§ 10.0 p.m.
§ Mr. Michael Stewart (Fulham)
I beg to move,That an humble Address be presented to Her Majesty, praying that the Milk and Meals (Amending) Regulations, 1956 (S.I., 1956, No. 575), dated 18th April 1956, a copy of which was laid before this House on 25th April, be annulled.The effect of these Regulations made by the right hon. Gentleman the Minister of Education, in pursuance of his powers under Section 49 of the Education Act, is to make it possible for local authorities to supply milk tablets in place of milk if milk of the proper quality is not available at a reasonable price. As I understand the matter, before these particular Amending Regulations were made, local authorities could arrange for milk tablets instead of milk to be supplied if milk of the prescribed quality was not available. Now they are given power to do so if it is not available at a reasonable price.
We understand that the fact which has led up to these Regulations is that local authorities have found it difficult to get milk supplied to them for schools at a reasonable price. In particular, they have not been able to get the supplies delivered to them at a discount when it would have been very reasonable to have expected a discount to be granted. In many cases, they have been asked to pay the maximum retail price, and the device of using milk tablets instead of milk may be considered, if I have the facts right, as a kind of lever to induce the suppliers of milk to take a more reasonable attitude about the price at which they could supply it.
There is, in my judgment, one small procedural and legal question which I should ask. I think I am right in saying that a number of local authorities are already supplying milk tablets instead of milk, on the ground that milk is not available at a reasonable price. If I am right in that, they are in fact doing something which the Minister only now proposes to make possible for them. We should be interested to know, if that be so, how they have managed to do it. I must confess—though this is perhaps a slightly un-parliamentary view to take—that, if that is what they have done, I feel inclined to congratulate them on their enterprise. Nonetheless, this House is bound to be somewhat interested if it is 1215 asked to approve Regulations to give people legal power to do something which, apparently, they have been doing without the legal power for some little time. Perhaps the right hon. Gentleman, or the hon. Gentleman, whoever is to reply, will be able to clear up that matter for us.
May I now turn to the question of milk tablets themselves? I must confess that, in such preparations as I have made for this debate, I have not myself consumed a milk tablet. Perhaps I ought to have done. I am sure the Parliamentary Secretary will have done so. I am, however, assured that milk tablets are nutritionally, and in every reasonable way, the proper equivalent of milk. I do not suppose they are as nice as milk, and I should not wish to recommend that the human race in general should take to milk tablets instead of milk.
We would like to be assured by the Government, first, that there is authoritative medical evidence that children who are supplied with milk tablets instead of milk are not likely to suffer in nutrition, in health or in any way, and that in every important respect these milk tablets are as good as milk.
Secondly, if milk tablets are supplied instead of milk, does a local authority make any appreciable financial saving? Thirdly, who makes the milk tablets? If one buys them instead of milk, is one buying simply from the left hand of some great dairy combine instead of from the right hand? Will local authorities find when purchasing milk tablets that, although it may not be so noticeable, they are being charged more than a reasonable price? We are under the impression that local authorities have been purchasing milk tablets instead of milk in order, very properly, to avoid being charged an unreasonable price for milk. Are they succeeding or is there danger of their also being charged an unreasonable price for the milk tablets?
I come now to the most important point raised by the Regulations. I have argued—I do not think this is in dispute—that one purpose, at least, of resorting to milk tablets is to try to induce a more reasonable attitude on the part of the suppliers of milk. It would be interesting to know—I hope the Government will be able to tell us—whether in 1216 recent months there has been any sign that some of the suppliers of milk, particularly in the great cities, are prepared to take a more reasonable attitude as to the price they charge. Has the emergence of the milk tablet over the horizon caused suppliers to modify their view as to the price they should charge for milk?
In that connection, it is worth while looking at the record of the facts, which, thanks to the diligence of the Public Accounts Committee, the House is able to do. I shall rehearse the facts briefly, because hon. Members who are interested can get the full record in the Reports of the Public Accounts Committee. The matter was first raised by that Committee in its Reports in the year 1951–52. The Committee commented on the fact that many local education authorities were unable to get a discount for bulk supplies of milk and contrasted this fact with the advantage apparently enjoyed by hospitals when buying milk in large quantities. The Public Accounts Committee, as was proper, drew the attention of Parliament, and so of the nation, to this problem.
Time passed, and in October, 1954, there passed to the local authorities the responsibility for putting out the contracts and determining by whom milk should be supplied to the schools. The Public Accounts Committee, however, looked at the matter again in May, 1955, when it appeared that of all the milk supplied for schoolchildren, only one-quarter was being supplied in conditions in which a discount was allowed. The remarkable thing was that it was mainly the rural education authorities who had been able to get a discount.
