MINISTRY OF FOOD

HC Deb 18 March 1953 vol 513 cc48-81

4.10 p.m.

The Parliamentary Secretary to the Ministry of Food (Dr. Charles Hill)

I think it will be for the convenience of the Committee if I speak briefly and generally in a few words of explanation of this Supplementary Estimate, seeking later, perhaps, to answer any questions which right hon. and hon. Gentlemen may put.

This is an estimate of cash requirements, and it will be appreciated how difficult it is accurately to estimate the cash requirements of a trading Ministry of the size of the Ministry of Food. It will be appreciated that the Ministry are under obligation to purchase the home production of our farms. They have undertaken to accept the export surpluses of a number of countries and a number of commodities, and with the variation in world prices and the negotiation of new or amended agreements the position is apt to change from time to time throughout the year. It will also be appreciated that as cash is paid on the presentation of shipping documents or even earlier, the arrival or non-arrival of individual ships can substantially affect the cash requirements.

The four subheads set out on page 2 of the Estimate—G, H. I.3 and L—reveal that Subhead H, in respect of Trading Services, contains almost the whole of this Supplementary Estimate. The details of Subhead G—Payments for Agency Services—are set out at some length on page 3. The item in respect of Northern Ireland relates to new salary agreements involving an element of retrospective payment. The payments under Subhead G (3) and (7) are in connection with the agency services being undertaken to an increasing extent by the Ministry of Labour and National Service and the Ministry of National Insurance on behalf of the Ministry of Food, and were I permitted to refer to the question of savings I should be able to show a more than corresponding saving under that heading.

But the main item is Subhead H— Trading Services. If the details are examined it will be seen that under the heading of animal feedingstuffs—and I should add that that does not include cereal feedingstuffs—there is a reduction in the anticipated credit, and in four other headings—meat, milk products, oils and fats, and sugar—there is a substantial increase over the revised Estimate. In the case of animal feedingstuffs that increase is due mainly to higher costs of procurement, and in the case of meat, milk products, and oils and fats the increase is due to larger purchases going into stock. I add the words "going into stock" because, clearly, if it were going into immediate consumption there would not be a corresponding need for cash.

In the case of meat, the early estimates of supplies from the southern Dominions, particularly Australia, happily proved to be too modest, and in the main the increase under this item is due to the larger arrivals of meat from Australia. In the case of milk products it is due largely to bigger purchases of the four main products—milk powder, butter, cheese and condensed milk—for stock. In the case of oils and fats, where the price is related to the world price, a higher price has resulted in speedier arrivals and larger purchases for stock, and so finds reflection in the need for cash.

On page 6 there is a reconciliation of the food subsidy position with that of cash requirements. I should make it clear that there is a difference between the two. For example, food purchased and put into stock involves cash, but not, at that moment, a subsidy, and food taken from stock into consumption involves subsidy, but not, at that moment, cash. Furthermore, as will be seen in the middle of page 6, there are two non-cash items—Interest on Exchequer Advances and Services provided by other Departments—which, although they come into the food subsidy total, do not involve a transfer of cash.

The hon. Member for Sunderland, North (Mr. Willey) played a prominent part in securing the addition of this reconciliation. I believe it began in the middle of 1950, following recommendations contained in the Thirteenth Report of the Select Committee on Estimates. Completing the subsidy story, but playing no part in the cash requirements, are the agricultural subsidies which are listed in the lower half of page 6.

Page 5 contains the Trading Estimate. That is an essential part of the reconciliation statement, for if the reconciliation statement merely stated baldly that the total subsidies administered by the Ministry of Food amounted to £297.4 million the obvious question would arise how that figure had been calculated.

That is the story in brief, and perhaps the Committee would wish me to leave my preliminary statement there and seek to catch your eye subsequently, Sir Charles, to answer any questions raised in the course of the debate.

4.18 p.m.

Mr. Hugh Gaitskell (Leeds, South)

The Supplementary Estimate for which we are now asked involves a sum of £21 million, but it is only one of a fairly large batch of Supplementaries totalling, in all, some £80 million, and that is not all that Parliament has been asked for this year. Indeed, the Supplementary Estimates, which are set out in the Paper that we are considering reach the very high total of £300 million gross and £200 million net.

We cannot even let it rest there. In this year we are faced with this very large total of Supplementary Estimates against a background of promises and pledges for the strictest economy and slashing cuts in Government expenditure. I think it was the right hon. Member for Chip-penham (Mr. Eccles) who, before the Election, spoke about £700 million coming off, but when it came to the Budget all that disappeared and the Chancellor came forward, rather more modestly but, nevertheless, still proudly, with a saving of £10 million on normal civil expenditure. But now, even against that saving we have Supplementary Estimates totalling £200 million, and I am bound to ask at this point, what do those claims look like in the light of this "rake's progress "?

We recognise that Supplementary Estimates are often inevitable, and, indeed, necessary, and I concede at once that some of those put forward this year fall into that category. But since not only more expenditure is involved, but more than was expected, I think the Committee would agree that special reasons for scrutiny do exist. I have often thought that in the House generally we spend far too little time studying the details of expenditure in proportion to the amount of time spent on details of tax legislation. But this afternoon, at any rate, we have an opportunity to get down to detail.

In the case of the Ministry of Food on whose behalf this Vote is proposed, the whole of the Supplementary Estimate is related in some way to the policy on subsidies. I should make it plain at once that we opposed the cuts in subsidies introduced in the Budget. We thought them unfair and dangerous and we consider we were right. Therefore, in principle we cannot object to any slowing down of the policy of cutting food subsidies which may be involved in this Estimate.

I shall ask the Parliamentary Secretary one or two further questions about that in a moment, but so far as the Supplementary Estimate is simply a reflection of a postponement of the cut in subsidies we would not object to it. On the contrary, we hope it indicates some fresh thinking on the part of the Government; that perhaps they have, albeit belatedly, seen some of the dangers to which we drew attention earlier on.

Mr. Gerald Nabarro (Kidderminster)

Wishful thinking.

Mr. Gaitskell

It may be wishful thinking—we often have wishful thinking about the Government—but we are still hopeful.

It certainly is our duty to see whether this Supplementary Estimate is simply a reflection of the postponement of subsidy cuts or whether there is more in it, and that is the question I wish to discuss now, I think the Parliamentary Secretary would agree it is a very complex Estimate. Taken as a whole it is not easy for anyone without a Departmental brief to follow the intricacies of pages 5 and 6. Although the hon. Gentleman was good enough to give us a broad picture of what was involved, there are a number of difficult details.

The original Estimate made for the Ministry of Food before the Budget last year was £375 million, of which £360 million was for trading services. We then had the Budget announcement to save £100 million in the first year; and following that a revised Estimate, produced on 27th June, where it was indicated that the subsidies would now be £309 million against the £410 million in the original Estimate. That was where the saving of £100 million was to come in. The actual Vote in that revised Estimate was for £254 million, indicating a saving of £121 million and not £100 million against the original Estimate.

