HC Deb 29 November 1951 vol 494 cc1719-25
Sir T. Dugdale

With your permission. Mr. Speaker, I should now like to reply to Question No. 55.

I should first explain that the Special Review which took place recently under the authority of the previous Government was a Review under Section 2 of the Agriculture Act, 1947, not of prices but of the economic condition and prospects of the agricultural industry, as affected by the latest awards of the three Agricultural Wages Boards for the United Kingdom. The Government have now considered the effect of these awards on the economic condition and prospects of the industry, and have also taken note of other increases in costs that have taken place since the Annual Review of last February.

The Government have decided that a case exists for adjusting those farm prices which were fixed after last February's Annual Review, so as to take account of the sudden and substantial change in labour costs resulting from the awards of the Agricultural Wages Boards. I will circulate in the OFFICIAL REPORT a statement giving the price increases and the dates from which they will operate. It will be possible in the case of milk, but not for other commodities, to make the new price restrospective to the dates on which the increased wages become payable in England and Wales, and Scotland respectively.

I have said that other increases in costs have also been examined. Of these the most notable single item both in magnitude and in regard to its potential effect on production, has been the steep rise in fertiliser prices. The excess increase over the estimate used for the purpose of last February's Annual Review is equivalent to an annual rate of just over £9 million. We have decided that this is a matter which should be dealt with separately by means which will most effectively encourage the proper use of fertilisers on crops and grass. Arrangements are being made accordingly for the payment of a contribution towards the cost of acquiring phosphatic fertilisers in the United Kingdom. The contributions will be at a rate equivalent to about 30 per cent. of the present cost to farmers and will apply to all phosphatic fertilisers bought between 1st July last and 30th June, 1952. I shall in due course ask Parliament to make the necessary provision.

These measures will partly offset the increased costs of production arising from higher wages and other causes. Since it is our policy to curb Government expenditure, they will be counted against the food subsidies and will involve increases in some food prices if the level of the subsidies is not to be increased.

Mr. A. C. Manuel

More broken promises.

Sir T. Dugdale

My right hon. Friend the Minister of Food has already announced an increase of 1d. per quart in the price of milk and he will be making further announcements as and when necessary.

Mr. William Ross

Throw in Your hand.

Sir T. Dugdale

The Government recognise that the rapid and substantial increases in costs which have taken place this year have created severe difficulties for agriculture, as for other industries. Necessarily these problems must be considered in relation to the general economic condition of the country and defence requirements. The whole economy is seriously overloaded; there are grave external financial difficulties; and we have heavy defence commitments. One of the most important contributions that can be rendered to agriculture is for the Government to press on with the attempt to get control of inflationary tendencies. The farming community will be among those who will benefit by reason of successful policies in this regard.

It will require more time than has so far been available to the present Government to balance, on the one hand, the nation's food production requirements and appropriate ways and means of enabling the agricultural industry to meet them, and, on the other, the national economic and material resources which are likely to be available for that purpose. We are applying ourselves to that task with energy and determination; we have made these present awards; and we intend to do our utmost in the circumstances I have described to ensure that agriculture can make the fullest possible contribution both to the nation's food requirements and towards the solution of its economic problems.

Mr. Hurd

While thanking the Government for dealing with this problem so promptly, may I ask my right hon. and gallant Friend if he will always remember in view of the fall in the production of milk and eggs in this present year—

Mr. Manuel

And the promises given in the Election.

Mr. Hurd

—that adequate prices in line with costs of production are essential to regain full food production here to meet consumers' needs?

Sir T. Dugdale

Yes, Sir, that is the intention of the statement I have made on behalf of the Government.

Mr. T. Williams

May I ask the right hon. Gentleman three questions? First, would he give us the estimate of the increases on a yearly basis? Secondly, are we to assume from the right hon. Gentleman's reply that it is expected that the total increase in the cost will be borne by consumers, and thirdly, are we to understand that this is an agreed statement with the National Farmers' Union?

Sir T. Dugdale

The answer to the right hon. Gentleman's first question is that on a yearly basis the total estimated cost will be in the neighbourhood of £26 million on two accounts. As far as his second question is concerned, although the new proposals with regard to fertilisers, which I think the right hon. Gentleman has in mind, will be borne on a Ministry of Agriculture Vote, they will be included in the consumer subsidies, in this grand total which is controlled by my right hon. Friend the Minister of Food. Regarding the right hon. Gentleman's third question, there is no question of agreement or disagreement to this statement as far as the National Farmers' Union is concerned. The right hon. Gentleman will realise that so far as this special price review is concerned, if the facts are accepted and agreed then the figures are machinery figures.

Mr. S. N. Evans

Is the Minister aware that his further pampering and featherbedding of an already cosseted industry will cause considerable dismay among housewives and taxpayers, and does this further financial blood transfusion mean that farm profits are now sanctified at £300 million a year, six times their prewar level, without any regard to efficiency or productivity? Have the leaders of this industry no shame, no regard—

Mr. Speaker

The Minister is not responsible for the absence or the presence of a sense of shame in other people.

Mr. Evans

Have those responsible for this decision no understanding of the grave financial and economic crisis that confronts this country, and are the tears of self-pity—

Mr. Speaker

This is really developing into a speech. Sir Thomas Dugdale.

Sir. T. Dugdale

I think the best way in which I can answer the hon. Gentleman is to say that the Government are very well aware of the extremely difficult financial position, but that they are equally aware of the danger of a fall in production from the farms of Great Britain, and that is my responsibility as a Member of the Government.