I stress that for this reason. It has, I believe, been suggested that if a dairy is required to supply milk, as schools frequently require it, in bottles of one-third of a pint, this peculiar requirement makes it difficult to grant a discount. If rural suppliers, in places where the schools are small and the milk may have to be carried quite a considerable distance from the dairy to the school, can in many instances manage to do it at a discount, why can it not be done by a great urban supplier, who probably does not have to take the milk the same distance and who can send it in large consignments to schools which are commonly larger than the rural schools?
1217 In the North Riding of Yorkshire, for example. 87 per cent. of the milk is supplied at a discount. The discount varies from small amounts up to about 5½ per cent. The average figure, on all milk on which a discount is granted, appears to be slightly less than 4 per cent., and if we look down the list in the Report of the Public Accounts Committee, we shall find not only the outstanding figure I mentioned for that particular rural area, but that in one rural area after another a very considerable proportion of the milk is provided, presumably by public-spirited suppliers or suppliers able to manage their businesses competently at a discount.
We must contrast that with the position in some of the great urban areas. In Manchester, it happened, curiously enough, that only one tenderer tendered for each particular school, so that the local authority then found itself with no competition for tenders. It had carefully organised the way in which the contracts were asked for with the deliberate intent of trying to encourage competition amongst suppliers, but the suppliers had their own views about that and only one tender was made for each school. In Birmingham, six firms supplied the whole city. When, not long ago, fresh tenders were invited, each firm tendered simply for the schools for which it had tendered before. There seemed to be some kind of gentlemen's agreement not to poach on schools already being supplied by another supplier.
In Sheffield, again, when new tenders were asked for, only two firms came forward. They were, remarkably enough, the two firms which exclusively had been supplying the children of Sheffield with milk previously. In Newcastle-upon-Tyne, only four firms covered the whole city, and all charged the maximum retail price. In London, where one would have thought that, owing to the size of the schools and the density of the population, it ought not to have been difficult to have been at least as generous as in the North Riding of Yorkshire, 75 per cent. of the milk supplied to school children is supplied by four great concerns. All of them charge the maximum retail price and none of them grants a discount.
§ Mr. Stewart
There are two cooperatives and two ordinary enterprises, and the hon. Member can, if he reads the Report of the Public Accounts Committee, get the names of the suppliers and of the cities I have mentioned, and will find it a very valuable exercise.
The sum of money involved is one not to be neglected. I mentioned that in May, 1955, according to the Report of the Public Accounts Committee, one quarter of all the milk supplied to school children was supplied at a discount. The size of the discount on the average was such that this meant a saving of £90,000, If we could get all milk supplied at about that same average amount of discount, that would save a further £270,000, which is substantially more than the Government are proposing to save by what I can only characterise as the rather mean and distasteful economy of telling the children in the nursery schools that in future they are to have only one-third of a pint of milk instead of two-thirds of a pint, or that the service of milk is to be cut off at the weekends and holidays. I am sorry that the Government should have introduced this rather nasty little economy at a time when it was reasonable to suppose, with the possibility of an extension of the use of milk tablets, that much more substantial savings could have been obtained if, one way or another, the great suppliers could have been induced to supply their milk at a discount.
The hon. Gentleman who is to reply will remember that, at the beginning, addressed to him one procedural question and went on to put questions about milk tablets. I now want to put one other important question in addition. What has he to report since we last heard of this matter from the publication of the Committee's Report as to any success that may have been achieved, by one way or another, in inducing the suppliers of milk to take a more reasonable attitude and supply it at a discount, which some of the more enterprising and public-spirited suppliers are able to do?
§ 10.15 p.m.
§ Dr. Horace King (Southampton. Itchen)
I beg to second the Motion.
My hon. Friend the Member for Fulham (Mr. M. Stewart) has spoken with his usual ability. I do not like these Regulations, but I sympathise with the 1219 motives of the Government in bringing them forward. There is no doubt that the evil which these Regulations seek to combat exists. Our schools are supplied with milk by a trade which is gradually and inevitably being concentrated in fewer and fewer hands.
One of the arguments for the concentration of this trade, as of anything else, is that we should get out of it efficiency on the one hand and cheapness on the other. Certainly milk is being supplied to our school-children today under far more scientific and wholesome conditions than have ever prevailed before in the country, and the model dairies of England are models to the world, but at the same time we are not getting the benefit of the cheapness we have a right to expect from this concentration. The nation and the local education authorities are being exploited by those who sell school milk, and at the present the local authorities are engaged in a battle to get what they regard as fair terms from the distributors of milk.
I want to give the House an example from the local education authority of which I am a member, the Hampshire County Council. In May, 1955, of the 417 of our schools which were supplied with milk, only 42 were given any discount, 375 schools being charged the maximum permitted retail controlled price of milk. My council was concerned about this, and when the contracts came to an end it threw them open to tender, and the various suppliers of milk, who had had a long run and a regular run, were faced with the prospect of losing custom through competition, and for the first time began to offer discounts, which ranged from 1½ per cent. to as much as I0 per cent.
