§ Mr. J. M. L. Prior (Lowestoft)
I beg to move, in page 50, line 46, after "Ice-cream", to insert "except dairy ice-cream".
The purpose of this Amendment is fairly straightforward in that it is designed to exclude ice cream made with milk from the imposition of the 15 per cent. Purchase Tax. The reason why my hon. Friends and I have put down the Amendment is to draw attention to the importance of the manufacture of dairy ice cream to the fanning industry and to the milk producers in particular. Milk is a product produced mainly by small farmers—[HON. MEMBERS: "By the cows."] Milk is a product produced mainly by cows owned by small farmers of holdings of under 100 acres. These small farmers own 44 per cent. of the cows in the country.
Here is a way in which we can help the small producers without at the same time costing the Government any money in subsidies. We already have the small farmers' subsidy and many other forms of subsidies. The milk subsidy has been reduced. Indeed, from now on, there will not be a subsidy on milk. This is a way in which we can give great encouragement to the small farmer to go on producing milk.
There is very little else that the small farmer, particularly in the west of England, can produce satisfactorily and keep up his income. Any method by which we can encourage the small farmer in this direction and at the same time encourage the consumption of milk in the country should be supported by the Government.
The consumption of ice cream made with milk has gone up steadily during the last two or three years. It went up from 5.9 million gallons in 1959 to 9.1 million gallons in 1961, at a time when the consumption of ice cream as a whole was falling slightly owing to the fact that the summers of 1960 and 1961 were very inclement. In percentage terms the rise was from 16 to 26 per cent. of total output.
1490 There is a very real possibility that the imposition of Purchase Tax may well check this rise in demand, not only because of the increase in price but also because some companies may charge a higher premium for dairy ice cream. I hope that when he replies to the debate my right hon. Friend will realise that this is largely an Amendment designed to help the small farmer, in particular, and that this is a way in which the Government can show that they intend to help the small man in business and that this can be done by this very simple definition of dairy ice cream. After all, dairy ice cream is a food, and a very popular food at that, and I think it is right that we should give it a favoured position over other forms of ice cream.
I do not wish to press the matter at this time of night, but I hope that my right hon. Friend will be able to give us some satisfaction if only by saying that the Government are aware of the problem and will examine it. I hope that we shall have a favourable reply from my right hon. Friend.
§ 11.0 p.m.
§ Sir Henry Studholme (Tavistock)
I support the Amendment. I am sure that everyone in the Committee, including the Chancellor, wants to do everything he can to encourage British agriculture, to help the small farmer in every way, and to boost the sale of home-produced milk.
As my hon. Friend the Member for Lowestoft (Mr. Prior said, sales of dairy ice cream have risen considerably in the last year or two. There is no comparison between dairy ice cream and synthetic forms of ice cream. The public are realising more and more that this is a very agreeable, valuable and wholesome food. I appeal to the Treasury to make the alteration in the Schedule for which we ask so as to benefit dairy ice cream. It is not much to ask. None of us wants to discourage people from eating dairy ice cream, which is a very delectable concoction. Its consumption does not harm the nation's teeth, but is of great benefit to the home milk producer. I therefore hope that we shall have a favourable reply from the Treasury.
§ Dr. Mabon
It is a great disappointment to me that no Scottish Tory Members have appended their names to this 1491 excellent Amendment. I thought that we should have heard from some of them, because there is no doubt that Scottish farmers have an interest. I do not want to speak on behalf of the farming community, but, once again, in a sense as a representative of the consumer. We heard some very specious arguments tonight about the tax on sweets. There cannot be much argument about the merits of dairy ice cream. Anyone who has attended an invalid and knows the value of dairy ice cream in diets knows that it can hardly be considered as a luxury or an article which should be taxed.
It has been the Government's intention so far to try to exclude genuine foods from their Purchase Tax system. It would be regrettable if the Amendment were not accepted. Without doubt dairy ice cream is not only an essential food in itself. It is also a food widely used in convalescence and medicine generally to supplement treatments. I hope that before the Treasury representative speaks we shall hear a voice from the Scottish Tories in support of the Amendment, as well as asking the Minister to turn his attention to the grave concern which many of us have that Purchase Tax is fast becoming a tax on food. This, if it is not stopped, might be the very small thin edge of a very large wedge.
