HC Deb 04 July 1938 vol 338 cc115-43

Order for Second Reading read.

7.15 p.m.

The Minister of Agriculture (Mr. W. S. Morrison)

I beg to move, "That the Bill be now read a Second time."

The House will remember that last summer a Bill similar to this was introduced, and I then said that I hoped that would be the last occasion on which a Measure of this temporary character would be necessary. The grounds for that hope seemed then to be fairly solid. In the first place, the Government's proposals for more permanent legislation were in an advanced stage of preparation and were, in fact, issued as a White Paper before the temporary Bill became law. In the second place, we had a session in front of us, and although departmentally there were two very large Bills to be disposed of, it seemed perfectly feasible that the proposals described in the White Paper would be given legislative form in time to enable them to operate from 1st October next. The course of a Parliamentary Session can never be predicted with accuracy by the Government; it is a matter for the whole House; and during recent months we have had to devote a great deal of time to questions of foreign affairs and defence, matters of perhaps less peaceful import than the subject of agriculture, and it thus became evident that it was not possible to pass the long-term legislation before the Recess.

I need not tell the House that it was with the utmost reluctance that the Government come to this decision. It is a feature of the diversified industry of agriculture that each of its problems requires separate treatment. We have had Bills dealing with livestock, pigs and bacon, and a group of problems which are comprised in the Agriculture Act, drainage and disease, cereal production, land fertility, and so on. Many more problems await solution, and plans for dealing with them are in various degrees of prepara- tion and consideration. It is the Government's intention to proceed with each problem legislatively as time and opportunity offer in an attempt to get a balanced agriculture founded on the principles of the Agriculture Act. One, and only one, of these problems is the problem of milk, and we hope to introduce legislation early next Session to give effect to the comprehensive policy described in the White Paper to which I have alluded. In the meantime, it is necessary to retain the present protection and assistance to the milk industry for another 12 months, and that is the purpose of the Bill. As the Bill is drafted very largely by reference to previous Acts, I thought it would be for the convenience of the House if a White Paper was available showing the relevant sections of existing legislation and how they will be modified if these proposals are accepted.

Clause 1 continues the system of assistance which has been in operation for the past few years for another 12 months. That system concerns the continuance of advances to recoup the producers of liquid milk if they have to sell milk for manufacture at a very low price. The benefit of this provision goes to the producers of milk, not to the manufacturers, who have their prices determined by the price of competing imported products, and not by this scheme. That provision is familiar to the House and I need not waste any further time upon it. Clause 2 proposes an extension for 12 months of the period in respect of which Exchequer grants can be made to the milk marketing boards towards their expenses in giving effect to approved schemes for increasing the demand for milk. Of these schemes the best known is the milk-in-schools scheme, and the House may be interested in the figures. Before the scheme started about 900,000 children were receiving milk in school under arrangements made by the National Milk Publicity Council. This number had increased to 2,000,000 when the new scheme was launched in October, 1934, and it is estimated that by this time 2,750,000 children are participating. Over 23,000,000 gallons of milk were consumed under the scheme in England and Wales in the 12 months ended last September, and judging from recent figures which I have seen this is likely to increase in the following 12 months to such an extent as to involve a consumption of at least 25,000,000 gallons. As stated in the White Paper, this scheme has undoubtedly proved its merits, and the Government attach great importance to its continuance. We have also taken the opportunity to give consideration to certain minor difficulties of administration which experience has shown to arise, and during the next 12 months we hope to, make improvements in that respect.

Grants have also been made in the past to the milk marketing boards towards the cost of a scheme known as the Press and poster publicity scheme, at the rate of £30,000 a year in the case of the English board and £10,000 a year in the case of the Scottish board. The Government feel that the milk marketing boards should now undertake full financial responsibility for these activities, and it is proposed, therefore, to give no further aid to Press and poster publicity schemes after the end of next September. On the other hand, it is hoped to introduce in the autumn a scheme on the lines foreshadowed in paragraph 21 of the White Paper, under which local authorities will be able to secure milk at a reduced price for the purposes of their maternity and child welfare arrangements. Local authorities will thus be in a position to extend their present schemes and to make milk available to expectant and nursing mothers, and to children under school age, either free or at a reduced price as circumstances may require. Discussions are now going on with the milk marketing boards as to the arrangements by which this can best be brought about, and it is a departure which I am sure the House will welcome.

In the meantime the Bill proposes that for those purposes the limit of the total Exchequer grant available should be increased to £750,000, that is to say £250,000 more than the £500,000 which in past years has been made available, and this will allow for the payment of grants for the maternity and child welfare milk schemes as well as for the various extensions of the milk-in-school schemes which are contemplated. I ask the House to recollect that this is the estimate of what we may expect to fall on the Exchequer in a full year; but it is hoped that the long-term legislation with its own proposals for financial assistance will be in operation well before the end of a year. Clause 3 of the Bill carries out the proposals which were contained in the White Paper, that the boards should be relieved of liability to repay to the Exchequer advances made to them under the Milk Acts after 30th September last. If this were not done it would mean the possibility of the milk marketing boards having to repay to the Exchequer and then the Exchequer having to refund to them what they had repaid to the Exchequer. It is best to deal with that matter now. These are the main provisions of the Bill, and the remaining Clauses are consequential; but there is one matter arising out of the postponement of the long-term legislation on which I ought to say a word.

It has been represented to the Secretary of State for Scotland and myself that many milk producers have during the past year incurred expenses in bringing their herds and methods of milk production up to "attested" or "designated milk" standards in anticipation that the increased premiums set out in the White Paper would become operative as from October next, as was originally intended. The proposed Exchequer assistance towards these increased premiums was, and still is, regarded by the Government as one feature of a comprehensive and balanced policy which contains other proposals to which the Government attach equal importance. It is essential in their view that the proposals should be enacted substantially as a whole, and the Government are unwilling to include in the short-term Measure now before the House provisions to enable Exchequer assistance to be given towards the payment of increased premiums on quality milks, as this course would involve an anticipation of one part only of what is a comprehensive and balanced policy. If, however, milk marketing boards should decide as from 1st October next to pay increased premiums and allow increased rebates for quality milks on scales approved by Ministers and corresponding to those foreshadowed in the White Paper, the Government will be willing to commend to Parliament, as part of their forthcoming long-term legislation, a provision authorising retrospective assistance from the Exchequer and putting the milk boards in the same financial position as regards Exchequer assistance from 1st October, 1938, as they would have been in if the long-term legislation had been passed this Session, and not the short-term emergency Measure which is now before the House. It will be seen, therefore, that the Bill involves no new controversial principle. It continues the existing assistance for the necessary period to enable the long-term legislation to come into effect; but we have taken the opportunity, as I have mentioned, to mitigate the loss and disappointment which would otherwise be caused by this inevitable postponement.

