HC Deb 12 July 1939 vol 349 cc2327-32
The Chairman (Sir Dennis Herbert)

The Amendment in the name of the hon. Member for Carmarthen (Mr. Hopkin)— in page 5, line 7, leave out "half-year" and insert "month"—is out of order.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

7.11 p.m.

Mr. Hopkin

May I ask the Committee to pay attention to the terms of Clause 3, because, in my submission, this Clause is one of the most important in the Bill. It proposes to make a very great and a vital change in the machinery of the Milk Marketing Board, and for that reason I would invite the attention of the Committee. For the reasons which I hope to put forward, I think that this Clause is a thoroughly bad one. I am quite prepared to believe that the Minister desires to make the milk scheme a success. I am quite ready to believe, also, that the Ministry do not desire to put any unnecessary difficulties in the way of the Milk Board, but under Clause 3 hon. Members will notice that, instead of monthly payments, the whole system has been changed regarding the payment of Government assistance on manufacturing milk to six-monthly payments. That is a very great change, and a change for the worse.

May I also ask the Committee to consider this: how is the system worked at present? The Milk Marketing Board gets, first of all, the price as it is obtained for liquid milk. Then it gets the price obtained for all the manufactured milk, milk manufactured for butter, cheese, cream, ice cream, condensed milk, milk powder, and so on. Then it has to make a calculation for the milk that is sold as milk in schools. After this a further calculation will have to be made for the cheap milk scheme. When all these calculations have been made, plus, as it is at present. the amount which it is to receive from the Government for the manufacturing milk, then it is able to send what amount the farmer is to receive on the whole of his liquid milk. What is the change? The change is that, instead of as it is at present—the ascertainments to be made monthly—they have to be made after six months. I want to ask the Minister, what is the reason for this change? Why has it been found necessary to alter the system that everybody agrees works well at present? At the present time, the board works on monthly pools, and pays the farmers monthly. If the Clause is passed in its present form, during five months out of six months it will be impossible to fix the final price that the farmers ought to receive. The Committee ought to know what is the real reason for upsetting the present system, which works well. At the end of the month, the farmer knows exactly where he stands, but under this Clause there will be five months in which he will not know how much he is to receive from the Government by way of assistance in regard to manufacturing milk.

Let us suppose that at the end of the six months, as a result of fluctuations up and down during that period, ¼d. per gallon will come to the board on 125,000,000 gallons. The amount will have to be spread over the whole of the liquid market. Who is to receive that money? How is the Minister going to distribute it? Will it be put into the next pool price? If so, I can foresee that there will be a crop of actions against the Milk Marketing Board and the Minister, because to do that would be illogical and entirely wrong, because the money would be given to people whose proportions of milk for that month might be entirely different from the proportions which they had put into the pool before. Who is to get the money? The answer, of course, is that in the case of each farmer the board will have to go back for six months and see what proportion that farmer has put into the pool over the previous six months. Why have that tremendous amount of book-keeping and accountancy? What will be the advantage of it? Will it be to the advantage of anybody that this new system should be tried?

I submit that the Clause cannot be worked equitably. With the best will in the world, at the end of the six months, the Milk Marketing Board, or whoever has to distribute this amount of money, must do so more or less by a guess. Already the board have 135,000 separate accounts. Why does the Minister throw upon them this wholly unnecessary work of keeping each individual accounts and finding it out over the last six months? In this matter it is not a question of money. I believe the Minister mentioned that it is only a matter of £20,000. This is the only check we have on this sort of thing, and I hope that hon. Members will see that this is a vital matter for the producers. If this Clause goes through, it will be bound to undermine that feeling of security and confidence which the farmers have in the board at the present time. I hope the House will agree that, unless the Minister has some reason which, so far, he has not divulged, it is unnecessary to change a system that works quite well at the present time.

7.20 p.m.

Mr. York

I should like to ask for your advice, Sir Dennis, on the subject of the Amendment in the name of the hon. Member for Carmarthen (Mr. Hopkin). Am I to understand that it will be impossible at any later stage of the Bill to move this Amendment or a similar Amendment?

