HC Deb 14 March 1947 vol 434 cc1753-65


Resolution reported: That a Supplementary sum, not exceeding £49,840,000, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1947, for the salaries and expenses of the Ministry of Food; the cost of trading services including certain subsidies; and sundry other services. Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."

1.25 p.m.

Sir Waldron Smithers (Orpington)

After having had an interesting Debate on civil aviation, we now come to a more important topic, namely, the provision of food for this country, without which civil aviation, or anything else, cannot be carried on. I want at the outset to make a protest at the absence of the Minister of Food. The Government have come to the House and have asked for £49,840,000, and I contend—

Mr. Deputy-Speaker (Mr. Hubert Beaumont)

Is the hon. Gentleman moving the Amendment?

Captain Crookshank (Gainsborough)

There seems to be some misunderstanding. I thought that the Parliamentary Secretary would make a statement to start the Debate, but in order to safeguard the position I will formally move the Amendment, so that I can speak later.

I beg to move, in line 1, to leave out "£49,849,000," and to insert £49,839,000."

Sir W. Smithers

I apologise for not being au fait with the procedure, Sir. I was making a protest at the absence of the Minister of Food, who should have been here to ask for this large sum of money which, in my opinion, is not necessary, because there has been mismanagement of the purchase and distribution of food by this Government. But I suppose that the Minister of Food, if anything goes wrong, will rest on the old-time excuse, and say, "The woman did it." I have asked Question after Question in this House of the right hon. Gentleman about prices paid for food, and the profit or loss on bulk purchase transactions. I have been refused that information time after time. I have been told that further Questions are not allowed, but I am authoritatively informed that I can raise the matter this afternoon, and I am glad to have the opportunity of so doing. The secrecy and refusal to give information is typical of the policy of communist and totalitarian Governments.

1.30 p.m.

I will give examples of bulk purchase, and how, in my belief, they have caused the British taxpayer a lot of money. I have not been able to extract any figures by way of official information, and, therefore, I will tell the hon. Lady some figures which I have been able to secure, and ask her to say definitely whether they are correct or not. If I have to leave before the end of the Debate, and I do not hear the hon. Lady's reply, it will not be because of discourtesy to her. The first example is the purchase of large quantities of oil seeds from the Argentine. I believe that they were sunflower seeds, cotton seeds and linseed, and I am told by those who should know that the difference in prices paid by the Argentine Government to their growers and the price charged to the British Ministry of Food Purchasing Commission was £49 million. It looks as if the Argentine Government took a nice commission of £49 million at the expense of the British taxpayer.

I would also like information as to the wheat deal with Canada. I understand that the Ministry of Food—and I am open to correction if I am wrong—has purchased two-thirds of the wheat crop from Canada, for the next five years, at the price of $1.55 per bushel. I have been to Canada many times, and I believe that the price of wheat in Canada has been as low as 30 to 50 cents per bushel. I was told, when I was there, that "dollar wheat" showed a good profit to the producer. I was also told that, before our purchasing commission arrived, there was a meeting of the representatives of Western Canada farmers, who said, "Here comes this chap from a very hungry Britain. What is the most we can get out of them?" That is the reason why $1.55 was charged to the British consumer at the expense of the British taxpayer.