§ Sir John Gilmour (Fife, East)
Speaking for Scotland, I am glad to join the hon. Member for Greenock (Dr. Dickson Mabon) in stressing the interest of Scottish dairy farmers. I also support what my hon. Friends have said. It should not be overlooked that ice cream is the first food that a doctor advises a patient to take after an operation for the removal of his tonsils. The Chancellor should not put a tax on a food which is prescribed after hospital operations. This is a very topsy-turvy world. I recently went to Smithfield and saw many fat pigs hanging up in the market. I asked what was happening to the fats. I was told that they were going to make ice cream—not dairy ice cream, of course. If a tax is put on dairy ice cream and sales fall, the Minister of Agriculture will obviously have to pay out further subsidies on the fat pigs being produced to provide fat in other ice cream.
1492 This is a natural product which is doing good. It is very much better for children to eat dairy ice cream at suitable opportunities at schools than to chew sweets and then have to have their teeth extracted. I can see no sense whatever in the Chancellor levying a tax on dairy ice cream. I hope that my right hon. Friend will consider the Amendment with favour.
§ Mr. William Yates (The Wrekin)
I would have thought that the Amendment would have appealed overwhelmingly to the Conservative Party. It occurs to me that here is a time when we have to face the problems of the agricultural world and, in particular, the difficulties which the smaller farmers are experiencing. I can speak only for my own constituency. I would not presume to speak for others. If whoever replies for the Government will be good enough to say that he will examine the Amendment and let us know, on Report, whether he will accept it, that will be satisfactory to me.
In general, the majority of my farming friends think that farming was prosperous only under Mr. Tom Williams, as he was then, when he was Minister of Agriculture. This is an extraordinary myth of the past. There was, of course, then plenty of money to hand out to the farming community without any regard to the national interest. [HON. MEMBERS: "Oh."] That is perfectly true. I think that I should be out of order if I pursued that point.
§ Mr. Yates
The hon. Member is very kind.
I should have thought that, in general, an Amendment of this nature, would probably increase the consumption of milk. It would be better for children and invalids to take dairy ice cream than some of the things we find in ice cream. Therefore speaking only for my own small farmers, I am not prepared to allow the Government to let the Amendment go by without some promise of its consideration on Report. If I were to divide the Committee I should be anxious to know how many hon. Members opposite, who always pretend to be 1493 so keen on supporting the farming community, would do so when it came to protecting fanning interests.
§ Mr. Ross
It is difficult to reconcile the words with which the hon. Member for The Wrekin (Mr. W. Yates) concluded his speech with those with which he opened it, when he told the Committee that the Labour Government were far too generous to farmers. We are concerned that anything that can be done should be done. My constituency has suffered sufficient blows from this Budget. I have already appealed on behalf of the boot and shoe industry of Kilmarnock and the lace industry in the small burghs which make the fabrics on which Purchase Tax has been increased. I had not fully realised until now that another important industry in my constituency was equally affected.
I represent about 200 square miles of agricultural land where milk production is basic to prosperity. Everyone knows that there has been concern about finding ways and means of increasing the consumption of liquid milk. As has been pointed out, attention has been turned to dairy ice cream and, in spite of changes in that industry, we have been fairly successful in securing an increased consumption of milk there. We are certainly concerned about anything which would reduce the sale of dairy ice cream.
The best that can be said is that this tax will not help. The chances are that the 3d. cornet has disappeared and become the 4d. cornet, an increase not of 15 per cent. but of 30 per cent. If the same happens to dairy ice cream the marginal difference will be very much greater probably by the time adjustments are made and it may well be that we shall have a considerable reduction in the use of milk for making ice cream.
I sisncerely hope that the Chief Secretary to the Treasury is better briefed on this than he was on the previous Amendment. It came as rather a surprise to the right hon. Gentleman that something was to be raised. I am sure that this Amendment is no surprise to him, and after the fiery words of the hon. Member for The Wrekin I wonder whether we have a farming lobby tonight.
I assure the hon. Gentleman that Ayrshire will be represented in the Lobby. 1494 I am sorry that Tory Members from Ayrshire are not present. I do not know where they are. The hon. Member for Bute and North Ayrshire (Sir F. Maclean), who has a considerable number of farmers in his constituency, is not here, and the hon. Member for Ayr (Sir T. Moore) is not here, either, though his constituency takes in a considerable part of agricultural Ayrshire. The hon. Gentleman is seldom here after half-past three.
After leaving the pasture lands of the prosperous valleys, one meets the small farmers on the hills around Loudoun, Craigie and Fenwick, to whom the sales of liquid milk are very much more important than they are to many other farmers. We should do everything that we can to make good the proclamations that we occasionally make about representing these small farmers. All the large farmers tend to base their demands on the Government on the prosperity of the small farmers because they know that once the small farmers go they may follow suit.