The result is that this year only 86 of our schools are paying the maximum controlled retail price of milk, and 338 schools are being supplied on discount terms, 168 of them getting 2½ per cent. discount, 93 a 5 per cent. discount. So we are saving at the moment about 3 per cent. on our milk bill for our schools. However, there are still 86 of our schools where we cannot get the distributors to supply milk except at the maximum controlled retail price.
Though this is an improvement, the position is far from satisfactory. In many 1220 cases we were not offered any discount at all until the distributors discovered that we would not make firm contracts with them unless they gave a discount, and when they noticed that we were giving three-year contracts to firms giving discount some which had not offered it before began to. Besides, tendering for milk, like tendering for everything else for local authorities, is not really competitive. The discounts offered by various distributors very often turn out to be suspiciously alike, and almost identical, and where there is only one distributor, where monopoly conditions obtain, we fail to obtain any discount at all.
I want to be fair to the milk distributors. When we had to ask them in war-time to supply those one-third pint milk bottles, they had to invest a fair amount of money in new plant, and they did a public, national service. I think they have had their reward for that. I admit, too, that some of the village schools are tiny and that transport difficulties probably make it impossible for us to get milk under the maximum controlled retail price. However, after every allowance has been made, I believe the country has been and is still being fleeced by the distributors of milk.
We are with the Minister in anything he does to secure true economy; that is something which will not hurt our children. Milk is plentiful. More milk is being produced today than ever before in the history of the country. There is no reason why, in conditions of utter plenty, we should have scarcity prices charged for the milk for our children. But having said that, I do not like the way the Government have chosen to fight the milk distributors.
Only recently the teachers have said that they did not want to strike because they did not want to hurt the children, and farm workers have refused to go on strike because they did not want to hurt the nation's food supply. I am not sure that in these Regulations we are not giving the Minister a weapon which can hurt some of our children. If we are going to use the threat of supplying milk tablets and, indeed, supply milk tablets as the only means of bringing milk distributors to heel, we are putting our children in the front line of battle and we face the possibility of a dangerous setback in milk consumption by our children.
§ Mr. John Arbuthnot (Dover)
What alternative has the hon. Member to suggest? We all want to see a reasonable price charged for milk.
§ Dr. King
Before answering the hon. Member, I want to say that I believe that free milk for children is one of the glories of the Welfare State. Its justification we can see any moment we look at the healthy children of our land, and I am worried about anything which would interfere with the healthy, precious habit of milk drinking which has grown up in our schools. Therefore, I would urge the Government to find other ways of tackling the milk combines.
It is outside the scope of this narrow debate on the Regulations to go at length into the question of how we ought to tackle the problem of the milk combines when we think prices are unreasonable. I am quite frank about it. I believe that we should control the price of milk, if necessary, and should say to the milk combines that they do not get the orders from our schools unless they supply the milk at a reasonable discount. But I beg the Minister to have second thoughts about these Regulations lest he should do something which might damage the health of some of our children.
§ 10.23 p.m.
§ Sir Charles Taylor (Eastbourne)
As hon. Members may know, I am interested in the milk industry. I declare that interest now, and I should not have intervened in the debate but for the lamentable ignorance of the milk industry which has been displayed by the hon. Member for Fulham (Mr. M. Stewart) and the hon. Member for Itchen (Dr. King). The milk industry is entirely controlled at the moment as to the buying prices for the raw material and the selling prices. The margin is fixed by the Ministry of Agriculture, Fisheries and Food as a fair margin, based upon costings taken over the whole of the milk industry. If the Ministry fixes what it considers as a fair margin of profit, having sent top-class accountants to every business in the country to find out what was a fair margin to give to the retail milk industry, is it right that another Government Department should say, "We think that the profit is too great and we are going to ask for a discount"?
§ Sir C. Taylor
That may be, but I am not going to defend it. I think that is dishonest, because if a discount is given to schools throughout the country it reflects on the overall margin allowed to the industry and such a discount is taken into consideration in the costings and margins allowed to the retailers. Therefore, if certain retailers give a discount in order to get a contract with a local authority, and as that discount is taken into consideration in the overall costings, it means that it is made up in one form or another by the taxpayer or by whoever it is who makes up the margins. It is easy for people to say that they will give a discount to such and such a local education authority, because they know perfectly well that in the costings carried out in the industry that is eventually going to be taken care of.
The hon. Gentleman who seconded the Motion talked about the great milk combines. The greatest milk combine in the country is the co-operative societies. Do they cut the price of school milk? Of course they do, but then the co-operative societies sell everything from coffins to coal to milk all from one source. That is rather hard on the small milk retailer who does not also sell coffins and coal.
The supply of school milk in ⅓-pint bottles is a very tiresome business to the average milk retailer. The bottle probably costs as much, if not more, than its contents. The retailer has to carry these ⅓-pint bottles to the schools and has to have a special bottling machine to fill them. Quite frankly, they are a dead loss.
