Ministry of Food (Hansard, 21 February 1952)

§ Mr. F. Willey
This Supplementary Estimate does not give a complete or comprehensive indication of the activities of the Ministry of Food. I make no complaint about that. The Ministry is a trading Department and this is a cash statement. I wish to look beyond the Supplementary Estimate to see the purpose of the additional sum required.
One would have expected that if a trading Department was coming to the House asking for extra moneys in a Supplementary Estimate, that fact would indicate that the Department had purchased more commodities than it had anticipated, or alternatively that what it had purchased had cost more. If we look at the position this clearly is not so. The rations for the current year have been less than those for the previous year and I think that the ration level upon which the assumptions were made for the original Estimates must have been higher than the actual present ration levels.
If we look at Sub-head H "Trading Services (Net)" we find this impression is borne out because the revised Estimate for purchase, freight and storage is now £1,697,800,000 against the original estimate of £1,838,000,000. In other words, we have bought not more but rather less —£140 million less—compared with the foodstuffs which it was anticipated we should buy when the original Estimate was presented.
So if we try to find out why an additional sum is required we have to look to the receipts in this new Supplementary Estimate. It is now anticipated that receipts from sales, that is sales to the housewife, will be £1,280,600,000, which is also less than the original Estimate, which was £1,450,300,000. That is the reason why the Minister has to come to the Committee and ask for additional sums—because he is getting from sales 508 of foodstuffs £169 million less than it was anticipated he would obtain when the original Estimates were presented.
In short, the position is not that the Minister has purchased more food than was originally estimated, not that he has spent more money on the food he has purchased: the fact that he is now obliged to come to the Committee is that he has sold less of the food which he has obtained. This Supplementary Estimate is necessary because the Minister has obtained less money by acting as a shopkeeper and selling the goods to the housewife, who needs them.
After all that the right hon. and gallant Gentleman's colleagues have said in the past, I should have thought that that was quite intolerable. I used to be accused from these benches, when I sat where the Minister is at present temporarily sitting, of being dictated to by the Treasury. This is surely dictatorship by the Treasury with a vengeance.
What I have said to explain this request for additional moneys is borne out if we look at the reconciliation statement—and I congratulate the Minister on following the precedent my right hon. Friend set in affording some additional information by this reconciliation statement. If we look at it we find that it is to some extent an explanation of Subhead H. We find the net increase in stocks is £28,800,000. That is to say that at the end of the year we shall have £28,800,000 worth of food more than when we started.
The interesting thing about this is that in the original Estimate we anticipated that the net increase of stocks would be £14,100,000. Stock levels are related ration levels. If there are higher ration levels to sustain them, it might be advisable to carry bigger stocks; in any case the atmosphere is one in which it is more tolerable to carry bigger stocks. Today we have the position in which the ration level is in several cases less than in the previous year and less than the assumptions on which the Estimates were originally based. Nevertheless the Minister is proposing doubling the stocks which we had in mind when the original Estimates were laid before the House.
That demands an explanation. When we are dealing with foodstuffs regard has to be paid to what the housewife would desire. Certainly my right hon. Friend 509 felt that the whole time. It is for the Minister to persuade the housewife, through this House, that today these stocks should be increased to twice the amount which we envisaged was necessary when we were contemplating a higher ration level and when the atmosphere was more hopeful than it is today.
All this has to be considered against the position of the strategic stockpiles. It would not be in order to discuss a later Vote but it is relevant to the present argument to point out that the right hon. and gallant Gentleman will this evening ask for the increase of the strategic stockpiles by purchases amounting to £8,294,000. That means that in this current financial year the Minister is increasing our food stocks by some £23 million over and above the £72,500,000 of strategic stockpiles which we have built up according to our programme in the present year.

§ Mr. Frederic Harris (Croydon, North)
Would not the hon. Gentleman agree that that may not necessarily mean any increase in the amounts of food, but that it may be, in many cases, a reflection of increased prices?