The Chairman

I must not answer the hon. Member more than informally, because the next stage of the Bill will be a matter for Mr. Speaker, and not for me; but I would point out to him that it would require a new Money Resolution in order to move the Amendment in that particular form.

Mr. York

I apologise for my ignorance of the procedure, but it seems to me that if we allow the Clause to pass as it stands, and with the present wording of Subsection (1), we shall do a grave injustice. I find myself in great difficulty on the matter. If we allow the Clause to go through, I believe that the Milk Marketing Board will have its entire accounting system thrown out of joint, and the only advantage to the country will be that the Treasury's accounts will be somewhat simplified. I ask my right hon. Friend whether he cannot give some indication that it will be possible at some time to alter a few words in the Clause so as to help the Milk Marketing Board out of a very grave difficulty.

7.22 p.m.

Sir R. Dorman-Smith

It is true that there has been a change both in the way in which we make payments and also in the approach to the whole problem of how assistance should be given to the industry. Under previous Acts, the assistance has been given monthly, directly on the manufacturing milk. We have now changed the emphasis on the type of assistance that is being given. The main assistance is now to be given on the quality milk, and the method of paying on the milk that is put into the manufacture of butter and cheese is in the form of price insurance in order to prevent the receipts of the Board on those quantities from dropping below a certain figure. Therefore, if there is to be this price insurance, it seems to me important that we should take it over a period and not month by month. Inasmuch as we have changed the method of giving assistance, it seems to the Government to be of real importance that we should take the longer period to determine what the payments under the system of price insurance should be.

Mr. Hopkin

If it is done purely on the ground of the amount, and as the Minister has himself said that the amount at stake is only £20,000, surely he will place on the other side the fact that it causes inconvenience and makes it impossible equitably to distribute the money when it is received.

Sir R. Dorman-Smith

That is not a new feature of the board's operations. At the present time, the board work their factory organisation on a six-monthly basis, and it might just as well be argued that it is impossible in that case to give back the exact amount. It is true that, probably, the board's accounting arrangements will have to be adjusted. I fully appreciate the difficulties which the board will have to face from the accounting point of view, but I do not think it will be impossible for them to face those difficulties, working on a broad basis, in much the same way as they do with their factory organisation. We are giving them a tremendous amount of assistance on quality milk, and I think they readily understand that if they are to get the payments on quality milk which we are going to refund them, they will also be in the position of having to take payment for their milk which goes into butter and cheese over a period, and not monthly.

Mr. Hopkin

Will the right hon. and gallant Gentleman answer my question as to whom he proposes that this money should be at the end of the period? At the end of six months, it will be known how much is to be paid to the Milk Marketing Board. To whom will the money be paid? Is it to be put into the next pool price, and if so, how can that be equitable?

Sir R. Dorman-Smith

It will be paid to the Milk Marketing Board, and it will be for them to dispose of it in the best possible manner.

Mr. York

I do not see how the board are going to spread the money they will receive over the price which the producers will receive.

Sir R. Dorman-Smith

I have pointed out that this is not an entirely new problem for the board, since they have the same problem with regard to their factary organisation. I am certain they will be able to overcome the difficulty in much the same way.

7.27 p.m.

Captain Heilgers

Am I right in assuming that this will be the position? In future, the Board are going to deal, over a six-monthly period, with a sum that will probably aggregate £50,000 in regard to the butter and cheese deficiency payments, but as they will deal with a sum of between £55,000,000 and £60,000,000 in all, the £50,000 which they are going to have over a six-monthly period will not be likely to dislocate their accounts to any great extent.

7.28 p.m.

Colonel Clarke

May I add to what the hon. Member for Carmarthen (Mr. Hopkin) has so ably said, that this is a matter which interests not only the Milk Marketing Board, but every farmer as well? I have been approached by a number of farmers who have told me that they hoped it would be possible for the system to remain on a monthly basis and not to be on a six-monthly basis.