As far as tenders are concerned, I think that I made myself quite clear earlier when I said that the margin on the sale of retail milk, the buying of the raw product and the selling of the bottled product, are all controlled by Government order. Is it not right and reasonable that if there are five or six milk retailers in one area, and because the margins are controlled, they should all tender the same price for school milk? As I say, if 1223 they do riot, that is taken into consideration in the costings of the industry as a whole and the price is made up in the costings.
I should like to know how much school milk is not drunk by the children but is poured down the drain or otherwise wasted, because the retail milk businesses throughout the country do their best in supplying these ⅓-pint bottles of milk to the schools. I believe that a great deal of this milk is wasted. I beg the Government to pay much closer attention to the amount of milk wasted. Finally, fresh milk is the best food in the world—that may be special pleading—and it is far better than milk tablets.
§ 10.30 p.m.
§ Mr. F. H. Hayman (Falmouth and Camborne)
The only point on which I agree with the hon. Member for Eastbourne (Sir C. Taylor) was his last statement, that good milk is far better than milk tablets. It is the first time I have heard it pleaded that Express Dairies and other big milk firms are thriving on their losses. I have heard cynical jokes about farmers thriving on their losses, but that is the first time I have heard that about milk distributors.
I have had considerable experience of the supply of milk to schools, and my experience has been that the wastage of milk is not very great. Hon. and right hon. Members will find that in the Tea Room of this House the habit of drinking milk, probably started in school, is continued. I am alarmed that the Minister should have authorised the extended use of milk tablets. It may have a second purpose, to force down the price of milk. In country districts with small schools it may be impossible to get a supplier when the number in a school is only between 30 and 70 children and where the school is miles from the distributing centre. If the local authority insists, as it should, on pasteurised milk, then it often becomes very difficult to get a proper supply of milk to such a school. However, the Regulations are mainly directed against the big towns, and the big distributors of milk should be able to supply schools of between 300 and 1,000 children and give a discount in those cases.
I am sorry that no spokesman from the Ministry of Agriculture, Fisheries and 1224 Food is present to deal with the point about the general price allowed to the distributors being so rigged as to balance the schools against the individual householder, but the very fact that up to one quarter of the supplies to schools are supplied at a discount can be set against that argument of the hon. Member for Eastbourne. In country areas, I doubt whether it can be done quite so readily, unless the county authority allows milk which is not pasteurised to be supplied. If it can be done in no other way, I suggest that the Minister seeks power to enable local authorities in big towns to become distributors themselves.
§ 10.35 p.m.
§ Sir Patrick Spens (Kensington, South)
I do not know whether I ought to declare an interest. The headquarters of one of the big distributing organisations is in my constituency, and it has done me the honour of asking me to become a patron. As such, I presided at a conference of a very large number of milk distributors at Scarborough at the beginning of last week. I do not for a moment pretend to have the knowledge of my hon. Friend the Member for Eastbourne (Sir C. Taylor) about the milk distributing trade, but I have naturally had to inquire as closely as possible into this question which is exercising all our minds.
As I understand the situation, the country does not realise that the milk industry is completely controlled as regards the price which it has to pay, the producer from whom it must buy its milk, and the maximum price at which it has to sell it. Before the Ministry of Education came into this question, the whole organisation was in the hands of the Ministry of Food, which fixed the margins at which milk should be sold. It was arranged that the ordinary retail price should be paid by schools so that distributors could sell to the public at the authorised price. When the Ministry of Education took over the supply of milk to schools, a new factor came into the industry, because the Ministry decided to try to obtain discounts on the sale of milk to schools.
The reaction of the retailers was at once to say, "If you ask us to accept less than we were authorised to receive by the Ministry of Food, you put us into a difficulty about our margins." From 1225 what I heard at Scarborough, the retailers are trying in every way to modernise and rationalise their industry, such as in transport and in machinery for bottling, delivery and everything else. In that way, they hope to have a larger margin. It is unfair to expect them to give up the margin that they were receiving on the supply of milk to schools and not have it made good in any other way. That is what the Ministry of Education is asking them to do.
My view is that the matter has not been thought out by the Ministry of Education and the Ministry of Agriculture and that the Ministry of Education is going ahead of the Ministry of Agriculture in this matter. I am sorry not to see a member of the Ministry of Agriculture here tonight—I see that he has just entered the Chamber and I am delighted to see him. This is a matter which the two Departments should get down to with the industry.
I assure the House from my own personal knowledge, from what I listened to for two days at Scarborough last week, that the retailers of milk are determined by every modern improvisation to make the delivery and distribution of milk as up-to-date and as cheap as possible. I believe that our delivery and distribution of milk are better than those of any other country in Europe. No other country that I know gets its milk delivered in the way that we do in this country. To blame the distributors for not offering discounts to schools without providing a way by which they can get them back is, as my hon. Friend the Member for Eastbourne pointed out, unsound.
