AGRICULTURE (Hansard, 19 March 1956)

§ Mr. Thomas Williams (Don Valley)
rose—

§ Mr. Gerald Nabarro (Kidderminster)
On a point of order. There are various features of this and the succeeding Supplementary Estimates, down for discussion this day, which overlap one another. Would it be possible for these to be debated simultaneously, Mr. Speaker, or is it necessary for each to be taken separately?

§ Mr. Speaker
We are bound by the rules, and Supplementary Estimates have to be taken separately.

§ Mr. Williams
Do I understand you to say, Mr. Speaker, that it would be better to take them separately?

§ Mr. Speaker
Yes.

§ Mr. Williams
I can assure hon. Members that we do not mind whether they are taken separately or collectively.
This Supplementary Estimate is more or less self-explanatory, but I am sure the right hon. Gentleman will not object if I put one or two innocuous questions, to which, I know, he will have ready answers. Subhead A.I, details of which are given in page 107, of the Supplementary Estimate, concerns the provision for increases in remuneration, totalling £457,000.
I notice that in almost every Estimate affecting every Government Department there is, as in the nature of things there must be, an item for increases of remuneration, but I should like to ask whether or not the increases shown in this Estimate are wholly due to an increase in the cost of living. We often hear, across the Floor of the House, references to the cost of living between 1945 and 1950, but in this case these increases presumably have taken place since the present Government or their 841 immediate predecessors took office. What percentage of these civil servants engaged within the confines of the Ministry of Agriculture, Fisheries and Food are covered by the item of £457,000? There is a saving of £285,000 due to reduction of staff. Perhaps the right hon. Gentleman will tell the House how many of the staff have been disposed of during the year in which this saving has been effected.
Perhaps the most important question of all is whether any important functions within the Ministry of Agriculture as distinct from the Ministry of Food have been closed down, because that could be important one way or the other. Under Subhead A.5—"Deficiency payments scheme for fatstock; sundry expenses," £48,500 are required because the substitution of grading panels by Ministry-employed graders has not taken place as quickly as was expected.
Perhaps the right hon. Gentleman will tell us why the Government-employed graders were employed and whether it is the general case that Government-employed graders can do this kind of work more cheaply than those outsiders who are not associated directly with the Government. Again, will the right hon. Gentleman tell us who did the grading in the absence of Government graders, and what the position is today? Has the staff been employed to determine who is entitled to deficiency payments?

The Minister of Agriculture, Fisheries and Food (Mr. D. Heathcoat Amory)
I missed the right hon. Gentleman's last sentence. Perhaps he would be kind enough to repeat it.

§ Mr. Williams
I was asking whether the right hon. Gentleman would tell us what the position is today. Have the contemplated Government graders been appointed, since, according to the Estimate, if Government graders had been appointed earlier we should have saved £48,500? Perhaps the right hon. Gentleman would enlarge on the reason why Government graders are so much more efficient than those from outside.

§ Mr. Sidney Dye (Norfolk, South-West)
I should like to pursue the question which my right hon. Friend the Member for Don Valley (Mr. T. Williams) asked about the deficiency payments scheme for 842 fatstock. Why is it that the cost of grading has increased by £48,500 when, as far as I can recollect, the deficiency payments for this same stock has been practically nil? Farmers who have been sending their stock to market have not been receiving the deficiency payment. I know that this matter comes strictly under the next Vote, in which a big saving is shown, but why has the cost of grading fatstock been £48,500 more than was estimated when quite clearly it has not resulted in any benefit whatsoever to the farming community?
We are told that the Government are assisting agriculture. This sum, therefore, is added to the amount which goes to the assistance of farmers by way of subsidy to agriculture. Why has this been necessary as part of the marketing scheme when the deficiency payments have not been necessary? Surely there has been real extravagance on the part of the Ministry in the appointment of graders. There have been far more graders than were ever necessary. These graders have had very little to do that has been of any benefit to the producer of fatstock.
What benefit have they been to producers of fatstock, to the butchers or to the consumers of meat? The Ministry instituted this practice to assist the marketing of stock, but it has been and can be of no benefit to the industry. This fact was brought to my attention on one occasion in a very big fatstock market where, normally, five or six graders were employed. One market day happened to be the wedding day of a relative of one of the graders. Four of the graders went to the marriage ceremony and left one to do the work.
I speak with some knowledge of this matter because, as a producer of livestock, I send my cattle to the market. On one occasion I sent six, all different—small, a little bigger and one giant, but they were all graded Grade II, though they weighed 10 cwt., 11 cwt., 12 cwt. and 14 cwt. and some weights in between. I am quite convinced, therefore, from my practical experience that the employment of these graders and the use of extra money for grading are pure waste. This practice does no one any good. It does not help to build a system of marketing fat cattle which will either encourage producers to produce the type which the public want 843 or assist the public in getting the type of fat cattle they demand, because the prices paid at the auctions very rarely approximate to the grading of the cattle. One can see that from examination of any report of cattle markets in the country.
Prices paid for the different grades severely overlap. Sometimes very much higher prices per cwt. are paid for Grade B than for Grade A cattle. Sometimes even Grade C cattle are sold at auction at higher prices per cwt. than Grade A. Why, therefore, should we have grading? It provides no satisfaction to the producer and is in no way linked to the sale of beef on a wholesale or retail basis. No housewife can go to a butcher's shop and ask for and receive to her knowledge a piece of beef from a Grade A bullock. There is no follow-through, and a butcher can charge a higher price for the lower grade animal than for the higher grade animal.
Therefore, I submit that this grading is unsatisfactory, expensive, extravagant and not helpful to producers or likely to give any satisfaction to the consumer.

§ Mr. Speaker
I follow the hon. Member, but the only doubt in my mind is whether the argument on the whole scheme is really a suitable one when we are debating a Supplementary Estimate. I think that the hon. Member himself has the point in mind and I have no doubt that he will keep to the Supplementary Estimate.

§ Mr. Dye
I am obliged to you, Mr. Speaker.
This is a growing expenditure and my point is whether there is any value in such expenditure which next year might even be greater. I am asking the Minister to explain how this system of grading at this extra cost leads to better marketing for the benefit of the producer or consumer. Judging from my own practical experience, it appears to be of advantage to nobody.

§ Air Commodore A. V. Harvey (Macclesfield)
I am sure that the House and the public, particularly the farming industry, are indebted to the hon. Member for Norfolk, South-West (Mr. Dye) for raising this point. It is a narrow one, and he has covered it extremely well. I should like to follow him on the subject 844 of the grading of pigs. The hon. Gentleman referred to cattle, but not to pigs.

§ Mr. Speaker
There are no pigs in this business. The subject is fatstock.

§ Air Commodore Harvey
The Fat-stock Marketing Corporation is concerned with the grading of pigs, Mr. Speaker. I merely want to say that a considerable sum of money must be devoted to the grading of pigs. I would ask my right hon. Friend to endeavour to widen the limits in grading for then it should be possible to use fewer men. At present, if a producer is 1 lb. overweight he is penalised, and this means that a man is wasting his time, which is reflected in this sum of money. If the limits were wider, not all this money would be required.

§ The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. G. R. H. Nugent)
On a point of order. I rather think, Mr. Speaker, that the payments cover all fatstock—cattle, sheep and pigs. I suggest that you might find that the pigs are in order as well as the cattle and the sheep.

§ Mr. Speaker
I beg the pardon of the hon. and gallant Member for Macclesfield (Air Commodore Harvey): I did not think that pigs came into it, but apparently they do.

§ Sir Robert Boothby (Aberdeenshire, East)
Further to the point of order. Is there any chance of getting in a word about oats, Mr. Speaker?

§ Mr. Speaker
No, not on this Vote.

§ Mr. Nabarro
I am in very great difficulty in view of the limits set by your Ruling, Mr. Speaker. I want to ask about the agricultural machinery services of the counties. I see, for example—I know that we shall come to it later—that in the third Vote there is reference in the preamble to provision and operation of machinery. And, also: J.3.—Goods and Services Scheme (Trading Service). Nobody can tell what this scheme covers. It might be anything. Therefore, how can we say that it is out of order to refer to pigs in one instance, in which we are all interested, and that we cannot deal, for example, with the whole policy in relation to pigs?

§ Mr. T. Williams
Further to the point of order. Was it not your earlier Ruling, Mr. Speaker, that we should take these items one by one, and is it not the case that machinery is not mentioned in the first subhead?

§ Mr. Speaker
First, I had better reply to the point of order raised by the hon. Member for Kidderminster (Mr. Nabarro).
I would point out that we are dealing with these matters one by one. It is not possible for me now to say what will be in order on a succeeding Vote; we shall deal with it in due time. The hon. Member must keep clear in his mind the distinction between dealing with an original Estimate and a Supplementary Estimate. These wide matters of policy might be raised in a discussion on the main Vote, but we are now dealing merely with a Supplementary Vote and not the main Vote.

§ Mr. Nabarro
The county machinery services are operated by the county agricultural executive committees, and these executive committees are mentioned in the preamble to the first Vote. Later, there is an amount of £330,000 in respect of salaries. In those circumstances, would it be in order to presume that a part of the £330,000 is attributable to increases in salaries paid to persons employed in the county agricultural executive committees for operating machinery? Should I not, therefore, be in order in talking about machinery services?

§ Mr. Speaker
Perhaps the hon. Gentleman will direct my attention more particularly to the reference which he says is made to the county agricultural executive committees.

§ Mr. Nabarro
In the fourth line of the preamble to the Ministry of Agriculture, Fisheries and Food Vote, Class VIII, Vote 1, there are the words: of County Agricultural Executive Committees. Then there is Subhead A.1 "Salaries," the additional sum required being £330,000. Would I be in order in suggesting, Mr. Speaker, that a part of the increase in salaries might be attributable to county agricultural executive committee machinery services, and that it would, therefore, be in order to talk about those services?

§ Mr. Speaker
No, the hon. Member would not be in order. I should require much stronger evidence than he has produced that the county agricultural executive committee machinery services account for the Supplementary Estimate. The hon. Member should not pursue that point.

§ Air Commodore Harvey
I am, at least, grateful to you, Mr. Speaker, for your Ruling about my remarks. It seems that my hon. Friend the Member for Kidderminster (Mr. Nabarro) has now made almost a speech on a series of points of order.
I should like to deal briefly with the question of pigs and the sum of money allocated to grading. My right hon. Friend and the Joint Parliamentary Secretary both have great experience in these matters, and they will appreciate that this side of the farming industry has suffered far too many ups and downs in recent years. The grading is far too severe. If the number of graders were reduced and the sum of money asked for were reduced, the industry would be better off. I hope that, while he is awaiting the report from the committee which is considering the marketing of pigs, my right hon. Friend will do something to help both the industry and the Ministry's funds.

§ Lieut.-Colonel Marcus Lipton (Brixton)
There seems to be something unsatisfactory about the grading system. I find from experience that when the price of pigs goes down, my grading goes up. I do not know why there should be any association between the two—

§ Mr. Speaker
Order. The hon. and gallant Member for Macclesfield (Air Commodore Harvey) managed to introduce into the discussion on this Supplementary Estimate a lot of matter which was really more applicable to the main Vote, and I think the hon. and gallant Member for Brixton (Lieut.-Colonel Lipton) is following suit. Hon. Members must remember that this is a Supplementary Estimate. All these matters might have been in order on the main Estimate, but I cannot find them in order on this Supplementary Estimate.

§ Lieut.-Colonel Lipton
Might I explain, Mr. Speaker, that I was misled by the hon. and gallant Member for Macclesfield (Air Commodore Harvey)? I thought you 847 had decided that what he was saying was in order. If that is not the case, then I cannot be seen.

§ Mr. Speaker
Once or twice I allowed references to certain extraneous matters, but I never really thought they were in order.

§ Mr. Nabarro
I am grateful to you, Mr. Speaker, for your Ruling on the complex question of who is getting the increased salaries under the Supplementary Estimate. There is no doubt that some permanent officials are getting increased salaries. An amount of £330,000 is shown in the Estimate. An integral part of the services operated by the Ministry is the machinery services of the county agricultural executive committees, and those services are operated by salaried officials, I suggest that it is pertinent to the Supplementary Estimate for me to ask my right hon. Friend why these officials are having an increase in salary. I suggest that they should not have an increase.

§ Sir R. Boothby
Why?

§ Mr. Nabarro
Because the services are redundant and should have been disbanded a long time ago. I want to pursue the point about the increasing salaries. I want the officials operating the machinery services to be given the sack, and I want the services handed back to private enterprise at the earliest moment.

§ Mr. Speaker
Order. The remarks of the hon. Gentleman would apply to the whole service, and that can only be discussed on the main Vote.

§ Mr. Nabarro
Perhaps I might pursue the question of the Supplementary Estimate of £330,000 for salaries, Mr. Speaker. I wish to address a few detailed questions to my right hon. Friend. Who are the officials receiving these increases in salary? Are they headquarters men at the Ministry? Are they permanent officials at the Ministry? Are they temporary officials of the Ministry, and if so, of which branch? I hope that my right hon. Friend is writing down all these questions.

Mr. Amory
I have a very good memory.

§ Mr. Nabarro
Are they officials employed in provincial centres of the Ministry, which has, of course, a very 848 considerable staff? I want to know what specialist services these officials, permanent or temporary, perform to account for this very large sum of £330,000. For instance, my right hon. Friend has control of various research services within the Ministry of Agriculture, and they perform a very legitimate purpose. I suggest to him that these officials fully deserve any increase in salary that has contributed to this Supplementary Estimate, but, equally well, I want to satisfy myself before this Supplementary Estimate is passed that no part of this £330,000 can be attributed in any way to increases in salaries for officials operating the agricultural machinery service, for that is redundant.

§ Mr. T. Williams
May I ask you whether, Mr. Speaker, if the hon. Member for Kidderminster (Mr. Nabarro) is permitted to ask about certain sections of employees directly or indirectly under the Ministry of Agriculture in this debate, I will be able to ask, later, what has happened to the employees of the National Land Commission or any other section of the agricultural service operating under the right hon. Gentleman?

§ Mr. Speaker
The hon. Member for Kidderminster (Mr. Nabarro) started fairly well in order by asking the Minister to tell him the answers to certain questions, including where this money was going, and so on; and that is all right. He is now proceeding on an assumption, for which there is no warranty until we hear the answer, that some branch of the agricultural service is in receipt of the supplementary grant voted. He cannot proceed upon that assumption; otherwise, there would be no end to debates on Supplementary Estimates.

§ Mr. Nabarro
I am grateful to you, Mr. Speaker, for your guidance. I am on the borderline throughout, and I recognise that.
I want a specific answer from my right hon. Friend. I do not want the serried ranks of officials within his Ministry to continue to expand; and I do not want them to continue to draw increased salaries if they are in respect of services that I consider to be redundant, and those services are the kind to which I have referred. I hope that my right hon. Friend will tell the House exactly who these officials are, exactly in what 849 branches of this Ministry they are employed, exactly why they are getting increased salaries, and, finally and most important of all, that they are not officials employed on any form of service that could be better conducted by private enterprise.