7.29 p.m.

Mr. T. Williams

This is one more of those temporary emergency Measures of which we have had so many since 1934. Every year since 1934 we have had a temporary or emergency Measure of this kind from the Minister of Agriculture, always with the promise that something more will be done in a few months' time. In other words, the Government are always promising a little bit more sugar for the agricultural bird. I think that the predecessors of the right hon. Gentleman developed a new technique in politics. The agricultural industry has always been promised a little more just before the Parliamentary Session has ended in 1934, 1935, and 1936 and 1937, and now in 1938 the same process is continued. The Government hope not only to quell agricultural riots but to retain the support of the industry. If it were possible to legislate industry into a prosperous condition then agriculture would be the most prosperous industry in the world. I imagine that during the last five or six years, there have been introduced more Bills dealing with agriculture than with any other industry.

When the Minister talks about a balanced, comprehensive policy for agriculture, I cannot help wondering how he intends to get that balance, considering the numerous Acts that have been passed in connection with agriculture during the last six or seven years. Apparently there is no finality to the introduction of these temporary and provisional Measures, and I am not quite sure what is the real reason for that. With regard to milk, there are constant complaints that the farmers are not receiving as big a price as they ought to receive, but equally there are constant complaints that the consumers are paying a higher price for liquid milk than they have paid at any other time during the last 15 years. Therefore, there is some weakness in the industry, and so far the Government have failed to detect it, or, if they have detected it, have not had the courage to deal with it. Every year hundreds of millions of gallons of milk go to the factories for manufacturing purposes, yet millions of families get less than enough liquid milk, and a large number of families get no liquid milk. We know—and I am sure that the Minister knows as well as anyone—that the potential demand for liquid milk in this country is almost unlimited. Nevertheless, we have the curious set of circumstances that year after year temporary Measures have been passed, but, apart from the increase in the consumption of liquid milk in 1937 as compared with the previous year, nothing fundamental has been done to solve the big problem.

This temporary Measure is nothing more than one of those Measures which tide us over a certain period, but does nothing to deal with the fundamental problem. Despite the promise made by the right hon. Gentleman, which was merely a repetition of the promise that he made 12 months ago, I ask him when the Government intend to face this problem. They do not lack information with regard to milk, prices, distribution, quality, disease, and so on. There have been commissions and committees galore. It cannot be because of lack of information that the Government have failed to make up their minds, nor do I think it can be a question of finance. I am not sure that the vested interests, although they may appear to be small, are not to some extent responsible for the inaction of the Minister and the Government.

A short time ago, the comments of dairymen, milk retailers and distributors in certain parts of the country prophesying what the contents of the main Bill, which has not been produced, would be, disturbed the Minister to such an extent that he replied in a speech in which he said that when the Bill finally emerged, those who had been making those comments would be astonished to find the difference between the actual Bill and the Bill that had been prophesied. I rather gathered from that statement that there was some timidity on the part of the Government in facing those who might be hostile to the Government's bigger policy if the Minister made up his mind to deal with the fundamental problem of distribution. Last week-end the Prime Minister told the farmers of the country that the Government could not bring forward a big, comprehensive Measure because there had been so many Debates on foreign affairs. The fact of the matter is that the Government have been as inept in handling foreign affairs as they have in dealing with agriculture, and if the Prime Minister had told the real truth, that would have been it. That, combined with the Government's fear of facing the vested interests, is the real reason the comprehensive Measure has not been produced. The producers and the consumers are being made to pay because of the ineptitude of the Government in regard to foreign affairs and their fear of dealing with the vested interests on the distributive side of the industry.

I am bound to confess that hon. Members on this side cannot oppose this very small Measure. As the Minister has explained, it merely extends the subsidy for manufacturing milk. I would have preferred to subsidise the consumption of liquid milk rather than subsidise the milk that goes to be manufactured. There is no sense in calling upon the wife of an unemployed man to pay 2s. 4d. per gallon for milk when it is sold to factories at 6d. or 7d. a gallon. As the Bill merely extends the small subsidy for manufacturing milk, I do not see how we can oppose it in the circumstances. Nor can we oppose the money that is set aside to provide for cheaper milk in elementary schools and for expectant and nursing mothers. But we want to see something bigger than these temporary expedients which have been so frequent during the last few years. We want to see something that will be more permanent than legislation in this respect has been in the past. I have said that the potential demand for liquid milk in this country is unlimited. We know, however, that there are millions of people in homes with small incomes who secure less liquid milk than they require. It is the Government's duty to find some means whereby some of the hundreds of millions of gallons of milk will find their way into the homes where there is a low income instead of going to the factories. It is nonsense to talk about "keep fit" campaigns when, in a large number of homes, no milk can be purchased for the children. On 27th June, there was a letter in the "Times," signed by the joint secretaries of the St. Pancras House Improvement Society, Limited, in which they recounted their experience in connection with 600 houses which they control for rent and other purposes. They wrote: Our daily work among the tenants of this society (about 600 families) in St. Pancras makes it depressingly clear that there are many to whom the cost of fresh milk is prohibitive. Our society's rents are below the London average, and are further reduced for 75 per cent. of our poorest tenants by family rent allowances averaging 2S. 6d. a week and going up to 5s. 6d. Yet we find that the poorest families—say, 20 per cent.—can only afford tinned milk. Then come those (about 70 per cent. of our tenants) who manage to buy half a pint of fresh milk daily. This is pitifully little for a family, but fresh milk is regarded as a luxury, though it is greatly preferred to tinned milk. Then they give two cases: Here are two typical instances: (1) A large family with father on low wages buys four 4½d. tins of milk a week and can afford no fresh milk at all, except what the children have at school. The two-year-old child has never tasted it. (2) The mother of four young children (husband on unemployment benefit) has gastric trouble, is recommended milk, but not being pregnant or nursing she is not eligible for cheap milk from a centre. She gives her children what little fresh milk she can afford, leaving none for herself. Those two cases in St. Pancras must be typical of thousands of cases throughout the country. Therefore, in the permanent scheme to which the right hon. Gentleman referred, I hope an effort will be made not only to bring about a reduction in the price paid by the consumer but to see that some part of the very large surplus finds its way into the homes with a low income, even if the Government have to put up the money for that purpose, for only then will it be possible for the producers to get a fair price and the consumers to get the quantity of liquid milk that they require. We are as anxious as the right hon. Gentleman—and that is saying a good deal—to increase the higher grades of milk, and he will find no opposition from this side of the House when he does something in that direction.