I hope that the two Ministries will put their heads together so that we shall have a definite arrangement in this controlled industry, as a result of which the Ministry of Education will be satisfied with the prices that it pays. I hope the result will not be that ordinary householders will have to pay more for their milk.
§ 10.40 p.m.
§ Mr. John Arbuthnot (Dover)
I think that perhaps I am the only Member of the Public Accounts Committee in the House at present. I welcome the support which has been given to my right hon. Friend the Minister of Education by hon. Members for the efforts which the Ministry is making to ensure that public money 1226 is not wasted and that proper economy is exercised.
I cannot feel that it is a reasonable line of argument to suggest that because the Ministry of Food, when it was in charge of these matters, did not press for an economy in public spending, the Ministry of Education should follow the same line. I am convinced that my right hon. Friend the Minister of Education is absolutely right in trying to see that more public money is not spent than is absolutely necessary, subject to the overriding desire of us all to see that the children are kept in the good health to which hon. Members have referred.
My hon. Friend the Member for Eastbourne (Sir C. Taylor), if he will forgive me saying so, was wholly inaccurate when he said that the costings of milk to schools were taken into account in the fixing of prices by the Ministry of Agriculture, Fisheries and Food. That he was wrong is clearly shown by the fact that the same proportion of schools does not exist throughout the whole country. When the Ministry of Agriculture fixed prices for milk, it was for the normal distribution from door to door. The fact that milk is being distributed in large quantities to schools should enable milk distributors to allow a reasonable discount to the Ministry of Education. The fact that many distributors of milk—particularly, as has been pointed out, in the rural areas—are giving discount of varied amonts shows that it can be done.
One would have thought on an objective view of the matter that, where there is a concentrated population as in the urban areas, there would be a larger discount than in the more scattered areas where the cost of distribution is higher and the size of individual schools is smaller. I welcome the Regulations which the Ministry of Education has brought forward—not that we want to see the use of milk tablets extended, nor do we want even to see it continued, but we want the authorities which are buying milk in large quantities for schools to be given a fair deal by milk distributors.
§ 10.42 p.m.
§ Mr. Harold Gurden (Birmingham, Selly Oak)
Perhaps to some extent I am the nigger in the woodpile in this matter, for it was I alone who thought of the idea, many years ago, of bottling milk for consumption in schools. That scheme was 1227 wholly self-supporting for many years, but many of us who were in the trade at the time—I do not have to declare an interest because I am not now in the business—tried very hard to retain the price of ld. per bottle. I think that was in 1930 or thereabouts.
It was when the Government decided to subsidise that scheme and to extend it throughout the country that the trouble arose. It has been mentioned that the maximum price of milk to the consumer ought not wholly to apply to schools because of the difference in quantity in delivery. It is true that the delivery cost represents a very large part of the trouble. As practical men, we in the business found it very difficult to fill three bottles of milk instead of one and to maintain the same price. It was proved that that could only be done if one had a compensating value in a high-quantity delivery; but when the Ministry of Education expected the milk distributors to go to remote districts, covering many miles to deliver small quantities—100 or 200 bottles of milk—it became uneconomic.
Let us recognise at once that the dairy trade has done a very fine job in trying to maintain a full service throughout the country, or almost throughout it, certainly at a loss in the case of deliveries to many schools. In many instances there was, and is, a loss. Not only private companies are involved in this distribution, for probably half the school milk in this country is distributed by co-operative societies. I know that in some towns the co-operative societies do not do much of it, but in others they do nearly all of it. The co-operative societies have clearly shown in some cases that they deliver milk to schools at a loss. In fact. the household consumer has to subsidise the service.
I do not deny that in such large cities as Birmingham, Manchester and Liverpool it may be possible to give a discount to some of the larger schools; I believe it is possible. Nevertheless, the dairy industry must look at the service as a whole, and say, "If we give a discount in these congested areas where we save money on delivery, what about the outlying districts and the schools being built in the remote areas?" They must balance the service in their balance sheet over a long period, 1228 because of the way in which the maximum price control operates.
There ought to be a separate controlled price for school milk—a higher maximum price. I believe that the Ministry of Education would benefit from that, because they would then receive a discount on the more economic deliveries, although they might have to pay 2½ per cent. or 5 per cent. more in the case of the country schools. This problem is brought about by having only one controlled price instead of several levels for the different types of milk distribution.
§ Mr. Hayman
Will the hon. Member comment on the fact that distribution in the big towns, which he admits is more economic, is made by other people than those operating in the country districts, where distribution is uneconomic?
§ Mr. Gurden
Those very distributors saddle themselves with the distribution of milk in outlying areas surrounding the towns. They also supply other smaller dairymen with school milk at a loss in order that a good service may be given and that the schools shall not be without milk. When I was a director of a company which originally started this business of bottling milk for schools, we bottled nearly a million bottles a year at a loss in order that the schools should not go short of milk and have to resort to milk tablets. We did that in order that the scheme should, as far as possible, be a success throughout the country.