As I understood, the reason for that difference was partly the adjustment of the stock position and the creditor-debtor position which accounted for half, or £10 million of the difference. The other £10 million seemed to have been produced or secured by the Treasury by introducing more agricultural food subsidies under the food subsidy ceiling. That is a question I wish to return to under the present Estimate.

Now we have this Estimate and we are asked for £21 million. In effect, this is a gross figure of £23 million for a higher trading services deficit against a saving of £2 million. It would be out of order if I discussed the details of this saving. I only mention, in passing, that the large item seems to be the ending of a payment to the British Sugar Corporation of £1 million. That, presumably, reflects the higher price which consumers now pay for sugar, and which, therefore, makes it unnecessary to continue the subsidy.

The real question is why was there an increased deficit of £23 million on trading services? Was it, as seemed to be implied by the Parliamentary Secretary, because of a greater volume of sales and supplies? We are all aware that with a subsidised commodity if the total available which is bought and sold by the Ministry increases, and no other changes are made, the total burden of subsidy increases accordingly. So far as I can see from the trading estimates, there does not appear to be evidence of that kind, taking the group as a whole.

If the Committee will turn to page 5, they will see the cost of purchases on the one side and the sales on the other. If one contrasts the figures given here with the figures in the previous revised Estimate, I believe I am right in saying that on the income side there has been a decline of £52 million in the figure for sales in the United Kingdom. On the other hand, there has been an increase of £17 million in the figure for sales for delivery abroad, leaving a net reduction on the income side of £35 million.

I would ask the Parliamentary Secretary how that is to be explained. How is it that in this year, when we were all supposed to be enjoying abundant additional supplies of food, the total sales of the Ministry appeared to be down by £50 million? It certainly has not been because of any reduction in prices. We are all agreed about the large increases which have taken place.

In passing, I would say that it is very difficult to reconcile the trading estimates set out here with the actual Vote under trading services. That is set out on page 3 and shows a deficit of £261 million. But there is nowhere in the trading estimates any such figure, and if the Parliamentary Secretary could explain the exact way in which it comes in I should be grateful.

I suggest in future there should be an explanation put forward regularly of the trading estimates in relation to the actual Vote required under Item H. Incidentally, so far as I can see it is also impossible to reconcile the figures given under Item H for purchases, freight, storage, etc. on the one side and receipts from sales on the other—the figures being £1,659 million and £1,398 million—with the totally different figure given for expenditure and income in the trading estimates. Again, if the Parliamentary Secretary could explain that we should be grateful.

It makes it extremely difficult for us to work out—and we did not get much help from the Parliamentary Secretary —exactly why £23 million more is required. I tried to calculate it and this is my conclusion, which may be right or wrong. It seems that while receipts were down by £35 million, payments were down by £22 million; that is to say, there was a need accordingly for another £13 million of cash. I do not doubt that is part of the answer.

Secondly, if we look at the trading estimates we find, under the subheads of distribution expenses, subsidies paid direct to producers, and trading deficiencies, an increase of £15 million as compared with the previous Estimate. The £101,900,000 given as the figure for distribution expenses is £5 million above the previous figure. The £80,900,000 for subsidies paid direct to producers is £8 million above the previous figure, and that for trading deficiencies is £2 million above, making £15 million in all. If that is so, it is obviously another reason why additional money is required. Together, they make up £28 million, which is more than the Estimate.

My surmise as to this discrepancy is that the credit-debit position has not, in fact, improved as much as was expected. I surmise that it was expected that there would be an improvement of £7 million —in other words, we were to pay bills faster than we were incurring liabilities— and the credit-debit position has improved by only £2 million. I take that figure not from the Trading Estimate, where it is not given at all, but from the reconciliation statement compared with the previous one. The Committee will agree that this is a most complex matter which could do with a great deal of simplification.

Mr. Nabarro

We need a balance sheet.

Mr. Gaitskell

It is a balance sheet—

Mr. Nabarro

What I said was that we need a balance sheet. It is impossible to understand the statement in its present form.

Mr. Gaitskell

I agree. It is a sort of balance sheet, but it is not a proper one. Is the explanation I have given about why the £23 million is wanted correct?

The Parliamentary Secretary rightly pointed out the difference between the Vote and the subsidy. It is a point which few people understand. The reconciliation statement certainly helps us to understand it. But as far as I can see it is really no more than a coincidence that the increase in the subsidy of about £22,500,000 is almost exactly the same as the Vote. The figure is £331,600,000 compared with £308,800,000. I repeat that that is fortuitous.

Why has the subsidy increased above the earlier Estimate? It is possible to see by looking at the reconciliation statement. We begin with £275 million which is the new total cash estimate. We then make the correction mentioned by the Parliamentary Secretary for any reduction or increase in stocks and any change in the debtor-creditor position. In this case the change as compared with the previous Estimate seems to indicate that £5 million less is being provided by drawing down stocks.

Again, I ask the Parliamentary Secretary whether I am correct. If so, we get, on that account, from £275 million to roughly £280 million. In other words, we have an increase of £5 million this time whereas previously the increase was substantially greater.

Then we come to these rather strange "Non-cash items." The first that has to be added is interest on Exchequer advances of £12,500,000. The next is services provided by other Departments. There is nothing much here by way of direct assistance to consumers. They are what might be called book-keeping items. We have to add them. And then we come to the agricultural subsidies. They fall into a different category not only because they are administered by another Department, but because their connection with the consumer is certainly not as close as those of the Ministry of Food. The last two items—the non-cash group and the agricultural subsidies— have increased substantially since the last Estimate.

According to my arithmetic, of this £22 million increase in the subsidies, no less than £7,500,000 is due to increases in agricultural, but not food, subsidies and in payments to the Exchequer. I pause for a moment on that last point. It is an interesting fact that during the past year the amounts which the Ministry of Food have had to pay to the Treasury on account of interest on Exchequer advances have risen from £9,500,000 in the Supplementary Estimate of exactly a year ago, to £10,900,000 in the original Estimate for this year, then to £11,400,000 in the revised Estimate for this year and now to £12,500,000 when this Supplementary Estimate is taken into account. That is an astounding increase of 33 per cent. in a year.

We ought to know why that has taken place. I think that it is right to say that it is not because there have been any substantial change in the total amount of Exchequer advances outstanding. It has, I suppose, been due to the higher rate of interest which the Ministry of Food has to pay. Therefore, for what is really a pure matter of internal book-keeping in effect the consumers have to pay another £3 million in higher prices. It is wonderful what the ramifications of a change in the Bank rate are when one really looks into them.

Then there is the other item of services provided by other Departments. Again, there has been a remarkable increase this year. The figure was £3,100,000 in the Estimate of a year ago. It was £3,500,000 in the original Estimate for this year, £4,400,000 in the revised Estimate and now it is up to £5 million. Can the Parliamentary Secretary say why the Ministry have to pay so much more—about 60 per cent. more—to other Departments for their services?

Then I come to the question of agricultural subsidies. It is difficult to say which agricultural subsidies should be included under the food subsidy ceiling. There have always been some such subsidies included, but I cannot help being a little worried about the rate at which this policy is progressing. In the Supplementary Estimate for 1951–52 the figure for agricultural subsidies was £18 million. It was £21 million in the main Estimate for this year. By June in the revised Estimate it was £28 million, and now it is £34 million.