§ Lieut.-Colonel Lipton
I think I may now be in order if I deal with one of the misapprehensions that exist in the mind of the hon. Member for Kidderminster (Mr. Nabarro), who is worried about this Supplementary Estimate of £330,000. The hon. Member was so anxious to introduce some illegitimate argument into this debate—

§ Major H. Legge-Bourke (Isle of Ely)
On a point of order. We are not in Committee, but the hon. and gallant Member for Brixton (Lieut.-Colonel Lipton) is speaking again. Is he in order in speaking twice without the leave of the House?

§ Mr. Speaker
I thought the hon. and gallant Member was making an intervention, but, as he has already addressed the House on this Supplementary Estimate, he cannot speak again except by its leave.

§ Mr. Frederick Willey (Sunderland, North)
It is not for me to hazard what reply the Minister will give to the first query raised by my right hon. Friend the Member for Don Valley (Mr. T. Williams), but I should have thought that this is not unassociated with the policy of the Government in increasing the cost of living. It is making things more difficult for Government officials.
I wish to put to the right hon. Gentleman some further questions about deficiency payments. We appreciate that this is really part of the cost of the Government muddle which followed their hasty measure of decontrol, and this is not the first time it has come before the House. We had the same position obtaining under the previous year's Estimates, and now we know about that because we have the report of the Comptroller and Auditor General. We know that the right hon. Gentleman said on last year's Estimates that the fees payable were higher than estimated, due to the marketings of cattle being greater than expected, and to grading panels not being replaced by Ministry staff as quickly as anticipated.
850 I want to have a look at these two excuses which were given last year, and to see whether they can apply in similar circumstances to the present Estimates. I want, also, to see whether we can satisfy ourselves that the critical comments made by the Comptroller and Auditor General on the previous year's Estimates still apply today. The Comptroller and Auditor General, when dealing with the previous year's Estimates, called attention to the inconsistencies and defects in the guarantee system, and the right hon. Gentleman then said that some of these had been remedied and that remedies for the rest were under consideration.
I would now invite the right hon. Gentleman to tell us, first, whether these remedies are still under consideration, or whether this administration of deficiency payments is still riddled with the muddles and inconsistencies that have riddled it since its inception. How far is this Supplementary Estimate merely a reflection of the past, which, we know, was absolutely deplorable, and will the situation be further aggravated by the steps which the right lion. Gentleman announced a short while ago?
Let us deal with the Supplementary Estimate, and see how far this failure of the Ministry to appoint these officials can be attributed to the reason given before the Comptroller and Auditor General that the marketings are greater than expected. Is the right hon. Gentleman going to tell the House that in 1955–56 marketings of fatstock have been greater than expected, and that this has caused the failure of the Government to make these appointments? If the right hon. Gentleman is to give that explanation, it will be a very difficult one to appreciate. We know that, as far as mutton and lamb are concerned, we marketed about the same amount as in the previous year.
The hon. and gallant Member for Macclesfield (Air Commodore Harvey) mentioned pigs, and we know that as far as pig meat is concerned, we are marketing this year 95,000 tons less than the year before.

§ Mr. Nabarro
Much better quality, though.

§ Mr. Willey
The figure for beef and veal is 72,000 tons less than the previous year, so that I should have thought that argument can no longer apply. The right 851 hon. Gentleman's Department said in the previous year that they were in difficulties because marketings had been heavier than they had anticipated, but this year we have a marketing of fatstock appreciably lower than that of the previous year. In the case of beef and veal, it was 72,000 tons less, and in the case of mutton and lamb, 95,000 tons less. In spite of this shortfall, this drastic reduction in productivity—it would be outside the scope of this debate to discuss the reasons for it—in spite of this relaxation of pressure, we now have the right hon. Gentleman coming before the House and saying that he is not taking the proper steps which it was incumbent upon him to take to administer the deficiency payments scheme properly.
In fact, if I may say a word in support of my hon. Friend the Member for Norfolk, South-West (Mr. Dye), we have this very anomalous position which arises on these deficiency payments. The support for fat cattle, by and large, is borne on the market realisation prices. In the case of fat cattle, this machinery is inoperative; in the case of fat sheep, we have a marginal support much less than anticipated by the right hon. Gentleman when he read his original Estimates, and practically the entire support of £50 million is going to the support of pigs, whereas—

§ Mr. Speaker
The sum of £50 million does not appear in this Supplementary Estimate.

§ Mr. Willey
I am much obliged, Sir. We are dealing here with the appointment of graders by the Ministry, and the point I am making is that in the case of fat cattle this machinery is not now serving an effective purpose.
We have the position today that Government policy is directed to those commodities—in this case, pigs, for which the Government are trying to provide a disincentive for production. That is an entire reversal of policy. However, I will not go further into that point on this Vote except to comment that I would like the right hon. Gentleman to explain the purpose of these provisions. It seems to us that the sole purpose now of Government price support is to mitigate the harmful effects to the farmer of Government policy.
852 The right hon. Gentleman does not dispute the fact that at present fat cattle are not enjoying the subsidy, that sheep are enjoying a very marginal subsidy, and that almost the entire purpose of this operation is to price support pigs, where the Government have stated deliberately that it is their intention to provide a disincentive and to discourage pig production. So that, without going further into this matter, I hope that in rendering account for this inexcusable muddle the right hon. Gentleman will also take the opportunity, if he be in order, of explaining the present purpose of the deficiency payments scheme for fatstock as administered by Her Majesty's Government.

Mr. Amory
I will tread as warily as I can, Mr. Speaker, but some of the questions seemed to be very much on the edge of order and I find it difficult to separate those which it would be legitimate for me to answer from those about which I shall get into trouble from you, Sir, if I answer them.
The right hon. Gentleman the Member for Don Valley (Mr. T. Williams) asked some questions which I thought were relevant and right on the target of this debate. In reply to his first question, on staff. the main reason for the increase in salaries there was the general increase in salaries given on 1st July last to all staff who were receiving under £2,600 a year. There was a separate salary award to the National Agricultural Advisory Service. The amount provided here for the increase on 1st July to the general staff was, £422,000, and the amount applied to the increase for the National Agricultural Advisory Service was about £35,000.
There was also an increase under this heading due to the fact that during the past year we have had to employ more fee-paid veterinary inspectors than we expected. I rejoice at the cause, which was partly that there was considerable progress in the Attested Herds Scheme. During the past year about 1 million additional cattle have been attested as against about 650,000 for each of the last two years. That is a result in which we shall all rejoice. The other reason was the unusually extensive outbreaks of fowl pest, towards the end of the year. This made it necessary to relieve our own staff by the employment of fee-paid veterinary inspectors. I assure the right hon. Gentleman that during the 853 past year there has been no reduction in the services offered by my Ministry.
On 1st April, 1955, the staff of the combined Department amounted to 18,683. It was estimated then that by the end of March this year the staff of the Department would have fallen to 17,493. We now expect, however, that by the end of this month the staff will be 16,242, so the reduction has taken place rather faster than we had expected. I want to be perfectly frank and fair with the House here, so I must admit that part of this reduction is a transfer. During the past year we have transferred over 500 staff to the Potato Marketing Board, 137 to the Ministry of Health and Scotland. Although, therefore, the whole of this reduction is not altogether a true reduction there have been substantial reductions by the release of staff engaged on duties concerned with Government trading at the Ministry of Food. As that work has run down we have been able to cut down the staffs there substantially.

§ Mr. T. Williams
Could the right hon. Gentleman say, without much investigation, what proportion of those not transferred were reduced from the Ministry of Agriculture as such?

Mr. Amory
Not as a percentage, but the number formerly employed on Ministry of Food trading work, whose services have been dispensed with, is 334 for the year. There were 120 dispensed with through general economies in work covering the Department as a whole.
On the other hand, my animal health staff has increased during the year by 85. There were also a few seasonally employed staff. The right hon. Gentleman will realise that in no case has there been any cut made in the functions of the Department. As a result of the abolition of the individual guarantees for fatstock I anticipate that there will be a substantial saving of about 300 in the staff of the Department in the near future.

§ Major Legge-Bourke
The Minister said that there would be no substantial change, but surely the salaries of the 500 transferred to the Potato Marketing Board will come off the Vote of his Department and be paid for by the Board?

§ Mr. Speaker
Order, order. I must intervene and point out that, although I have allowed some discussion on savings, these are really not part of the Estimate. They are merely put in to explain why the Estimate is at that figure. We cannot go into them too far, because we should not go too far into the causes of the savings.

Mr. Amory
I am sorry, Sir, and you will no doubt pull me up if I err again. It is difficult to make sure that one is keeping in order on Vote 1.
As regards graders, on 1st April last year, the Ministry had 96 and there were 467 panels. Now there are 223 Ministry graders and 58 panels. About 600 markets are covered by our own graders. Again, I must remind the House that the abolition of the individual guarantee will simplify greatly the work of grading. Except for bacon factories, grading from now onwards will not be required in determining eligibility for the deficiency payments scheme.
The hon. Member for Norfolk, South-West (Mr. Dye) asked why grading has cost more. It has cost more than the Estimate for the reason I have given, namely, that at the beginning of the year we expected to train more of our own graders than has been possible in the period. From the figures I have quoted, the hon. Gentleman will see that this position has now been largely rectified.
I will not comment on what the hon. Gentleman said about graders who went off either to get married or to see somebody else get married. I have taken note of it and will try to see that we recruit in future only married graders. I do not agree with his statement that the industry has had no benefit from grading. I admit that the standard of grading in the early days was patchy, but I believe that the standard has improved steadily each month.
I took note of the remarks of my hon. and gallant Friend the Member for Macclesfield (Air Commodore Harvey) and I am satisfied that the average standard of grading is steadily improving. He will also note what I said about the effects of the abolition of the individual guarantee. The hon. and gallant Member for Brixton (Lieut.-Colonel Lipton) told us that the lower the price, the higher his percentage of Grade A's. I will take 855 note of that, because the incentive he seems to require for the best results is a lower and lower price. My hon. Friend the Member for Kidderminster (Mr. Nabarro) raised one or two relevant points.

§ Mr. Nabarro
Did my right hon. Friend say relevant?

Mr. Amory
Relevant. I am never rude to my hon. Friend.
The trading activities of county committees have been and are being steadily cut down. The criterion which we adopt is whether there are private enterprise activities which can take their place. Where that is so, we do not continue our trading activities. By and large our remaining trading activities pay for themselves. In spite of that fact, we are always watching the situation and where we are satisfied that private enterprise concerns are available, we shall not continue our own state run activities.

§ Mr. Nabarro
I am most grateful to my right hon. Friend, first for confirming the relevancy of my observations.

§ Mr. Deputy-Speaker (Sir Charles MacAndrew)
The hon. Member cannot proceed to make a second speech.

§ Mr. Nabarro
I was intervening to ask a question and in the preamble I was endeavouring to be courteous and to thank my right hon. Friend for the ample fashion in which he had replied to my earlier question. Is any part of the increase in salaries of £330,000 attributable to increases given to persons employed by the county executive committees in respect of machinery services?

§ Air Commodore Harvey
Before my right hon. Friend replies, will he bear in mind that some of us think that county agricultural committees give very good service to agriculture?

§ Mr. T. Williams
If the Minister is entitled to answer that question, may I ask a similar question about any or every section under the control of the right hon. Gentleman?

§ Mr. Deputy-Speaker
The second question was out of order, although the first one was not.

Mr. Amory
Was the question of my hon. Friend the Member for Kidderminster in order, Mr. Deputy-Speaker?

§ Mr. Deputy-Speaker
That was all right.

§ Mr. Nabarro
Thank you very much. Mr. Amory: The answer is, yes, it is.
I want, finally, to deal with the remarks by the hon. Member for Sunderland, North (Mr. Willey). I cannot agree with the implication in what he had to say about the numbers of staff. We are here dealing with the numbers of cattle that have actually passed through auction markets and been graded for the deficiency payments, compared with the numbers which, at the beginning of the year, were estimated to be likely to go through the markets. On the whole, the numbers that have actually gone through were higher than was estimated.

§ Mr. Willey
The Minister knows perfectly well to what figures I was referring. I was referring to the figures of agriculture production as given by his Department. When we are dealing with deficiency payments, we have to relate the figures to throughput, as was done by his Department in the reply it gave to the Comptroller and Auditor-General.

Mr. Amory
I was trying to make the point that the basis which the hon. Member selected was not relevant for this purpose. The relevant basis for this purpose, when talking about the Supplementary Estimates, is the additional amount above what was estimated at the beginning of the year to be required. There was an increase of 131,000 in cattle, 426,000 in sheep and a decrease for pigs of 176,000. In other words, there was a net increase over what was estimated would be likely to be the output.

§ Mr. Willey
It is clear, therefore, from what the right hon. Gentleman is now saying that his estimate of agricultural production was much less than it has turned out to be. If that is so, why was it not revealed to the House on a much earlier occasion?

Mr. Amory
I do not think that that flows from what I have said. The estimate for agriculture production as a whole, which was made a year ago, was not at all far out. The out-turn has been 857 slightly better than we estimated. I remember telling the House a year ago that we expected that recovery from the previous year would be very slow indeed. It is gratifying to note that it has risen from 151 per cent. to 155 per cent. of pre-war production as quickly as it has and I hope that the end has by no means been reached.
I could not agree with the hon. Member in what he said about the way the deficiency payments scheme has worked. It has had its growing pains, but, on the whole, it has worked extremely well and there is no question but that it has gone a very long way towards ironing out fluctuations in market prices.

§ Mr. T. Williams
I should again like to put one or two innocuous questions, almost as irrelevant as those put by the hon. Member for Kidderminster (Mr. Nabarro). The right hon. Gentleman is aware that after twenty or thirty years of hopeless neglect of agriculture some inducement had to be provided if agriculture was ever to be restored to its proper place. Therefore, from the outset in 1937 we have always agreed with the policy of providing a subsidy for fertilisers to help in the campaign towards efficiency. We shall offer no objection to the Supplementary Estimate of £1,450,000 for the general fertiliser subsidy.
Of course, under the Price Review of February, 1955, there was an increase in the fertiliser subsidy and, presumably, that accounts for most of the additional £1,450,000. Apart from the increase in the fertiliser subsidy which was then granted, what increase has there been in the physical distribution and use of fertiliser? I want to ask a similar question about the lime subsidy, for which the Estimate has increased by £3 million. We make no complaint about that, but we want to know to what extent the tonnage of lime has increased as well as the subsidy itself.
The accounts of fertiliser companies and lime producers show profits which are very nice indeed. What supervision is exercised by the right hon. Gentleman's 858 Department to see that the real value of the increased subsidies is going directly to the farmers and not to the fertiliser companies or the lime producers? All hon. Members will know that increasing yields over the past ten or fifteen years have been the result of the policy of fertiliser subsidies.
Right hon. and hon. Members will not complain about this Supplementary Estimate so long as we are assured that the full value of it is going to the farms, and that, because the Government are providing sizeable subsidies, the money is not leaking away in the form of excessive profits to those providing the fertiliser either at home or abroad. I am sure that the right hon. Gentleman will agree with the substance of these questions and with their intention and purpose. I repeat that we support the policy of the fertiliser and lime subsidy, but we wish to know that the value of the money is going right on to the fields and farms of this country to increase the yield and, ultimately, the efficiency of our farms.
I am provoked to ask at least one question on the subsidy payments in respect of hill sheep and cattle. It arises because of the larger number of hill cattle than was expected. That is all to the good. I have been told by the experts that the grazing on our hills deteriorated over the decades because there were no hill cattle and that the presence of cattle on the hills was expected to bring about better grazing conditions and a higher carrying capacity for sheep. I wish to ask whether the experts have noticed any appreciable improvement in the grazing on our hilltops because of the presence of hill cattle. Here again, I assure the right hon. Gentleman that we agree with the sheep and hill cattle subsidies. We feel that one of the few bright spots in agriculture is that because of the presence of hill cattle, more sheep are being produced, bred and fed, which is all to the good of the country.
I hope that the right hon. Gentleman can tell us whether the increase in the number of hill cattle is still going on and if a very considerable improvement in the grazing on the hilltops has been noticed. I trust that my questions are relevant and to the point.