Mr. John MacLeod

Is the Minister aware that farmers in the Highlands and other remote areas are greatly penalised through the raising of freight charges which took place to such a great extent under the Socialist administration? Can he say if this was taken fully into account in this review, and will he bear it in mind in the future?

Sir T. Dugdale

I wish to make it clear that this is a special price review which only deals with the special point of increased costs.

Mr. Hector McNeil

Does the Minister's reply mean that if the Government are unable to absorb these additional costs inside the existing subsidy ceiling they will be passed on to the consumer in terms of increased food prices?

Sir T. Dugdale

I made it perfectly clear in my statement, if the right hon. Gentleman will read it, that we anticipate that there are bound to be increased retail prices.

Colonel Ralph Clarke

Is it not a fact that since the last review in February the costs of farmers have risen something like £50 million to £60 million for extra wages and other things over which they have no control, and which, under the 1947 Act passed by the late Government, now the present Opposition, are fairly placed on the consumers?

Sir T. Dugdale

That is not quite accurate if we are considering only price review commodities. Those are commodities for which guaranteed prices are arranged under the 1947 Act, but I would point out to my hon. and gallant Friend that under the proposals I have now submitted to the House they will cover, so far as fertilisers are concerned, not only price review commodities but the horticultural industry as well.

Mr. Frederick Peart

As during the Election many Tory farmers supported the policy of right hon. Gentlemen opposite, is this the way in which they are now to be disappointed, and do not these terms reveal the hypocrisy of the Tory Party's claim that they would reduce the cost of living?

Mr. C. N. Thornton-Kemsley

Is not the best thing that could happen for consumers in this country that agriculture should be made to prosper and to pay its way?

Mr. Speaker

Order. This is developing into a general debate of agriculture.

Mr. H. Hynd

In view of the unsatisfactory nature of the reply, I wish to give notice that I shall raise the matter on the Adjournment.

Mr. R. T. Paget

In view of the immediate importance of this statement and the shock it will convey, would you, Mr. Speaker, accept a Motion to adjourn the House on a matter of urgent public importance?

Mr. Speaker

No, I could not accept such a Motion under the Standing Order. Notice has already been given that the matter is to be raised on the Adjournment, and it is not a matter which falls within the Standing Order.

— Prices fixed after the last Annual Review Notes Price Increases Operative Date
Crops: 1952 harvest
Wheat, per cwt. 29s. — 6d. 1.7.52
Rye, per cwt. 21s. 6d. (i) 6d. 1.7.52
Barley, per cwt. 23s. (i) 6d. 1.7.52
Oats. per cwt. 20s. 8d. (i) 6d. 1.7.52
not earlier than
Potatoes, per ton 232s. (ii) 7s. 1.8.52
Sugar beet. per ton 108s. 8d. — 3s. 6d. 1.7.52
Livestock products: 1951–1952
Fat cattle, per live cwt. 116s. 11d. (iii) 4s. 3.12.51
Fat sheep and lamb, per lb. dressed 2s. 5d. — ¾d. 3.12.51
Fat pigs, per score dead weight. 53s. 2d. (iii) 5d. 3.12.51
Eggs, per doz. 4s. 3½d. (iv) 1d. 6.12.51
Milk, per gall. 2s. 11¾d. (V) 0.68d.{England and Wales Scotland Northern Ireland 21.10.51
5.11.51
7.1.52
Wool, per lb 6s. — ½d. 1.5.52
Mr. Ivor Owen Thomas

On a point of order. Is not the House entitled, Mr. Speaker, in view of the Minister's statement, to learn whether this is the first contribution of the Government—

Hon. Members

Hear, hear.

Mr. Speaker

Order. I wish to hear the hon. Gentleman on a point of order.

Mr. Thomas

Arising out of the Minister's statement, is not the House entitled to learn whether this is the first contribution of the Government's promised reduction in the cost of living?

Mr. Speaker

That is not a point of order, and I would call the attention of the House to the fact that an hon. Member of it has given notice that he intends to raise this matter on the Adjournment.

Following is the statement of price increases and operative dates:

The price increases shown in the Table are average annual increases for agricultural commodities in the United Kingdom covered by the First Schedule of the Agriculture Act, 1947. For crops these increases apply to the 1952 harvest, and for livestock products other than wool the increases will begin at the dates stated in the Table. In the case of wool the increase shown will be added to whatever guaranteed price is fixed for the 1952 clip. For practical reasons the price increases for particular grades of produce, or for produce marketed in particular months or from particular areas, may differ slightly from those set out in the Table. For livestock products the prices quoted as having been fixed after the last Annual Review include small once-for-all amounts added in respect of the deferment of the 1950 Special Review.

  1. (i) Columns 1 and 3 refer to the minimum price only.
  2. (ii) Column 1 refers to standard ware potatoes only; Column 3 applies to sub-standard ware as well.
  3. (iii) For cattle, column 1 refers to steers, heifers and cow heifers, but column 3 applies to other classes of adult cattle as well. For pigs, column 1 refers to clean pigs in quality weight ranges, but column 3 applies to other pigs as well.
  4. (iv) Column 1 refers to hen eggs sold through packing stations. Column 3 applies, as well, to an increase in the guaranteed minimum price for duck eggs.
  5. (v) Columns 1 and 3 refer to the average pool price plus production bonus and quality premiums. The operative dates are those on which in the three countries revised wage rates came into force or are in prospect.

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