But we want also what we consider to be fundamental, a rational distribution of milk. Information is in the possession of the right hon. Gentleman—I will not refer to it now, but I will refer to it later when the comprehensive and balanced scheme is prepared, if ever—showing that some distributors, where competition has been reduced to a minimum, are making over 4d. per gallon profit on every gallon of milk they distribute, which is infinitely more profit than the average farmer gets for producing it; whereas in other areas those who distribute the milk are making anything from ½d. to 1½d. per gallon profit. That indicates that there is a severe weakness somewhere in the distributive system. It is the duty of the Government to see that there is no weak link in the distributive system and that there is the most efficient scheme that can be devised. We want to see something that is different from the half-baked schemes, the weak and vacillating Measures, in which the Government have held back because 20,000 or 30,000 people happened to stand in the way. If the Government think of a fair, reasonable and efficient scheme that will be of benefit to the producer and the consumer, nothing ought to bar the way. Failing the production of such a scheme, the right hon. Gentleman will meet very stern opposition from these benches. In view of the importance of this industry to the economy of the country, we would prefer to see a Measure to which we could give whole-hearted support, which would help the farmers as we want to help them, but at the same time would help the consumers.

7.43 p.m.

Brigadier-General Clifton Brown

The hon. Member for Don Valley (Mr. T. Williams) referred to the delay which has taken place in this matter, and he accused the Government of having dropped the main Bill because of the time taken up by foreign affairs. I think the Opposition ought to take some of the blame for the dropping of that Bill, because if it had not been for their constant interruptions in connection with foreign affairs we might have got on much better. The hon. Member also said that the Minister had plenty of advice from all quarters as to what the Bill should be. I quite agree with the hon. Member. There has also been plenty of criticism, but whenever the hon. Member addresses the House, he speaks with knowledge and gives knowledgeable advice to the Minister. Like most producers, I approve of the extension contained in this Bill, although I regret that the main Bill has not been brought forward. I also approve of the fact that the Minister has issued a White Paper explaining the provisions of the Bill, which enables us to follow it more easily, and I hope that he will do the same thing in connection with other Bills. One of my regrets is that, contrary to the advice of the whole industry—certainly of the milk producers and I believe of the distributors as well—the Minister has omitted from the Bill the levy subsidy proposal which was generally recommended. If the Bill is to be on the lines of the White Paper, apparently that is not to be included. A levy subsidy on imported manufactured milk would, I believe, be much more suitable than other forms of subsidy.

The Minister is to present his long-term policy later in a Bill which will, no doubt, be contentious. There are proposals in the White Paper which will, I presume, be in that Bill and they are of a very controversial nature, dealing with such matters as pasteurisation and the rationalisation of that distribution. I ask the Minister, when he brings in that Bill, to give us plenty of time to consider it before the Second Reading is taken. It will be a very technical Bill and will need a great deal of consideration on all sides. There is one thing in the Bill now before us which, notwithstanding the explanation in the White Paper, rather puzzles me. In the Schedule, paragraph 3 states: Sub-sections (2) and (3) of Section eight of the principal Act shall cease to have effect. I have looked up the principal Act, and I find that these Sub-sections deal with provisions as to revocation of schemes. I cannot see how they relate to this Measure at all, and I do not know what this part of the Schedule means. Does it mean that the revocation provisions of the earlier Act are repealed in so far as the present Measure alters the scheme in relation to payments by the board to the Exchequer? Finally, I wish to have a clear and definite explanation of what the Minister means by "concessions to the board in regard to quality milk." I understand that the promises made by the Government to producers of quality milk are not to be postponed, but I do not see anything in the Bill to authorise the spending of that money to help those producers. People have gone in for T.T. and other licences on the assurance that the quality premium contribution of the Government would be £1,700,000 for the year ending September, 1939, but I find no mention of this matter in the Bill though the Minister promised that it would be all right. I would like to be assured that this sum of £1,700,000 is to be paid.

7.50 p.m.

Mr. R. Acland

The Minister confessed that he stood before us a disappointed man. I cannot help reminding him that this is not the first time, nor I believe the second time, that he or one of his colleagues has been in a similar position. Almost exactly 12 months go the Minister of Pensions said: In the Debate on 17th February, 1936, the Minister 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 good-bye."—[OFFICIAL REPORT, 5th July, 1937; col. 119, Vol. 326.] We have had the other prima donna performing to-night, and it is the same old song. I wonder what odds the Minister would offer me against the probability of his having to repeat the same performance 12 months hence. Indeed one would begin to feel a little sympathy for the hon. Member for Evesham (Mr. De la Bère) if he supplemented his "mischievous curiosity"—as I believe it is called in these times—by attending to take part in these Debates and giving us the benefit of his constructive suggestions. The natural desire of the Opposition to do what we can to divert this Government on to sound lines in foreign affairs was blamed by the Minister for his failure to produce a policy. I wonder whether it is not the case that even now, after two years, the promised policy Bill is not yet ready in draft.