§ Major Legge-Bourke
Regarding the fertiliser subsidy. I wish to point out that 859 in my constituency, as in other constituencies where there is fenland, concern is felt about the wastage of fertiliser which results whenever there is a bad blow on the fans. When this happens, the soil goes up into the air and is carried out to sea, so that the soil, the fertiliser and everything else is lost. Last year we had a bad blow, and I imagine that the extra cost reflected here may be partly due to that. I hope that my right hon. Friend is continuing to make inquiries and that research is being conducted to ensure that every reasonable means is taken to prevent that sort of thing happening as it can result only in waste.
When the fertiliser is put in after the land has been drilled, or even at the time of drilling, and the whole fen blows away like a desert sandstorm, obviously an enormous waste results. There are methods of preventing this happening, as will be well known by the hon. Member for Norfolk, South-West (Mr. Dye). It may be done by the use of clay or the judicious planting of trees, and so on. But the fact remains that not enough fen farmers are taking sufficient care to prevent soil erosion, which is one of the causes of a direct waste of money under this Vote. I hope that my right hon. Friend will continue to bear that point in mind.
The other matter to which I wish to refer relates to Subhead Q and the British Sugar Corporation Limited. Originally, the Estimate was for a nominal amount of £10 which was later increased to £1,214,803. That is shown as being due largely to a deficit £1,214,813 on the manufacture of sugar by the Corporation. A great deal of capital has been made by hon. Members opposite from the fact that the British Sugar Corporation has taken vast sums from the Exchequer. Can my right hon. Friend say whether this figure is arrived at after the Excise payments by the Corporation or before? Over the years the Corporation has made pretty substantial contributions to the national Exchequer in the form of Excise payments on its manufactured sugar. I wish to know whether this loss arises as a result of the amount of those payments or whether sugar is being manufactured at a loss, and if that has been taken into account?

§ Mr. Dye
I wish to ask the right hon. Gentleman whether he is satisfied that the supply of fertiliser is sufficient to meet the demand. At Norwich Market on Saturday I was advised to get at once the supplies which I had already ordered because the demand was exceeding the supply from the factories. Earlier this Session I raised the question of fertiliser supplies with the right hon. Gentleman, because at this time last year supplies were insufficient to meet the needs of Norfolk farmers, and a similar position seems to be developing this year. I wish to know whether there is a definite estimate, which may be regarded as accurate, of the amount of fertilisers which may be usefully used on our farms, and whether the suppliers can meet that demand at a reasonable price.
I wish to ask whether, in view of the additional sum now being voted, there will be an increase in the production of fertilisers, and, if there is, whether the fertilisers should be produced at a lower cost per ton. Has the Minister gone into the question with the suppliers, and, if so, why is it that the profits of the fertiliser manufacturers seem to be going up in accordance with the subsidy which is to be given? May we be satisfied that the big companies—I.C.I., and others engaged in the manufacture of fertilisers—are not getting a much bigger reward as the result of the subsidy? May we be satisfied that they are as efficient as they should be?
I feel that here arises a matter which should be investigated. We are not getting sufficient supplies, although, were they available, the British farmer could make use of them to produce much better crops than hitherto. The same thing applies to the lime subsidy where there is a big payment increase amounting to £3 million in a year. I understand that that is partly met by an increase in the supply of lime, but are we certain that the quality of the lime as supplied to the farmers is as good as it ought to be?
I gather from experience that some of the suppliers do not guarantee a very high lime content in the substance which they supply to farmers. May we have an assurance that there is an adequate check on the supply of lime and that we are not spending this money unnecessarily? The weight can be made up by moisture, 861 earth and substances other than lime. What control is exercised by the Ministry over the suppliers of lime both with regard to its quality and its quantity?
I gather from what has been said that the next question which I wanted to ask is out of order. If I cannot ask it now, I wish to enter a protest against this saving of £14 million on livestock by which we are financing all the other deficiencies. I will not pursue the matter, but I must make that protest because of the low prices of cattle in the last month or two when the deficiency ought Ito have been paid. I enter that protest. No doubt it will be noted elsewhere.

§ Commander Agnew (Worcestershire, South)
Like other hon. Members, I am very glad to see that there has been a substantial increase of nearly £1,500,000 in the general fertiliser subsidy. As the right hon. Member for Don Valley (Mr. T. Williams) said, I hope that really means an increase in the quantity of fertiliser supplied to the farms. I wish to make an inquiry about what I understand is a general complaint—if it is still true—about the way in which this subsidy is administered.
I understand that until recently fertiliser sold in bags of less than 1 cwt. did not qualify for subsidy. That is a general complaint, especially among the small men who do not want to buy as much as one hundredweight at a time of this expensive but comparatively perishable commodity. Could something be done to improve the administration of the subsidy so that similar quantities when sold over the counter qualify for it?

§ Mr. George Jeger (Goole)
I am interested to hear the approval from both sides of the House of the increased subsidy to farmers. Of course, we on this side welcome the increase, but it is surprising to hear hon. Gentlemen opposite approve of it when only a short while ago we heard them cheering for a reduction in the subsidies to consumers. That is one of the contradictions we meet in the political sphere when we discuss such matters as subsidies.
I know from the farmers in my constituency how much they make use of this provision, and they welcome the increase. I know, too, from the Committee on Agricultural Questions of the Council of Europe how much emphasis is put on 862 fertiliser subsidies throughout the whole of European agriculture, not merely in our own country, and how this move will be welcomed by that body. Production and productivity are directly related to the question of general fertilisers, and the increased subsidy will help in that respect.
This provision also helps to bring fertilisers to the farmers at reasonable prices, In a previous discussion, we heard, both from the back benches and from the Minister, an assertion that it should be the aim of the Government to do as much as possible to put within the scope of private enterprise whatever can be released from Government auspices. It appears that the provision of fertilisers to farmers, so necessary to keep our food production at a reasonable level, is something that cannot be left to private enterprise. This is an instance where decency in prices cannot be entrusted to private enterprise and where the Government have to step in. I am glad that Government intervention in this sphere is increasing, and I hope that it will lead to increased productivity.

§ Mr. Robert Crouch (Dorset, North)
I also welcome the increased expenditure on fertiliser and lime subsidies. The result will be that from the increased use of these two commodities we shall have an increased yield. Also, the increase demonstrates that farmers are realising how important it is for plants as well as livestock to be fed.
I was glad to hear the Minister state last Thursday that it is proposed to spend another £3 million next year in addition to this expenditure. Fertilisers cannot be used by themselves alone. The use of fertilisers without an adequate supply of lime in the soil would not have a very good result. At the same time, we must be cautious to see that not too much lime is used.
It is most interesting to note the improvements which can be carried out. An ordinary pasture can increase its yield of hay from 20 cwt. to 48 cwt., as a result of the application of three or four cwt. of fertiliser. It is also interesting to note the improvement in beef production which can be brought about by the proper use of fertilisers. On a good pasture, a good ley, one can get a yield of 180 lb. to 200 lb. of beef to the acre whereas the average yield is about 70 lb., and on poor pastures it is even smaller.
863 Generally speaking, the emphasis has been on the use of fertilisers for animal crops and horticulture, but I believe that there is greater opportunity to use fertiliser on grass land than on any other type. We could easily increase our consumption of fertilisers by 50 per cent., and even then we should have some leeway to make up. Figures produced just before the war, as a result of an inquiry into grassland, show that only 1.6 per cent. is first-class grassland, that 5.8 per cent. is second-class and that 27.4 per cent. is third-class pasture. Those figures could be improved and the whole of the second-class pasture could be brought up to the first-class standard with the use, of properly balanced fertilisers and the adoption of advice from commercial undertakings and the advisers of my right hon. Friend.
The State today spends large sums of money assisting various industries and various sections of the community. It is my honest belief that the State today makes no better investment than that of giving these subsidies, because they bring an immediate and direct return to the State.

§ Mr. M. Philips Price (Gloucestershire, West)
I very much agree with what has been said by the hon. Member for Dorset, North (Mr. Crouch) about the importance of developing grassland cultivation. It appears to me that the emphasis of the Price Review in increasing the subsidy for fertilisers indicates the desire of the Government to encourage the cultivation of more grass with a view to saving foreign currency expended on imported feeding-stuffs.
To my mind, that is the right line, but I want to make it plain that the figures indicate that farmers are increasing their use of artificial fertilisers on the land. It is to be hoped that much of that is going on to grass, and particularly on to temporary leys. No doubt a large part of it goes to cereal crops, but if we want to help the nation's balance of payments problem we should realise that we have a wonderful cattle food in the form of grass, which we can use to save money on imported feeding stuffs. It can take the form of hay, sileage or dried grass, and sileage is relatively cheap to make.
If we are to make the best use of this grass, however, we must have a proper 864 system of fertilisation, and the best way to encourage it is by a subsidy of this kind. I am glad to see that the emphasis is this year's Price Review, as was the case in the previous year, is upon the encouragement of the use of fertilisers in this way. I hope that fertilisation will continue along these lines, especially in the direction of grass cultivation, so that it can help our balance of payments problem.

§ Mr. Nabarro
I want to say a few words about the additional sum required for the general fertiliser subsidy, namely, £1,450,000. I endorse everything that other hon. Members have said about the desirability of the use of increased tonnages of fertilisers, but I am not sure that the figure of £1,450,000 necessarily connotes the use of that increased tonnage. I hope that my hon. Friend will tell us how much of this amount is attributable to the use of an increased tonnage of fertilisers, and how much is attributable to an increase in the price of fertilisers themselves. That seems to be a very relevant point.

§ Mr. T. Williams
I have already made that point.

§ Mr. Nabarro
Yes, but the right hon. Member for Don Valley (Mr. T. Williams) might permit hon. Members on this side of the House to have views as well. He is not the only spokesman.
I raise this point particularly because a good deal of discontent exists in the farming industry about the price of fertilisers. I recently attended a farmers' meeting at Worcester, where four Conservative Members of Parliament met representatives of the National Farmers' Union. My hon. Friend the Member for Bromsgrove (Mr. Dance), my hon. Friend the Member for Worcestershire (Mr. Ward), my hon. and gallant Friend the Member for Worcestershire, South (Commander Agnew) and myself were confronted with this general grumble from farmers about the price of fertilisers. That is associated directly with this Supplementary Estimate.
Farmers feel that there are relatively few firms manufacturing fertilisers, and I hope that my hon. Friend can tell us whether his Department exercises any control or surveillance over the retail prices of fertilisers, in order to ensure 865 that the farming community receives its supplies at the lowest possible price.
The second grumble among the farmers—and this is a widespread feeling in the farming industry—is that there is an agreement among fertiliser manufacturers to maintain prices. I hope that my hon. Friend will be able to give us some assurances on that matter, because very large supplies of fertilisers are being employed today. Large sums of public money are being spent upon this fertiliser subsidy, and taxpayers are entitled to ask whether the fertilisers which are being made available are being supplied at the lowest possible price, or whether there is any evidence that the market is being "rigged". I used that term in repetition of what has been said to me by countless farmers in relation to fertilisers. They are very perturbed about what they allege to be the high price of fertilisers.
If there is any case—I am being purely interrogatory; I do not want the hon. Member for Rugby (Mr. J. Johnson) to nod, thinking that I am alleging that there is a price ring in this matter, because I do not know. I am asking my hon. Friend to give us an assurance that his Department has satisfied itself, in view of the heavy cost of the fertiliser subsidy—the right hon. Member for Don Valley did not make any of these points, so it is no use his nodding—that there is no foundation in fact for the allegations made by many farmers of all types and in all parts of the country that an attempt is being made to keep up fertiliser prices by some sort of ragging, or by a ring in the fertiliser market.
If that is the case, however, I would ask my hon. Friend to deal with the matter without delay through the Monopolies Commission or, when the Restrictive Trade Practices Bill reaches the Statute Book, to make quite certain that a matter of this kind is subjected to the scrutiny and surveillance which the large sums of public money being invested in the fertiliser subsidy merit.

§ Mr. Joseph Slater (Sedgefield)
The hon. Member for Kidderminster (Mr. Nabarro) referred to the fact that there are only four firms in this country who produce fertilisers.

§ Mr. Nabarro
I said that there were relatively few.

§ Mr. Slater
One of the longest happens to be in my constituency, namely, I.C.I. In my constituency, which is the second largest, agriculturally, in the county of Durham, farmers are very interested in the way this matter is being dealt with, and they would like to know why the Minister needs to ask for this increase in subsidy.
I am also very interested in the lime subsidy. In this case we are asked to vote an extra £3 million. Will the Minister tell the House what form of control he has upon those who supply lime to our farms? Has he a proper check system, whereby the thousands of tons of lime conveyed along our highways are subjected to a proper weighing system, with inspectors on the job to see that the tonnage for which we are paying is being delivered?
Can the Minister say whether dolomite comes within the lime subsidy? If he looks into the matter he will find that thousands of tons of dolomite which has been lying dormant for years and years has been bought up by contractors at a low price, and they are now selling it at at good price. They are bound to make fortunes out of it.

§ Mr. Brian Harrison (Maldon)
I regard these Supplementary Estimates as very important. In the train coming up to town today a farmer was telling me that if we had a proper subsidy for lime and for drainage that was all that was needed for good farming. I cannot go as far as that, but I think they are both vital in agriculture. Lime is very important for building up the fertility and strength of the soil. If fertiliser is put on ground that has not been adequately limed it is largely wasted. We must get the condition of the soil right by an adequate supply of lime, when there will be an absolute minimum of waste of the chemicals that are on the subsidy.
I hope that my right hon. Friend will consider whether the lime content of sludge manure can be included in the amount of the lime that attracts subsidy. There are hundreds and hundreds of tons of this sludge manure in my constituency, and it is used particularly by horticulturists. If they had the assistance of the lime subsidy for the lime content of that by-product they would be substantially helped and many of the smaller 867 men particularly would be encouraged to use more of this very good fertiliser.
Is the Minister quite happy about there being adequate quantities of nitrogenous fertiliser available in the coming spring? In a number of areas the merchants have their order books full and cannot supply any more of it. This will become a very serious national problem if it is not possible to raise the productivity of grassland and corn crops by adequate top dressings. It is impossible in East Anglia to get nitrogenous fertiliser until some time in May or June, and even later in other areas.
Before the Minister pays any of the subsidy on lime that is spread on the land I suggest he makes it conditional that the land be examined for acidity. In some cases 10 tons of chalk per acre is the standard dressing, but that may be in excess of the requirements of the soil. I cannot believe that the supply of chalk will be unlimited, so I suggest that the subsidy should be conditional upon analysis of the soil, and that priority should then be given to the payment of subsidy for this product.