Five hundred thousand tons of wheat were purchased from the Argentine. I will quote an article which appeared in "Wall Street Journal, New York," published in the "Evening Standard" on 13th March, with the title, "How to make 200 per cent. profit on wheat." I do this because it is very important in purchasing food not to engender international heat, between countries. We want the food, and we do not want to set one country against another, and put up the price against us. This is what the Journal says: How to make a profit at 200 per cent. in business deals with wheat farmers is being demonstrated by the Argentine Government, according to London reports from the Comtelburo news agency yesterday. The procedure is simple. Buy wheat from the farmers for £11 to £13 a ton—sell it to the bread-hungry British for £34 a ton. When the Argentine Government recently sold the British Ministry of Food 500,000 tons of wheat, it was publicly understood that the price was 350 pesos (about £29) a ton. Yesterday, it was learned, according to Comtelburo, that the price was actually 450 pesos a ton—or £34. In Argentina the Government buys all the wheat The farmer sells to the Government or he doesn't sell. And the Government determines the price. The rate of payment to farmers is 170 pesos (nearly.13) a ton for sales of wheat up to 300 tons, and 150 pesos (about £11) a ton on larger quantities. The £34 a ton price is equal to about 16s. a bushel. It represents—apart from black market or minor transactions—the highest price on record for wheat in European markets. It tops the peaks of world war I and the Napoleonic wars. Apart from the 500,000 tons deal, it is reported that further sales of Argentine wheat have recently been made to Britain at a price of 16s. 3d. a bushel. The United States, with half the world now hammering at its doors for grain, is currently selling wheat (what it doesn't give away) at around 14s. 6d. a bushel. I ask the hon. Lady the Parliamentary Secretary seriously to go into these figures that I have given, and to tell me if they are correct, and why these enormous prices have been paid. The House will realise that I read out that the only buyer in the Argentine is the Argentine Government. Bulk purchases inevitably involve bulk selling. The wheat producing countries naturally want to sell their wheat. They know that Britain is short of food, and they are getting the highest prices they can. I have always understood that one of the first duties of a Member of Parliament is to be a guardian of the public purse. This is the High Court of Parliament, and I maintain that, owing to' the inability or unwillingness of the Ministry of Food to give us details, this High Court of Parliament is being denied the right of full information, of full evidence, and of full answers, and, therefore, we are not able to arrive at a judgment and tell the taxpayer the awful muddle and loss to the taxpayer which the Minister of Food has created. One of the main reasons for the issue of the economic White Paper, for the shortages, and the crisis is due to bulk purchase.

Apart from all party politics, when we send the Lord President of the Council, Sir Ben Smith, and the present Minister of Food flying over to America on behalf of the British Government, it advertises to the whole world that the British Government think that there are 47 million people in Britain who are short of food. What is the strongest instinct in every human breast? It is self-preservation. Thank Heaven that the mandate of this Government does not run beyond the shores of Britain. Other countries say, "Forty-seven million people in Britain are short of food," and their first thought is to put aside a bit for themselves and their families and then to hold the balance for higher prices. Fancy sending a man like the Minister of Food, who has given allegiance to more political parties in the House than almost anybody—

Mr. George Thomas (Cardiff, Central)

What about the Leader of the Opposition.

Mr. Deputy-Speaker

The hon. Member is now going a little too wide.

Sir W. Smithers

I am trying to show. Mr. Deputy-Speaker, the kind of people, and the kind of background to the Minister of Food. The right hon. Gentleman has about as much stability as a bead of mercury on a polished tray. This is the kind of man who goes to foreign countries and deals with the best business brains in the world. It is a tremendous risk and puts the whole of British credit behind such a man as our representative, although I do not know what business experience he has had. I should think not very much.

Another point is that bulk purchases of food lead to international irritation and heat. I beg the Government to leave these transactions to experienced firms in the Baltic and Mincing Lane, Manchester and Liverpool. They have long experience and they know exactly where the crops are grown and how to get them. They have had long experience of shipping, of warehousing and insurance. I hope the Government will allow that kind of healthy competition in securing the food that we want. It would operate quietly and would not engender, as I know it has engendered, international heat, or create dissension between Britain and other countries, as in the case of our deals with Argentina and with America. The White Paper 7046 acknowledges that State control has broken dawn, The Prime Minister, in his foreword, was compelled to appeal to the individual. Here we have continuance of food purchases under the State, yet the Government call upon every man and woman in the country to devote himself unflinchingly to the task.

Mr. Deputy-Speaker

The hon. Gentleman is now quoting from the White Paper upon which we have only this week had a three-day Debate. I must remind him that it would be out of Order to go over the same ground.

Sir W. Smithers

I was not going over the same ground, Mr. Deputy-Speaker. I was trying to show that the Government had confessed that State control had been wrong because they were now appealing to the individual. The Minister of Food should appeal to individual traders to help us out of our difficulties. A little more faith is needed, instead of sending panicstricken mountebanks flying all over the world—[HON. MEMBERS: "Oh."] May I give a definition of "mountebank"? It will shorten my speech. I have obtained it from Webster's Dictionary., It is as follows: One who mounts a bank or bench or stage in a marketplace and boasts of his skill in curing disease by medicines which he pretends are invaluable remedies, and thus deludes the ignorant multitude.

Mr. Deputy-Speaker

On which part of the Supplementary Estimate is the hon. Member now speaking?

1.45 p.m.