I hope the Minister will realise that there is a big job of work to be done even within the four corners of this Bill. I would direct his attention to an answer given to-day by the Parliamentary Secretary to the Board of Education which did not, I think, satisfy hon. Members on this side. The hon. Gentleman said that in every district "all or some" of the schools were providing milk. It seems to me a disgrace that there should be big gaps in this scheme and that some of the biggest gaps should be in those very areas where milk is produced. I deeply regret to say that I understand that some of the biggest gaps are in my own county, and I hope this Bill will give the Ministers concerned an opportunity of seeing what they can do to repair those gaps.

Of course the really large tasks in connection with this industry lie outside the four corners of the Bill, and those tasks have been well known for a number of years. In 1933 the Grigg Commission reported that the multiplication of effort in the distribution of milk while bringing no great advantage to the consumer, added in no small measure to the costs of distribution. The Committee of Investigation in 1936 reported that they had been deeply impressed with the unnecessary elaboration and waste of effort in the present distributive organisation. They had had evidence of over 20 distribution services operating in one street and they said that this apparently was not an unusual occurrence. They saw in the proper organisation of the distributive trades a real hope of reducing prices to the consumer. I hope that the Ministers concerned will give their attention to that job in a really big way.

I understand that difficulties have arisen, largely in relation to the position of producer-retailers. I have considerable sympathy for the position of the producer-retailers, largely because I believe that in them, owing to the direct connection provided between the producer and the consumer, there is a possibility, perhaps the only permanent possibility, of supplying milk—at any rate when they reach the T.T. grade—to the consumer without that depressing habit of boiling it against which the hon. and learned Member for Argyll (Mr. Macquisten) so wittily and so ably campaigns in this House. Even the producer-retailers themselves would welcome some opportunity of working out, with the assistance of the Government, a system under which it would no longer be necessary for them to leave a pint of milk at one house and then to pass by 50 or 100 houses before coming to the house where they had to deliver the next pint of milk to the next customer. Whatever may be the difficulties in the way of organising distribution I submit that they must be overcome and that it is the Government's job to overcome them. Eventually the Government must make up their minds on these problems, and put forward a policy which they will be prepared to ee through against opposition and I hope hey will not allow commercial interests o prevent the people of this country getting milk as cheaply as they might have it.

There is another point which I have put to the Minister before without getting an answer which I could understand. It relates to butter-making. If we got a better price for our butter, we could give a better price for milk, and the farmers who sell liquid milk woud not have such a large levy to pay so as to bring the pool price up to uniformity. One of the reasons why we do not get the price which we might get for our butter, is because it is not graded to the same standard as Australian butter and butter from other sources. Are we going to put this matter right as part of the long-term permanent policy, or are we to continue to face the competition of imported butter which comes in graded regularly in two, three or four recognisable grades, with British butter which is not graded? A newspaper which attempts to quote the varying prices of foodstuffs from week to week has said that no article comes on to the market graded sufficiently regularly as to quantity and quality to enable it to be designated as "British butter." If you quote the price of British butter as Is. 6d. this week and Is. 6¼d. next week, you have no assurance that you are comparing like with like. The essential element in the grading of butter is to have a staff of butter graders. The Australians have a staff of butter graders trained for the task. In 1936 I put this point to the right hon. Gentleman's predecessor— Can we have an assurance that the Minister will forthwith survey the possibility of finding in this country a sufficient staff of really skilled butter graders to cope, at the start, say, with 75 per cent. of the butter output in this country? I received the following reply: I give the hon. Member all the assurance in my power that from the point of view of efficiency and quality what he has said will not be lost sight of."—[OFFICIAL REPORT, 2nd March, 1936; col. 1150, Vol. 309.] I want to know what is meant by that kind of assurance. When one asks the Government the specific question, "Will such and such a thing be done?" and the answer is that everything will be done that is necessary towards efficiency, does that mean that the point that one suggested will be done or will not? I asked a similar question two years ago, and was given an assurance. Have the Government in those two years surveyed the possibility of finding a sufficient staff of expert butter graders to enable us, as part of a long-term policy, to put standardised British butter on the market? If that has been done, I shall be delighted. If it has not, will the Ministry undertake to look into the matter at once so that when the Bill comes before us, as presumably it will, in 18 months or two or three years' time, we shall at least have laid a foundation towards getting a satisfactory butter industry?

8.1 p.m.

Mr. Hely-Hutchinson

It always seems to fall to my lot to speak in this House on complicated subjects or else on those that arouse no particular emotional excitement; but as one of the original co-opted members of the Milk Marketing Board, I think it is right that I should make such contribution as I can to the Debate. I would like to say, however, that I am the only member of that popular body who is not a producer, and, therefore, I hope the House will feel that anything that I may say on behalf of the dairy farmers is not the special pleading of an interested party. Hon. Members opposite who have spoken have spent most of their time in expressing their customary disapproval of His Majesty's Government in general and have said so little about the Bill that it is rather difficult to make out the extent of their approval of it. I hope I shall acquire merit with you, Mr. Deputy-Speaker, if I follow the unusual course of returning to the Bill itself. I am sure the dairy farmers will gratefully acknowledge the cancellation under Clause 3 of the liability to repay the substantial sum which they might have to repay in the event of a rise in prices of certain categories of milk products, namely, butter and cheese. They will also appreciate the extension for a year of the guarantee which sets a bottom to the prices of those commodities, though they feel that this concession is of little value, and indeed they hope it will prove to be of little value, because it is most unlikely in present circumstances that prices will reach that minimum.

My right hon. Friend's statement with regard to the contribution from the Ex- chequer towards quality milk will have served to relieve the very great anxiety that was present to the mind of dairy producers throughout the country. There is no doubt that during the last year, based upon the statement of the White Paper of July, 1937, a great deal of money has been spent by producers in bringing their herds up to the attested standard and their premises into a condition in which they could produce the quality grades of milk and it would have been a very serious disappointment to them if they had to face further postponement of the additional contributions from the Exchequer for quality milk from October 1st next. While I cannot, of course, give an undertaking on behalf of the Milk Marketing Board, there is no doubt in my mind that they will welcome the assurance that my right hon. Friend has given and will immediately look into the matter and see how they can finance the payments pending the opportunity for the Government to implement that assurance.

