EMERGENCY POWERS (DEFENCE) COLD STORAGE (CHARGES) (Hansard, 17 October 1944)

§ The Parliamentary Secretary to the Ministry of Food (Mr. Mabane)
I beg to move, That the Cold Storage (Control of Undertakings) (Charges) Amendment Order, 1944, dated 59th September, 1944, made by the Treasury under Section 2 of the Emergency Powers (Defence) Act, 1939, a copy of which Order was presented on 26th September be approved. The House may think it proper if I make a brief explanation of the reason why we ask approval of this Cold Storage Order. Perhaps hon. Members may pardon me if I enter in some detail into this rather complicated business. At the outset of the war it was necessary for my Ministry, when it was constituted, to enter into control of cold storage undertakings. The control became completely effective sometime in 1941, and the Ministry of Food did make arrangements with the proprietors of the cold stores as to the methods whereby they should be rewarded for the services they were giving to the Ministry of Food. The basis of the remuneration of the proprietor of cold stores was something like this: A schedule of rates was arranged. It was agreed, I think I can say, with the industry, that the remuneration based on this schedule of rates, was to be subject to certain maximum or minimum amounts allowed to be retained by the proprietor of the cold store, The cold stores obtained as a minimum a reward of 2d. per cubic foot per annum for the controlled price. In addition to that they were allowed to retain any net revenue, based on payments made to them, of between 2d. and 6d., but in so far as the net revenue amounted to more than 6d. per cubic foot per annum, they returned to the Ministry of Food 75 per cent. of that excess reward and retained 25 per cent. themselves.
2328 It transpired in the course of time that that scheme resulted in the smaller and less well placed cold stores receiving a reward rather less than adequate. On the other hand it resulted in the larger and better placed stores receiving a reward rather more than adequate. In the early part of this year the proprietors of the cold stores made representations to the Minister of Food to the effect that they should receive payment on a different and more favourable basis. The matter was examined. They argued that the smaller and less well placed stores were being very badly treated. We were bound to admit, in the Ministry of Food, that there was considerable force in that contention. On the other hand the Public Accounts Committee of this House, which all hon. Members will agree is the senior Select Committee of the House, had expressed some criticism of the arrangements we had made on the grounds that they gave rather too large a profit to the larger and better placed stoles. So the Ministry of Food proposed variations of the arrangements for the purpose of meeting both these objections.
Now we are able to say we have secured agreement with the industry—there may be some objection to that phrase, but I think we can claim we have secured agreement with the industry—on a variation in the schemes so that in the future the scheme will be after this fashion: There are, as I said, the basic rates of payment. Those basic rates will be subject to a bonus of 12½ per cent., that is, an increase from the bonus previously granted of 5 per cent., intended to meet the increase in labour charges and so forth. Furthermore, the minimum which operators can look for is raised from 2d. to 3d. per cubic foot per annum. But now the operators may, if they are able to make more than the basic minimum of 3d., retain the difference between 3d. and, not 6d., but 5½d. That is where this Order comes in. It reduces the figure from 6d. to 51d., but in so, far as operators make a profit in excess of 51d. per cubic foot per annum, whereas in the past they returned to the Department 75 per cent. of that surplus and retained 25 per cent., they will now return 90 per cent. to the Department and retain 10 per cent. for themselves.
The only part of that new agreement which affects this Order is the reduction from 6d. to 5½d. in the amount which 2329 operators may retain in any case. I think the House will recognise this is the kind of agreement we may make with an industry which secures to them a reasonable return for their efforts, and which on the other hand reasonably protects the taxpayer. The House will, I think, agree that that sets out the position quite clearly, and I ask the House to approve this Order.

Mr. McKinley (Dumbartonshire)
I must say that the only accurate thing that the Parliamentary Secretary said was that this was rather a complicated business. If I may say so without offence, I do not think he has in any way clarified the position, because I am at a loss to know who controls the cold storage space, or whether the owners of the cold storage space retain for their own purposes space used in storing goods. I cannot see how the Ministry can have a proper ascertainment of the cubic space used on behalf of the Ministry unless the Ministry have control of the whole of this storage space. If they have control of the whole storage space it is quite positive that the only source of income which the cold storage owners have at the moment is from the Ministry of Food. Why there should be this complicated table only the Ministry understand. I say that, because cold storage premises still retain part of their accommodation for private customers.

§ Mr. Mabane
I am sorry to interrupt, but perhaps what I say will enable my hon. Friend to agree that I was not so obscure. The proportion of the cold stores that is occupied by private undertakers still comes within the scheme.