Sir W. Smithers

I am talking about the method of purchasing foodstuffs from abroad. It is in paragraph (2) under the heading: Trade services, cereals (including cereals and foodstuffs). These materials are being obtained by bulk purchase. I am contending that they are being done in the wrong way and by the wrong people, and I am saying that this gentleman, by the policy put forward through him, is pretending to have an invaluable remedy which is deluding the ignorant multitude. The definition concludes: Persons of this character may be indicted or punished. As Arbuthnot wrote: Nothing is so impossible in nature but mountebanks will undertake it. I am saying that to attempt to feed this country through men with no business experience and to send him out as a buyer, on behalf of the British Government creates tremendous loss to the British taxpayer. If the ordinary channels of trade had been allowed to operate, the Supplementary Estimate would never have been necessary.

I say in all seriousness, let us put our faith not in a Socialist Minister but in God. God's promise has been given, and we should have more faith and not so much panic. He will not fail His people.

While earth remaineth, seed time and harvest, cold and heat, winter and summer, shall not cease. I ask the hon. Lady to give us some indication whether the figures which I have given to the House are true or not, and what profit or loss has been made on the bulk purchase transactions.

The Financial Secretary to the Treasury (Mr. Glenvil Hall)

I am not quite sure where we are in this Debate. I understood that an Amendment was to be moved for a reduction in the figure in the Estimate. I behave that the right hon. and gallant Member for Gainsborough (Captain Crookshank) has in fact moved that reduction, but I am not quite sure why a reduction has been moved unless it is in order to elicit a further explanation of the £7 million which was the occasion of a good deal of argument last Friday and which was paid to the Argentinian Government in respect of meat supply under contract with this country. It is on that point and that point alone—

Sir W. Smithers

With great respect to the right hon. Gentleman, I would point out that there is also £49 million in respect of the oil seed deal and other transactions, about which I cannot get an answer to my questions. I therefore want an explanation now.

Mr. Glenvil Hall

I have no doubt that the Parliamentary Secretary will deal with the points raised by the hon. Member when she winds up the Debate. In order to see exactly where we are it might be for the convenience of the House if we dealt with the Amendment on the Paper. I am now assured that it has relevance only—

Captain Crookshank

As the right hon. Gentleman is asking me a question it would be only courteous for me to reply. The right hon. Gentleman will remember, and he will see from HANSARD of last Friday, col. 883, that we ceased the Committee discussion of these Estimates upon an assurance that the hon. Lady would make a full and frank statement on the Report stage with regard to the £7 million. If, as I take it, the right hon. Gentleman is now taking her place, that is another matter.

Mr. Glenvil Hall

We were under the impression that that was the one outstanding point left for discussion when we dealt with this matter.

Captain Crookshank

It does not limit the Debate.

Mr. Glenvil Hall

It will be within the recollection of the House that there was some suggestion that, if we got through these Estimates as early as possible, we might have time for a discussion on Greece.

Sir W. Smithers

No. Has not the right hon. Gentleman been here all the time?

Mr. Glenvil Hall

Last week we gave a considerable amount of time to this Vote. The Parliamentary Secretary replied at considerable length to criticisms. I was under the impression that the one outstanding point on which there was a great deal of criticism and query was why the £7 million had been paid to the Argentinian Government in respect of meat. Although it is my view that the Parliamentary Secretary to the Ministry of Food dealt with this point adequately—I have been very carefully through that Debate —there is not a great deal that I can add. Nevertheless, in so far as I can expand what she said I am, of course, very willing to do it.

Sir Peter Macdonald (Isle of Wight)

We have had no replies to our questions about groundnuts from Tanganyika. We hope to hear more about that today. Also, there has been no adequate explanation about the loss which occurred on Ceylon tea due to the export duty charged by the Ceylon Government, which evidently has been passed on to the British taxpayer.

Mr. Glenvil Hall

When the Parliamentary Secretary replies, she will deal with the points raised by the hon. Member for the Isle of Wight (Sir P. Macdonald). My function in this Debate is to deal with the point about £7 million paid to the Argentine Government in respect of meat bought under contract. As hon. Members know, for many years we have bought meat from the Argentine, which is a great exporter of meat. This country has unfortunately to import a good deal of meat; and one of our main sources of supply is the Argentine. The contract under discussion now is the sixth of its kind. That fact gives the House some idea of the length of time during which we have been buying in bulk from the Argentine Government. I thoroughly agreed with the hon. Member for Orpington (Sir W. Smithers) when he said earlier—and I am sorry that he did not remember what he said—that we do not want to set one -country against another.