§ Mr. James Johnson (Rugby)
I welcome this Vote, under which we shall pay about £4½ million to our farmers in respect of fertilisers. That is a lot of money, and is even a little more than we spend on the whole of Nigeria, which has 30 million inhabitants in colonial development and welfare, so let us get this matter into perspective. I have almost 500 farmers in my constituency, some of whom are good old-fashioned dog-and-stick farmers, and we have the finest beef cattle in the world. The hon. Member for Aberdeenshire, East (Sir R. Boothby) has boasted in this Chamber about the beef from East Scotland; I claim that in Market Harborough and on the blue clay-soil lands we have the finest beef cattle.
I welcome the proposal to spend money upon additional fertiliser and lime for what is sometimes heavy and sour soil. I feel a little shamefaced on this occasion, because, for the first time in my life, as I look over to the second bench below the Gangway on the Government side of the House, I realise that I am in most unusual company, that of the hon. Member for Kidderminster (Mr. Nabarro). 868 Despite his sighing and moaning, I find that he and I think together on this matter, and I want to back him up in his no doubt sincere plea and sincere attack—despite his sitting on those benches—on private enterprise in the lime industry.

§ Mr. Nabarro
The hon. Member must not misrepresent me. I was very careful to say that I did not even make allegations in this regard, but was repeating the widespread grumbles made by the farming community. I asked my right hon. Friend to confirm those statements or otherwise.

§ Mr. Johnson
There is a term in the United States of America of "guilty by association." If the hon. Member is guilty by association with those farmers, then I am guilty by association with him in this Chamber this afternoon. I echo substantially, and I back up his plea to the Minister for some explanation of the tonnage involved, and how much the size of this Vote is due, not to the value of the fertiliser going to the farmers in my division or any other division, even including Kidderminster, but to the cost per ton of fertiliser. Government supporters have referred to the amount of lime and fertiliser being put upon our fields. They attacked us when we were in power because of our subsidies. A favourite term of hon. Gentlemen was to ask, "Where is your ceiling?" They never even had a basement in some instances. They asked where was our ceiling in education, housing and in other aspects of finance.
I would ask the Minister to tell us where his ceiling is in this connection. I do not mind whether he goes to double figures if we are to get more in the value and quantity of foodstuffs from our 30 million acres or so in the United Kingdom. It will be money well spent, in fact, better spent than some of the money used to subsidise the British Sugar Corporation of Messrs. Tate and Lyle, which we see on page 109 of the Estimates. Is the right hon. Gentleman prepared to spend £5 million, £6 million or £10 million under this Vote? I hope he will answer this question later. If, with an open mind, and, what is more important, with an open hand, he goes on with these genuine, constructive subsidies, he will have the backing of all hon. Members on this side who, like myself, have many hardworking farmers in their constituency.

§ Mr. J. E. B. Hill (Norfolk, South)
I prefer to regard the so-called subsidy as a production grant because to me its importance seems to be mainly, not that it lowers the price of the end product, whether to the world price level or to what the0 consumer is prepared to pay, but that it encourages the best system of farming, namely, ley farming, for our climate and general market needs.
The figures of consumption today compared with pre-war are interesting. The firm of I.C.I. produced a study of farming, and with respect to fertilisers it points out that the consumption in 1953–54, as a percentage of 1937–38, reduced to constant prices, is no less than 289. In other words, we have used nearly three times as much fertiliser in 1954 as we did immediately before the war.
It is important when using fertiliser not to waste it in the sense that the fertiliser chosen, and on which public money is expended, must be suited first to the condition of the soil and then to the crop which it is proposed to grow. There are so many kinds of fertilisers, especially the compound ones, and money can undoubtedly be wasted by an injudicious choice. That is where the services of the National Agricultural Advisory Service and the manufacturers' own representatives can be most useful.
I regret the absence of any sum for fertiliser subsidy upon potash. The absence is serious for the horticultural industry and for those farmers who farm on the lighter, sandier soils which are often deficient in potash. I know that one of the difficulties is that we have no native supply of potash. The hoped for sources in Yorkshire were not a commercial proposition and, at the moment, our sources are limited to Europe, though there is, I understand, some prospect of a further source being developed in the area of the Dead Sea. I hope that my right hon. Friend will pursue the search for an alternative supply of potassic fertilisers so that at a later date we may be able to extend the subsidy to their use.
As to the question of price raised by my hon. Friend the Member for Kidderminster (Mr. Nabarro), if my recollection is correct, the question of the supply of chemical fertilisers has already been referred to the Monopolies Commission and, therefore, we may hope to have the truth revealed in the normal course of its 870 investigations. I hope, therefore, that this sum of money will continue to be increased as long as it is related to greater productivity, because I am certain that it is one of the best ways of channelling money into agriculture.

§ Mr. William Whitelaw (Penrith and The Border)
I should like to refer to one subject which I think has been touched on very little this afternoon. I have not been able to be here for the whole debate, and I apologise to any hon. Member who may have referred to it in detail and whom I did not hear. I refer to the question of hill farming. There are many hill farms in my constituency in Cumberland, and I believe that the value of the work which is done in these areas and the improvements which we have seen under both Governments since the war are truly amazing.
I refer particularly to the subsidy payments in respect of hill sheep and hill cattle. I believe that any money that has been spent in this way has been well spent in the national interest. I should like, in particular, to refer to the money spent on fertiliser and lime in the improvement of grassland in these areas. A great deal of the grass, particularly on the rather higher and wetter hills, is still very poor and much can be done through drainage and the wise application of lime and fertilisers. A good deal of money also needs to be spent on fencing, and I believe here, too, great value can be gained when the money is so spent.
There is one point which I should like to raise with the Parliamentary Secretary. I have already done so in correspondence. He has been most helpful to me, but I should like to repeat the point on this occasion. I understand that a hill farmer who receives various fertiliser and lime subsidies as well as other grants cannot in any circumstances get more than 50 per cent. of the cost of that work, even where in some cases, if he added all the grants to which he was entitled, that sum would come to more than 50 per cent. The rule says that he cannot get more even in those circumstances.
I feel that perhaps this is not entirely fair, because in the same circumstances the good-land farmer can also get 50 per cent. of the cost, and surely the man who is putting out the money—and much of it on very poor land—should be entitled 871 to more than the man who is working on the good land. I realise the difficulties, but I should like to put that question once more to the Parliamentary Secretary.
I conclude by saying that in these districts on our hills there is a tremendous potential still to be developed, and I believe that the money voted to these areas in the past and today has been and is being well spent in the national interest.

§ Mr. Douglas Marshall (Bodmin)
My hon. Friend the Member for Norfolk, South (Mr. J. E. B. Hill) mentioned the question of potash, and I think that many hon. Members feel strongly upon this matter, especially as it affects the horticultural industry. I know the arguments against that point. My hon. Friend said that a certain amount was coming from Israel. This is from the factory at Sodom on the Dead Sea. I was there in January, and the capacity of that factory has been doubled, and within the year production is likely to be quadrupled. I trust that the Minister will keep that matter very much in mind and will see whether at a future date potash could be included, especially in support of the horticultural industry which has been suffering much of late.

§ Mr. Willey
I am sure the House will feel that we have had a useful debate on fertilisers. I wish to put one or two questions to the right hon. Gentleman before he replies. First of all, may I say that by way of an aside the right hon. Gentleman referred in our last debate to agricultural output, and perhaps on this occasion, in an aside, he will tell us what has happened to the target of 60 per cent. increase of net output compared with pre-war which we were easily to attain by 1956. Perhaps he will tell us what has happened and what the Government's attitude is towards that target set by his predecessor.
We have been told that the supply of chemical fertilisers has been referred by the President of the Board of Trade to the Monopolies Commission. We can only hope that we shall get an early Report, because it is obviously disturbing when the President of the Board of Trade has referred the supply of chemical fertilisers to the Monopolies Commission and at the same time the House should be considering increased subsidies for the provision of those fertilisers. Because of 872 this special relationship between the Exchequer subvention and the attitude which the President of the Board of Trade has shown by referring the matter to the Monopolies Commission, I hope we may have as early a report as possible. Meanwhile, it is very difficult, if not improper, to go very far with this question, but I hope that the right hon. Gentleman will pay attention to the concern which has been expressed on both sides of the House. It will be to the benefit of all, and certainly to the benefit of the farmer and the manufacturer, if we have an early report in this case.
5.30 p.m.
There has been some discussion of the difficulty of supply of fertilisers, and I wonder whether this difficulty is affected by the Government's credit squeeze. The Government are apt to embarrass themselves on the one hand by some action they take on the other hand. I gather from the Minister that that is not the case here. If it is not the case. I will put another contradiction to him with which he will find it more difficult to deal.

§ Air Commodore Harvey
The hon. Gentleman has referred to the credit squeeze. If it were having an effect in this case there would be no demand, but in fact there is a big demand and it is very difficult to get the material.

§ Mr. Willey
I was dealing with the question of supply and asking whether the manufacturers are being affected by the credit squeeze, just as we know some manufacturers have been affected in other fields. I am asking simply as a point of inquiry.

§ Mr. J. E. B. Hill
The fertilisers industry is said to be a monopoly. Surely it has never been part of the Opposition's case that monopolies have been affected by the credit squeeze. It has been said that they are the people, like I.C.I., with huge resources, who can go right ahead.

§ Mr. Willey
The hon. Member has not been as attentive as he usually is.

§ Mr. Nabarro
He has.

§ Mr. Willey
I was most careful not to stigmatise the manufacturers in any way. I said that in these circumstances it would be to the benefit of all concerned if we had an early report. I am 873 not prepared to express any opinion until we have that report, but I have asked a question. I can appreciate the desire of hon. Members opposite to reply for their Minister, because we know how stigmatised he has been by the farmers when he has spoken, but I prefer the right hon. Gentleman to reply for himself.
Another contradiction, which is much more difficult to explain, is the increased subsidy payments in respect of hill sheep and hill cattle. In criticising the withdrawal of the individual guarantee, the National Farmers' Union says that these are the very people who will be affected. If hon. Members will look at the statement issued by the National Farmers' Union, they will see that, in dealing with the withdrawal of the individual guarantees, the union said: This will greatly increase the producer's…

§ Major Legge-Bourke
On a point of order. Am I not right in saying that the matter to which the hon. Member is now referring arises from the last Price Review and has nothing to do with the Supplementary Estimate?

§ Mr. Deputy-Speaker (Sir Charles MacAndrew)
I thought it was all right.

§ Mr. Willey
Thank you, Mr. Deputy-Speaker. Of course, hon. Members opposite know what is in the N.F.U. statement and that is why they are trying to prevent me from quoting it.

§ Mr. Archer Baldwin (Leominster)
rose—

§ Mr. Willey
I will give way after I have read this quotation. In dealing with the withdrawal of the individual guarantees the National Farmers' Union said: This will greatly increase the producer's risk of a lower than average return from a bad market and will bear particularly severely on the smaller man.…

§ Major Legge-Bourke
On a point of order. I must persist in this point of order, Mr. Deputy-Speaker. Many of us who have taken part in the debate would have been only too delighted to discuss the future of the industry in its various aspects. The hon. Member is now quoting from a statement by the National Farmers' Union as to the future of a 874 certain section of the agricultural industry. Surely that cannot possibly be connected with the Supplementary Estimates for the past year.

§ Mr. Deputy-Speaker
That would certainly be so. I thought the hon. Member was making a point on the £691,000. He must not go into the future.

§ Mr. Willey
I have no wish to pursue the matter further, since it has not in fact been touched on. I will make the point briefly by saying that we are concerned here with the fact that the Government are being inconsistent, for the reasons which I have already advanced.
I want to touch on a subject which has not so far been mentioned—milk. This is Vote M.4. Here we have an increase in subsidy of £7,800,000, the largest increase required under the Vote. This will mean that the total subsidy required for this year will be rather less than that last year, but it is appreciably higher than the original Estimate presented by the right hon. Gentleman. I understand that this is due to increased distributors' margins, and of course that is consequential upon last year's Price Review.
If we are considering the purpose of the subsidy to the producer we have to pay regard to its effect, and the production of milk must be related to the consumption of milk. Again I will express myself with some caution, and certainly not at length, but once again there is an inconsistency in the Government's approach, because they have recently announced steps the consequence of which will be, and is intended to be, a reduction in consumption. As The Economist said, The possibility of some fall in milk production is not particularly disturbing to the Government. That is a very mild expression of view. We know that the price increase which is to be imposed this year will reduce the consumption of milk.

§ Mr. Nabarro
Why?

§ Mr. Willey
Because that has been the effect of the previous price increases, as we can see.

§ Mr. Nabarro
I am sure the hon. Gentleman has read the leading editorial articles in the principal national newspapers—The Times, the Daily Telegraph, 875 the Manchester Guardian, and on Sunday the Sunday Observer. None of those newspapers took the view which the hon. Member is now expressing.

§ Mr. Willey
I am endeavouring to express myself on the point with brevity.

§ Mr. Nabarro
No doubt the hon. Gentleman read the Daily Worker.

§ Mr. Willey
The distributors make it quite clear that an increase in the retail price will affect the consumption of full price fresh milk, as it had done in the past. This is an inconsistency in the Government's policy. It might appear on the face of it that by the increase in subsidy the Government are supporting an increase in the production of milk, but, as I have indicated, that is not so. We are dealing with this year's Estimates, not the next year's Estimates, if I may point that out to hon. Members, but it is quite clear from the Government's present attitude that they do not now wish to increase the consumption of milk. I have referred to the question of the retail prices. Obviously production must be related to consumption.

Several Hon. Members
rose—

§ Mr. Nabarro
Pull him up again.

§ Mr. Willey
I was endeavouring to make the point briefly, but I can understand the apprehension of those hon. Members who represent agricultural constituencies, because milk production is a matter of some concern to farmers. It is quite clear from the retail price policy which has now been announced that the Government intend to try further to reduce the consumption of full price fresh milk.

Mr. Amory
I very much object to that. The Government have said repeatedly that they would welcome a further increase in the consumption of liquid milk. Nothing has happened to give the hon. Member grounds for saying that we wish to see a reduction in the consumption of liquid milk.

§ Mr. Deputy-Speaker
I think we should confine ourselves to what has happened and not deal with the future; then we shall get on better.