At best, one can only say that this gives a decidedly misleading impression. When the Government decide to increase or to grant a subsidy to agriculture it all looks very nice and handsome, although to find the money they quietly filch it away from the consumer by pushing the cost under the Ministry of Food subsidy ceiling. That is precisely what has happened. I should like to know whether this process is to continue and how much the poor Ministry of Food will have left for themselves after all this has happened. I dare say that there may be come feeling inside the Ministry of Food on this point.

I should like to ask the Parliamentary Secretary one other question, which puzzles me a good deal. On Monday this week, I asked the Minister of Food a Question about the way in which the subsidy saving was made during the financial year 1952–53, and he was good enough to give, in reply, a table of figures in the OFFICIAL REPORT. I am sure that the Parliamentary Secretary will be familiar with that reply from his own Department, but the queer thing about it is this. I understand from this reconciliation statement and from everything else that has been said that the actual saving in food subsidies this year was £80 million—£100 million less £20 million.

In fact, if we take the figure of £331 million at the bottom of the column and compare it with £410 million, the difference is £80 million. Yet the total amount which is given as saved on the list of eight commodities which the Minister gives is not £80 million but £112 million. What exactly has happened? Has the consumer had to find £112 million, and, if so, why is it not in the statement? I am sure that there must be some simple explanation, which the Parliamentary Secretary may be able to give, but he will agree that it is very confusing when we are unable to find out exactly how much the consumer has paid.

I come finally to what is, after all, the major question. Why was not the original decision of the Chancellor carried out? We opposed that decision, and we were not in favour of it, but that is really no excuse for the Government to say, "Well, we are not going to carry it out," unless they really did have second thoughts about it. If they have not carried out that decision—and I have already said that there is some obscurity about it—I should like to know on which commodities did they hesitate. Was it that they did not like to advance prices sufficiently early? That would be one explanation why the saving was only £80 million instead of £100 million. Was it that there were external factors, such as the price of Argentine meat being a good deal higher than they expected originally? Nothing that the Parliamentary Secretary has said gives us any clue as to why the price increases were not made, and I should like him to deal with that point when he replies to the debate.

Lastly, I should like to ask what is the significance of this hesitation for the future? Have all the increases now been made? If one is to take this table, they have not only all been made, but more than all been made. Are we to presume, as a result of this Estimate, that any change in policy is being introduced? What is to be the saving to be achieved next year on the ending of the subsidies on eggs and feedingstuffs? Are we to expect automatically now, and quite apart from any budgetary decision, that there will be further price increases and further reductions in subsidies?

Perhaps I might be allowed to mention the Vote on Account for the Ministry of Food, because there is a very substantial reduction of £165 million. One would expect a reduction, as compared with the total for this year, including the Supplementary Estimate of £80 million, because if, in fact, only £80 million was saved this year, we know that a full year's saving is estimated at £160 million. Therefore, if £80 million certainly was the extent of the saving, what has happened to the other £85 million? Is this the result of some new policy which the Government have introduced? Is it connected with the ending of the subsidies on eggs and feedingstuffs, or is it simply that they are going to run down stocks a great deal?

I hope that the Parliamentary Secretary will be able to relieve our anxieties on this point, because there are many people in the country who are extremely worried about the way in which food prices have gone up. I believe that the increase in food prices last year has been a major stimulus in the wages-prices spiral, and when hon. Gentlemen opposite complain about the rise in the price of coal I would say to them that it is no good putting down Motions attacking the Coal Board and the miners. They ought to put down Motions attacking the Chancellor of the Exchequer, who is the real culprit in this instance.

Mr. Nabarro

How does the right hon. Gentleman reconcile this wild statement with the fact that, over the last few months, the cost-of-living index remained quite stable?

Mr. Gaitskell

Apart from the fact that it has gone up today, the fact that price increases took place in the early months—and that is another element in the mystery as to why the total amount of the subsidy cut was not made—does not make it any less necessary that coal miners and other workers should make up in wages for the rises in prices, and that is a major cause of the increase in the price of coal.

I was not intending to pursue that point further, however, because I feel, Sir Charles, that you already have your eye on me. However, if the Members of the Fuel and Power Group of the party opposite really want to tackle this problem seriously, they had better look at their own Front Bench and say some hard things to them instead of to the miners.

4.45 p.m.

Mr. Gerald Nabarro (Kidderminster)

I am glad to be allowed to follow the right hon. Gentleman the Member for Leeds, South (Mr. Gaitskell), who dealt with these Estimates in his customary thorough and courteous fashion. I feel confident, however, that I shall immediately incur your displeasure, Sir Charles, if I become involved in a dissertation on the price of coal or even upon its remote relationship to these Estimates.

At one point in the speech of the right hon. Gentleman, I found myself in considerable sympathy and agreement with him.

Mr. W. R. Williams (Droylsden)

He must be wrong.

Mr. Nabarro

On a matter of a strictly non-political character, but one which involves the technicalities of accounting the right hon. Gentleman, as an ex-Chancellor of the Exchequer, ought to be able to read a balance sheet as well as I can, but the right hon. Gentleman complained, as we often do, about the dearth of information brought to the House when Supplementary Estimates, or, indeed, Estimates of any kind, are presented for consideration.

It is extremely difficult to reconcile the figures given on page 3 of the Estimates with the precise reasons for the increases on the original Estimate from £238,800,000 to £261,500,000, in the absence of any statement of debtors and creditors, in the absence of a profit and loss account provided in some detail, and also in the absence of a trading account. Therefore, any comments that are made on this rather simplified form of accounts now presented to the Committee must, in my view, be very largely conjectural.

However, my sympathy and agreement with the right hon. Gentleman ends there. He complains of the increases in the prices of food, which, in my view, have been very largely offset by other benefits that have been granted, but, of course, the saving is just beginning to be reflected in many of the Estimates that we are considering today, and they will be reflected much more in the Estimates for the forthcoming year, where the economy amounts to a sum of no less than £165 million. In the course of some 16 months of office, it is unreasonable to expect that the Conservative Party could have effected any greater economy in public expenditure, and particularly by the Ministry of Food, than they, have done so far.

I had occasion to say in a supplementary question not very long ago that it was the duty of the Minister of Food and his Parliamentary Secretary—and I think this is worth repeating today—to expurgate control, eliminate their Department and extinguish themselves at the earliest possible moment, and in expressing that view I believe that I take the great majority of public opinion with me.

The right hon. Gentleman referred to a matter in which I have been deeply interested for some time, namely, the agricultural subsidies, which are shown on page 6. I hope it will not be out of order to discuss the large item of £6.3 million shown under the ploughing grants near the foot of the page. It is extremely difficult to say where the division comes between an agricultural subsidy and a food subsidy, for they are clearly linked one to the other, in view of the fact that this ploughing grant subsidy is primarily for the purpose of furnishing a greater volume of feedingstuffs.