Mr. McKinley
I may be awfully dense, but I still cannot grasp why the Ministry of Food should have made it so difficult and so complicated. I could see the sense of the Ministry taking control of the cold storage undertakings, and saying that if any person desired to use any of the accommodation for private purposes he could hire it from the Ministry, but it appears to me that they have taken a long way round. I know of cold stores in Scotland which have what is known as "overs." This is rather a narrow Order, but I think I can deal with this aspect. The cold storage proprietors have what is known as "overs."

§ Mr. Deputy-Speaker (Mr. Charles Williams)
I am sorry, but this is only a matter of a reduction. The only thing we can discuss here is the reduction from 6d. to 5½d. We cannot go into the different sorts of cold storage. I thought I would remind the House that this is not a discussion on cold storage.

§ Mr. McKinlay
I know; and I want to find out how the Ministry of Food can ascertain even the 5½d. My submission is that they have no method of ascertaining the cubic space being used by the Ministry at any time, or the cubic space that is being used by private persons one week and by the Ministry another week. The "overs" that I referred to represent cold storage accommodation belonging to the Ministry, containing foodstuffs belonging to nobody. It arrives there at the instigation of the Ministry of Food, and it lies there. How can the Ministry ascertain the cubic space to be charged for if there are chambers lying idle, or containing carcasses of sheep belonging to nobody? If my information is correct—and I know it is—these carcasses are disposed of in the black market. But how can the Ministry ascertain the cubic space that is used if they do not know what part of the accommodation is being used for cold storage? There is considerable laxity. It is all very well to, say that the auditors can come along from time to time, but I could give a list of cold stores in respect of which I would he glad to know the amount of cubic space that has been charged for in the last 12 months. I do not want to oppose the Order, but the whole system is ludicrous. In my submission the only proper way would be to do as any ordinary person would do, and take an accurate record from year to year.

§ Mr. Craik Henderson (Leeds. North East)
I do not want to follow my hon. Friend into his argument that the cold stores should be taken over entirely, but I agree that the matter is complicated. To try to solve this Order is like trying to work out a crossword puzzle without getting any of the clues. The Order conveys nothing at all to any Member of this House, and, even if one refers back to the Order which is proposed to be amended, a great many of the clues which would enable one to understand what it is all about are missing. No hon. Mem- 2331 ber trying to apply himself to what is meant by this Order, could get any idea of what is proposed under the Order or under the various arrangements which, apparently, are carried out by the Ministry of Food.
My first submission is that what is being done is something very much beyond what Parliament intended when it passed the Emergency Powers Act, Section 2 of which enables this particular Order to come into being. The Emergency Powers Act, under which this Order is brought in, gives power to impose charges. Actually, something very much wider has been done by the Ministry of Food, in conjunction with the Treasury, and even when it comes to the Order now proposed to be amended, the House of Commons, the Legislature, has no method of ascertaining the very unusual course that is being pursued by the Ministry of Food. Actually, I submit that this is—

§ Mr. Deputy-Speaker
We cannot discuss the merits of this Order. We can only discuss the merits of the reduction from 6d. to 5½d. We cannot discuss the original Order.

§ Mr. Henderson
With respect, Sir, we could not possibly decide whether 5½d. or 6d. was right without considering all the other elements that come into the calculations of what the industry is to get.

§ Mr. Deputy-Speaker
I think the House should be quite clear. This is only a matter of a reduction in the charge. I do not think that a discussion of the charge under the Order would be in Order.

§ Mr. Henderson
If that Ruling is adhered to, it means that it is impossible, in fact, to discuss this Order at all, because, as is stated in the letter which went from the Ministry of Food to the various firms, a copy of which I have, this question of a change from 6d. to 5½d. is only one item of the remuneration which the industry is to get, and if we are limited to this narrow question we can only see one side of the problem.

§ Mr. Deputy-Speaker
The point before the House is that it has only got to deal with this one small point about the reduction. It is not an occasion for dealing with the Order itself.

Mr. Robertson (Streatham)
May I remind you, Sir, that the Parliamentary Secretary, in his speech, referred not only to the reduction from 6d. to 5½d. but also to the distribution of profits and to the 75 per cent. being retained by the Ministry and 25 per cent. by the cold storage undertakers, and the proposal to alter that? There is going to be no Debate at all if the question is to be narrowed down Eke this.

§ Mr. Deputy-Speaker
It may be that, in some other way, that might be discussed, and it may be that, inadvertently, I omitted to call the right hon. Gentleman to Order, but I am absolutely certain that, under the Order, we can deal only with the reduction from 6d. to Sid. and that it is not in Order to discuss the merits of the Order and other things, such as profits.