§ Mr. Willey
I will deal with what has happened. Under the first two years of 876 the Conservative Government the consumption of full price fresh milk dropped by about 3 per cent. and has since been steady. I shall not comment further on what is likely to happen this year.
Now lest us deal with the production side as it is disclosed at the moment. I am trying to see What the indications of this additional subsidy are. The right hon. Gentleman has said "some change from milk to beef so far as it is practicable" is desirable, but—

§ Mr. Nugent
On a point of order, Mr. Deputy-Speaker. I can find no mention at all of the point the hon. Member has just made in the Supplementary Estimates? Is his new topic in order?

§ Mr. Deputy-Speaker
The hon. Member has not developed that point. I was listening to him very carefully.

§ Mr. Nugent
If I may amplify it, the point was the changing from milk to beef, but I can find no reference to that in the Supplementary Estimates. Is that in order?

§ Mr. Deputy-Speaker
No, it is not in order to develop that argument, but I thought the hon. Member was making another point.

§ Mr. Willey
I was certainly making another point. I was endeavouring to discover the purpose of the Government policy that lies behind this Vote. It is quite clear, as has been shown by the Joint Parliamentary Secretary, that Government policy is not now to increase the production of milk. That has been made clear and is not disputed by the Government. So, once again, we find increasing difficulty in following what the purposes of the Government are in regard to agriculture. We know that one of the current difficulties is that caused by importing feedingstuffs, but this Vote is not to meet that difficulty. I will put it fairly and squarely to the right hon. Gentleman. The purpose of an increased milk subsidy is to recognise the position which is being caused by the Government. We are no longer getting the use of agriculture subsidies to increase agricultural production.

§ Air Commodore Harvey
The hon. Member is making very wild assertions about the consumption of milk, but I think that if he looks at the official figures he will find that the consumption has gone up, not down.

§ Mr. Willey
I have the figures before me. The consumption has not gone up; it has remained stable—[HON. MEMBERS: "Oh."]—after having fallen by 3 per cent. under the present Government.

§ Mr. Nabarro
When?

§ Mr. Willey
Under the first two or three years of the Conservative Government.

§ Mr. Nabarro
When was that?

§ Mr. Willey
From when the Government took over. I apologise for taking up the time of the House, but I must reply to interruptions. All I am saying is that, having got stability into milk production, the Government now are deliberately depressing it. This is the dilemma which the right hon. Gentleman faces. Just as in discussion of the previous Vote, so we have the position on this Vote, that the purpose of the Government is no longer to use the subsidy to increase production. We have here the increasing subsidy element, but it is quite clear—for the reasons I have given—that it is not the purpose of the Government to increase milk production.

Mr. Amory
I must interrupt the hon. Member. The Government are at present making a direct contribution to the expenses of the National Milk Publicity Council, which has as its main object the encouragement of the consumption of liquid milk. If we were not in favour of increasing consumption of liquid milk, why, I ask the hon. Member, do we go out of our way to contribute to the expenses of that body?

§ Mr. Willey
I asked the right hon. Gentleman the other day what he would do, and he said he would do nothing but leave it to the Milk Marketing Board. What I am considering is the effect of Government policy as stated by the right hon. Gentleman.
I would point out that this is becoming a matter of increasing disturbance. We are getting subsidies, as in the case of the subsidies we discussed earlier, and now in the case of milk, which are not bringing security to the producers. Because of the policy of the Government which lies behind the subsidy, there is acute disturbance in the industry. The right hon. Gentleman is using the taxpayers' subvention merely to mitigate the harm of deliberate Government policy.

§ Mr. Archer Baldwin (Leominster)
I had not intended taking part in this debate, but after the statements made by the hon. Member for Sunderland, North (Mr. Willey) I feel I must ask whoever is to reply to take up the question which the hon. Member asked about the individual guaranteed price. The hon. Member made a statement that the N.F.U. was complaining that this would seriously affect farmers on the hills of Wales. The hon. Member would not give way so that I could ask him to develop that point, but I will willingly give way if he wishes to develop it now. The individual guaranteed price was brought in at the time to meet those cases.

§ Mr. T. Williams
On a point of order, Mr. Deputy-Speaker. Although it may seem unkind to the hon. Member for Leominster (Mr. Baldwin), may I ask you whether the individual minimum guaranteed price is referred to in these Supplementary Estimates?

§ Mr. Nabarro
Further to that point of order. May I first—

§ Mr. Deputy-Speaker
Let me deal with one point of order first. We are only dealing with the additional sum required. I hope that hon. Members will try to keep to that and not to deal with the future or with policy. The policy has been agreed. Extra money is wanted and we should try to keep to that question.

§ Mr. Nabarro
On a point of order, Mr. Deputy-Speaker. Subhead J is "Subsidy payments in respect of hill sheep and hill cattle." Surely that covers the individual guaranteed price?

§ Mr. Deputy-Speaker
The only thing which has to be explained is why this £691,000 is required. That is the only point. It is quite simple.

§ Mr. Baldwin
The hon. Member for Sunderland, North stated that the individual guaranteed price affected the hill farms of Wales and that the N.F.U. was making a complaint about it. Surely we on this side are entitled to make our contribution to that argument?

§ Mr. Deputy-Speaker
Perhaps I was to blame. Perhaps I should have stopped the hon. Member for Sunderland, North (Mr. Willey).

§ Mr. Baldwin
Further to that point of order, Mr. Deputy-Speaker. Surely, it cannot be that a statement can be made from the Opposition Front Bench to which it is out of order for us to reply? I do not say that the statement was out of order, but are we not allowed to reply?

§ Mr. Deputy-Speaker
If I made a mistake in allowing the hon. Member to say something which was out of order, I apologise, but I am not going to allow another hon. Member to be out of order in replying to it.

§ Mr. Nugent
If I begin by replying to the questions put by the right hon. Member for Don Valley (Mr. T. Williams), I shall be more likely to be in order than if I begin by replying to the hon. Member for Sunderland, North (Mr. F. Willey); indeed, I found great difficulty in discovering what part of his speech was in order.

§ Mr. Willey
That is a reflection on the Chair.

§ Mr. Nugent
I could make a further reflection on the hon. Member, but as we are having a friendly debate, I shall proceed.
I turn to the question put by the right hon. Member for Don Valley, and indeed by hon. Members on both sides of the House, with regard to the fertiliser subsidy. I thought we had an interesting and valuable debate on the fertiliser subsidy and on the value it is giving to our farms. It was welcome both by my right hon. Friend and myself to hear from both sides of the House general approval of these subsidies. I think everyone feels that these are subsidies which really help production at the right point and give good value to the whole community. The questions that were raised were rather with a view to seeking reassurances on certain points as to just what was happening.
The first general reply I shall make is to the anxiety which was expressed by my hon. Friend the Member for Kidderminster (Mr. Nabarro), as well as by right hon. and hon. Members opposite about the competitiveness or otherwise of the fertiliser industry. The first point I must make in reply to that was made by the bon. Gentleman the Member for Sunderland, North—when he was in order—that the fertiliser industry has already been 880 referred to the Monopolies Commission. In due course that Commission will undoubtedly give the House, and indeed the whole country, a full report of just what the industry's price arrangements are and how the industry is working. Although I do not want to seem in any way to be anticipating the findings of that Commission, I feel that the House would wish me to make some general reply to inquiries because, after all, we have a responsibility for these large sums of money and should be in a position to assure the House that we consider that good value is received for them, and why.
First, then, turning to the fertiliser industry—before dealing with lime—let me give a few figures which may be helpful to the House. The right hon. Gentleman the Member for Don Valley asked me what increase in fertiliser consumption had taken place in recent years, and the figures which I think give the best indication are those based on a three-year average up to 1951–52 and working up to the estimated figure for 1954–55. I should here say that the fertiliser year is one which, if my memory serves aright, ends in the middle of the summer—for some reason that I have not been able to discover. It ends on 30th June, and the new fertiliser year begins on 1st July.
The figure for nitrogen as a three-year average up to 1951–52 was 207,300 tons and the estimated figure for 1954–55 was 240,000 tons, so we have an increase there of nearly 33,000 tons. For phosphates, the three-year average up to 1951–52 of 285,300 tons is estimated to have gone up to 345,000 tons in 1954–55—a substantial increase of nearly 60,000 tons. For potash the three-year average figure was 210,900 tons and that is estimated to have gone up to 250,000 tons. Those figures show quite a healthy increase moving in the direction that we all wish to go.

§ Mr. J. Johnson
It might be more helpful if the Joint Parliamentary Secretary expressed the figure as a percentage increase in tonnage and a percentage increase, perhaps, in the spending of the actual taxpayers' money.

§ Mr. Nugent
It will be impossible for me to give every right hon. and hon. Member the figures in exactly the form he wants them. I think that the House will know that when I am replying to 881 such debates as this I give all the information that we have. If I do not give exact percentages, I do not doubt that the hon. Member for Rugby (Mr. J. Johnson) is a good mathematician and can work them out for himself.
I can now give the prices, which run roughly over the same period. In July, 1951, the price for nitrogen—sulphate of ammonia, which is the main form in which nitrogen is used—was £15 15s. a ton, and today it is £20 7s. a ton. That includes the latest price increases.

§ Mr. Dye
Is not the hon. Gentleman comparing two different periods of the year? It is always cheapest in July and at this time of the year it is always dearest.

§ Mr. Nugent
I can give the hon. Gentleman the figure for last July if he likes, but that will not help him because the price last July was £18 5s.—a good deal lower. If right hon. and hon. Members take today's figure which I have given they will find that it is quite a fair indication of what the price increase has been over the period.
Phosphorus—that is, superphosphate—was £14 13s. 6d. in July, 1951, and is now running at £14 8s. 6d. There is a slight decrease there. I shall not trouble the House with the figures for potash and other qualities of phosphorus, because those I have given are sufficient to give the main trends. They show that with phosphates there is almost no change—the price has gone down slightly—while nitrogen shows an increase, and quite a considerable increase, since last year.
It is true that these fertilisers are mainly in the hands of two firms—indeed, nitrogen is mainly in the hands of one firm. Our control over fertilisers is only general. When general fertiliser control came to an end we left the industries free to serve the community as well as they could, and, naturally, we have kept a close eye on their operations to assure ourselves that they are giving good value to the farming community and that we are getting good value for the large subsidies which we are putting into the industry.
We get quite a useful guide as to what sort of value our farmers are getting in nitrogen if we refer to the relevant O.E.E.C. Report. The last one, which dealt with the matter of comparative fartiliser prices in different countries, showed 882 that our farmers were getting their nitrogen cheaper than almost anyone else. In fact, the nitrogen price in this country is significantly lower than the price to the export markets. The manufacturers concerned do give a preference to this market and generally do their best to satisfy it before they go into the export market where they have a very considerable involvement—

§ Mr. Slater
Would not the Parliamentary Secretary agree that a 33⅓ per cent. increase in the price of nitrogen is rather steep?

§ Mr. Nugent
We had some direct experience of nitrogen manufacture during the period of control. The Ministry of Supply was directly responsible for the operation of a nitrogen factory and the experience at that time was that margins were no more than sufficient for us to break even. Constructing on that experience, nitrogen prices seem to us to be very reasonable today. We do, in fact, receive complaints from the few small marginal suppliers of nitrogen that the present prices are not sufficient.
I think that the best and most reliable indirect information we can get is from the O.E.C.C.—or the F.A.O., one or the other—price survey in other countries, which indicates that despite price increases we are still getting our nitrogen rather cheaply. Our assessment is that we have not been badly served in this respect. Further than that I cannot go, but in due course we shall receive the Report of the Monopolies Commission which will, no doubt, give the whole picture in detail. Our responsibility is to see that good value is being given, and such information as we can get does, I think, show that these people are giving good value.
Turning to phosphates, I would just point out that the prices I have given show a slight decrease over the years, although many of the costs have increased. I noticed that in the last annual report of Fisons the chairman remarked that, although their volume of business had considerably increased, their profit margins had decreased, indicating that they were trying to pass on to the consumer some of the benefit of their extra business. It seems to us that generally, although fertiliser manufacture is largely controlled by two firms, the farming community has been getting good value.
883 There certainly are anxieties about supply. There is no doubt that demand today is almost up to capacity, especially for nitrogen but, as I have already said, the main supplying firm gives preference to the home market and does its utmost to supply it. I understand that both I.C.I. and Shell, in association with Fisons, have plans for expansion of nitrogen production so that in the course of a few years the supply should be more ample. Indeed, we hope so.

§ Mr. Dye
The difficulty arises because of the demands at this time of the year. If the farmers buy their notrogen earlier they get no rebate on it and run the danger of losing on storage. If the suppliers of nitrogenous fertilisers would give a rebate on early sales in the summer and autumn I am sure they would overcome the difficulties that arise at this time of the year.

§ Mr. Nugent
These rebates may be given, but I am afraid that there are always some farmers who will not order fertiliser until they want it. Judging by the price increase I have indicated to the House, the farmers who bought last autumn would have benefited very substantially. Every farmer knows that now is the peak demand for fertilisers, and every farmer knows that if he wants to be sure of getting his supply he must order in good time. Therefore, I do not think there is a great deal in the hon. Member's intervention. In any event, both these big manufacturers are expanding production, and we hope that they will succeed with their projects and thereby give us a more ample supply.
It is relevant to that to say one word on the rate of subsidy, about which the hon. Member for Rugby particularly asked, and to which my hon. Friend has agreed. We want the maximum use of fertilisers. We must have regard, on the one hand, to what the land needs, and, on the other, to what supply is available, and we must not stimulate the use of nitrogen any further at the present time or else we shall run the risk that there simply will not be enough to meet the demand. We think that there will be enough to meet the demand this year, although some people who ordered late may find that they have not got it just when they want it.
884 The right hon. Gentleman the Member for Don Valley asked for figures of what increase there has been in lime usage. The year 1953 to 1954 was very good, and the usage was 6.4 million tons. In 1954 to 1955, the usage was 4.7 million tons. Hon. Members will recollect that that was a very difficult year; that it was a very wet and bad year. In the last year, 1955 to 1956, the usage was a record usage of 7.2 million tons. The farmers were, I think, a good deal encouraged by the higher rate of subsidy. We were giving to up to 77 per cent. during the summer months, giving them thereby further help in the application of lime.
We have direct control on lime. We take direct costings of the operations of the lime contractors, and we watch very closely to see that the margins are no more than sufficient. The House will know that lime contractors are very numerous. There are some very big ones; on the other hand, there is a multiplicity of small ones. They all give good service. Therefore, we have to fix the margins at a level sufficient to enable the small people to get a living, and that naturally enables the bigger ones to do fairly well. We are glad they do. We want this lime on the soil.
As several hon. Friends of mine have said, the first necessity in fertilising the land is to see that, in the technical jargon, the pH, the acidity is taken out of the land before any other fertiliser is applied. Therefore, lime is basic. That is why we give such a big rate of subsidy. The effect is undoubtedly very beneficial indeed.
I have some optimum figures which, I think, will answer the question put by the hon. Gentleman the Member for Norfolk, South-West (Mr. Dye) as to what optimum figures there are for fertilisers. An estimate made in 1952 of the level of consumption obtained by applying optimum dressings to all fields in the United Kingdom gave a total optimum usage of about 450,000 tons of nitrogen, 560,000 tons of phosphate and 340,000 tons of potash. Current consumption is only 55 per cent. of nitrogen, 60 per cent. of phosphate and 74 per cent. of potash of these figures. These figures are all of pure nitrogen, phosphate and potash and will have to be converted to indicate the tonnages of sulphate, ammonia or superphosphate.
885 Reverting for a minute to lime and a question asked by the hon. Member for Sedgefield (Mr. Slater), dolomite is used and does qualify. To check usage of any lime-containing substance, we check its calcium content and the subsidy is paid on that. If the lime content exceeds that proportion a greater tonnage has to be used, and a smaller rate is paid per ton. That aspect of it is carefully checked. We are very delighted if contractors find some other lime-containing substance which is lying idle and put it on the fields where it will do good.
I think that the general picture of lime usage should satisfy the House, and that the House should be satisfied that we are getting good value for our money. Although we do not have any general control of fertiliser application I hope that the general indications I have given will be sufficient to reassure the House that we shall get good value.