That subsidy of £6.3 million is one of the finest pieces of business this Government have done. In May, 1952, a Bill was brought to the House to provide a ploughing-up subsidy. We do not yet know its full results, but we know that one result has been that 400,000 to 500,000 tons of additional feedingstuffs have been grown at home which otherwise would have had to be imported at an average price of nearly £40 a ton.

Mr. Frederick Willey (Sunderland, North)

I am trying to follow this argument. Does the hon. Gentleman suggest that if a food subsidy is cut and prices to the housewife go up, that is an economy, whereas if an agricultural subsidy is doubled, so that the money paid to the farmers is doubled, that is good business?

Mr. Nabarro

If the hon. Gentleman will allow me to finish this passage of my speech I think I shall make the point a little clearer to him.

I was endeavouring to demonstrate that, as a result of this wise Measure, which passed through the House last May, we have derived the benefit of several hundred thousand tons of additional feedingstuffs which otherwise would have been imported at nearly £40 a ton. The saving in foreign exchange is approximately £20 million. What we have done by paying this subsidy of £6.3 million in this country is to save approximately £20 million of foreign exchange which is a direct contribution to our balance of payments.

That is a very wide Measure. The right hon. Member for Belper (Mr. G. Brown) called it a pump-priming Measure, but it has already demonstrated its great value. I think no one in the Committee would cavil at this estimate of £6.3 million or any other purely internal, insulated, United Kingdom payments which have the result, as a corollary, of saving foreign exchange upon essential imports.

May I pass to a matter in the Estimates, which, I think, is of great importance to millions of housewives in the country—the question of sugar. On page 3, as the third item from the bottom of the table, we see that the original estimate for sugar was £4,900,000 and the revised estimate was £9,300,000—in other words, an increase of £,4,400,000. I want to ask the Parliamentary Secretary what this increase is for. Is it on account of an increased price of imported sugar, or may it perhaps be on account of an increase in the volume of imports of sugar? Can it be read from the revised Estimate that increased supplies may lead to the derationing of sugar at a fairly early date?

This is the most important single item to the housewife today—how to get rid of sugar rationing. It is also a major consideration to hon. Members who represent fruit-growing constituencies, of which mine is one of the most famous.

Captain J. A. L. Duncan (South Angus)

And notorious.

Mr. Nabarro

I said that it was one of the most famous.

In the last few years we have suffered tens of thousands of tons of soft fruit in the Vale of Evesham and Western Worcestershire going to waste largely because the housewives have not had enough sugar for bottling and jamming. It is true that the Government are drawing from the Commonwealth, as they ought, every ton of sugar which can be bought. This year the figure will be of the order of 1,800,000 tons. We are using our home beet crop to the extent of 625,000 tons of sugar and we are buying from dollar sources—Porto Rico, San Domingo and Cuba—something of the order of 425,000 tons, as well as additional supplies from some Eastern European sources. But still, evidently, we have not enough to deration sugar in Britain in view of our Commonwealth agreement commitments. Does the Estimate mean that we have found some more sugar or that the price is going up? Can my hon. Friend smile with a little benevolence on the housewives and give them an assurance that this increased estimate may result in the ending of sugar rationing at a fairly early date?

There is a rather surprising point on page 2 of the Estimates—a saving on payments to the British Sugar Corporation of £1 million. Hon. Members will find it on page 2, Item L, Subhead E. We derive from beet sugar production in this country 625,000 tons of sugar annually, a monopoly in the production and processing of which is in the hands of the British Sugar Corporation, which is largely a Government sponsored concern. There have been many complaints in the House about the restrictions on capital investment for new sugar beet factories. May I be told whether there is any carefully thought out policy for increasing beet sugar production or whether we are only relying on an increase in the next few years from Commonwealth sources of supply?

Why have we reduced the amount to the British Sugar Corporation by £1 million? Does it mean that there is an anticipated decline in home-produced beet sugar or that we are placing more reliance on Commonwealth imports or that we are devoting more dollar resources to the purchase of sugar abroad? Or what is the Government's policy about sugar, and about stimulating or otherwise the production of home-grown beet?

Finally, for many years these supplementary Estimates have been brought to the House on the account of the Ministry of Food. We shall unavoidably have one more, in 1954, but I hope it is the last. I want to see the Government get out of State trading at the earliest possible moment and restore every one of these services to private traders. [Interruption.] It is no good the right hon. Member for Battersea, North (Mr. Jay) muttering. Why are the Government mucking about with potato trading? It is in the Estimates. The Government have got out of the banana business. Why should they not get out of the potato business and all other forms of food business mentioned in the Estimates?

Mr. R. E. Winterbottom (Sheffield, Brightside)

Why can they not get out of things altogether?

Mr. Nabarro

What I mean by getting out of State business and trading is restoring to professional business men the purchase and sale of the various commodities and foodstuffs.

I hope that this is the last of these supplementary Estimates, except only for the year 1954, when there will be a residual sum to be cleared up, and that in the remaining two years of the life of this Government, from 1954 to 1956, we shall not have to consider these dismal documents, which ought to be considered instead, in their proper place—in the warehouses and the business centres of private enterprise.

5.0 p.m.

Mr. Frederick Willey (Sunderland, North)

The hon. Member for Kidderminster (Mr. Nabarro) will not be surprised if I do not follow him in what he has just said. I will deal with the Supplementary Estimate which is before us. In relation to the subject of this debate I have been poacher, game-keeper, and poacher again.

Mr. Nabarro

Especially poacher.

Mr. Willey

The Parliamentary Secretary has kindly referred to the part that I played in securing a reconciliation statement. That, at any rate, has put in order any discussion on the food subsidies.

As poacher, I find both the Trading Estimate and the reconciliation statement difficult documents to deal with without a Departmental brief, because it is difficult to make sure that one is making the proper deduction. Before I come to Subhead H, dealing with trading services, I should like to mention two of the other subheads. As there is a request for moneys to wind up the Commonwealth Food Gifts service, I think that the Committee would wish to take the opportunity of thanking all the people concerned at home and in the Dominions for the magnificent work which they did.

I remember that when I was Parliamentary Secretary to the Ministry of Food I read scores of letters from children in my own constituency thanking the Australians for the food gifts which they had provided. Apart from the value of the gifts themselves, this scheme was an excellent way of creating good feeling and fellowship throughout the Dominions. If it had been known that we were going to have a Conservative Government, I think that the preliminary steps on which I was engaged in winding up this fund would have been delayed, because we have had less food since.

Mr. Nabarro

Nonsense.

Mr. Willey

So the Parliamentary Secretary has informed me, and the hon. Member for Kidderminster will see the precise figures in HANSARD.

I should not have thought that the sum of £100,000 for the procurement of emergency food stocks mentioned in the Estimate could have provided very much by way of reserve for emergency feeding. The Parliamentary Secretary should tell us why we are making this provision and why it is so small. It is rather odd that it should be made at all. I do not wish to deal with savings, but, in fact, at the same time, there are substantial savings made under "Emergency Services," and, I am sorry to see a saving made at the expense of research. If it should be in order, I should like the Parliamentary Secretary to tell the Committee, if he will, whether any advantage was taken of these emergency services during the recent flood disaster because, unfortunate as was that flood, it provided a test for these services which have been built up.