§ Mr. Henderson
By this Ruling, Mr. Deputy-Speaker, you have really excluded any discussion at all on this particular Order. The question of 6d. or 5½d. is the basis of determining what surplus is to remain, and I would have thought, with respect, that we were entitled to raise the question as to what would happen to the surplus left over. This question of the reduction from 6d. to 5½d. is only part of what is proposed should happen.

§ Mr. Deputy-Speaker
I must be clear on the point. We can only discuss the question of reduction and cannot possibly deal with the virtue of the Order.

§ Sir Herbert Williams (Croydon, South)
Surely the reduction from 6d. to 5½d. must be justified. So many fivepence halfpennies are collected and something has to be done with them, and we ought to hear from the Parliamentary Secretary what will be the finances resulting from this change in taxation.

§ Mr. Deputy-Speaker
I see the ingenuity of the hon. Member, but we certainly cannot widen the Debate on this question.

§ Mr. Craik Henderson
In view of your Ruling, Mr. Deputy-Speaker, I am afraid there is nothing more one can say and Parliament cannot perform its proper function, which is, to watch legislation, and this really has an effect on legislation. It may be that the previous Order should have been attacked.

§ Mr. Deputy-Speaker
I cannot argue whether the hon. Gentleman is missing his function. That has nothing to do with it. We are discussing this Order and not what the hon. Gentleman has done on other occasions.

§ Mr. McKinlay
Justification for this smaller price has been brought about by the smaller undertakings. Can the Parliamentary Secretary give a list of the names of smaller undertakings, so that hon. Members can make up their minds whether they are small or large undertakings? If I understand the position correctly it is because small undertakings were being penalised that this action is being taken in order to give them a square deal. Would I be in Order in asking the question?

§ Mr. Deputy-Speaker
The hon. Member is in Order in asking, but not in developing the question.

§ Mr. McKinlay
I only wanted, in view of the difficulties of the subject, to make myself as clear as the Parliamentary Secretary. Can we have a list of the smaller undertakings which gave rise to this re-adapting of the price?

§ Mr. Craik Henderson
rose—

§ Mr. Deputy-Speaker
I assumed that the hon. Member had finished his speech when the hon. Member got up to ask a question. I may be mistaken, but I understood that the hon. Member had finished his speech.

§ Mr. Craik Henderson
I am sorry for any misunderstanding. I certainly had not finished. The point now is that, in view of your Ruling, Mr. Deputy-Speaker, we must come back and consider whether the Order is within the powers conferred. This Order states that it is made under the powers conferred by Section 2 (1) of the Emergency Powers (Defence) Act, 1939. The Emergency Powers Act, 1939, Section 2, Sub-section (1) provides that: The Treasury may by order provide for imposing and recovering, in connection with any scheme of control contained in or authorised by Defence Regulations, such charges as may be specified in the order; and any such order may be varied or revoked by a subsequent order of the Treasury for imposing and recovering the charge. Now, Sir, I would like the hon. Gentleman to explain how this 6d. or 5½d. is a charge. This is a minimum figure which 2334 the Ministry is to get. The figure above may be a charge which is to go to the Ministry of Food—

§ Mr. Mabane
For the sake of accuracy, it is the minimum figure which the industry is to get.

§ Mr. Henderson
The minimum figure which the industry is to get cannot be called a charge. In view of this, how is it maintained that this 5½d. is a charge? I can understand that the figure above is a charge, but I cannot understand how this is a charge, and I would like an explanation of how that Order is made under the emergency powers which only give power to impose and recover a charge.

§ Mr. Deputy-Speaker
Let us be quite clear; has the hon. Gentleman finished now?

§ Mr. Craik Henderson
indicated assent.

§ Mr. Ralph Etherton (Stretford)
By the reduction which this Order proposes there is being continued a scheme which is not only unprecedented but it is one which raises certain principles which I think the House should have before them. The principle which the reduction continues is the matter of an imposition by the Ministry of Food of taxation on the country, and the Ministry—

§ Mr. Deputy-Speaker
There is no question of taxation here; that is right outside the Rules of Order.

§ Mr. Etherton
But with respect, Mr. Deputy-Speaker, by reducing the charge from 6d. to 5½d. the Minister is reducing the amount which is being levied on the industry, and is thereby reducing the amount which he is putting into the account of the Ministry of Food, whereas it is money which ought properly to go into the general Exchequer account, and the country is being deprived of moneys which would otherwise be Excess Profits Tax moneys which would go into the general Exchequer account.

§ Mr. Deputy-Speaker
That is a very ingenious argument but I cannot see it has any relevance. It might have been right when the existing charge was being laid down, but this is merely a matter of the expediency of making this reduction.