§ Mr. J. Johnson
Does this anticipate a subsidy of £5 million or £6 million, perhaps more, upon lime fertilisers in future?

§ Mr. Nugent
No. I think that the actual rate for lime is enough. As the hon. Member knows, we work on a seasonal scale up to 70 per cent. during the summer months, and that, I think, is enough. That leaves the farmer to pay for only 30 per cent. If the farmer paid for less than that he would not have sufficient incentive to ensure getting full value, full weight and so on. This is an essential part of the check. Whatever quantity of lime farmers like to use, we think the present percentage rate of subsidy is enough.
I have no figures in my head of what would be the optimum amount of lime needed for all our land, but I can assure the hon. Member that although I think this increase is good and satisfactory there is still a long way to go and a great deal of land to which it could be applied—a good deal in his part of the world as well, especially on those clay lands.
I think the hon. Member was out of the Chamber for a minute when I was dealing with the fertiliser position, which is largely governed by practical considerations—how far we think it would be useful to go in the way of subsidy, having proper regard to what supplies are available at the present time, and how demand 886 at present equals the supply, and how it would be unrealistic to increase that demand further.
I have given figures of optimum usage of nitrogen and phosphate, and it can be seen from them that there is considerable scope for further usage. My right hon. Friend will be guided by the supply position in deciding whether more or less is desirable.
My hon. Friend the Member for Maldon (Mr. B. Harrison) asked whether we could extend the subsidy to cover sewage sludge, which often has a lime content. The answer is that we find it impossible for the subsidy to cover organic fertiliser owing to the difficulty of calculating the content, which varies so much.
One of my hon. Friends spoke about the condition of the hill farms and said that it was a hardship that not more than 50 per cent. grant was given even for the worst land. I would remind him that where big capital grants are given, these hill farming schemes are intended for land which, by the nature of the contour and of the soil, is poor and difficult to work. Therefore, in the main these very big capital grants are intended for the more difficult marginal types of soil, but I can give my hon. Friend the comfort that we have made a provision this year to extend the marginal production scheme. This will give a higher rate of grant for those who occupy particularly difficult land.

§ Mr. T. Williams
Is it not also true that, apart altogether from the 50 per cent. grant provided by the hill farming improvement scheme, the hill sheep and hill cattle subsidies are something extra and, therefore, the farmer receives 50 per cent. plus and not merely 50 per cent.?

§ Mr. Nugent
Yes, the hill farming scheme is a capital grant and on top of that the farmer gets whatever current subsidy there may be. Therefore, in the total he might receive a very great deal more.
The right hon. Member asked me about the hill sheep payment and hill cattle payment. The hill sheep payment was made at the 1955 Annual Price Review and was a special award to take account of the particularly bad winter these farmers had had and the special difficulties which they encountered at that time. 887 The hill cattle award is, of course, directed to the increased price of hill cattle which was higher than we had estimated. I can certainly confirm that the presence of these cattle on the hill is having a most beneficial effect on the pastures there. The cattle are strong and heavy enough to break down the bracken and break back the brambles, and to eat a good many things which sheep cannot eat and to improve the pasture there generally. There is no doubt, therefore, that we are getting good value from that Supplementary Estimate.
I was asked about the minimum quantity of fertiliser which qualifies for a subsidy. The answer is that there is a 4 cwt. minimum. The House will remember from our discussions of fertiliser subsidies that this subsidy is intended for commercial farmers and horticulturists, and 4 cwt. is a small amount for any commercial man to buy. This subsidy is not intended for private gardeners. Very small smallholders have an opportunity of combining together into a co-operative society to buy larger quantities of fertiliser which they can then break down to meet their needs.
My hon. and gallant Friend the Member for the Isle of Ely (Major Legge-Bourke) asked about the British Sugar Corporation's loss. In the two previous years the Corporation made a profit. The loss made in the accounting year with which we are concerned was due to the exceptionally bad weather in 1954 which resulted in a lower yield and a lower sugar content. That figure is the figure after paying Excise Duty, which amounts to something like twice the loss recorded in the statement accompanying this Estimate. I have not the precise figures, but over recent years the Corporation has been showing a profit.

§ Major Legge-Bourke
I am very grateful for that information. Will my hon. Friend deal with the other point—the use of fertiliser in connection with the prevention of fen blowing?

§ Mr. Nugent
My hon. and gallant Friend spoke about the dangers of erosion. I felt that that was going a little wide of the Supplementary Estimate, though I agree that the use of fertiliser on crops in early stages of growth 888 secures a covering on the ground before it dries out and significantly helps in preventing erosion. To that extent, I entirely agree that the use of fertiliser is a very sound practice.
Finally, I can assure the hon. Member for Sunderland, North (Mr. Willey) that there has been an increase of 10 million gallons in liquid milk consumption in the last six or eight months. It is true that in 1951 and 1954 there was a 3 per cent. decrease and the following 12 months were almost stationary, but in the last six or eight months there has been a welcome upward trend. I confirm, what my right hon. Friend has already said, that it is Government policy to maintain a high level of liquid milk consumption and to do anything we can to stimulate that consumption and assist the Milk Marketing Board in keeping it as high as possible. We agree that liquid milk in particular is a product of the highest nutritional value. Both in welfare schemes and for general consumption we want to see the highest possible use made of it.
As will be seen from the Estimate, the Milk Marketing Board has managed to reduce costs by higher realisations, not only through expansion of the liquid milk market but also through better realisation in manufacturing which has brought in a higher sum than we originally anticipated. Together, the two accounts have brought in a sum of £3.8 million and, therefore, there is some offset against the higher cost of distribution in the last February Review award to which the hon. Member for Sunderland, North referred.
I believe that I have now dealt with the many points raised in the debate and I hope that the House will now be prepared to approve the Estimate.

§ Mr. T. Williams
I have two modest observations to make on the third Vote, but I promise the Minister that neither will be highly controversial. I am rather pleased to see that we have to find £378,000 for drainage, because I rate drainage either as the first requirement or at least second only to fertilisers as a real service to agriculture. I do not know the 889 man who can get any value out of his fertilisers if his land is not drained or the man who, if his land is drained can farm it effectively and efficiently with or without fertilisers.
I am pleased to see that a scheme has been arranged whereby advances can be made while the work is in progress. I am convinced that the river catchment boards are doing a first-class job. I set them up, but I do not want to dwell on that point. They are useful bodies, and even fishermen, who were hesitant to welcome them in the early days, are now beginning to realise that the catchment boards are the fishermen's friends.
Subhead C.2.—Land Settlements Estate—is a residue of the wicked Tory days of the 'twenties and 'thirties, when unemployment was rife. I will not go into that, Sir, lest you tell me that I am out of order, but we are still spending £1,800,000 upon their administration. Perhaps the right hon. Gentleman will tell us whether, over recent years, cooperation has been promoted and intensified, and that there is greater activity at the centre in the purchasing and retailing of requisites to those on land settlement estates than in the early days. It took a long time to teach individuals to value that co-operation, but I know that it has been growing over the years and I hope that these estates have reached a high state of efficiency now.
Under Subhead C.4.—Smallholdings—I see that £60,000 extra is required for loans. This is to be expected. Either it is because those concerned are expanding their businesses or because their incomes are contracting. They must have capital to carry on, and £60,000 for all the smallholdings in the country is a modest figure about which no one can afford to complain.
On Subhead K.10.—Governmentowned Cold Stores—I want to ask my last question on this Vote. A company called National Cold Stores (Management) Limited has been set up to take control of Government-owned cold stores. The arrangement is that the Government find the capital and leave the administration in the hands of what is presumably a semi-private company. Are there any Government directors on the board of this company? Is there any limitation of profits? Will the right hon. Gentleman tell us the terms and arrangements entered 890 into by the Government with this company which they have deemed it wise to set up? Presumably it is the best thing to have done.

§ Major Legge-Bourke
I must apologise to the House, and to you Sir, for the fact that the point I am raising has the air of being a constituency point, but it is in order under Subhead A.1 (b) which asks for an extra £358,000 for grants to catchment boards and river boards under the Land Drainage Act, 1930, as extended by the River Boards Act, 1948, including contributions to loan charges. The right hon. Gentleman the Member for Don Valley (Mr. T. Williams) said how important drainage is to British agriculture, and I agree. My own constituency sinks or swims by drainage, and it is only because men have got together in the past that the area is as productive as it is.
As the House will remember, in 1947 a great deal of my constituency was put under water and, as a result, a great flood protection scheme was developed. This Vote covers contributions to loan charges on grants made to catchment boards and river boards under those two Acts—

§ Mr. Speaker
Is that money covered by the Supplementary Estimate?

§ Major Legge-Bourke
Yes, Sir. As I think you are aware, there has been an increase in the rate of interest on borrowing over the last few years. There is a 90 per cent. grant to enable this work to be carried out and the interest on the remaining 10 per cent. is carried by the river boards. To enable them to pay that, a grant is made to them under Subhead A.1 to pay for the work they are doing.

§ Mr. Speaker
The hon. and gallant Member will forgive me for interrupting, but is that money provided under the main Vote or under the Supplementary Estimate? I am not clear about that.

§ Major Legge-Bourke
As a result of the decision about the rate of interest to be charged on loans, there has been an increase in the amount charged. That appears under this Vote and for all river boards this year amounts to £358,000. Some part of that amount is due to the increase in the grant which is being made by the Ministry to the Great Ouse 891 River Board to enable it to pay the increased charges on the 10 per cent. of the total capital works it is carrying out under the flood protection scheme. That scheme is designed to prevent a flood similar to the one in 1947.
I am particularly anxious because recently I heard the chairman of that river board make a speech. May I say here that the chairman is well known to me and that I have great respect for him. He made this observation: As a result of the credit squeeze, the cost of the flood protection scheme will be exactly double what it would have been if the board had been able to borrow money at the rate operating when the work commenced. I am anxious to remain strictly in order, Sir, but I want to ask whether that is an accurate statement or not. If I am right, so far from the scheme costing double what it would have done, what has increased since the work first began is the rate of interest that is to be charged on the money borrowed. When borrowing began the interest was at the rate of 3 per cent. and it is now at the rate of 5¼ per cent. Of course, the amount of money now borrowed is a great deal more than was borrowed when the rate of interest was at 3 per cent. As the scheme develops, so the amount of money borrowed will increase, and so the amount that has to be paid, even if the interest remained constant, becomes greater and greater each year as the work goes on. The cost will eventually be £5 million and perhaps even more when the provisions of Subhead A.3 are developed.
My main point is that my right hon. Friend might have a case here for arguing whether this scheme ought to come under the same heading of borrowing, as all local authority schemes come under. It seems to me that some part of the £358,000 is involved in enabling the river boards to pay increased interest. I can see that in the ordinary way we want local authorities to play their part in restricting capital development, but this is a scheme which cannot be stopped halfway. It has to be completed or not done at all. It is a matter of public safety as well as being necessary in order to ensure the fullest possible production from the land.
It happens that the floods in the Fens have occurred on the average once every 892 ten years, and as we are now getting near to the tenth year since the 1947 flood I hope that nothing will be done to impede this work. I wonder whether my right hon. Friend would have a word with the Chancellor to ascertain whether any scheme involving the safety of the public could be given different treatment in regard to rates of interest compared with other work carried out by local authorities. River boards are local authorities, being rating bodies.
6.30 p.m.
I wish to say a word or two about smallholdings. I have a particular reason to be interested in the subject because my grandfather piloted the 1906 Measure through the House, and, in addition, I have many smallholdings in my constituency. I should like to know whether the increase in grants to the tune of £60,000 has in any way benefited my constituency. I feel that we are entitled to ensure that the money which has been voted has been wisely spent. I do not believe there is an area more suited to smallholdings, both part-time and full-time, than the Isle of Ely.

§ Mr. Speaker
The hon. and gallant Gentleman is entitled to ask his question—whether it can be answered or not I do not know—but the general subject of smallholdings is not raised by the Supplementary Estimate.

§ Major Legge-Bourke
I agree that the sum of £60,000 is a trivial one compared with our total Budget, Mr. Speaker, but surely it is our duty to make sure that the money is spent where it can most suitably be used. There was a time when smallholdings were started in unsuitable areas, and we know what happened to them. I want to make sure that the £60,000 has been spent on smallholdings in the right parts of the country which are worth encouraging.

§ Mr. Nugent
On a point of order. I wonder whether I might assist the House, Mr. Speaker. The grant is for loans to smallholders. It relates to smallholders as individuals. The money is not for starting or equipping new smallholdings.

§ Major Legge-Bourke
I am delighted to hear that. I had already realised it. It certainly confirms my supposition. I want to be sure that the smallholders who are being helped are in areas where we 893 want to encourage smallholdings and not in areas where we want to discourage them. The views of the hon. Member for Norfolk, South-West (Mr. Dye)—who is a member of the National Smallholdings Advisory Council do not coincide with mine in relation to part-time holdings.
I want to make sure that the money is going to the men who will take most advantage of it in increasing production. Smallholdings in the area which I represent have much better prospects tthan those in other parts of the country. That is why I hope that we shall be allowed to know where most of the £60,000 has gone.
I am glad that more is being spent on smallholdings and land settlement estates, for I am convinced that they have an enormously important part to play. I should like even greater encouragement to be given to the type of development which the Land Settlement Association has made such a success. If we can show smallholders that the Government mean to encourage the efficient ones, we shall have done a good job.