To return to Subhead H, Trading Services (Net), the Appendix to the Trading Estimate, 1952–53, and the reconciliation statement, I note in the Trading Estimate a rather interesting figure for administrative expenditure. It is £700,000 more than was estimated under the revised Etimate in June. What does that mean? Is the Parliamentary Secretary going to disappoint the hon. Member for Louth (Mr. Osborne)? Has he not been energetic enough in cutting administrative expenditure or is the simple explanation that the Ministry of Food have not carried out some decontrol which they intended to carry out in June? That, of course, would have provided for a saving of about this nature. I am perhaps being a little optimistic, but I should like the Parliamentary Secretary to tell the Committee what it was that they were going to decontrol and did not proceed to decontrol, if that be the case.

We should also have an explanation of the figure in the reconciliation statement of the reduction of creditors from £7,200,000 as estimated in June to £3,300,000 in the present Estimate. I will say no more about the ploughing grants and the calf subsidy, except that there will be a more appropriate occasion to discuss them later in the day if we reach those subjects in time. But it is surely a matter that seriously concerns the Minister and the Parliamentary Secretary that the proportion of producer subsidies within the food subsidies is growing at such a rate.

On food subsidies generally, I would not be prepared to say that the Ministry of Food have not gone as far as they intended to go. The figures about the present position are misleading. I gathered from the Minister the other day that the Ministry of Food have done better than they expected to do. In fact, at this moment the subsidies are running at a rate of £220 million a year, whereas the Ministry's objective had been £250 million. That means, of course, that the housewife has suffered correspondingly more. I cannot understand the figures which were given in reply to my right hon. Friend the Member for Leeds, South (Mr. Gaitskell). Perhaps the Parliamentary Secretary will explain why the figure fo £112 million is given and why subsidies on bread and flour are excluded from these figures.

As the Parliamentary Secretary will remember, we had a debate in the House and we assumed that the £48 million saving in the food subsidy on bread and flour was one of the results of the Budget cuts in the food subsidies. Looking ahead, the Government have already announced considerable reductions—a reduction of £22 million on eggs, £30 million on animal feedingstuffs and probably £70 million on cereals—a very substantial cut in the remaining food subsidies.

Subhead H, which the Parliamentary Secretary very properly said is a cash statement, does not give figures at all, or any real indication of what the figures of food subsidies should be. I am much obliged to the Parliamentary Secretary for opening the debate and he has given a general explanation which I rather expected. He said that if one broke down the figures it would be found that a larger proportion of the purchases have gone to stock than was estimated in June. He said that the explanation in the case of oils and fats was that increased prices were reflected in the figures. I am rather surprised at that. I should have expected that the fall in world prices of oils and fats would have been reflected in the Estimate.

That leads me to a similar conclusion to which I came when I spoke on the Supplementary Estimates about 12 months ago. Why has this step been taken? Why, particularly, has it been taken in the case of oils and fats? Surely it is because the Minister is preparing the stock position for the early derationing of oils and fats. This is bad housekeeping. The housewife wants the oils and fats now, and, incidentally, she would like them at present prices and before the price increases which precede decontrol. That is really the key to the present Supplementary Estimate.

I repeat what I said last year. The reason for this request for additional moneys is not what one would expect from a commercial Department. The Ministry are not asking, by way of Supplementary Estimate, for extra money because they bought more, or because they bought what they expected to buy, but it turned out to cost more. As the Parliamentary Secretary indicated when he dealt with the breakdown of the figures, the reason is that they have sold less. The hon. Member for Kidderminster would be surprised, but it is a fact that we have eaten less in 1952 than in 1951 however we judge it, whether by calories or animal protein—in which the Parliamentary Secretary is specially interested —or by the amount of the rations.

Mr. Cyril Osborne (Louth)

It may well be that the country is taking the advice of the late Sir Stafford Cripps, when he said that the nation as a whole eats too much.

Mr. Willey

All these statements are made relative to the situation then obtaining. I did not consider—certainly the hon. Gentleman did not tell the electorate so—that the diet we had in 1951 was more than adequate. However, it is less now, although the hon. Gentleman and his friend told my constituents it would be more.

Mr. Osborne

I was not saying what we had said, but was quoting a leader for whom the hon. Gentleman had veneration.

Mr. Willey

I cannot deal with a quotation thrown in out of context, although I should be glad to deal with the matter on a more appropriate occasion.

I was coming to the figures in the cash statement to demonstrate how they proved the case that I have been making. The purchases in the Supplementary Estimate are for £1,659,700,000, but in the revised Estimate, the preceding Estimate which was laid as late as June, they were far more, it then being anticipated that we should purchase £1,741,500,000 worth of food. In other words, we have bought £81,800,000 worth less food than we expected in June to buy.

That is the first factor, but it is not the factor which explains the Supplementary Estimate. Incidentally, it rather gives the lie to what the Minister said on the wireless. What he then said was that we have tried over the past 15 months bit by bit to increase the amount of food you get. But it is nothing of the sort. He has deliberately not bought foodstuffs. If he were here he would perhaps explain this as a matter of policy. However, he has deliberately not bought what it was anticipated in June that he would buy.

However, when we go to the other side for the cash statement, to the receipts from sales, we get the key to the present request for an additional £22 million. These are sales to the housewife; the Ministry's business is to buy food and sell it to the housewife. We find that the sales have been £1,398,200,000, but as recently as June the Minister, in his revised Estimate, had expected the sales would be £1,502,700,000, or £104,400,000 more. The Parliamentary Secretary should explain to the Committee why there has been this dramatic change. It is the difference between the decrease of £104 million in sales and the decrease of £81 million in purchases which explains why, according to the cash statement, he must come to the House of Commons and ask for £22,700,000. Why has he given the housewife £100 million less food than he anticipated in June?

A footnote to the cash statement says that the figures in the breakdown of the £22,700,000 also reflect changes in the level of stocks. Here is something which is very interesting, and it is very largely from this that I draw my picture of the food position which will obtain this year. The Committee will remember that we discussed the question of Christmas bonuses and stocks, and we were told that there were no stocks. But when we had the Supplementary Estimate 12 months ago what did we find? We found that the Ministry of Food, under the Labour Government had, in fact, doubled the large commercial stocks; they had increased the stocks from the estimated £14 million to £28 million.

What has happened this year? When he was confronted with his own Supplementary Estimate, the Minister had to describe the stocks that he was accumulating as "vast stocks" and had to explain to the House that they were accumulated by the Labour Government. One of the reasons for the increase was that we did not get the Christmas bonuses, so they remained in stock. But shortly afterwards, when we got the revised Estimate, in June, we found that out of the £28 million the Minister was to take £18½ million for current consumption this year. It was rather shabby to criticise the Labour Government when he was going to help himself out this year by using stocks which the Labour Government had provided.