We must remember that, when contracts are made with the Argentine, it is not our fault that that Government insists that their farmers shall sell their produce to the Government. We must take the world as we find it, and we must buy what is needed for the people of this country in the markets where we can get it. One of the markets is the Argentine. I imagine that, like the hon. Member for Orpington, they believe in private enterprise and free commercial give and take, the buyer paying whatever the seller can extract from him. If a buyer wants a thing very much, it is difficult to keep that information from the seller.

Sir W. Smithers

It is all very well to use that argument. If Britain would allow her ordinary merchants to go personally to the producers in the Argentine, we should get the food at a lower price.

Mr. Glenvil Hall

It is not my function to pursue this point in the Debate. We are to have a reply from the Parliamentary Secretary, who is more than able to deal with points of that kind. We must take things as we find them. It is a fact that the Argentine Government take over from their nationals, and we must deal with the Argentine Government. For many years I am afraid it will be essential, just as it was during the war, that we should buy in bulk in order to get the best for the people at the best possible world price. It is also true that during the war the Argentine Government sold their exportable surplus of meat to us for sterling. We must not forget that, when some of us are inclined to say hard things about the people of that country.

In 1944, a further agreement was signed which was to last for four years. It was an integral part of that agreement that the prices fixed were open to survey at the request of either party at the end of two years. The Argentine Government, as they were entitled to do under the terms of the original agreement, reopened the matter and, on behalf of the Ministry of Food and the Treasury, representatives went out to discuss details with them. The opportunity was taken, in negotiating the new price for the two years unexpired portion of the previous contract, to extend the agreement for a further year. What surprised me—and it still does—is that hon. and right hon. Gentlemen opposite appeared not to know anything about this £7 million when the matter was debated last week. If they had looked at the Economic Agreement which was signed in September, 1946, and which has been in the Vote Office for many weeks—Cmd. 6953—they would have seen that paragraph 6 says: In order to facilitate the adjustment- to present costs of production the British Government will make a single cash payment of £5 million in 'free sterling' to the Argentine Government represented by the Argentine Institution for the Promotion of Exchange. Therefore, it is wrong for hon. and right hon. Gentlemen opposite to come to the House and to pretend that this is the first they have heard about it. It was made quite plain in a document which has been in circulation, and has been available through the Vote Office, for many weeks. If hon. Members opposite did not know of this agreement to pay an extra sum, that is not our fault. What they may not have known about is the fact that the £5 million had been increased to £7 million. As my hon. Friend the Parliamentary Secretary explained during the Debate last week, the reasons for that are quite plain. They are that, in the negotiating which took place, the Argentine Government represented to the British Government that £5 million was insufficient to enable them to satisfy their primary producers. They asked for something more in addition to the original £5 million which had been agreed to in September, 1946, and set forth in the White Paper to which I have referred.

The representatives of the British Government did not agree to this immediately. There was a good deal of hard bargaining and discussions which occupied many weeks. The negotiations went on for several months and it was only in the end, as part of a larger bargain, that the representatives of the British Government agreed that the extra £2 million should be added to the £5 million. The consideration for the extra £2 million is that this country is to get 83 per cent. of the exportable surplus of the Argentine meat output during the coming years. I think the House will agree that it was worth while coming to that arrangement in order to get the extra meat which this country wants. In our view, it is much better, for one reason if for no others, that the matter should have been settled in this way rather than we should have paid the very much higher prices for which the Argentine Government asked.

We do not only buy meat from the Argentine but from other parts of the world and from our own Dominions, and we consider it would be grossly unfair to give the Argentine Government a better price for comparable meats than we have arranged to give Australia, New Zealand or some other part of the British Commonwealth; these prices must be more or less in line. When we are buying in bulk we must bear considerations of that kind in mind. They were borne in mind in coming to the agreement with the Argentine, and the extra £2 million which, after a good deal of discussion, was added to the £5 million brought as a quid pro quo from the Argentine Government their agreement to sell to us 83 per cent. of the exportable surplus of the Argentine meat supply. That has been embodied in an agreement, and the meat is already coming here.