§ Mr. Dye
I hope that the hon. and gallant Member for the Isle of Ely (Major Legge-Bourke) will not mind if I do not follow him in his remarks and even if I disagree with his statement about land settlement estates. We are being asked to approve a sum of £357,000 as an additional subsidy to the Land Settlement Association. That indicates not that the Association has been a success, but that it is failing and requires more money to be put into it.
As the hon. and gallant Gentleman said, I am a member of the National Smallholdings Advisory Council, and I was appointed to a sub-committee to investigate the organisation of the Land Settlement Association. We went into it very carefully and made suggestions for improving the organisation. We thought that it would in future be less dependent upon the National Exchequer. Consequently, I am very disappointed to find the Ministry now asking for an additional amount, and I should like to know why it is being requested. There is a reference to an expansion in trading activities. I should have thought that in that event the Association would have required less assistance of this form.
894 Surely something has gone wrong with the Association. Why has not the right hon. Gentleman referred the matter again to the National Smallholdings Advisory Council so that the position of the Association can be investigated? Surely if this type of agriculture or horticulture is more prosperous than it used to be, the Association should require less Exchequer assistance? Has something gone wrong in the management of the Association? Does it lack business ability? The management was reorganised, and I should have thought that it would now have been able to manage with very much less assistance.
The additional amount requested for loans to smallholders is rather small. If we were to encourage our smallholdings as we ought to do, to encourage farm workers with adequate experience and knowledge to apply for them and to enable them to be properly equipped when starting, I should have thought that a great deal more in loans would have been required so that the smallholdings might be turned into profitable ventures.
I should be glad to have answers to two questions. In the light of the prospects of a few years ago, has something gone wrong with the management of the Land Settlement Association? Also, are we doing all we should do in the way of loans in present circumstances to encourage farm workers to go in for smallholdings?

§ Air Commodore Harvey
I am very pleased to see that another £378,000 is being spent on drainage. I should like to know in what part of the country the money is being spent. Is it evenly distributed so that each county gets its fair share?
Earlier today my hon. Friend the Member for Kidderminster (Mr. Nabarro), probably quite rightly, was criticising county agricultural executive committees. In my constituency and in respect of my small farm in Surrey I have had nothing but happy experiences of county agricultural executive committees. I have always found them helpful and ready to give advice. The drainage work that they carry out is first-class. I wonder whether my right hon. Friend could make more farmers aware of the fact that such a service is available. The work is very well carried out and the price is fairly moderate.
895 The subsidy on fertilisers was increased last year, and the drainage subsidy ought to be increased likewise. It is illogical to increase one and not the other. If the ground is not drained properly, one will not get the best results from the use of fertilisers. I urge my right hon. Friend to look into the matter. I know that it is asking for increased expenditure, but when we are trying to save expenditure on food produced overseas surely it would be wise to spend another £1 million or £2 million, if necessary, on land drainage to ensure that our land gives the very best results. Otherwise, crops are frequently ruined and wasted if we get a rainy season.
The third thing I want to ask him about is whether he is sure that the money is well spent, and whether, when a farm receives a subsidy for drainage work, the adjacent farms are brought into step so that they do likewise; otherwise, very frequently, a lot of work put in on one farm can be nullified by another not having had its ditches cleaned out at the same time.
I should also like to ask my right hon. Friend about this cold storage business. Am I right in assuming that these plants were put up originally to deal with a glut of herrings? I remember that a few years ago the Labour Government stated that that problem would be dealt with by the provision of extra cold storage facilities in the North of England, and that is probably very well worth doing. I want to ask whether it also applies to meat and other home production. The House is entitled to have more information about it to know how it is run, who is in charge of it, and what services it is rendering to the taxpayer. It is probably a very necessary business, but we should have very much more about it.
If it is Government-owned, I should like to see industrialists, men who understand the business, contributing towards the operation of this cold storage plant. Frequently, the two elements—Government money and free enterprise money—can work quite well together in trying to get the best out of both worlds, though there is one of them, at least, in which I do not believe. It is not a large sum which is involved, and if it is to be a worthwhile effort, it will have to be a 896 very much larger figure than is shown in the estimates.

§ Mr. J. Johnson
I should like to ask two short questions relating to land drainage and smallholdings.
First, I hope I may keep in order, because this is partly a constituency matter. Of course, I very much welcome the provision of the £358,000 in the Estimate, because the more we spend here the better I like it, both for the actual improvement of farmland and the cleaning out of ditches and other watercourses. I should like to ask the Minister how much of this money went to the Severn Catchment Board, if it is in order for the Minister to give detailed figures.
In my constituency, there are some villages, notably Willoughby and Princethorpe, which are flooded at certain times of the year. We cannot find out upon whom the responsibility of draining the land and cleaning out the ditches devolves. The county council does not seem to be able to make up its mind, nor does the land agent for the county, and the matter seems to revolve from one authority to another. I should like to know how much the Severn Catchment Board spent last year and whether it is in order for that authority to take up matters of this kind. We find that if our local councils clean out the village ditches, it is only a temporary salvage operation, because the farmland down the valley towards the Severn is not cleaned out as it should be, so that the water comes back into these villages. Therefore, I ask how much the Severn Board is spending and what work it is doing.
The other point, about smallholdings, is, again, a matter of interest to the Midlands, and particularly Warwickshire. The £60,000 which is mentioned in the Supplementary Estimate is stated to be required as more applications have been received from people wanting smallholdings than the Minister expected at the beginning of the year. Is it fair to ask the Minister what amount of money has been earmarked for Warwickshire, because very often smallholders there do not receive the encouragement they desire. Often, they are wanting more money, and do not seem to be able to get it.
I wonder whether the provision of this sum is due to more money being given to individual smallholders. particularly in 897 the Midlands, or whether this £60,000 is due in the main to increased loan charges as a result of the monetary policy of the Government.

§ Mr. Crouch
I welcome the opportunity of supporting this Vote for land drainage, and I am very pleased to see, in page 112 of the Supplementary Estimates, the reason for requiring this sum of £378,000. The explanation provided under Subhead A.1 states that this sum is required— mainly because more progress has been made than was expected with assisted schemes, and because changes have been made in the arrangements for issuing advances as work proceeds. I think that is very satisfactory, and I should like to compliment my right hon. Friend on speeding up land drainage work. I see that by far the greater part of this sum is being spent on grants to catchment boards and river boards under the Land Drainage Acts, 1930 and 1948.
In the discussion on the previous Vote, I mentioned the necessity of having lime as well as fertilisers where one wishes to grow crops, particularly grass, but it would be quite useless to spend money on lime and fertilisers unless the land is adequately drained. I have seen a great change take place during the last 20 years as a result of the work of the catchment boards. Much land that was formerly waterlogged is now productive as a result of that work, which applies not only to land bordering on rivers, but also to land that is covered by the Hill Farming Act.
It is surprising to find how much hill land is waterlogged, but, once the water has been adequately and efficiently removed, it is also surprising how, with good husbandry and the application of lime and fertilisers, additional crops can very quickly be grown. Since this matter affects my own area, I would, in particular, like to congratulate the Avon & Stour Catchment Board for the excellent work which it has done. [Interruption.] My hon. Friend the Member for Kidderminster (Mr. Nabarro) does not realise that there is a River Avon and a River Stour in Hampshire as well.

§ Mr. Nabarro
There is a River Stour in Worcestershire.

§ Mr. Crouch
Oh, is there? I was particularly interested in this matter when 898 going over land by the River Allen, which, for about half a century, had just been waterlogged, and I know that as a result of the board's work, this land became very useful and very productive land. In a few years' time, I have no doubt it will be much more productive than it is at present.

§ Mr. Speaker
I am not quite sure whether the matter to which the hon. Member is directing our attention arises on this Supplementary Estimate or on the main Estimate?

§ Mr. Crouch
I think a part of it, because this scheme was proceeding over this land three or four years' ago, and I noticed the other day that there were still further developments on that particular estate, so that I hope I am in order in mentioning it.
Mention has been made of smallholdings. I have seen land which is now used as smallholdings which was formerly waterlogged, but of which very good use is now being made, and I suggest that any work that can be done on the drainage of land is at all times a very good investment.

§ Mr. G. Jeger
We are all united on the advantages of improving the drainage of agricultural land. There is no disagreement anywhere about that.
I should like to ask the Minister a question about the land drainage grants for which we are asked to vote the additional sum of £378,000 tonight. I should like to know how much, if any, of it is being devoted to the drainage of land which has been waterlogged owing to mining subsidence. The Minister is now aware that this is a pressing agricultural problem in many part of the country, and he was kind enough to intimate to me on a previous occasion, in reply to a question when I raised the matter, that this problem was occupying his mind and the minds of other Ministers.
I should like him to tell us today whether this question enters at all into this sum of £378,000, and whether, in particular, the 3,000 acres of land in the neighbourhood of Goole which need draining are being catered for in this Estimate. It is, however a national as well as a local problem and I hope the Minister will be able to give us some information which will bring comfort to 899 the hearts of farmers in agricultural areas surrounding the coal mines.
My next subject has more of a local constituency interest, but I offer no excuse for that because it is very important indeed. We have been bothered by the River Ouse flooding its banks and causing difficulties, not merely to surrounding villages, but to agricultural land bordering on those villages and to land some distance away. In the Ouse and Trent areas are about 50,000 acres of good agricultural land which will be subjected to very severe flooding from the River Ouse if something is not done very soon to raise the level of the embankment. Does the grant of £378,000 include any amount for that work which will help to safeguard those 50,000 acres?
In my constituency, farmers are anxiously watching the tides. They know that drainage authorities are very responsible bodies and they know that in his wisdom the Minister scatters his largesse and encouragement in accordance with the urgency in each situation. Does he consider that our local situation is urgent and that it requires a grant? I should be very interested to know how much of the £378,000 is for increased rates of interest on loan charges. We are very interested to know that. The increased interest rate has resulted in rising costs to all local authorities, whether drainage or local government authorities.
The last point with which I want to deal is that concerning National Cold Stores (Management), Limited. The sum of £350,000 is asked and we are told that This provision includes an advance on account of a deficiency expected to arise.… I should like more information about that deficiency. I have no objection to a State organisation operating on a deficiency. In those circumstances it is providing a service to the community which if not paid for in one direction, is paid for in another. However, I should like further details about the deficiency which is expected to arise. Is it due to good management at such low charges that a service to the community is provided without wishing to make a profit, or is it due to bad management which can be corrected so that the cold stores could be made to pay their way?
The cold stores are indeed fulfilling a national purpose. No housewife these 900 days who can afford to buy frozen vegetables would disparage the National Cold Stores. Today, vegetables are very scarce and dear and cold storage is obviously of great interest. I hope we shall have an extension of cold storage and that we shall be told how much of this £350,000 will be devoted to meeting the deficiency and how much to an extension of the service.

§ Mr. Nabarro
I was inhibited in talking about county agricultural machinery services under Class VIII, Vote 1, because, Mr. Speaker, you ruled that I might talk only about the increases of salaries of such persons employed within those services. I now feel somewhat freer, for I see that under "Emergency Services" there is Subhead N.1—Capital Costs, which says: Additional provision required for expenditure on vehicles, plant and equipment, owing to delay of certain items provision for which was made in 1954–55…£52,000. I cannot be certain, but I believe that there can be no explanation of this fact other than that the agricultural executive committees have increased their stocks of agricultural machinery for contracting work, and it is that which I wish very strongly to deprecate.
In the course of replying to me earlier today, my right hon. Friend made two valuable points. He assured me that these services now pay their way. I congratulate him. He said that they were being wound up as far as possible where private enterprise contractors demonstrated that they had available facilities to undertake such services as were formerly carried out by the agricultural executive committees.
I want to refer my right hon. Friend to the County of Worcestershire. The private enterprise agricultural contractors in Worcestershire can carry out any and all of the services required by farmers, including land drainage. They have very amply demonstrated that to me in the course of the last few weeks. Yet at the same time the county agricultural executive committee has been buying new machinery. As the principle is here involved, can my right hon. Friend tell me why the committee is buying additional machinery for a State trading service when private enterprise is perfectly able to do the job and already has 901 the necessary plant, equipment and machinery?
That is the sort of thing which accounts for this item of £52,000. My right hon. Friend has said that he is anxious to terminate these trading services by the agricultural executive committees as early as possible. I hope that he will direct his attention to the position in Worcestershire and in the course of the next few weeks send me a letter, justifying why additional public funds should be devoted to a State trading service which is supposed to be an emergency service, and which I aver is no longer necessary. The whole of the work should be turned over, without delay, to private enterprise contractors, who are readily able to carry out the work to the satisfaction of the farming community.
Also, I wish to deprecate, as a second example of the extension of State trading, the expenditure of £350,000 under Subhead K.10.—Government-owned Cold Stores: Provision of Working Capital. What are a Tory Government doing extending nationalisation?

§ Mr. T. Williams
Nothing.

§ Mr. Nabarro
The right hon. Member for Don Valley (Mr. T. Williams) says, "Nothing." He is primarily an advocate of nationalisation and I am primarily and fundamentally opposed to nationalisation. I view with great disquiet and concern that my right hon. Friend should come to the House for £350,000 to create a quasi-nationalised industry and additional State trading services, when the work could be done, including the provision of capital by private enterprise, and by cold-storage companies which have long experience of this class of business.

§ Mr. J. Johnson
I find it difficult to follow the hon. Gentleman's argument and his almost pathological attitude towards agricultural executive committees a few moments ago—

§ Mr. Nabarro
I have left that, Mr. Speaker; I dealt with that ten minutes ago. The hon. Gentleman has been asleep.

§ Mr. Speaker
Order. We are now dealing with cold stores.

§ Mr. Nabarro
Thank you, Mr. Speaker, I am grateful for your protection. I was in need of it.
I was dealing with the item of £350,000 which the Government have spent on cold stores. My hon. and gallant Friend the Member for Macclesfield (Air Commodore Harvey) said that might be for herring. The hon. Member for Rugby (Mr. J. Johnson) followed on and said it might be for vegetables. Both are wrong—

§ Mr. Johnson
I deny that I said a word about cold herring, or cold Kidderminster, or anything else.

§ Mr. Nabarro
I apologise to the hon. Gentleman. The bright suggestion about vegetables came from his hon. Friend the Member for Goole (Mr. G. Jeger).
My hon. and gallant Friend the Member for Macclesfield talked about cold stores for herring and the hon. Member for Goole talked about them being for vegetables. I am not in the least interested in what the cold stores are used for. I am interested in a primary and fundamental point of Conservative policy—that there shall be no extension of nationalisation. When he replies, I desire my right hon. Friend to tell me, first, what efforts were made by his Department to get private firms to carry out this work, and, secondly, what efforts were made by his Department to get private enterprise business to provide this £350,000. I might add that whatever reply he gives me, he will not have my very enthusiastic support for an item of this magnitude which, manifestly, is an extension of State trading services.
It does not matter in what field one looks today, one finds the State interfering with commercial intercourse, commercial practice and the conduct of business; whether it electricity boards, agricultural machinery services—

§ Mr. Speaker
Order. The hon. Member cannot discuss electricity boards on this Suppelmentary Estimate.

§ Mr. Nabarro
I am sorry, Mr. Speaker.
Whether it is agricultural machinery services or cold stores, the principle is the same in every case. Though, of course, I cannot vote against this Supplementary Estimate—I cannot go so far as that—I want my right hon. Friend to 903 know, in terms of his right hon. Friend the Minister of Fuel and Power, that by his action in including the item of £350,000 for a further State trading Service, in this Supplementary Estimate, he has incurred my gravest displeasure.