§ Mr. Willey
I shall come to that point. The point I was putting was that we are increasing our trading account stocks by more than was envisaged when the original Estimates were made, and we are increasing the strategic stockpile. Notwithstanding that, we have made this substantial and appreciable increase in our food stocks during the current financial year.
It appears to me that all this shows that I was absolutely right when I challenged the right hon. and gallant Gentleman on his attitude to the question of Christmas bonuses. He created the impression then —and this will give him an opportunity to correct it—that he was being driven to what seemed to us to be niggardly action because of the stock position. He repeatedly conveyed the impression in the country that it was because of the state of the larder that he had to do many things which were unpleasant to the housewife. But these Supplementary Estimates show that that is not so. They show that we are at present in a strong position regarding stocks.
This is relevant to the present request for more money. This increased stock- 510 piling has to be considered against the strategic stockpile that we are building up. But I heard the Chancellor of the Exchequer say that he intended to raid that stockpile. If we read carefully the Chancellor's statement, it is clear that he intends very substantially to raid that stockpile. Surely, the right hon. and gallant Gentleman will agree that, on the face of it, all this seems most fantastic.
We are building up stocks which the Chancellor, who clearly controls the Minister of Food notwithstanding the support he is supposed to have got through the co-ordinating Minister, says that he intends to raid. The Minister says, "I am going to increase the stockpile and at the same time, to show how energetic and virile I am, I am going to increase our trading stockpile to figures we have not previously attained." The first thing the Minister must do is to satisfy the housewife that he is doing what she would want him to do, certainly as far as the increase in our stocks on the trading side is concerned.
I should like the right hon. and gallant Gentleman to be frank with the Committee. All this creates the suspicion that he has got one of two alternatives —or both—in mind. The first, which may surprise some of my hon. Friends, is that he may well have in mind the de-rationing of some of these commodities which are in short supply. If he has that in mind, he must build up a sufficient stockpile to meet the first onrush. But if he does that, he is safe, according to his own lights, because then the increased price will dictate lower consumption.
I should like him to be frank and to say that, at any rate, behind this action of the Ministry there is no intention to build up stocks which might be sufficient to allow de-rationing in circumstances where de-rationing would be most antisocial and most unfair to the people. That is one possible explanation.
Another possibility is that the right hon. and gallant Gentleman is again acting in a niggardly way. He is acting as a shopkeeper knowing what is to happen and waiting to sell these foodstuffs at a higher price. If there are stocks which are sold now with subsidies at the present rate, that will cost the Treasury more money and they will not like it. But if, 511 as has been indicated in so many places, it is the policy of the Government radically to reduce food subsidies not-withstanding what was said on other occasions by the co-ordinating Minister, that is another matter.
A remarkable fact about the Minister and his Parliamentary Secretary has occurred to me. I say this without offence. I tried to work out some rational reason for bringing them together in the positions they now occupy.

§ Mr. Wigg
Politics.

§ Mr. Willey
It is more than politics. Neither of them are Members of the Prime Minister's party. They are not committed by "Britain Strong and Free." They did not subscribe to it. Again, this is an occasion perhaps for them to say what they committed themselves to on the question of subsidies during the Election. If there is to be a radical change of food subsidy policy, then it is in the interests of the shopkeeper to keep goods in the back of the shop and not to sell them until the prices go up. I hope that the right hon. and gallant Gentleman will go at any rate some way towards allaying those two fears this evening.
There are one or two other matters which are a little obscure. The reconciliation statement shows that the amounts now required for the fertiliser subsidy have increased substantially.

§ Mr. F. Harris
Higher prices.