§ Mr. Etherton
With great respect, Mr. Deputy-Speaker, it is wholly inexpedient that this reduction should be made because, by making the reduction, the Minister is merely reducing what is already an evil, and he is increasing the evil nature of what he is doing by his reduction, because moneys which should properly go into the general Exchequer account are being diverted into the Ministry's account—a matter which is wholly without precedent, and a matter which this House, with great respect, should take some steps to prevent. The point I wish to make is that before this reduction is allowed to pass, attention should be drawn to the fact that moneys which ought to go into the general Exchequer account, because they would in the normal way be the profits of the industry and would become Excess Profits Tax—

§ Mr. Deputy-Speaker
No, we cannot argue as to the amount which should go to Excess Profits Tax. This is just a very simple matter.

§ Mr. Etherton
There was another aspect of this matter to which I wanted to draw attention. In his opening remarks the Parliamentary Secretary said that this Order had become necessary by reason of certain criticisms of the Public Accounts Committee.

§ Mr. Mabane
No, no.

§ Mr. Etherton
The hon. Gentleman did say so.

§ Mr. Mabane
No, I said that the Public Accounts Committee appeared to be concerned at the profits being made by certain cold storage undertakings.

§ Mr. Etherton
With great respect, I do not quite appreciate the subtle difference, but whatever the difference may be, the question I wanted to ask the Parliamentary Secretary was whether he would tell us whether those are criticisms which appear in the proceedings of the Committee which are already published, or whether they are criticisms which have been made, and the reports of which are not yet available to the public.

§ Mr. Mabane
I was referring to criticisms which appeared in the minutes of evidence of the Public Accounts. Committee, 1943.

§ Mr. Etherton
I would like the Parliamentary Secretary to tell us to which particular page and which particular reference he is referring. I understand criticisms have also been made before the Public Accounts Committee since 1943, which have not yet been made available to the House as a whole. I want to know whether, in proposing this reduction, he is dealing with some of those criticisms and whether this Order is the forerunner of other Orders which will deal with some of the other criticisms. When the Parliamentary Secretary talks about giving a square deal to the small undertakings by means of this reduction is he not, in fact, depriving the industry as a whole of its right to a return, after the war, of 20 per cent. of its Excess Profits Tax?

§ Mr. Deputy-Speaker
I do not think the Parliamentary Secretary can answer that; it is beyond the scope of this Order.

§ Sir H. Williams
I think the whole House appreciates the Ruling you have given, Mr. Deputy-Speaker, but I would like to know whether you have considered Section 2, Sub-section (4) of the Emergency Powers (Defence) Act, 1939, which I will take the privilege of reading: Any such order as aforesaid imposing or increasing the charge shall cease to have effect on the expiration of that period of twenty-eight days beginning with the day on which the order is made, unless at some time before the expiration of that period it has been approved by a resolution of the Commons House of Parliament. … This Order which appears to reduce something from 6d. to 5½d., is increasing the charge not diminishing it, because a Motion has been moved to approve it. If it had been the intention to reduce the charge there would have been no need for the Parliamentary Secretary to move a Motion. The fact is that 5½d. instead of 6d. is an increase, and when the Parliamentary Secretary asks us to approve an increase we are entitled to more explanation than he has so far given as to what is the effect of the increase. The question arises whether this Order is ultra vires. The fact that in 1941 some of us were not so alert about these Statutory Rules and Orders as we have since become and that the House then, possibly, tacitly accepted an ultra vires Order does not make it vires to-night by making an illegal charge still higher. Section 2; Sub-section (1) of the Act says: 2337 The Treasury may by order provide for imposing and recovering, in connection with any scheme of control … such charges … By "charges" we think of licence fees and things like that. This is in line with the Customs and Excise Duties we authorise in our Finance Bills, and the word "charges," in an Order like this, is a complete misdescription. Naturally, we do not argue with the Chair—we only put points of Order—but I think this is a more serious matter than the House has up to now appreciated. This Order imposes a higher charge; if it did not it would not have been before us. The Parliamentary Secretary understands the Order—nobody else appears to do so—and has moved a Motion to approve an Order which puts a new charge on some of His Majesty's subjects without giving us any information as to what is the magnitude of that charge, how many thousands of pounds are involved and without any indication as to what will be done with the money when he has got it.
Question put, and agreed to.
Resolved: That the Cold Storage (Control of Undertakings) (Charges) Amendment Order, 1944, dated 19th September, 1944, made by the Treasury under Section 2 of the Emergency Powers (Defence) Act 1939, a copy of which Order was presented on 26th September be approved.