My right hon. Friend has mentioned a fact which was also present to the mind of the Milk Marketing Board, that the £750,000 foreshadowed under Clause 2 for assistance to the approved arrangements for increasing the demand for milk and especially for the milk-in-schools scheme and the nursing mothers and child welfare schemes in Special Areas is unlikely to prove sufficient, especially in view of the contemplated extension of those schemes. The £500,000 already allocated in this year by no means covers the existing schemes on the subject. Out of that £500,000 one-seventh goes to Scotland and the remaining £430,000 to England, of which only £400,000 is applied to the milk-in-schools scheme. The assistance given to the milk-in-schools scheme by the Government was based upon a contribution of 5d. a gallon on the first 18,000,000 gallons and 2½d. on each subsequent gallon. The figures in the present year are, I think, nearer 27,000,000 gallons than 25,000,000.

Mr. W. S. Morrison

They may be hearer 27,000,000 gallons. I made a conservative estimate.

Mr. Hely-Hutchinson

On the basis of 5d. for the first 18,000,000 gallons and 2½d. for every subsequent gallon, the total amount required would have come very near £470,000, so that this year the Milk Marketing Board is falling short by £70,000. It is worth mentioning how the farmers come out of the arrangement. Under the milk-in-schools scheme milk is supplied in the schools at ½d. for one-third of a pint, which works out at a 1s. a gallon. The distributors under a special arrangement are charging 6d., therefore if it was left there with no assistance at all the Milk Board would be getting 6d. a gallon for their milk as against 1s. 4d., which is the contract price. The arrangement of giving a 5d. contribution from the Government brings the price to the board up from 6d. to 11d., which we know is just about the average cost of production throughout the country; but from the Milk Marketing Board's 11d. has to be deducted 1½d. on the average for transport. Therefore, even that part of the milk which is being subsidised at the full figure of 5d. a gallon is being supplied at a loss by the farmers; and when we get into the second category beyond the first 18,000,000 gallons where the assistance is only 2½d., that milk is being supplied by the board at a price equivalent to 8½d. less 1½d. for transportation, or 7d. Any milk for which no assistance is given is being supplied by the board at 6d. less 1½d. for average transportation. It will therefore be seen that even on the existing basis we need substantial assistance from the Government in order that the farmer may not be supplying this very valuable service at a loss.

The Milk Marketing Board realises the very great value of the milk-in-schools scheme and also the nursing mothers and child welfare schemes in Special Areas. They do not want to be put into the position, through lack of funds, of having to say they cannot agree to further extensions of the scheme. I therefore hope that my right hon. Friend will find it possible to give some sort of assurance that if it should prove necessary supplementary Estimates will be brought in. I should like to say how much the Milk Marketing Board and the dairy farmers welcome the Bill and hope it will receive a speedy passage. I do not wish to strain the imagination of the House by asking it to visualise a body of contented and satisfied farmers, but I think we shall all agree that a prosperous body of farmers is an essential element in our general scheme of National Defence, if we are to maintain the supply of homegrown food.

8.12 p.m.

Mr. Hopkin

I also regret that it has been impossible for the Minister to bring in his Milk Bill. This is the second agricultural Bill which was promised which the Government have failed to bring in. The other was the Wheat Bill. I cannot understand how it is that the Minister, knowing the importance of the Milk Bill to dairy farmers in general, did not start working on it last July and work incessantly until he was able to bring it in even now. I believe the dairy farmers have come to the conclusion that the Government have let them down. They are told there is no Parliamentary time for the Milk Bill or for the Wheat Bill. They see that the Government have taken no steps at all to meet the disaster that has overtaken them in the mutton and the lamb trade. They see that prices are falling in the livestock market. On the other hand, they see with envy the certainty and the rapidity of action that the Government took when complaints were made about the dumping of Opel motor cars, and they wish that any action that they could take could be met with such swift and certain action. They feel that if there had been a real will to help dairy farmers there would most certainly have been a way. The farmers accepted this scheme five years ago on the basis of the promised control of imports of dairy produce. There has been no such control established and no such control is visualised. It is certain that the policy of the levy subsidy has been completely abandoned.

My first objection to this Bill is that it retains the 5d. and 6d. guaranteed minimum prices. I argued a year ago that if those were the proper guaranteed minimum prices two years before, they should have been 6d. and 7d. last year, seeing that the prices of all feeding-stuffs had gone up. If that were true last year, it is truer still this year. Are these figures of 5d. and 6d. too much? How much does it really cost the farmer to produce one gallon of milk? I believe it is agreed that it costs 10d. to 10½d. at the farm to produce one gallon. If to that is added the transport costs, the interest on capital and the payment for work by the farmer and his family, it does not cost much less than 1s. 1d. to 1s. 2d. How much does the farmer get for his milk? I have before me the accounts of a farmer in my constituency who produced in May this year 272 gallons of milk. For that quantity he received £8 15s. 1d. That works out at 7.6d. per gallon. That is the amount this farmer received for all the work, responsibility and worry of producing one gallon of milk. At the same time, that milk was sold in London at 2s. per gallon. Can anybody justify that? I agree with what has been said by my hon. Friend the Member for Don Valley (Mr. T. Williams), that this is a scandal that ought to be ended. It is a problem with which the Government ought to deal, to see how it is that the man who does the work and carries the burden gets 7½d., and the man who sells the milk in London gets 2s. a gallon.

Another farmer produced 414 gallons of milk in April. For that amount, on the contract price of 1s. 4d., the sum which he would have got under ideal conditions was £27 12s. The 1s. 4d., however, was reduced to 1s. 0½d. through no fault of the board. The reason was that two gallons out of every five that this farmer, as every other farmer, produces, has to go for manufacturing milk. For this he received 5d. to 6d. per gallon. That reduced the £27 I2s. to £21 11s. 3d. Two other deductions were made—collection £1 1s., and standard freight reduction £2 16s. 11d.—and the amount the farmer put into his pocket was £17 12s. 9d. That works out at 10.2d. per gallon. That milk was sold in London for 2s. 4d. I submit that that cannot be justified. There must be something wrong when, between the man who produces the milk and the person who consumes it, there is this gap. The gap certainly ought to be closed.

