MILLING INDUSTRY. (Hansard, 28 February 1939)

Mr. De la Bère
I wish to raise the question of the milling industry. Flour is a national necessity; and it should not, therefore, be capable of being exploited by large and vested interests which hold a virtual monopoly. It would not be overstating the case if I said that three large milling combines hold a virtual monopoly in this country to-day. No doubt it is by their ability and foresight that these combines have achieved this result, but are they not being unduly protected by the fact that they are able to identify themselves, when it suits their purpose, with the Food Defence Plans Department, and with the advisory committee which is linked up with that, and which, even if not directly connected with the Millers' Mutual, is certainly often influenced by advice from that source. Therefore, they are all correlated. What does the Millers' Mutual 1223 do? It succeeds in assuring to the milling industry, by means of a price-fixing ring, dertain substantial profits. Who is it that contributes to these profits? It is, of course, the general public. What is the real purpose of this extensive and complicated machinery? Is it not set up very largely for the purpose of dominating the country's bread supply and crushing out of existence a large number of citizens who have helped to build up the trade over a period of many years?
What is the Government's attitude? The Government, by its original purchase of a security stock, that is, stock against an emergency, acquiesced in this state of affairs, inasmuch as practically the entire national emergency stock of wheat was supplied through Messrs. Rank. Do not think I do not approve of an emergency stock as vital and necessary, and I am fully aware that Messrs. Rank made no charge for this service. At the same time, it will be obvious to anyone with any business acumen and a knowledge of this subject how extremely valuable information and a knowledge of the Government's intentions would be to large concerns engaged in the grain trade, and how detrimental a lack of it would be to the smaller men to whom the information was not available. On more than one occasion I have ventilated my objections against a few millionaire directors of combines being allowed to dominate and control the people's bread, but every request of mine for an inquiry into certain circumstances in regard to these matters has been refused. The President of the Board of Trade has stated that there is nothing to inquire about.
The difficulties to be encountered must not be under-estimated, and I have no doubt that every obstacle will be put in my way. There is only a slender chance of any Press being available outside the faithful record in the OFFICIAL REPORT. It may be wondered at that I should say there is only a slender chance of any Press being available. I do not think that severe criticism of the Press would be entirely fair. The editors of all newspapers have the duty of doing the best they can for the papers of which they are editors, and to launch a campaign against the milling combines would undoubtedly entail retaliation, and they would lose substantial sums in advertisements. It is substantially true to say it was almost 1224 impossible to get any Press on any matter affecting patent medicines, milling combines or brewery interests, and I hope that my remarks will be taken in the right spirit and will not cause offence to the Press who are always fair to me and give me a fair deal on other matters. I have to say that because I believe it to be substantially true.
I am making no accusation against the integrity of the Board of Trade but I suggest that there has been ineptitude in safeguarding the public against these abuses. The integrity of the Board of Trade remains, and the ineptitude of the Board also in this respect. It is no use the President repeating that there is nothing to inquire into. Provisions have been made under the Royal Commission on Food Prices in 1925 for the necessary machinery for inquiry. Let me tell the House what it is that the Royal Commission have laid down. This is from their first report: We have been informed that millers, through the agency of their local associations, discuss the price of flour, but that these associations are voluntary bodies, any one of the members of which can prevent a rise in price. The practice of the industry is stated to be the regulation of prices within fairly narrow limits in different areas which are based on the principal wheat ports. Conferences of millers fix schedules of prices for their areas subject to local considerations, deductions for larger buyers, or additions to meet additional rates of carriage. We are informed that the mode of procedure is to arrive at a hypothetical mixture of wheats which are available at the time, the price being based on that mixture and governed by such considerations as value, competition of imported flour, market conditions, and the price which the lowest important seller will accept. It is admitted, however, that were it not for the conferences there might be a miller who, if he were entirely free, would be disposed to cut his prices, but that he is persuaded not to do so. In view of the admitted existence of price-fixing associations in the milling industry, we consider that, as in the baking trade, the Food Council should continuously watch the operations of these associations, and intervene when investigations show that the interests of the consumer call for intervention. All that I am asking for is that the President of the Board of Trade will reconsider his refusal, and will call for an inquiry with regard to the price of wheat offals to the fanner and the poultry-keeper, many of whom have been completely ruined by the effect of this price-raising association. It is no pleasure for me to stand here to-night and I hope the President of the Board of Trade will accept 1225 what I have said in the spirit in which it is meant and that inquiry will be made into the cost of bread to the consumer.