When we come to the Supplementary Estimate, we find, as my right hon. Friend said, that the Ministry of Food have changed the decision about stocks. As I have explained, they have allowed less food to the housewife, but, instead of taking £18½ million worth of food out of stock, they have, according to this Supplementary Estimate, taken only £7,700,000. That clearly shows that between June and the date of the Supplementary Estimate the Ministry of Food have taken a much gloomier view of the food prospects for this year and while they had jauntily proposed to take out £18½ million from stocks, they have altered their decision taken in June and taken only £7,700,000. That is, in itself, a reflection upon what the Ministry of Food estimated to have been the food prospects.

It also shows what I argued on the Supplementary Estimate last year. What the Ministry of Food are doing is, first of all, under compulsion from the Treasury, saving some money, although very little, by holding back stocks against price increases. They are saying, as the hon. Member for Kidderminster would say if he were here, "From a business point of view, as we know we are putting up the prices, we will hold these commodities in stocks until the prices go up." The second reason, which is so obvious in the case of some of the commodities which the Ministry are stocking up, is that they are anticipating decontrol and they are building up the amount of supplies which, against the price increases, will allow the Ministry to overcome the first onrush of decontrol.

So, generally, this is a most depressing Estimate. It indicates that the Ministry now take the view that, although we had less food in 1952 than we had in 1951, we shall have less food in 1953 than we had in 1952. It shows that the Ministry are committed to the policy of price increase and decontrol; in other words, deliberately to reduce demand and then to decontrol. Finally, it shows that the Ministry are committed to the Conservative policy of the '30s, which is deliberately to restrict imports of food.

I see the hon. Member fox Louth shaking his head, but we have had disturbing statements in the past few weeks. The Dutch and their Minister of Agriculture have been complaining that they cannot get the guarantees they want. The Danes and also the New Zealanders have been complaining. What have they been complaining about? They have been complaining that the Labour Government's policy of taking all the food that they could produce has now gone. We now have a Government which is wedded to restriction, and, within the field of restricted imports, by steep price increases they are ensuring that the few are not to be prejudiced.

I rather suspect that I have gone a little wide of the Supplementary Estimate, but it is such a gloomy document and one feels that if one missed the opportunity some hon. Members might not appreciate just how gloomy it really is.

5.19 p.m.

Dr. Hill

The right hon. Member for Leeds, South (Mr. Gaitskell) struck in me a sympathetic note when he referred to the complexity of this Estimate, a complexity which he will agree arises in considerable degree from the truncated form of the Trading Estimate. He did not challenge the Trading Estimate or its form on the grounds of its limited character, though from time to time he suggested that in certain respects it might well be in fuller form. After all, the Trading Estimate is at the very basis of the calculations which appear before and after it in this Supplementary Estimate. The Trading Estimate, which is necessarily made in provisional form month by month, culminates in the publication of the trading accounts which are certified by the Comptroller and Auditor General and scrutinised by the Public Accounts Committee.

As a trading concern, it is of course appropriate that we should publish the fullest trading accounts after the end of our financial year. These accounts are published, and they go into every possible detail. Our difficulty is that it is wholly inappropriate that a trading Ministry should expose in a trading estimate what it expects to buy, the price it expects to pay, and its debtor-creditor position. All such details, while appropriate in the final accounts, are inappropriate, indeed dangerous, if published in the Trading Estimate. I recognise that the right hon. Gentleman did not make that point but I want to defend the somewhat scanty information which is found in the Trading Estimate

This Trading Estimate found its way into the published Estimates following the decision to include the reconciliation of food subsidies with cash requirements, for it supplies a calculation which is necessary to understand the reconciliation. In order to meet the points made, it may be helpful to look at some of the items included in the Trading Estimate. Of course the cost of purchases has gone down, as has the income. Last year there was a deliberate cut, necessarily undertaken, in the importation of food to this country, and that finds expression in the trading accounts of the Ministry of Food. Indeed, if it had not found its place there we should not have been playing our part.

Mr. Gaitskell

It is only the change since June that we are concerned about.

Dr. Hill

I will come to the change since June. As the right hon. Gentleman knows, many of the cuts which a Government determines to make in the field of imports cannot find expression in actual reduction of purchases and reduction of expenditure until some months after the original decision to make those cuts has been taken. It was a quite general experience during last year that a cut which was determined upon at the beginning of the year came into operation some months later; and it was so with the trading accounts and Estimates of the Ministry of Food.

The Trading Estimate shows the cost of purchases in the top line and then the stock position, distribution expenses and subsidies paid to producers and others. These last, incidentally, are in the main subsidies paid for milling and bread baking, which are injected at the level of the miller and bread baker, and the bacon curing subsidy, injected at the level of the bacon curing factory, and they account for the item amounting to £80.9 million. Trading deficiencies are then recorded. Reconditioning of wheat is one item under this heading, and the losses incurred by the Scottish Milk Marketing Board, which, the hon. Member for Sunderland, North (Mr. Willey) will recall, maintains autonomy, represent another. So we reach the total expenditure of the Ministry.

The trading loss of the Ministry of Food is the major element in the food subsidies, ignoring the other items to which reference has been made. So it is necessary to proceed from the trading position of the Ministry of Food to calculate the amount of its trading loss, and thereafter to add the cost of the welfare food service and the milk-in-school scheme, both non-trading items, to reach a figure of the subsidies administered by the Ministry of Food—£297 million. I think that no more need be said on the subject of reconciliation.

Mr. Gaitskell

Will the hon. Gentleman explain the relationship between the figures of the Trading Estimate and the figures in the actual Vote, Subhead H— trading services? That is the difficulty.

Dr. Hill

Under Subhead H we are dealing with cash requirements, and in the Trading Estimate we are dealing with the trading aspect. There is a reconciliation to be effected between the cash requirements and the Trading Estimate, just as there has to be a reconciliation effected between the cash requirements and the subsidy itself. We have to seek to compare like with like. They meet at the level where subsidy is determined.

I must refer to the other items which come into the Ministry's total subsidy bill because they have been dealt with in the debate. There has been an increase in services provided by other Departments. As the right hon. Gentleman suggested, the rate of interest on Exchequer advances has risen and led to an increased expenditure on interest. As will be known to the Committee as a whole, various steps, legislative and others, taken by other Ministries have resulted in the inclusion of these production or agricultural subsidies in the Estimate. I am glad that the right hon. Gentleman made reference to that, because I feel it should be generally known what other items are included in the subsidy bill.

It is not generally realised that the ploughing-up grant comes within the total of food subsidies. I do not make any comment as to the desirability or otherwise of its being there. The right hon. Gentleman found these things there and left them there. I merely record the fact that there is a good case for regarding those subsidies as effecting a reduction in the price of food and so making unnecessary a subsidy on the end product, which would otherwise be incurred.