§ 10.50 p.m.
§ The Parliamentary Secretary to the Ministry of Education (Mr. Dennis Vosper)
I welcome this opportunity of explaining to the House the circumstances which have necessitated the laying of these Regulations and of saying a few words about the now celebrated milk tablets. I also welcome the moderate and helpful way in which the hon. Member for Fulham (Mr. M. Stewart) moved the Motion. My only regret, as he probably realises, relates to his reference to any reduction of milk for nursery schools, which can be, and probably will be debated on another occasion. He omitted to say that the vast majority of children under five are in nursery classes where the allowance is and always has been one-third of a pint in addition to the cheap milk provided 1229 by my right hon. Friend the Minister of Health.
I think it is generally realised by the House that this is not an attempt to deprive the children of their milk, but rather the opposite. It is a small Measure necessary, I believe, to ensure the continuance of school milk. I think that dried milk and milk tablets can play a useful, if limited, part in the provision of school milk, and I hope—and I am sure that it will be so—that hon. Members will not seek to limit their use by seeking to annul the Statutory Instrument.
As the hon. Member for Fulham told the House, the responsibility for the provision of school milk is derived from Section 49 of the 1944 Education Act and is exercised by Regulation. I mention that because ever since 1945 my right hon. Friend has been able to approve, by Regulation, dried milk where liquid milk is not available. There is, therefore, nothing new about that provision at all. Again, two years ago, when the milk tablet was introduced, my right hon. Friend amended the Regulations so as to be able to approve the use of milk tablets or of dried milk where liquid milk was not available. I should, therefore, like to take this opportunity of saying just a word about the milk tablet, about which the hon. Member asked me.
I hope that no hon. Member who is listening to this debate confuses the milk tablet with the malted milk tablet. It so happens that they are, I think, made by the same makers, but there is otherwise little resemblance between them. I am sorry that the hon. Gentleman has not had the experience of consuming one of these tablets, and I assure him that he would be satisfied in the course of a very few minutes. Only the rules of order prevent me taking immediate action to put him right on that particular point.
§ Mr. Vosper
The initiative for the preparation and production of the milk tablet was taken by the Ministry of Food some years ago—possibly when the hon. Member for Sunderland, North (Mr. Willey) was a member of that Department. In fact, it was produced as a satisfactory commodity only about two 1230 years ago, and ten tablets, contained in one packet, are equivalent to one-third of a pint of milk.
The hon. Gentleman asked for an assurance that the tablet was nutritionally equal to liquid milk. I can give him that assurance. It has the approval of the Ministry of Food. It is much more attractive to school children than is dried milk, and, for some children, more attractive than liquid milk. Its cost is no greater, but little less, than that of liquid or dried milk. The tablets contain the full food value of milk, less water. If necessary, I could give the comparative constituents of dried milk, milk tablets and liquid milk.
I think that there has, on occasion, been criticism of the milk tablet in certain schools, but we have no positive evidence that they have been much abused. I should therefore like to assure the hon. Gentleman and the House that the milk tablet is a satisfactory alternative, although I would not put it much higher than that. When originally introduced, the tablets were used to supply those schools which, because of their isolation, were still unable to get a supply of liquid milk.
Then, again, a new feature was introduced, which has been the principal subject of this debate—the dispute, if I may so call it, although I hope that it will no longer be a dispute—arising out of the transfer of responsibility for the supply of milk from my right hon. Friend the Minister of Food to my right hon. Friend the Minister of Education. I think that hon. Members who have taken part in this debate have accurately recounted the story of that dispute.
When my right hon. Friend took over the supply of milk, it was thought reasonable to expect a discount on bulk supply, as indeed was then the case with hospitals and other institutions. This was supported by the Public Accounts Committee, who had reported unfavourably some years ago, in the 1952–1953 Report, about the absence of competitive tendering. Local education authorities were therefore expected, through normal tendering procedure, to secure reasonable terms for the supply of milk.
As has been said. their original efforts to secure better prices met with organised resistance, and this was commented upon in the Third Report of the Public 1231 Accounts Committee in the Session 1955–1956. I think I should read this extract, which is particularly relevant to this debate:Your Committee are therefore greatly concerned to learn that when efforts were at last made to obtain competitive tenders there should be widespread and concerted opposition from the trade. They consider this unwillingness to co-operate with local education authorities in a service of such undoubted value to the children of the country to be most regrettable and they are glad to note the stand taken by the Departments concerned and the local authorities. Your Committee recommend that all possible steps should be taken to secure that milk is supplied to schools at genuinely competitive prices.That Report was sent to local authorities towards the end of last year, together with a covering letter or circular saying that my right hon. Friend would give them support in any action they thought fit to take, even to the extent of stopping the supplies of school milk. I am glad to say that that has not been necessary.