§ Mr. Willey
I am asking the Minister for an explanation. It is more than an increase. There is a note at the bottom of the page explaining that it includes payments not maturing until 1952–53. Why on such a reconciliation statement should we include payments which are not maturing until 1952–53? We are entitled to some explanation. This reconciliation statement might be open to the interpretation that it is rather a gloss, being a straining after making the subsidy appear as though it were running at £410 million when in fact it may be rather below. I mention that so that the question might be cleared up.
Another point which does not arise directly, though it is surprising and calls 512 for an explanation, is that in the reconciliation statement we have the note: Improvement of debtor/creditor position, etc. … £21,600,000. In the original Estimate the item was: Variations in debtors and creditors and it amounted to £1,400,000. That point requires some explanation. I should like to know what "etc." means. It was not there in the original Estimate. Secondly, what is the explanation of this substantial increase compared with the figure shown in the original Estimate?
I should like the Minister generally to make it clear that there has been no resort to any ingenious arithmetic to bolster up the figure of £410 million. I should like him to assure the Committee that we are in fact—as will be revealed later when we get the accounts—running at the £410 million subsidy level. If we are doing that, we must still pay regard to the fact that the Minister was late in introducing certain of his price increases, because those increases will run for the whole of the next financial year.
By the stratagem of delay in bringing them into effect, in short by giving himself a short space of time to recover the moneys required, he was able to lift the prices much higher than he would have been obliged to increase them if he had taken action at an earlier date. That, again, affects the subsidy position as it will appear next year, and it is a matter which does not allay my suspicions about the policy of the right hon. Gentleman on subsidies.
I hope that the Minister will take this opportunity of apologising to the House for misleading us when we discussed the Christmas bonuses, that he will say that the stock position is, as we said from these benches, favourable, and that he will be quite explicit and say that behind the action which is revealed by the Supplementary Estimates, there is no intention of drastically attacking the food subsidies when we reach the next financial year.

§ Mr. F. Harris
The hon. Member for Sunderland, North (Mr F Willey) until only a few months ago had a peculiarly easy position of knowing the answers to many of the points he has levelled at the Minister today. I was critical of the two previous Governments on certain matters of food expenses, and I still want to ask several points of detail, because I feel that many of these Supplementary 513 Estimates are completely wasted information when the figures can be quoted only in monetary values.
We are living in such a topsy-turvy world that many of the monetary values detailed in the Estimates give no true indication of what can possibly be happening in regard to the stocks and the expenditure involved. It would be of inestimable value if the monetary values could have been accompanied by details of tonnages. Had that been done, we should have got a true indication of whether the statements just made by the hon. Member for Sunderland, North, have any bearing on the situation.
The hon. Member asked, for instance, whether there could be an increase in rations or whether bonuses could have been issued at Christmas. The answer to that is closely related to the question whether the monetary values shown in the Estimates represent any real increase in the quantity of stocks. One has to go even further and decide whether, later on, there will be an availability of supplies to enable the rations to be maintained.

§ Mr. Wigg
Surely the hon. Member is not raising that point. Only on 26th October we were assured that as soon as a Conservative Administration came back, there would be no shortages of any kind.

§ Mr. Harris
That is an entirely false statement.

§ Mr. Wigg
Tell it to Woolton.

§ Mr. Harris
I shall tell it to nobody. I simply say quite definitely that that is a false statement.

§ Mr. Wigg
Where are the traders who are out in the world?

§ Mr. Harris
Looking at the details of the various items, one wonders seriously whether estimates by the Civil Service are of much value at all, because the discrepancies which appear eventually are so disturbingly different that one asks whether there is much value ever in seeing estimates of any kind.
The animal feedingstuffs figure is up by some £4 million. That is a good thing, but one wonders how much of that figure represents the price increases which have taken place. Regarding the bacon and ham figures, which are down by some £14 million, I am not at all 514 satisfied of the need to have as low a figure as £40 million as against the original Estimate of £54 million.
It would be a pity if we were to miss opportunities of living up to the Estimates if supplies were available. I know that in East Africa, for instance, plenty of additional supplies of bacon have been available, and I should like my right hon. and gallant Friend's assurance that every advantage has been taken by the Ministry of obtaining all the supplies that can be available. In some respects, I am extremely doubtful.
The same remarks can be applied to eggs and egg products, which are down by the alarming figure of some £12 million. The immediate reaction after looking at the figures is to ask whether we are buying all the supplies of which we could take advantage. In many respects, we could be purchasing more supplies, particularly from the Commonwealth and Colonies, than are detailed in the Supplementary Estimates.