§ Mr. Willey
I wish to say a word about the apprehensions expressed regarding this provision for cold stores. Unlike the hon. Member for Kidderminster (Mr. Nabarro), my apprehension is based not on ignorance of the position, but on knowledge of it. It is because this £350,000 is being paid to bolster private enterprise that we have some disquiet about it. The hon. Member for Kidderminster will probably recall that this matter was debated in the House some time ago when my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) moved a Prayer and many hon. Members on this side of the House supported him.
We believe that this represents a further step in the sacrifice of public enterprise to private enterprise. The hon. Member for Kidderminster will recall that during the war the Government built forty-eight modern cold stores at a cost of about £7 million and that, unfortunately, in January, 1940, at a luncheon to the British Association of Refrigeration, the then Permanent Secretary at the Ministry of Food gave an assurance that the Government cold stores would not be operated in competition with private cold stores.

§ Mr. Nabarro
Hear, hear.

§ Mr. Willey
It is as an implementation of that pledge, which was confirmed later by Lord Woolton, that the action of setting up the National Cold Stores (Management) Limited, was taken. I do not wish to debate the general principle, because in doing so I should probably be out of order. But we expressed the view then, and we still hold the view that in the new circumstances now obtaining this pledge ought to have been reviewed; that any Government with a sense of responsibility for public property would have negotiated a new agreement with the trade. That was what the Postmaster-General failed to do. Consequently we got the setting-up of the National Cold Stores (Management) Limited, and we have this supplementary Estimate before us.

§ Mr. Nabarro
Surely, if the Government denationalised these wretched things and sold them back to private enterprise, this Vote would not be necessary?

§ Mr. Willey
The Vote arises in this way. The Government set up this company, consisting of Government nominees and cold storage interests, for the express purpose of preventing the publicly-owned and publicly-built cold stores from being used so as to prejudice privately-owned stores. That is the purpose of this operation. What disturbs us is that already, within a few months, the Government are saying that this will not only prejudice the taxpayer by preventing the stores from being used, but will cost the taxpayer money, because it will be expensive to prevent these stores from being properly used.

§ Mr. Nabarro
Denationalise.

§ Mr. Willey
This was quite contrary to the views of the Public Accounts Committee which said that special consideration should be given to ensuring that the fullest possible use should be made of Government stores. We have now an initial expenditure—I quite understand the anxiety of the hon. Member for Kidderminster about this, because it is only an initial expenditure—of £350,000 to prevent these stores being made use of to the advantage of the country, in disregard of the opinion of the Public Accounts Committee.
I would point out to the hon. Member for Kidderminster one of the arguments used by the Postmaster-General when we debated this matter previously. He explained to the House that one of the difficulties that arose was the … tremendous increase in the amount of what might be termed individual refrigeration …"—[OFFICIAL REPORT. 23rd November, 1954; Vol. 533, c. 1196.] In other words, he said—and it was the Government's case—that we are facing a position where the provision of refrigeration facilities is prejudiced by the fact that there has been an enormous increase in private refrigeration; people provide their own refrigeration. If that be the reason for a contraction in the demand for refrigeration services, it seems pernicious to me that the loss should fall solely on the publicly-owned cold stores. It seems quite wrong. If this be a new development and private traders are able 905 to provide for refrigeration themselves, it should affect both sections of the industry. We should not have a company set up for the express purpose of ensuring that the publicly-owned refrigeration plant shall be redundant.

§ Mr. Nabarro
Denationalise.

§ Mr. Willey
I have mentioned my hon. Friend the Member for Cardiff, South-East because there is a well-equipped modern plant in Cardiff to which he has frequently called the attention of the House and which ought to be fully and profitably used. Here we have the position that not only has there been a sell-out to the trade, not only has there been a sacrifice of Government property, but quite unexpectedly—by this Supplementary Estimate the right hon. Gentleman is precluded from saying that he had this in mind at the time—we have a position where the right hon. Gentleman says, "Not only am I going to sterilise the use of cold stores built at public expense, not only shall I prejudice the country by preventing the use in many cases of stores which are modern and well-equipped, but I am telling the House that this will cost the taxpayer money and that this year alone we are to have an expenditure of £350,000."

§ Mr. Nabarro
Denationalise.

§ Mr. Willey
The hon. Member for Kidderminster has muttered, from a seated position, something about denationalisation.

§ Mr. Nabarro
The hon. Gentleman must not do me an injustice. I said that three times over in my speech. May I repeat, in case the hon. Gentleman has not grasped this simple point, that the Vote would not be before this House this afternoon if the Tory Party stuck to its policy and denationalised projects of this kind?

§ Mr. Willey
It is not for us on this side of the House to answer for the Tory Party. That task is beyond our capabilities. Let these publicly-owned stores go into competition with private enterprise. Do not preclude them from competing. What can be more crass and stupid than precluding them from competing is allowing them to impose a burden on the taxpayer. The Government are now to charge the taxpayer with the 906 cost of the care and maintenance of these stores.

Mr. Amory
Possibly the point does not arise strictly within the Supplementary Estimate, but I hope, Mr. Speaker, that you will allow me to say how very glad we have been to notice, until just a moment ago, the presence with us again of the hon. Member for Norfolk, North (Mr. Gooch), after his severe illness. [HON. MEMBERS: "Hear, hear."] We hope that he is fully restored to health.
One remark made by the right hon. Member for Don Valley (Mr. T. Williams) was of fundamental importance. It was afterwards supported by my hon. Friend the Member for Dorset, North (Mr. Crouch). I agree with it wholeheartedly. It was that good drainage is the basis of good and successful husbandry in farming. The right hon. Gentleman was not quite sure whether it came before fertilisers, but I think that drainage does come first. I would pay a tribute to the patient and sometimes difficult work of the river boards. They do a tremendous amount of work which, because it is not always spectacular, may not always be properly appreciated. I do not often get a chance to pay them a tribute, and I am glad to take this opportunity of doing so.
The Land Settlement Association has been mentioned. I can say what will be comforting to a number of hon. Members who raised doubts on this subject; the Land Settlement Association is going well. No exceptional difficulties have arisen and I am very satisfied with the way in which it is being managed. A sum of £78,000 of the present figure of £357,900 includes additional loans paid to Welsh Co-operative societies which got into temporary need of additional resources. That has no bearing on the main Land Settlement Association.
On the trading expenditure of the Association, we are asking for an increase of £279,000. This is related to the question which the hon. Member for Norfolk, South-East (Mr. Dye) asked. On the other side, under the Appropriations in Aid, we are reckoning on increased trading receipts of £307,000. The need for the additional expenditure arises because the trading activities have been at a higher rate recently. The right hon. Member for Don Valley knows very well what they are— 907 supplies, machinery services, etc. That explanation fully and satisfactorily accounts for the higher figure.
7.15 p.m.
Next, I will refer to cold stores in a way which I am sure my hon. Friend the Member for Kidderminster (Mr. Nabarro) will consider satisfactory. We find ourselves with 47 Government-owned cold stores that we built early in the war at a cost of about £7 million. A definite pledge was then given to the industry that they would not be used after the war in competition with the trade. The hon. Member for Sunderland, North (Mr. Willey) suggested that we might review that pledge. I do not think so. It was a specific pledge, and I consider that it ought to stand.

§ Mr. Nabarro
Hear, hear.

Mr. Amory
We were faced with three practical alternatives. One was to sell the cold stores. There were practical difficulties. These cold stores were built in the right places during the war, but in the wrong places to be commercially convenient in peace-time. There was a very small demand indeed for buying them. I could not have sold many of them and those that I sold would have gone at a knock-down price. Again, I had to remember the pledge that they would not be used in competition with the trade. It is also of great advantage to the Government to have these cold stores available again for use in another emergency. So there were practical and formidable arguments against selling them.
Another alternative would have been just to put the cold stores on a care-and-maintenance basis. That course I rejected because it would have been considerably more expensive to the Government than the course we are following. This course is to try to get the advantages of commercial management. Therefore, we set up this company, which is being subscribed for not by the Government but by the trade, with an authorised capital of £50,000 and an actual capital of £10,000. It is managed by a board of directors, of which the Government appoint two, and these have over-riding powers on important questions. The arrangement is made that any deficit is paid by the Government, if any.

§ Mr. Ede (South Shields)
What does the right hon. Gentleman mean by "Government, if any"?

Mr. Amory
I meant "deficit, if any". Ten per cent. of the profit goes to the shareholders and the remainder comes back to the Government, if any.

§ Mr. Ede
I did not know that the Government had entirely abdicated.

Mr. Amory
I meant "profit, if any." There is a limit of £10,000 on the amount which can go to the shareholders. The most important part of the use that is to be made of these stores, in which the Government have a very real interest, is to store strategic stocks of the foodstuffs that are to be held. We could have done that by just retaining these stores under Government control in the ordinary way, but we should not have secured the advantages of commercial management.
The second use is that they will be available—in so far as they are not required for Government strategic stocks—for the use of private trade in areas where, in the judgment of the trade, there are not adequate commercial facilities available.

§ Mr. Willey
On the subject of strategic stocks, does the right hon. Gentleman mean that the stores will be converted to dry stores for that purpose?

Mr. Amory
A certain amount of conversion is going on in order to be able to introduce a controlled atmosphere in the stores. The amount of conversion required depends on the use that is to be made of the stores in any particular circumstances. The £350,000 is for working capital. I will give an indication of how the money is to be used. Of that sum, £150,000 is required for taking over by the company of certain subsidiary assets from my Ministry. Then £60,000 of it represents the commercial annual rent which is to be paid to the Ministry by the company. A sum of £35,000 is for imprests to individual stores for working capital, and £105,000 for other expenditure.
I believe that this solution which has been found is a practical and sensible arrangement for maintaining these stores in the most economical way, and that their maintenance will prove of very great value indeed to the Government and will 909 be the cheapest and most convenient way that we could possibly store a proportion of our strategic stocks of food.
The hon. Member for Rugby (Mr. J. Johnson) asked me one or two questions. He asked how much of this Supplementary Estimate for the drainage grants went to the Severn Catchment Board. It is impossible to say, because it is difficult to link a particular grant for a certain local authority to the Supplementary Estimate concerned, but if he will write to me about any particular points I will give him all the information I can.
The hon. Member for Rugby also raised a point which, I agree, is very important, and that is the responsibility for maintaining water courses which can damage the work done by other authorities or farmers. I agree with him that no really satisfactory solution to that problem has yet been found.

§ Mr. J. Johnson
Can the Minister tell the House when he hopes to implement the finding of the Heneage Committee, which sat under my right hon. Friend the Member for Don Valley (Mr. T. Williams) some time ago?

Mr. Amory
One of the recommendations of the Heneage Committee referred to this matter, but, as I have recently said in the House, unfortunately I have not managed to secure sufficient general agreement at present to enable us to proceed on a broad front with the recommendations of the Heneage Committee. This point which the hon. Gentleman has raised is very much in my mind at present. County committees do what they can to help, but there are great practical difficulties.
The hon. Gentleman asked me about loans to smallholders. These loans, as he probably knows, may be up to three-quarters of the working capital that may be required on a smallholding. The numbers have gone up recently, partly because there has been an unusual number of changes of tenancies; the average amount has also gone up and this increase in the average amount is also partly responsible for the Supplementary Estimate.
My hon. Friend the Member for Dorset, North (Mr. Crouch) said that he could testify to the good results that accrued from drainage expenditure in his locality, and that is very much our 910 general experience. I should like to see it go still faster than it is going at present.
The hon. Member for Goole (Mr. G. Jeger) asked me, as I was afraid he would, a very difficult question about mining subsidence. I think I answered a question on this subject put by him the other day. It could be, and I think it may be, that some of this supplementary money may include work done on drainage as a result of mining subsidence. That is one of the reasons why river boards sometimes undertake improvement schemes, but I find it quite impossible to sort out the amount or to give any indication of how much it might be. Nor could I relate these Supplementary Estimates in any way to the local schemes that the hon. Gentleman mentioned, both of which I know about and both of which present real difficulties—the raising of the height of the banks of the Ouse and also the flooding of the land that he mentioned.
The question of loan charges is very difficult to explain. What happens is that when a river board decides to finance an improvement scheme it usually raises a loan for the whole of the expenditure and then the Ministry undertakes responsibility for the loan charges on the Ministry's share—that is to say, on the 85 or 90 per cent. as the case may be. What the Ministry does is to recoup the river board for loan charges on the Ministry's share, but not on the 15 or 10 per cent. which is the river board's own responsibility.
I think that I have already answered the question which the hon. Member for Goole asked me about the Land Settlement Association.
My hon. Friend the Member for Kidderminster (Mr. Nabarro)—unusually, I think—just missed the target in what he said about the emergency services, because these services that are referred to in the Supplementary Estimate are nothing to do with the county agricultural executive committees or the goods and services scheme or the machinery service. They are solely related to the Ministry of Food emergency feeding plans and defence plans in the case of a national emergency.

§ Mr. Nabarro
I am grateful to my right hon. Friend. I was obviously out of order throughout, Mr. Speaker. None the less, I am sure that I might ask your indulgence to ask my right hon. Friend whether he will deal by letter with my valuable points.

Mr. Amory
I will certainly look into the matter of the Worcester County Agricultural Executive Committee's machinery service. On the present basis, as I explained earlier, when, in our opinion, there are no private enterprise services available, and there is a need for the work, we are providing the machinery with which the county committees may do that work efficiently. I am glad to join in the tributes that my hon. and gallant Friend the Member for Macclesfield (Air Commodore Harvey) paid to the work of the county agricultural executive committees.
My hon. and gallant Friend the Member for the Isle of Ely (Major Legge-Bourke) raised several points. I think I have already referred to the loan charges position on the land drainage grants, but I am not quite certain that I understood correctly the point that he was making. I shall be glad if he will write to me on the subject, when I will certainly look into it and see if there is anything that we can do to help. My hon. and gallant Friend asked me whether the Government could meet some of the expenditure on the interest rates in the case of the river board.

§ Major Legge-Bourke
I want to make it clear that I was referring to a very exceptional part of the work, namely where national danger is involved.

Mr. Amory
As my hon. and gallant Friend knows, where there is a question of danger we have tried to be as generous as we possibly can; we always try to be in our interpretation of the regulations. If my hon. and gallant Friend feels that we are being less than generous, I hope that he will write to me about it.
My hon. and gallant Friend the Member for the Isle of Ely also asked me about the suitability of smallholdings in connection with these loans. I agree that particularly in the earlier days many smallholdings were bought and fitted up at great expense which were not really suitable as smallholdings; but over the years I believe that some of them have been eliminated and some are still being eliminated. We are encouraging local authorities to decide on the merits of the smallholdings, as to whether that is the right permanent rôle for that land, and, where it is, to concentrate on improving and bringing the smallholding to a proper 912 level of equipment and so forth. That is what we are concentrating on at present. I believe that a slow but steady improvement is going on in that direction.
I think we have had a very good and useful debate with a great many practical points brought out. I sense that in general the House approves of this Supplementary Estimate and believes that the money is being used for sound purposes and that British agriculture will get excellent value from it.