I would emphasise that methods of securing reductions were being employed, and it would be wrong to think that the milk tablet was thought to be, or proved to be, the only method. I was asked by the hon. Member for Fulham, and I think by other hon. Members, what progress has been made. I am glad to say that the progress I can report is extremely favourable. The position in the counties, for some rather inexplicable reason, has always been favourable. I can at present give the House no further information about the counties, but in a few weeks' time I hope it will be possible to make a further report on them.
So far as the county boroughs are concerned, in May, 1955, of 83 county boroughs, 55 were having to pay the maximum retail price for all their milk supplies. In May, 1956, a year later. only two county boroughs were having to pay the maximum retail price for all their milk, and a further three were having to pay the maximum retail price for a considerable proportion of their milk. I am therefore able to report considerable progress, and I do not for a moment put it down entirely or even in a large part to the milk tablets, or even to any threat to use them—but to the fact that there has been considered and sensible negotiation 1232 between local authorities and the milk trade.
The hon. Member mentioned London, I think a discount has been obtained, or is about to be agreed, in the London area. I had not wished to take sides in what can be termed "a dispute," for the reason that in the last three or four months there have been such favourable developments, and I have every reason to believe that progress will be continued.
The saving, so far as can be ascertained at the moment, is in the neighbourhood of £250,000, but I hope it will be larger than that, and about 50 per cent. of the schools are now getting milk at discount. The contribution made to this progress by the milk tablet is hard to ascertain. Only eight local authorities have used the tablet for this purpose, none of them for a period exceeding three months, most of them for an average of four or five weeks. The effects on some of the other authorities may have been considerable.
My hon. Friend the Member for Eastbourne (Sir C. Taylor) made a point of some substance when he spoke of margins. I quite agree that there is some substance in that argument. Subsidy arrangements, as he probably knows better than I do, are very complicated. Any reduction in the price of school milk would be taken into account in the periodical review of the retail margin—but that is any general reduction in price. and it certainly would not apply to any individual discounts.
There is of course no guarantee that the arrangements for fixing margins will continue indefinitely, and in any event it is surely desirable that the arrangements of local authorities for the purchase of school milk should be put on a normal commercial basis, in common with their purchase of other commodities. I see no reason to penalise the enterprising and efficient retailer or distributor who wishes to supply milk at a discount, as many have done.
Perhaps the best supporting evidence for my argument is that these negotiations throughout have been conducted by my right hon. Friend together with his right hon. Friend the Minister of Agriculture, Fisheries and Food. Therefore, it would be wrong to suggest, as my right hon. and learned Friend the Member for Kensington, South (Sir P. Spens) seemed 1233 to suggest, that there was a difference of opinion on this matter between Government Departments.
The hon. Member for Fulham asked a legal question, namely, how it was that eight local authorities had been able to supply milk tablets where milk supplies were not available at a reasonable price, and only now was it necessary to introduce a Statutory Instrument to that effect. The original Regulations permitted the use of tablets if satisfactory fresh milk was not available, but made no reference to the price on the grounds that the obligation to supply milk could not be held to apply regardless of cost. If, therefore, the price asked was unreasonable, the authority could properly suspend supplies; fresh milk would not be available, and it would be, and was indeed, proper to supply dried milk or tablets instead. All the eight local education authorities acted under that power, and their action was confirmed by my right hon. Friend and has not been challenged.
§ Mr. M. Stewart
If that explanation is correct, as I am sure it is, I do not quite see why these Regulations are necessary at all.
§ Mr. Vosper
I was coming to that point. The reason is simply this. There were one or two local authorities in the country which were reluctant to use this power unless the Regulations were strengthened to make certain that their action was not capable of being challenged in the courts. For that reason, to put the matter beyond all doubt, the additional words, bringing in a reference to "reasonable cost," have been introduced and are in the Regulations laid before the House. The Regulations before the House do that, and only that, and I hope that the Explanatory Note makes that clear.
I hope that these Regulations may be redundant in the sense that no local authority may need to make use of them. If that is so, I think that hon. Members who have taken part in this debate will be pleased, because it is their wish, as it is that of my right hon. Friend, that the supply of liquid milk shall be available to all school children at a reasonable cost. That is my right hon. Friend's wish, and he hopes, and has hoped for some time—and his hope has in part 1234 been realised—that wise counsels will prevail and make recourse to this Instrument unnecessary.
Now that my right hon. Friend knows that my right hon. and learned Friend the Member for Kensington, South has joined the counsels of the milk distributors, I feel that this procedure will be accelerated. If that does not happen, it may be necessary from time to time to appeal for the use of tablets of dried milk, not in preference to liquid milk, but as an adequate alternative substitute to that of paying an unreasonable price.