§ Mr. Wigg
Is the hon. Member advocating an extension of bulk purchase, or is he now referring to Lord Woolton's private traders scouring the earth for these supplies?

§ Mr. Harris
We are quite used to the hon. Member's varied interventions. Now he is trying hard to score some sort of point. My concern is that in certain parts of the Commonwealth and Empire we could be taking greater advantage of supplies that are available. I have instanced bacon and ham, about which I am satisfied from personal knowledge that more purchasing could have been undertaken when the previous Government were in power; and more advantage could be taken of these supplies at present.
The Supplementary Estimate of £25,900,000 which we are asked to vote could, I feel, have been lessened a little by further reductions in the item for salaries, which is put at £200,000. There could be much more simplification of method inside the Ministry to allow greater savings to be obtained. A certain amount of joining up of Departments and simplification generally would enable this to be done. I appeal to my right hon. and gallant Friend to satisfy himself that we are taking the fullest possible advantage of economy inside the 515 structure of the Ministry in order to keep down costs as much as possible.

§ Mrs. Jean Mann (Coatbridge and Airdrie)
I do not propose to detain the Committee very long, or even to make a speech, because I cannot make up my mind about Sub-head H. I should like the Minister to enlighten me on two points. In the separate commodities included under Sub-head H is an item of "Milk, including Milk Welfare Schemes," the original Estimate for which was £105 million and the revised Estimate £88,500,000. I am quite unable to say whether this reduction means that we are going to extend the welfare schemes and, therefore, to give more free commodities, or whether the Government are going to abolish or to restrict them.
In regard to tea, a very important item as far as housewives are concerned, I notice that in the original Estimate there was an anticipated credit of £4,200,000 and that in the revised Estimate there is an obvious anticipated deficit of £700,000. I shall be glad if the right hon. Gentleman can throw some light on these two points.

§ The Minister of Food (Major Lloyd George)
I shall try to deal with the points which have been raised by hon. Members. First I should like to say a word about the speech of the hon. Member for Sunderland, North (Mr. F. Willey). He said a good many things which, if I may say so, were a long way from the subject of this Estimate. He asked some very pertinent questions and seemed to imply through most of his speech that there was a very sinister motive behind the Estimate. I can assure him that that is not the case.
For example, the hon. Member wanted to know the explanation for doubling the rate of stocking and seemed rather to suggest that we had all sorts of ideas of derationing things in short supply and asked me to be quite frank as to the reason for so doing. I ask the hon. Member to be quite frank. This doubling of stock was done entirely during the period of the late Government; so he may have a better idea than I have of the reasons.

§ Mr. Willey
Why did the right hon. and gallant Gentleman not follow the 516 assumptions made by the previous Administration, that there would be, for instance, a Christmas bonus?

§ Major Lloyd George
On the first point I thought the hon. Member might enlighten us. I will now go into some of the details of what the increases were. If the hon. Member will look at the details on page 75, he will find that the biggest increases were for oils and fats and for meat and livestock. The reason for the big increase in meat and livestock was, firstly, the increased cost of procurement and, secondly, a fairly substantial loss on the sale of hides, which again had nothing to do with us.

§ Mr. Willey
I said that of course it is difficult to know what is behind the Estimate, and I gave my reasons for drawing certain deductions from the Estimate. It is no good the right hon. and gallant Gentleman referring to meat and livestock when I referred to a specific figure on stocks in the reconciliation statement. Is he telling us that at present we are carrying exceptional stocks of meat? If so, it is difficult to reconcile that statement with the action he has recently taken about the ration.