I appeal to the Chief Secretary to discard the brief that he has been reading so anxiously and wondering how he can courteously turn down the Amendment and be true to what the party opposite says about its interest in the well-being of farmers small and large. Milk producers have not done too well out of the last two Price Reviews. I do not propose to lecture about standard quantities, and so on, as there will be an opportunity later to discuss that.
We are serious about this Amendment, and I am sure that sooner or later the hon. Member for Edinburgh, West (Mr. Stodart) will be forced to rise to support the Scottish farmers. We are determined that the Chief Secretary shall be true to the things that the Government have said about their policy to support agriculture. We are not worried about the Common Market. We are worried about the market for dairy ice cream. We want to see the market extended considerably, and we see this tax on dairy ice cream as something that will restrict a very promising development in the consumption of liquid milk. I hope that the right hon. Gentleman will do what I have suggested—throw away the prepared brief turning down the Amendment, and accept it.
§ 11.15 p.m.
§ Mr. Edwin Wainwright (Dearne Valley)
I support the Amendment which has been so ably moved by the hon. Member for Lowestoft (Mr. Prior). I regret, however, that he selected this item out of a number of others that could have been discussed.
There is one point that we must always bear in mind when discussing matters of this sort. It is not only the usefulness of the article that matters. The quality of it is extremely important, and I hope that if the right hon. Gentleman accepts the Amendment he will bear in mind that we must have some safeguards to protect the quality of the product.
It is essential to ensure that the quality of this type of food is such that it fulfils the requirements necessary to maintain health. Dairy ice cream is a lovely food. Other kinds of ice cream are quite nice, but sometimes they are not as healthy as they should be. It is because even dairy ice cream can be interfered with and its quality spoiled that I want the right hon. Gentleman to ensure that its quality shall be safeguarded. This means that certain conditions must be laid down.
I am pleased to know that the acceptance of this Amendment would help the small farmer. I have an affection for the agricultural industry, but I have a greater affection for the small farmer than for the rich one. I hope the small farmer will take advantage of any encouragement which the Government may give him in this respect.
This type of ice cream should be advertised more. It is proposed to increase the Purchase Tax on certain kinds of sweets, which children buy, and the Government have sought to justify this action. I hope that the Government will encourage the small farmer to advertise the high quality of dairy ice cream, as well as drawing attention to inferior ice cream which may be put on the market from time to time, because it should be of the finest quality if we are to promote the health of our children.
§ Mr. A. V. Hilton (Norfolk, South-West)
I, too, support this Amendment. This is a very important matter. My hon. Friend the Member for Greenock 1496 (Dr. Dickson Mabon) referred to the importance of the food value of this type of ice cream, and there is no doubt that it is far superior to the mass-produced staff that is dished out by certain well-known manufacturers.
Another point which has been made by various hon. Members is that this would be a real boon to the milk producers, especially the small producers. Only a few weeks ago there was much criticism in the House because 2 million pints of skim milk were being poured down disused coal mines. We are not discussing skim milk on this occasion, but much of the fresh milk, before it is skimmed, could be put to a better use in the production of dairy ice cream, which, I repeat, is far superior to the other manufactured type. We should do all we can to increase the sale of this very valuable commodity.
My hon. Friend the Member for Kilmarnock (Mr. Ross) said that we were not concerned about the Common Market—
§ Mr. Hilton
—but the small farmers in my constituency, many of whom are milk producers, are desperately concerned about it. This is one other ray of hope that we can give the small farmers who are so concerned about our entry into the Common Market.
§ Mr. Ross
This is very important. I do not want to be misrepresented in my constituency. I did not say that we were not concerned about it. I have a very marginal constituency with a majority of only 10,000, and I have to be careful. [HON. MEMBERS: "Frightened of the Liberals?"] The last time the Liberals appeared in my constituency they did the same as the Communists. They lost their deposit, and they will do the same next time. Moreover, my majority went up considerably. What I said earlier was that we were not tonight concerned "with" the Common Market—not that we were not concerned "about" it.
§ Mr. Hilton
I am sorry if I misunderstood my hon. Friend's reference to the Common Market, and I withdraw what I said. But I repeat that the small farmers, especially in Norfolk, are desperately concerned about it.
1497 My hon. Friend referred to the Liberals in a previous contest in his constituency. They may have been interested in trying to unseat him there, but they are not very interested in this most important Amendment that we are discussing tonight. I wish that the Liberals were here to lend their voice and support to it. I hope that the Government will give an assurance that they will favourably consider the Amendment.