Having proceeded from the Trading Estimate position to calculate the subsidy, the reconciliation is arrived at. In parenthesis I might deal with the subsidy position, as the right hon. Gentleman raised a point on the answer which my right hon. and gallant Friend gave him the other day. I think I ought to read the Question in order that hon. Members of the Committee should appreciate what was asked. My right hon. and gallant Friend was asked to state the increases in the prices of the various foods necessitated by the reduction in subsidies; when they became effective; and how much saving was achieved in each case in the financial year 1952–53."—[OFFICIAL REPORT, 16th March, 1953; Vol. 512. c. 1807.] My right hon. and gallant Friend, in his answer, gave the estimated savings in detail. By adding up the detailed items, as the right hon. Gentleman said, we get the figure of £112 million. But the right hon. Gentleman did not ask what were the increased procurement costs which have occurred during that period, and that is an element which comes into the subsidy calculation. It is one thing to make an estimate of saving by increasing retail prices, but it is another thing to take account of the increased procurement costs which add to the Bill. Perhaps I may give the right hon. Gentleman the figures in order to complete the story.

The increased procurement costs amounted to £48 million in that period. There was, on the other hand, a saving. In his Budget speech a year ago my right hon. Friend the Chancellor referred to a proposed increase in the price of eggs. It may have escaped the notice of hon. Members that it did not happen. What happened was the continuance of a higher seasonal price for a longer period, and so there was a saving which did not come within the ambit of the right hon. Gentleman's Question, but which amounted to £15 million.

If one takes the saving of the £15 million from the £48 million, one gets a net increased cost of £33 million. If I may, I will do the calculation in a way which I find easier to understand. The £112 million brought the figure of £410 million down to £298 million as the figure of subsidy for the year. This addition of £33 million due to procurement costs less the saving on eggs—brought the subsidy expenditure for the year to £331 million.

That is the explanation of the apparent discrepancy between the figures given in the reply to the Question and the true position. Both the right hon. Member and the hon. Member for Sunderland, North said that we undertook to bring down subsidies by the end of the current financial year to a level of £250 million a year. It can be inferred—as the right hon. Member and the hon. Member for Sunderland, North, in fact inferred—from the difference between the £331 million of subsidies in the current year and the £308.8 million, which was the estimate a year ago, that we have not, in fact, quite got down to the level of £250 million at which we aimed. The right hon. Gentleman did not complain of that; indeed, he could not complain of it.

Mr. Gaitskell

There seem to me to be two quite distinct points here. The first is the present rate at which the subsidies are now running, and I gather from what the hon. Gentleman said that they are still running above the £250 million figure. That, as he will readily see, is a different point from whether £100 million has actually been saved in the fiscal year; of course, we know it has not.

Dr. Hill

I appreciate the point. Of course, if one undertakes to begin the year with £410 million and to end it with £250 million, then the amount of subsidy incurred during that year will be some sum between those two figures, although it might be almost anywhere between them, according to the dates on which price increase are made.

Therefore, the fact that £331 million is the figure of subsidy for this year, and not the £308.8 million as was anticipated a year ago, is not evidence, although it suggests that we may not have got our subsidy level down to the £250 million. I am not, of course, going to be more precise on this point. The Department's Estimates will be published. Although the figure has been brought down to the region of £250 million, I am not going to pretend that it has been brought down to the actual level of £250 million, though I ought, as I say, to make it clear that I am not going to be drawn into saying anything more specific on the point.

Mr. Willey

I do not propose to draw the Parliamentary Secretary at all. My recollection is that the Minister said £220 million on a fairly recent occasion.

Dr. Hill

I think the hon. Gentleman is confusing the Vote on Account of about £220 million, to which my right hon. and gallant Friend referred, with my right hon. and gallant Friend's refusal to be drawn on the issue of the rate of subsidy when the hon. Gentleman was pressing him a week or two ago.

I now come to some of the other points which have been raised. My hon. Friend the Member for Kidderminster (Mr. Nabarro) seized with vigour upon the sugar item. I would point out to him that the reason for this is that the export of refined sugar, which has recently been proceeding with considerable success, has fallen off in the last month or so. But purchases of dollar sugar have been made in anticipation of exports, and as a result we have for the moment 100,000 tons more sugar in stock.

I know that my hon. Friend would love to go down to history as the man who pressed his Government to deration sugar. I can assure him that when we can afford to do it we shall do it, and that there is nothing concealed here. He has not unearthed a supply of sugar which would permit derationing, although it has afforded him, with the leniency of the Chair, an opportunity of pursuing his favourite subject.

Mr. Nabarro

I hope that my hon. Friend did not misinterpret what I said. The question that I put to him was whether the significance of these figures was to be interpreted as a precursor to a position whereby we might be able to deration sooner, or whether I was being too optimistic.

Mr. Willey

Surely, even if the Parliamentary Secretary released the whole of this extra stock of 100,000 tons of sugar, the housewife would still be worse off than she was under the Labour Government.

Dr. Hill

It is clear with what melancholy the hon. Member for Sunderland, North will greet this decontrol when we find it possible.

On the various items in Subhead H to which he referred, the hon. Member for Sunderland, North sought, in a way I found difficult to grasp, to criticise us both ways on the stock position. It would seem that if we put food into stock it would be wrong and if we took it out of stock it would be wrong. I found it difficult to ascertain upon which leg of the criticism the hon. Gentleman was resting. I know, of course, that in 1950 160,000 tons of meat were taken out of stock by the last Government. All I can say on this occasion is that we are purchasing more food and that a good deal of it is going into stock. Meat is going into stock because of our obvious desire to level out the ration of meat over the year and to avoid wide and frequent variations.

One of the biggest items under Subhead H is a meat item of £10 million. This represents purchases for stock and the increased prices involved in the revision of the New Zealand and Australian agreements, and in due course it will involve increased amounts in respect of Argentine prices. Similarly with milk products, the increase is due to larger purchases.

The hon. Gentleman referred to oils and fats. He realises, no doubt, that we take the exportable surplus from West Africa. The higher Estimate results from our being required to take, at a price related to the world price, all the oils and fats offered to us.

The case of sugar I have dealt with. I cannot be sure I have answered every question—

Mr. Willey

The hon. Gentleman has dealt with some of the specific commodities, and he dealt with those two points, but in this Supplementary Estimate, as I pointed out, we are spending £82 million less on purchasing food than we estimated to spend in June. In spite of the price increases of the foodstuffs to which the hon. Gentleman called my right hon. Friend's attention, we are spending less than last year. How, then, can he tell us we are purchasing more and putting more to stock?

Dr. Hill

This Supplementary Estimate involves a comparison between the Estimate made in the middle of last year and the Estimate made today. In so far as we take exportable surpluses, as, for example, meat from Australia, then it involves higher cash expenditure. After all, the hon. Gentleman knows that the estimate for meat produced at home and imported into this country this year is that it will be the highest since the war.

Mr. Nabarro

More red meat.

Dr. Hill

That involves a good deal of importation and storage, in that case as in others, and the hon. Gentleman knows perfectly well that it is on the presentation of documents or earlier that we pay more. In the case of some of our imports we pay f.o.b.

Mr. Nabarro

Before my hon. Friend winds up this most interesting debate, would he please answer my question about the reduction of £1 million in the payment to the British Sugar Corporation, and say whether this is going to have any bearing on future policy in regard to the home production of sugar beet?