§ Sir C. Taylor
My hon. Friend has not dealt with the case of the buying price and the selling price of liquid milk being fixed. If a margin is allowed to a milk retailer as a fair and reasonable margin, can my hon. Friend say that it is an unreasonable price if the same price is being charged to the schools throughout the country? I submit that he is now suggesting that these Regulations are a threat to the milk retailers.
§ Mr. Vosper
To the best of my belief, the margin fixed for the milk distributor is fixed on a national, or at least a regional basis, and there is nothing to stop the enterprising or efficient distributor from seeking to supply milk at a discount, as many of them have wished to do.
§ Sir C. Taylor
My hon. Friend spoke of supplying milk in bulk. May I draw attention to what he means by "bulk"? It means supplying large quantities of milk in small one-third pint bottles, for which the trade has had to install special bottling machines at great cost. It is much more expensive than supplying milk in one-pint bottles.
§ Mr. Vosper
I appreciate that. Some allowance is made for one-third pint bottles and for the use of straws. For that reason it is not always possible to expect the same discount as is allowed for hospitals which receive their supply in bulk, but many distributors are now supplying milk at a discount. Under existing circumstances this is taken into account when the margin is fixed, and if there is a general reduction in the price of school milk it might be that the margin would have to be adjusted. But it was not reasonable to expect for ever a continuation of this state of affairs and it was therefore with the support of my right 1235 hon. Friend the Minister of Agriculture that we reverted to more competitive terms.
I am sorry that my hon. Friend the Member for Eastbourne is not in agreement with me on this matter, because I very much appreciated the change of opinion amongst his colleagues in recent months. I hope that without the use or even the threat of the use of these Regulations there will be a further development during the coming months. For this reason I hope that the hon. Member for Fulham will accept my explanation and my assurance, if he needs it, that this is not an attempt to supplant fresh milk, and will withdraw the Motion.
§ 11.8 p.m.
§ Mr. Frederick Willey (Sunderland, North)
I am sure that the House will join with me in expressing appreciation of the attendance of the Minister of Education, the Minister of Health, and the Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food. I differ from my hon. Friend the Member for Falmouth and Camborne (Mr. Hayman) in that I think that it would be unreasonable to expect the Minister of Agriculture to attend, because we know that he has a full-time job in soothing the National Farmers' Union. Personally, I am well content with the attendance of his Parliamentary Secretary.
I share the view of my hon. Friend the Member for Southampton, Itchen (Dr. King). I do not like the use of tablets for the purpose for which they are being used in this case. It is clear now that the Parliamentary Secretary is not a strong advocate of their use. I think that they are very properly used in cases to which the hon. Gentleman referred, where they are better for the individual child and in the case of isolated schools. I agree with the hon. Gentleman that the sooner the present threat of their use is dispensed with the better for us all.
I quarrel with the Parliamentary Secretary about one thing. We need not debate it tonight, because we shall have other opportunities. It is the Ministry's mean, shabby action in respect of nursery schools. I join with the hon. Gentleman in his appeal to the dairymen. In the 1236 past I have had friendly associations with them. I have a great admiration for what they did and the way in which they worked together during the war. I appeal to them to allow, and not obstruct, the introduction of a little initiative in distribution. There is far too much ossification in distribution. On the contrary, we should all welcome these variations. If a case were made out for higher distribution costs in particular cases it would be better to meet those costs in individual cases rather than to take the attitude that all the tenders must be the same.
The Parliamentary Secretary has, at all events, given the House a fair interim report. It is unfortunate that the Government have had to go to this length to induce such a report. It is quite clear that we now have more flexibility in the distribution of milk to schools. I hope that this debate and the good offices of the right hon. and learned Member for Kensington, South (Sir P. Spens) in the responsible office which he holds will help us to get over this deadlock. I trust, therefore, that my hon. Friend the Member for Fulham (Mr. M. Stewart) will be able to accept what the Parliamentary Secretary has said as sufficient justification for us not forcing the matter to a Division.
I will not pursue this matter any further tonight, but I want to call the attention of the Parliamentary Secretary to the falling away in the consumption of milk in schools. I concede at once that it is a matter about which it is too early to be dogmatic, but I hope that the hon. Gentleman will look seriously at it and, if necessary, see that his Ministry takes action to encourage the fullest possible use of the milk-in-schools scheme.
As far as the subject that has engaged most of our attention tonight is concerned, I hope that the matter can be settled in a satisfactory way without resort to tablets. I trust that it will be settled by the distributors realising that they should accept the free winds of competition in the field of distribution, and that in a few months' time, when we press the Parliamentary Secretary for a further report he will be able to say that we have rid ourselves of this unfortunate dispute between the Ministry and the distributors.
§ Mr. M. Stewart
In view of the explanation so admirably given by the Parliamentary Secretary, in which he was able to tell us that many of the distributors are now doing what the hon. Member for Eastbourne (Sir C. Taylor) tried to demonstrate was impossible, I beg to ask leave to withdraw the Motion.
§ Motion, by leave, withdrawn.