I do not think there is any more I can say. I hope I have satisfied the right hon. and gallant Member for Gains-borough. We have nothing to hide. We realise it is the duty of this House to watch these matters with the utmost care. So far as this contract is concerned we think we have not made a bad bargain at all. We have not been silly or soft, nor have we improperly given in to pressure. On the contrary, we think the House will find on examination of our agreement, that it was worth the money we gave.

Captain Crookshank

I am much obliged to the right hon. Gentleman for his very full statement. He probably agrees that the interchanges we have had last Friday and today have been something in the nature of a storm in a teacup entirely due to the Parliamentary Secretary to the Ministry of Food. Either she was not fully informed at the time what this was about or else she loosely used words which are reported in HANSARD. The trouble was that she told us this: The Argentine Government satisfied us that perhaps the contract which we made with them was not as liberal as it might have been, and we gave them this extra £7 million."—[OFFICIAL REPORT, 7th March, 1947; Vol. 434, c. 880.] When the Minister says we go giving money away like that, the right hon. Gentleman, with his Treasury experience, will realise that it is not surprising that we questioned the whole transaction. He has now made it quite clear It was not a question of giving in the sense of an ex gratia payment. There was a regular four year agreement. At the end of two years the prices were open to survey. The Argentine Government were entitled, as we were, at that date to reopen the question of the figures, and they did so, and as a result of that an agreement was reached to make a further payment. That is quite a different thing to saying that we had given them something, which was the impression which the hon. Lady most unfortunately left us with. However the right hon. Gentleman has now cleared the matter up and I do not propose to press the Motion for reduction any further.

I have just a couple of comments to make. It is unfortunately the case that when we have these bulk agreements negotiated by Governments if any question is raised about any points in them there is apt to be misunderstanding in one country or another. That has been one of the arguments we on this side of the House have always felt was decisive against a continuance of bulk purchasing. A little difference of opinion between two business people about a word incautiously used—such as by the Parliamentary Secretary, when she says "gave" when she means nothing of the kind—would pass away and no one would give it a moment's thought, but because it has been used and reported in HANSARD, for all I know it may have caused misunderstanding elsewhere. If that is so, it is not our fault, but that of the hon. Lady. I hope that no harm has been done. If there was anything I could say today which would prevent misunderstanding, I would say so.

My second point is one which arises out of this particular incident. The Government ought now to take into consideration very seriously when they are indulging in all these bulk purchases what sort of accounts they intend in future to bring before Parliament in these matters. In all the nationalisation Bills going forward, very great care is being taken by Parliament to see that proper forms of account are provided so that the nation may know what is being done with that part of the national property. During the war it was impossible, but now Parliament should have proper notice when bulk purchasing of food is to continue on the scale envisaged in this Supplementary Estimate. We are having to add nearly £50 million by one Supplementary Estimate for one reason or another, whether it is because we have not drawn enough or have drawn too much on one lot of stocks or another, or have paid too much or too little on one commodity or another. Commercial accounts are produced in the case of the Post Office. The right hon. Gentleman and his Treasury officials should now consider very seriously how far proper commercial accounts can be produced with regard to trading services on food. If not, there are bound to be—to use a commonplace term—endless possibilities for playing about with stocks and endless possibilities with regard to balancing the Budget for the year. At any moment the Chancellor of the Exchequer may tell the Minister of Food, "Draw more on your stocks because we cannot afford to spend another £50 million or £100 million as it will unbalance my Budget." Parliament should know what is happening, and I urge the Minister to consider that.

So far as the Argentine contract episode is concerned, we are quite prepared to accept the full and frank statement which the Financial Secretary has made. We merely regret that the hon. Lady the Parliamentary Secretary to the Ministry of Food was not sufficiently informed to give it last week as that would have saved all this trouble. However, as we all benefit by these lessons, I hope that the hon. Lady on the next occasion will be able to deal with any conundrum put forward. I would add that I hope that on the next occasion we may be treated to a sight of the Minister of Food.

Mr. Osborne (Louth)

On a point of Order, Mr. Speaker. During your absence the Financial Secretary said he understood that we were going to get through the next Supplementary Estimates very quickly in order to get on to Greece. Does that mean that the next Supplementary Estimate will not be discussed?

Mr. Speaker

That referred to the discussion on this Vote. We will see what comes on next.

Question, "That '£49,840,000' stand part of the Resolution," put, and agreed to.

Resolution agreed to.