§ Major Lloyd George
I did not suggest anything of the sort, and naturally I am not going to tell the hon. Member what the stocks are. His whole argument was that the increase in the procurement or in the amount spent indicated that we had bought enormous stocks and were holding them back for some sinister motive. I make two points in reply. The first is that as this expenditure was largely incurred during the time of his Government, perhaps he could give a better explanation. I am giving one explanation, that under Sub-head H the biggest increase is for oils and fats and is due to the increasing of stock which occurred during the time of the late Government. The other increase is in meat and livestock, which is a substantial increase of about £14 million per annum.
The explanation is that there was a loss of a very substantial nature on the sale of hides and skins and there has been an increase in procurement costs. That is the explanation of the whole of that increase. I have explained that on those two biggest items of increase there is no sinister motive at all. The hon. Member asked about the fertiliser subsidy—

§ Mr. Willey
Before the right hon. and gallant Gentleman leaves that matter, would he deal with my main point, that when we compare these Supplementary Estimates with the original Estimates and trace how the figure of £29,500,000 is made up—which is adjusted by savings—it is quite clear that the figure is accounted for not by increased purchases by his Department but by reduced sales?

§ Major Lloyd George
On certain commodities it is obvious that that must be so.

§ Mr. Willey
I am sorry, but we want to get this clear. I am not talking of certain commodities, but of the aggregate. We have to take the aggregate sales and aggregate receipts. When we take the aggregate sales we find they are less than those of the original Estimate. The aggregate receipts are also less, but the difference in the second place is greater than it is in the first, and that gives rise to the need for extra moneys and for an explanation.

§ Major Lloyd George
I have pointed out to the hon. Member what some of the increased items are, and they do not represent any increased stock.
I now come to the point about milk which was raised by the hon. Lady the Member for Coatbridge and Airdrie (Mrs. Mann). The reason for the great drop in milk is that the price was increased and the actual amount of milk available, owing to the short-fall particularly in the first five months of last year, made the sales very much less. That of course has no effect whatever on the welfare schemes, because they are not affected by price fixing. The reason for the figure is that there was a rise of 1d. and at one time there was a very heavy short-fall, especially in the first five months of the year.

§ Mrs. Mann
Does not that rather indicate that that 1d. increase in milk was not justified?

§ Major Lloyd George
No, because it did not have any effect on actual consumption. I am talking of the period before. I think it was raised twice last year, but in the period to which I am referring there was a definite shortage, in the first five months compared with those of the year before. That was due to a very bad winter, heavy rain and bad pasture. That affects this figure in addition 518 to the increase in cost of a 1d. and explains almost completely the difference in the figure.

§ Mr. Wigg
Will the right hon. and gallant Gentleman clear up this matter? I want the point clear in my mind. As I understand it, the purchases are down and the sales are down, but the difference is greater by the amount of the Estimate. What we want is an explanation of the declining sales.

§ Mr. F. Harris
Before replying to that question, would my right hon. and gallant Friend explain this? I do not understand how he means that the increase in the price of milk helps his point. Surely it is the other way round? The increase in the price of milk worsens the difference.

§ Major Lloyd George
No. It makes our liability less. It is obvious that if we increase the price to the consumer it decreases the liability of the Ministry. The real shortage was due to perfectly natural causes in the first five months of last year. There was a comparatively heavy reduction in the first five months and that was the real cause of the shrinking of the product.

§ Mr. Wigg
The right hon. and gallant Gentleman is now talking about one specific item.

§ Major Lloyd George
I am talking about milk. I thought that was the point I was answering.

§ Mr. Foot
Surely, the main point put by my hon. Friend is confirmed by the figure in the reconciliation statement about the net increase in stocks, which is £28 million. Therefore, if the right hon. and gallant Gentleman is attempting to dispose of the point raised by my hon. Friend, should he not deal with that figure as well and explain the meaning of the statement about the net increase of stocks of £28 million? That covers all commodities.

§ Mr. Willey
Before the right hon. and gallant Gentleman replies, may I put an assumption to him, because he said we were carrying some of these stocks at the time of the last Government? Supposing we were carrying some of these stocks for the purpose of giving a Christmas bonus and that bonus was not in fact made, would not the stock position be greater than estimated at the time of the original Estimate?

§ Major Lloyd George
I tried to explain that these vast stocks were mostly acquired up to November last year. Not only do they include things like oils and fats and certain animal feedingstuffs in order to meet the pool requirements, but the Committee must also remember that there are increased prices. It does not necessarily mean a greater quantity. So far as meat is concerned, procurement prices are up. That does not mean that there are more stocks, but when it comes to oils and fats there was a definite increase, and that explains the whole of this position.
The hon. Gentleman went on to ask me about another statement in the reconciliation statement, which was the Improvement of debtor/creditor position, etc.