§ The President of the Board of Trade (Mr. Oliver Stanley)
This is not the first time the hon. Member has raised this or cognate subjects on the Motion for the Adjournment and I always find some difficulty in knowing to what I have to reply. I had the misfortune last week, as many hon. Members have had during the past few months, to suffer from influenza, and during influenza, as everybody knows, there is a sort of miasma. When I am dealing with this subject I always have a sort of influenza feeling, because I never quite know what is the object of the hon. Gentleman's criticism. I think that during the greater part of his well-read essay to-night he was dealing with the question of flour, but he ended by asking me to have an inquiry into the price of offals. Similarly, the question upon which he raised the subject was, as far as I could see, the position of the big combines in food storage.
The discussion to-night has developed into something quite different. On what ground does the hon. Gentleman base his continued hostility to these three big combines? It is all very well to talk, and no doubt to expect to excite a certain amount of popular sympathy, about millionaire directors, but the hon. Gentleman knows that the Co-operative Wholesale Society is on exactly the same plane as Spillers and Ranks.

Mr. De la Bèe
Will my right hon. Friend tell the House why the Co-operative Wholesale Society was brought in? Was it not brought in in rather peculiar circumstances?

§ Mr. Stanley
I do not know what the peculiar circumstances were, but the fact is that these are the three big combines, and they are charging more or less the same prices, which are determined to a large extent by the price of imported wheat and offals. I really think that to bring in the question of millionaire directors is merely prejudice. With regard to the question of the food storage, I have dealt with that before. I explained to the House at the time the reason why we operated our purchases through these three combines. I explained that they were prepared to do it for no commis- 1226 sion at all and the advantage that that gave us both in the buying of the original stock and in turning it over. With regard to the question whether or not they gain an advantage from it, I would like to make these few observations. The hon. Gentleman says, that because they know what the Government are going to do, they gain a great advantage. I have explained before that the decision how and when to turn over the Government stocks is not taken independently by these three big combines. It has to be, first, on a report to my Department from the inspectors who go round to see the state of the wheat. The decision is taken on the advice of a committee, the chairman of which is a small independent miller who is there to see that the position of the small independent millers is not prejudiced. It is on the advice and instructions of that committee that these combines act, in the turning over of these stocks. Therefore there is no possibility of their turning this knowledge to their advantage. On the other hand there are considerable disadvantages, because they are under an obligation to take out of the Government store whatever wheat we decide has got to be turned over, whether or not it inconveniences them to have to mill it, whereas the independent miller is able at the moment of making his purchase to choose the particular kind of wheat which suits him best.

Mr. De la Bère
Is my right hon. Friend aware that we have no millers who can steer an independent course? If they want to go on they must take notice of the request, I put it that way, from the Millers Mutual. The whole thing is linked up.

§ Mr. Benjamin Smith
The right hon. Gentleman has referred to influenza. He will know that when you have this influenza mental miasma you come out of it very sane sometimes. I want him to give some exhibition of the sanity which has come to him. If an inquiry cannot be held—and I am not suggesting that an inquiry is necessary—it seems to me that there is, within the Board of Trade, the knowledge that offals which before the War were sold, mostly to poultry raisers, at 60 per cent. of the price of flour, are now 150 per cent. of the price of flour. A simple act by the Board of Trade, in insisting that all wheat shall come into this country in grain and be 1227 milled in this country, would reduce the price of offals to the consumer, and thus help a large section of our people.

§ Mr. Stanley
That brings me from the point I was dealing with to the other one which has been raised. There is no necessity for me to order an inquiry into the price of flour. The Food Council are charged with the duty of keeping watch upon it, and at any time, on their own initiative, they can inquire into it, but I understand that no complaints have reached them regarding the price of flour. Do not let us forget that although we have got on to offals the whole of the speech of the hon. Member for Evesham was concerned with flour and the hardship to the consumer. The hon. Gentleman opposite is quite right. That is really what we are thinking of, the question of offals. The hon. Gentleman really based his whole case on the fact that for the moment the price of wheat offals is greater than the price of wheat. That, as a matter of fact, is not a unique phenomenon. I have looked up the last few years, and I see that that has happened about four times in the last seven or eight years. It happens, and is liable to happen, when the price of wheat is exceptionally low. When the price of wheat is exceptionally low, the cost of the processing involved 1228 in the offals has, of course, a more exaggerated effect on the price. The suggestion of the hon. Gentleman opposite is, of course, the complete banning of all imported flour. I am glad to see the independence of his mind, because I do not think his proposal would commend itself to the rest of his party. I cannot deal with it at length to-night. It is a subject with which I dealt at some considerable length when it was last raised on the Adjournment. I pointed out the fact that this imported flour came largely from the Dominions, and partly from America, and that this banning would involve the Ottawa Treaties with Australia and with Canada, and the Anglo-America Treaty. Having done that, you would remove from the consumers of flour the best safeguard that they have against the monopolistic tendencies either of co-operative societies or of the other two combines, which is the fact that imported flour sets a limit on what they can charge for the home-grown flour. Therefore it acts as an automatic check on the profiteering which the hon. Gentleman sees in all their processes.