 2s. per cwt. I would inform him and the House that in fact since that time there has already been a reduction by 2s. 4½d.
The third question put to me was with regard to Rumanian wheat, and here he did not like my reply that Rumanian wheat which had been bought by the Food (Defence Plans) Department for the purposes of turning over existing stores would be dealt with by the three millers to whom I referred on the Second Reading of the Bill which gave me authority to make these purchases. At that time, I explained that we had come to an arrangement with the three concerns that they would take charge of this wheat and that, as and when it was necessary to turn it over, they would replace it, merely for out-of-pocket expenses and without charging any commission. That arrangement was 2636 one which was not only economical to the taxpayer but was for the good of the industry as a whole. The wheat is dealt with in the ordinary way by these concerns, and it is not necessary and it would certainly not meet my hon. Friend's difficulty, at stated intervals to put upon the market in open competition large amounts of wheat quite outside the regular dealings of the grain market. When the hon. Gentleman said that those firms were unnamed, giving some idea of mystery, that we had concealed who it was that was doing it, that was quite inaccurate. On the Second Reading and since I have given the names. They are, as I think everybody in the House knows, Ranks, Spillers, and the Cooperative Wholesale Society. There was general agreement in the House at the time that it was the most economical and best method to adopt from the point of view of the taxpayer and in order to avoid the disturbance of the market, and I feel that to alter that arrangement now would not be in the general interest.

Mr. De la Bère
Will my right hon. Friend have an inquiry as to why the farmer has to pay a greater price for his wheat offals than he receives for the wheat itself? Surely the price of wheat offals is in excess of the price that it should be.

§ Mr. Stanley
I will answer that quite simply. When the miller has the wheat he gets out of it in the process two commodities—offals and flour. If he were to sell the offals below the world price, he would have to make it up by trying to sell flour above the world price, and in view of the competition that he gets from imported flour that would be impossible. He therefore has to sell the offals at the world price in order to be able to compete with flour at the world price of flour.