I have to alter the speech I was about to make at this point because the Minister has now announced that quality premiums will be paid from 1st October I am certain that the announcement will be received with thankfulness and joy by a large number of farmers, and from no county will he get more gratitude than from the county of Carmarthen. Hundreds of farmers have spent thousands of pounds in order to go in for attested herds on the assumption that quality premium, would be paid after 1st October. The figures prove that. In Carmarthenshire, in July, 1937, there were 535 accredited producers. In June this year there were 677. In October, 1937, there were 61 T.T. producers. In June of this year there were 133. Let the House particularly note that in July, 1937, there were 197 attested herds in the county, and in June this year there were 452, which, I believe, is the highest in the country. About the same number are now going through the course of attestation and have, I believe, passed the first two of the tests. These figures show clearly that hundreds of farmers in this one county alone thought that it was worth while even to borrow money to bring their herds up to the best standard so that they could come under this scheme of quality premiums.

May I support what has been said by the hon. Member for Hastings (Mr. Hely-Hutchinson) regarding the amount which has been set aside, £750,000, for schemes for milk in schools and welfare schemes? I agree with him that that figure is entirely inadequate. These schemes are the best way of helping the producer. All that I have said about raising the minimum prices of 5d. and 6d. for manufacturing milk to, say, 6d. and 7d., affects the farmer in but a small way. I suppose that at the best he can hope only for an improvement of two-fifths of a penny per gallon, but if the Minister could assist in widening the liquid milk market through these schemes the price would rise from 5d. or 6d. to 1s. 4d. per gallon not an increase of two-fifths of a penny but of 11d. per gallon, and not only would he be helping the producer but helping also the consumer, who most needs help.

Let us consider the additional £250,000 which has been promised in this Bill. It has been said, and rightly said I think, that £100,000 of that is already wanted for the schools, which leaves practically £100,000 to promote welfare schemes. At present these schemes are more or less confined to areas which are not very populous, but if a populous area such as Birmingham came along with a welfare scheme, would not the whole of this money be completely exhausted in a short time? I do not think the Minister would stand up at that Box and say that the new Milk Bill will be through this House by next Christmas. Suppose that by the end of December the whole of this money is exhausted. Then one of two things must happen. Either the board must carry the loss or the schemes must come to an end. Where in this Bill has the Minister taken power to come to the House to ask for money for more schemes, a proposal which Members on this side, anyhow, will support every time? Will the Minister undertake to bear the total loss of the Milk Board on the milk-in-schools scheme out of any balance arising on any other scheme, or do we understand that when the money is exhausted all these schemes must come to an end?

The job of producing milk is a sevenday-a-week job—more often than not 16 hours a day—for 52 weeks in the year. It is a job in which either the farmer or his wife or son must give constant attendance at the farm. It is a job which must continue throughout the year. With the cost of feeding stuffs where they are at present—in the little example I gave a few moments ago five cows were kept and the feeding stuffs for the month cost £3 12s. 6d.—it can easily be seen that at present the dairy farmer is having a bad time. The profits are small, the risks are great and the responsibilities are heavy. The Government are spending a good deal upon increasing the fertility of the soil. Having created soil fertility, do they want to use it? If they do, let them say so, and then keep faith with the producer.

8.30 p.m.

Mr. C. S. Taylor

It has been stated that the continual supply of Motions put down by His Majesty's Opposition upon questions of foreign affairs is largely responsible for the delay in bringing the new Milk Bill before the House, and I rather agree with that explanation, but not altogether. There is no doubt that interests throughout the county began to organise themselves against that Bill long before they knew what it contained, and there is no doubt that certain popular newspapers stirred up a great deal of fuss and bother, and advised active opposition, long before the full facts of the Bill had been even considered. The hon. Member for Don Valley (Mr. T. Williams) said to-night that there was much greater scope for the consumption of liquid milk in this country, and I very much agree with him, but I feel it is time the Government came forward with some definite views on the question of pasteurisation or non-pasteurisation. There is an opinion expressed by a very large body of medical authorities in this country, and, indeed, by our own Medical Committee in this House, in favour of pasteurisation. They express their views rather forcibly in the "Times," but that does not do very much good one way or the other. We have not yet had any observations from the Government on pasteurisation, and there is no doubt that a great many people will not drink milk, not, simply, because they cannot afford to buy it but because they feel that the milk which is being supplied by a great many distributors is very unsafe. It is no good to run a "Keep-Fit" campaign and advise people to drink milk when medical opinion expresses itself so forcibly against raw milk.

I believe that a rationalisation of the distribution of milk would be welcome throughout the country. I do not believe that anybody, whether a producer, distributor or consumer, would really quarrel with a sane and sound scheme of distribution. It has been suggested to-day that some distributors are making 4d. profit while others are making a loss of as much as 1½d. or 2d. That is the case in the distribution of milk at the moment and it is bound to be so when there are three or four, or perhaps half-a-dozen, distributors of milk all going down the same road, one calling, perhaps, on alternate houses and another calling at one house at the beginning of the road and one at the end. Unless the Government adopt block distribution there is no doubt that distributive costs will be high. The difference between the profit or loss made upon distribution has been referred to, but the costs of production vary much more than do costs of distribution. The hon. Member for Barnstaple (Mr. Acland) spoke of English butter; there is no doubt that English butter is not graded in the same way as is butter from the Dominions. That is a good argument for the idea of a secondary products board which would be responsible for seeing that English butter was of a definite grade and standard and then the public would know from week to week that their English butter, like certain cigarettes, would never vary.

A good deal has been made in the last few weeks about the dumping of Opel cars, but they are only one item of manufactured products dumped in this country at a price which may be below the cost of production. Very quick action was taken in the matter of the Opel car. I humbly suggest to the Minister of Agriculture that he should consult his right hon. Friend the President of the Board of Trade to see how many agricultural products, not necessarily manufactured, come into this country from countries like Holland and Denmark. There is no doubt that the producer and manufacturer in this country suffer very greatly from competition with those countries.

Mr. Hopkin

Through a subsidy.