Dr. Hill

I did not reply to that point because any discussion of savings is out of order. My hon. Friend can count himself fortunate that he has made his point, but I have no doubt that if I sought to respond to it I should be declared out of order. In any case, I will privately give my hon. Friend the information which he seeks. [HON. MEMBERS: "Why privately? "]

So there, in broad outline, is the explanation of this Supplementary Estimate, indicating that the additional cash that is required is related, as the right hon. Gentleman suggested, to a slightly higher level of subsidy, though the relationship is not direct.

Perhaps, before I sit down, I should deal with one point that comes to my mind in that connection. The right hon. Gentleman referred to the fall in cash requirements as revealed by the Vote on Account for next year. He will appreciate that the decision to decontrol cereals, animal feedingstuffs and eggs— certainly decontrol of cereals and animal feedingstuffs—and flour involves a beginning of an unloading of the stocks that are held by the Ministry. The fall in stocks has begun. The trade will shortly be purchasing on their own account. I hope that at this stage the right hon. Gentleman will not press me for further details. The general explanation of that fall in cash requirements by the Minister is his own departure from these three fields, and the disposal of the stocks that he has held, in a steady disgorgement, as it were.

5.45 p.m.

Mr. Cyril Osborne (Louth)

I am sorry to rise now after my hon. Friend the Parliamentary Secretary has finished. However, I did rise before he was called, but was not myself called; and I understand that this is one of those occasions when back benchers have the right and the duty to ask questions about the spending of public money. It is a right and a duty that is tending to fall more and more into abeyance. With huge Budgets coming before us year by year I think we have an increasing duty to look carefully into the way the money is being spent.

Under Subhead H, Trading Services, there are one or two items about which I should like some information. For oils and fats the amount required has increased from £7,400,000 to £15 million. My hon. Friend said, in his first speech, that this was due largely to higher world prices. I have read elsewhere and am under the impression that the world shortage of fats has just about ended, and if that be so, I should think that the tendency would be for world prices to fall. What I should like to know is what higher percentage have we had to pay for oils and fats that requires this increase from £7,400,000 to £15 million? Can my hon. Friend say something as to the future? Are we going to be paying still higher prices although world shortages seem to have come to an end?

Again, in the Vote on Account there is an item called "Miscellaneous." So far as I can remember, no one has asked any question about that at all. There was to have been a credit item of £8 million. Now it is down to a credit item of £4,500,000; that is, the position has deteriorated by £3½ million. On a total Estimate of about £300 million, I will agree that £3½ million may seem petty cash, but it is petty cash that the taxpayers have to find, and I wonder whether we could be told about that. I should like to know what is included in that "Miscellaneous" item. As to these trading services, it is difficult to judge each item without knowing the quantities which are involved. Where large amounts are being spent we cannot judge whether they are being spent wisely or not without knowing the quantities which are involved.

I should like to ask my hon. Friend a couple of questions on items in the Appendix. There is there an item of £101.9 million in which are bulked together "Distribution, &c."—I do not know what "&c." means—as expenses including "processing charges, storage, carriage, agents' remuneration, &c." In a normal business no director or shareholder would allow such a large item as £101.9 million to go through without knowing more about it. I should like to see that broken down. If food is being processed, then it is part of the real purchase price of the food. I want to know how much is being charged for distribution, because I believe that, generally speaking, we as a nation are paying too much for distribution costs, both in money and manpower, over the whole of our economy.

My hon. Friend looks at me rather askance for asking these questions, but I want to know whether we are paying too much for distribution costs. Also, I want to know what the "etceteras" include. Is my hon. Friend looking as keenly at these costs as—and as the right hon. Gentleman the Member for Leeds, South (Mr. Gaitskell) reminded him and all of us on this side of the Committee—we promised before the Election we would do? Are we as keen on economy now we are in office as we were when we were in Opposition? This £101.9 million on total costs of £1,546.6 million is about 7 per cent.

I ask, is there any waste in that? Can we have these items broken down? I should not like to pass, in any business where I had any control, any item as proportionately big as this without knowing more about it. We are the guardians of the taxpayer. In a month's time we shall all be standing here and demanding that the Chancellor of the Exchequer shall reduce taxes, or that he shall give more to our people. This is the occasion to get down to a problem like this.

Next, I want to ask my hon. Friend about the administrative expenses, including the expenses of regional and local food offices of £14.8 million. There is in the country a good deal of grumbling about the expensive way in which certain Government offices are run, and in the past a lot has been said about that by hon. Members on this side of the Committee. Is my hon. Friend sure that from that administrative expense item of nearly £15 million, which is a lot of money when the taxpayer has got to find it, nothing could be cut out? Can he say anything at all about the possibility of reducing it in the future?

I am sorry that I was not fortunate enough to catch your eye, Colonel Gomme-Duncan, before my hon. Friend spoke. Those are some of the questions I wanted to ask. There are a lot more that I would have asked had I caught your eye before, but if my hon. Friend could give me answers to those I have asked I should be grateful.

5.52 p.m.

Dr. Hill

Perhaps I might briefly answer the questions which my hon. Friend the Member for Louth (Mr. Osborne) has put to me. He referred, under Subhead H, to the increased expenditure on oils and fats. What has happened is that comparatively recently the world price, after falling, has risen again. That has resulted in a speedy and substantial dispatch of oils and fats from West Africa to this country. We have undertaken to buy the exportable surplus. Accordingly, we estimate an increased expenditure under that heading.

Secondly, my hon. Friend asked for a greater break-up under the heading of trading estimates. I recommend to my hon. Friend that he reads the trading accounts and balance sheets in which all the items are exhaustively described, analysed and examined by the Public Accounts Committee and certified by the Comptroller and Auditor-General after the end of the financial year, just as in the case of the companies to which he referred. This is a trading estimate, and just as he would not, in his company accounts during the financial year in question, give a host of details—indeed, he would not publish any trading estimate during the year—so this trading estimate is necessarily meagre in detail. Its express purpose, as I have argued, is to make the reconciliation statement on the last page understandable.

Next, he asked me about the miscellaneous items. The increase is mainly due to higher estimated stocks of dried fruit and rice, partly off-set by lower stocks of starch; decreased distribution of canned fruit, coffee and starch; and a modest deficit on the disposal of Moroccan sardines abroad.

Mr. Osborne

My hon. Friend said that the increase in the amount required for oils and fats was due to the fact that there had recently been a rise in world prices and we have had to take the total surplus from West Africa. Do I understand from that that the people in West Africa held up their stocks until world prices increased?

Dr. Hill

My hon. Friend perhaps knows that the world price is determined by a very complicated calculation on the basis of prices quoted in a London publication—I believe "The Ledger." The world price is calculated in London, and if the producers of West Africa, knowing that we have agreed to take their surplus, acquire a greater zeal and enthusiasm to send their stuff here when the price is rather high, that would be an illustration of human nature which my hon. Friend and I fully understand.

Question put, and agreed to.

Resolved, That a Supplementary sum, not exceeding £20,899,350, be granted to Her Majesty to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1953, for the salaries and expenses of the Ministry of Food; the cost of trading services, including certain subsidies; a grant in aid; and sundry other services, including certain expenses in connection with civil defence.