§ Mr. Wigg
The right hon. and gallant Gentleman really is not clearing up this point to my satisfaction. My hon. Friend has made it clear that there is a decline in sales. Will the Minister explain it? What he apparently cannot get over is the fact that there is a fall in both purchases and sales, but that the net result is that the decrease is greater by the amount of the Estimates.

§ Major Lloyd George
I thought I had made myself perfectly clear.

§ Mr. Wigg
Well, nobody here understands it.

§ Major Lloyd George
It is not my fault; I am doing my best. What I am saying is that these increased figures do not necessarily mean increased stocks. In some cases there are increased prices for lesser quantities. For instance, with regard to meat the cost of procurement and the cost of distribution are up. I could go through them in detail. There are many things where the costs are up which is reflected in this figure.

§ Mr. Wigg
Am I right in assuming that the sum of £28.8 million is wholly reflected in increases in value and not in quantity?

§ Major Lloyd George
Speaking generally, we find that the price is reflected in most of the costs and is not reflected in increased stocks. That is what I want to make perfectly plain.

§ Mr. H. Hynd (Accrington)
I am trying to follow the Minister's statement, but I am in exactly the same difficulty as other hon. Members. Let us take the case of milk. The Minister said a moment ago that (a) the price of milk had gone up and that that accounted for a certain amount of increase, and (b) that there had been a shortage in the supply which presumably meant less milk. I should have thought that to some extent that should have cancelled the increase in the price. If that is not the case I hope the Minister will explain it to us.

§ Major Lloyd George
If less milk is sold then, obviously, the liability of the Ministry is less. With regard to stocks I repeat that, apart from meat, butter and cheese and tea were not so good. That only reinforces the point I am making, that just because the figures are higher it does not necessarily mean that there are larger stocks.

§ Mr. Wigg
Will the Minister deal with meat? Is the stock of meat higher?

§ Major Lloyd George
Slightly, but that is not saying a great deal.
With regard to the item: Improvement of debtor/creditor position, etc. none of this is very simple to explain. It includes many things, the liability for which was incurred in the previous year. There is, for instance, a payment under the meat agreement with Argentina on a reciprocal arrangement. There is some increase in the price review. The big money, this £13 million or so, does not affect the ceiling for the subsidy at all.

§ Mr. Willey
May I thank the right hon. and gallant Gentleman for that explanation, although I am still not satisfied about his previous explanation. However, I do not think we can pursue that matter further. As I say, I am obliged to the right hon. Gentleman for this last explanation. I raised the point because of the considerable increase on the previous Estimate. I thought it was a matter on which we should have an explanation.

§ Major Lloyd George
The hon. Gentleman was perfectly justified in raising it.
Another point was raised by one of my hon. Friends with regard to the discrepancy. When one looks at the figure 521 of £1,697,800,000, I do not think that £29,500,000 is a very serious discrepancy. I think it is something like 1½ per cent., although I have not worked it out. The fertiliser subsidy which was incurred this year will not be paid until next year.
With regard to the point about tea which was raised by the hon. Lady opposite, that was explained by the fact that when tea was handed over to the tea market last year we had stocks of tea at the Ministry. The reduction on the sale of the stocks to the trade is the explanation. My hon. Friend asked whether we were doing everything we could to get supplies of food especially from members of the Commonwealth. We have not been in very long, but I can assume my hon. Friend that in that fairly short period two agreements have been made which we hope will greatly influence the production by members of the Commonwealth of things that we need.
The other point I would make is that the fact that the agreement has been made will not in any way prevent the trade taking over when the time comes and it can be done, the purchase of sugar and meat. That is explicit in the agreement. I think I have covered all the points that have been made. I admit that one or two are extremely complicated, but I have endeavoured to make them as clear as I possibly can, and I hope that the Committee will now agree to the Estimate.