Mr. Taylor

Yes, and there is no doubt that the quota system is not working properly. Some countries evade their quotas by exporting manufactured products, such as condensed milk, to other countries and allowing them to be re-exported from there to this country. The goods are, therefore, not marked with the country of origin. When, for instance, the quota of A country has been used up, the goods are exported to B country and re-exported from there. They thus evade our quota restrictions. I suggest that my right hon. Friend might usefully confer on this matter with the President of the Board of Trade to see whether any anomalies can be removed. I am very sorry that we have not been able to have the Milk Bill introduced now. I firmly believe that had people not been so misinformed as to its contents, or what were supposed to be contents unfavourable to their interests, the Bill would have been before Parliament this Session.

8.38 p.m.

Mr. Ridley

If, in the next week or two, Members see a Maypole set up in New Palace Yard and people gambolling round it, they will know that a party of constituents from Carmarthen, represented in this House by my hon. Friend (Mr. Hopkins) have come to London to do honour to the Minister of Agriculture. We have been assured by a very large number of people that they are very disappointed at the non-production of the promised Milk Bill. In a sense, I suppose that one-third of a pint is better than no milk at all, and in the same way. to have this Bill is better than not to have a Bill, but as a substitute for the major Bill this is indeed a poor thing The hon. Member for Barnstaple (Mr Acland) has already described it as a piece of political procrastination. Not withstanding their respect for the Minister, a number of hon. Members will fine it, I think, as difficult as I did completely, to accept his explanation for not proceeding with the major Bill.

From the amount of literature that comes into the House from all sorts of interests in these matters, there appears to be a large number of people who do not like the prospect of compulsory pasteurisation or the prospect of rationalising the method of distributing milk. There is a vested interest which has managed very effectively to stay the Minister's hand. The Government have come to be known as one that will never stand up to anyone. They will not stand up to General Franco or to the electricity interests. I hope that before the week is is out they will stand up to the coal lords; and the Minister might have been expected to stand up to a herd of cows.

According to the reply which the Minister gave me on 9th May, experimental schemes have been conducted by the Milk Marketing Board, and I would draw the attention of the House to what seems to be the significant part of the work. The experimental schemes were conducted in selected areas in which there had been a daily per capita consumption of .13 of a pint or 61 per cent. This means that the original per capita consumption in those selected areas was .2 and that it has now been lifted to .3; in other words in families in the selected areas the original per capita consumption of milk was one-fifth of a pint and it has now, by a special process used by the Milk Marketing Board and special encouragement, been lifted to something over one-third of a pint. Hon. Members need only examine their own domestic milk supply in order to understand how completely inadequate those amounts are compared with what we regard as normal and adequate in our own domestic requirements.

The more I examine the figures of the special experiments conducted by the Milk Marketing Board the more appalled I become at the facts revealed. According to the "Home Farmer" for October, 1937, special schemes were providing milk at 2d. a pint to 4,691 families. They had been providing milk for families at about 25 per cent. of the price, when the positively alarming discovery was made that, before the scheme started, 970 families, or 21 per cent., had a daily per capita consumption of only .1 of a pint. I hope I am not encroaching on the limits of the discussion in underlining the point that there was in that case a daily per capita consumption of milk of less than one-tenth of a pint. Surely the experimental schemes have produced enough data to justify a considerable extension of the schemes. In the sense that this Bill does nothing or hardly anything to make possible a widening of those experiments, and that we shall have to wait another 12 months before anything can be done, either in the enormous area outside, or within the selected and experimental areas, to deal with this important social problem, the non-production of the major Bill is indeed a great disappointment to everybody interested in that problem.

In the very families in which there is a shortage of milk consumption there is a general shortage, and especially of protective foods. Such families have not sufficient butter, eggs, fruit or meat, and they are suffering from general food inadequacy almost to the point of physical starvation. I hope that the House will not mind if I detail personal experience which has some relation to this point, and to another point which my wife made yesterday when we were discussing the matter. She carried the matter a stage further by pointing out that the absence of milk in the home means unpalatability of what otherwise would be palatable foods. The Minister does not enjoy porridge without milk; it becomes a less palatable food. That factor further contributes to the general dietary difficulties of poverty-stricken homes. A friend of mine has in her house a girl from one of the distressed areas, and after the girl had been there for some time she was asked whether she would have some rice pudding, but Margaret, the girl, said very emphatically that she did not like rice pudding. She then recollected, and said: "I suppose I do like rice pudding, but just for a moment I thought you meant rice pudding made with water." What sort of race are we rearing on a diet of that kind?

How can we feel comfortable in the face of the procrastination of the Government in dealing with this problem? It is an economic problem, and we must face the fact that the amounts allowed for unemployment benefit and unemployment assistance will not provide a diet of even minimum sufficiency. If the policy of the Government is not to be that of the New Zealand Government, namely, to raise purchasing power in order to create and extend the demand for agricultural products, our Government must, for health purposes, use other measures to bring milk within the range of existing incomes, no matter how inadequate those incomes may be. It is startling to discover that our average milk consumption per head is the lowest of any great country in the world, and that our retail price for milk is the highest of any great country in the world. The two are, of course, related; they are, so to speak, the brother and sister, the light and shade, of one fact. To the extent to which policy can reduce the retail price of milk from the present abnormal figure of 3½d. per pint—the highest price that this country has ever known in July—to a figure which is even at all within the reach of people with inadequate incomes, we shall have done something, not only to stimulate the prosperity of the agricultural industry, but to stimulate the health of the people in those tremendous areas where it is now being sapped because of economic inadequacy. The Minister will say, brandishing the White Paper, that this is exactly what he proposes to do when time and opportunity permit. In the White Paper, issued exactly a year ago, these words were used: Legislation to give effect to these proposals will be introduced as early as practicable next Session. That means this Session, which is rapidly drawing to its end. It may be that the Minister will tell us once more that time has stolen a march upon him, to say nothing of vested interests, and that, because the Government have been so busy with other things, they have not had time to deal with this matter. The proposals of the White Paper, therefore, except for the modification made by the Minister's statement, are not to be put into effect until October, 1939, and in the meantime, for another 12 months, the present inadequacies must continue, with all the appalling consequences which I have attempted to indicate. One-third of a pint is now being provided for an elementary school child when not less than one pint is reasonably required. The needs of nursing and expectant mothers and school children are satisfied to some extent in a very few specially selected areas, but in the country as a whole, in the Special Areas as a whole, in the hard-hit areas as a whole, they are not assisted at all, nor is the question of cleanliness mentioned in the Bill. The exceptions and reservations made in the White Paper, and the time lags of two years in some cases and three years in others, will result in haphazard arrangements, some local authorities having orders and some not. The Minister may reply that these matters had better be discussed on the major Bill, but he ought to know that the House will expect a Bill that is major not merely in length, but in intention, purpose and contents. The delay in producing the major Bill is a very considerable disappointment, which has been modified to-night to some extent, but has not been modified at all in the direction which we regard as most important, namely, in the direction, by a considerable extension of the consumption of milk, of lifting and maintaining the health of our people.

8.51 p.m.

The Under-Secretary of State for Scotland (Mr. Wedderburn)

The Government regret, as the hon. Member for Clay Cross (Mr. Ridley) regrets, the delay in the introduction of the main Bill, which we had hoped to bring before the House during the present Session. I do not propose to discuss whether the postponement is due, as was suggested by the hon. Member for Don Valley (Mr. T. Williams), to the ineptitude of the Government, or whether we ought rather to blame the loquacity of the Opposition on other subjects. The hon. Member has described this Measure as an annual July promise, and perhaps the necessary penalty of an annual July promise is that it must necessarily be accompanied by the annual July speeches. The speeches which have been made to-night are very much the same as those which were made in July of last year, and I am left with very little, or perhaps nothing, new to reply to to-day. What the hon. Member for Don Valley did say, however, was, as it seemed to me, very helpful to the purpose which I think all sections of the House desire to achieve, and, accordingly, the last thing I should wish to do would be to enter into any sort of controversy with him arising out of this Measure.

He urged with some emphasis the necessity of having a better distributive organisation, which, of course, is what the Government hope to achieve. There are great practical difficulties in the way of narrowing the gap between the price received by the producer and that paid by the consumer, but we have already declared that organisation is one of our objects, and I have no doubt that the hon. Member will give us his support. If he wishes to go further than we propose to go, that, perhaps, from our point of view, will be all the better. He also said something about the proportion of the total milk production which goes into manufacture, and the need for encouraging the liquid supply. That also is an object at which the Government desire to aim. It is, however, perhaps a little misleading to speak as if the whole, or a very large proportion, of that part of our milk production which is used for manufacture ought normally to be used for liquid consumption, because, as the House is aware, the production of milk is very much greater in summer than in winter. Unless you can persuade people to drink more milk in summer than in winter you will find that you have a surplus at some part of the year. I do not think milk is one of those beverages which is consumed in greater quantities at one time of the year than at another, and it is desirable that there should be no shortage; so it is inevitable that over the year there should be a substantial amount surplus to our liquid requirements which will have to go into manufacture. But the figures for last year, as compared with those for the previous year, showed a very great alteration in the proportions. The consumption of liquid milk increased from 669,000,000 to 720,000,000 gallons in England—that is an increase of 51,000,000—while the sales of milk for manufacture decreased by a somewhat similar amount.

The hon. Member for Barnstaple (Mr. Acland) again raised the question of butter grading. The grading of factory butter is not strictly an agricultural matter, and although grading of butter is part of the National Mark Scheme, and advice is given to factories by officers of the Ministry, we regard it as primarily the duty of manufacturers themselves to see that their butter is properly graded for the market. The House will appreciate that Exchequer payments under this Act in respect of milk used for manufacture are designed not so much to foster a home butter industry as to give the Milk Boards a minimum return for the milk which at present cannot find a market for liquid consumption.

An hon. Member referred to New Zealand and Denmark. It would be hardly possible in this country to have a system of butter grading similar to that employed in those countries. In those countries butter can be conveniently graded at the port, but it would be uneconomic to centralise supplies for the purpose of grading in a similar manner here. Indeed under our present system, it would be hardly possible for the Government to organise such a system. However, the trade could do so. All the Government can do is to set up standards under the National Mark Scheme and see that they are observed.

My hon. Friend the Member for Hastings (Mr. Hely-Hutchinson) and the hon. Member for Carmarthen (Mr. Hopkin) both referred to the possible inadequacy of the sum that is provided under Clause 2, though they spoke from rather different points of view. The hon. Member for Hastings thought that this sum might not be sufficient to reimburse the Milk Marketing Board for the expenditure it incurs under these schemes on the existing basis. He did not, however, take account of the fact that if it were not for the existence of these schemes the farmer would not be able to sell most of the milk except for manufacture, and would therefore be obliged to dispose of it at a very much lower price than he would have received if he had sold it for liquid consumption. The hon. Member for Carmarthen, speaking from another point of view, thought that the amount provided in the Bill would not be sufficient for what ought to be done in the way of promoting the greater consumption of milk, through the local authorities' maternity and child welfare centres, in the case of expectant and nursing mothers and children under five years of age. It is anticiated that the annual cost fo these schemes will eventually exceed the figure of £750,000 a year provided for in the present Bill. The maternity and child welfare scheme will, however, inevitably take a little time in getting under way, especially as progress will depend on the initiative of local authorities, and it is not anticipated that the amount required for milk supplied under cheap milk schemes in the year covered by the present Bill will exceed £750,000.

It is feared by some Members that this figure will itself act as a brake on the progress of the scheme. I do not think that that would be so. The long-term Milk Bill, despite all the forebodings of hon. Gentlemen opposite, will be on the Statute Book in less than a year from now, and, if necessary, provisions in that Bill for cheap milk schemes could come into force before October, 1939. Of course, that is a matter for consideration in connection with the Bill itself when it is introduced. The Government do regard as a most important part of their milk policy that part which is designed to increase the liquid milk consumption, not only for the benefit of the industry itself but also for the benefit of those considerable sections of our population among whom it is so very desirable to encourage a greater consumption of milk than there is at the present time.

Question, "That the Bill be now read a Second time," put, and agreed to.

Bill read a Second time.

Bill committed to a Committee of the Whole House for To-morrow.—[Mr. Furness.]