§ Mr. J. A. Stodart (Edinburgh, West)
The milk production case has been very adequately and competently covered. All I would say—it is not only because milk production is not a feature of my own agricultural unit—as the representative of an urban constituency is that I think that there is a very great chance here of the Government discriminating between something which is synthetic and something which is genuine and doing a tremendous amount of good to those who eat ice cream, as was said by the hon. Member for Greenock (Dr. Dickson Mabon), who has very much greater medical knowledge than I have. It is for that reason that I support the Amendment.
§ Mr. Barber
As my hon. Friend the Member for Lowestoft (Mr. Prior) said in moving the Amendment, the effect of it is to exclude dairy ice cream from the new tax at 15 per cent.
The first thing I want to make clear is that there would be no difficulty of definition in distinguishing dairy ice cream from other ice cream because the definition is already made in the schedules to the Food Standards (Ice-cream) Regulations, 1959.
It follows—I want to be frank about it—that the Amendment raises a question of policy. While I see the attraction of the proposals to the small farmers in the constituencies of my hon. Friends, I hope that they will consider what I have to say not only from the point of view of their constituents, but also in the wider context of the trade generally and, indeed, of Purchase Tax generally.
It is always tempting to accede to sectional interests, but I am sure that in this case it would not be right to do so. I suppose that the Amendment might be of some limited help to our dairy farmers, but there are two things I would say about that. In the first place, the 1498 manufacturers of dairy ice cream are under no obligation whatever to use home produced milk or butter to satisfy the definition of dairy ice cream.
I am told that nearly half the total production of this ice cream comes from the larger firms, and they, of course, will buy their dairy products in the cheaper markets. This is what they are doing, in fact. Only a few minutes before the debate started, one of my hon. Friends told me that he knew very well that some of these manufacturers were, not long ago, using Polish butter. But even if this were not so, and if the whole of the butter or milk were produced at home, it is very doubtful whether this new tax would have any substantial effect on consumption.
It may be, as my hon. Friend the Member for Tavistock (Sir H. Studholme) said, that dairy ice cream is a better and more nutritious product than ordinary ice cream; but in the case of a tax which is imposed over the whole range of confectionery, soft drinks and ice cream, it plainly would not be right to exclude dairy ice cream on that ground. Same sweets, for instance, are more nutritious than others.
I think that it was my hon. Friend the Member for Fife, East (Sir J. Gilmour) who took the view that dairy ice cream was particularly desirable because it afforded some relief after one had one's tonsils out. I must remind him that it was made clear to the hon. and learned Member for Kettering (Mr. Mitchison), in the debate yesterday, that another product, which is of great medicinal value in the North of England, namely, black beer, is taxed at a high rate. I do not think that we can make any distinction on that score.
There is another point of considerable importance. Whatever may be the motive of those who wish to exclude dairy ice cream from the provisions of the Schedule, one inevitable consequence of excluding it would be to relieve from tax the most expensive kinds of ice cream. I believe that if we were to do that, the poorer classes of consumer and those firms, mainly small firms, which make ordinary ice cream would have a justifiable grievance.
I am told that total consumer expenditure on ice cream is about £75 million 1499 a year, of which about £20 million is thought to be accounted for by dairy ice cream. So, on that basis, the cost of the exclusion would be about £2 million a year.
§ Mr. W. Yates
Is my hon. Friend saying that, even though it were classified as dairy ice cream, since dairy ice cream can contain milk or butter from abroad, the Amendment, if carried, would not help the smaller farmer in this country? Is that the point he makes?
§ Mr. Barber
I was pointing out that, though the ice cream satisfied the existing definition of dairy ice cream which was accepted by the House of Commons in 1959, it would not follow that the ingredients in the ice cream would necessarily be ingredients produced by United Kingdom farmers. That was the only point I was making.
It is fair to say that it is the general view of hon. Members on this side of the Committee that Purchase Tax should be widely based and that we should be very wary of making exceptions. I hope that my hon. Friends who spoke in support of the Amendment, and hon. Members opposite who took the same view, will see the force of the arguments which prompted us to include all ice cream in the Schedule.
My right hon. and learned Friend the Chancellor reconsidered the matter when the Amendment appeared on the 1500 Notice Paper, but, having considered it again, he does not feel able to accede to the proposal which has been made. I hope that, in the circumstances, and having in mind the reasons I have given, my hon. Friends will not press their Amendment.
§ Amendment, by leave, withdrawn.
§ Schedule agreed to.
§ Mr. H. Brooke
I beg to move, That the Chairman do report Progress and ask leave to sit again.
We have now completed the Purchase Tax provisions of the Bill, and unless any hon. Member is passionately anxious to proceed at this hour to debate the standard rate of Income Tax, I suggest that we have done a good day's work.
§ Mr. Mitchison
I have no difficulty in resisting the temptation to discuss the standard rate of Income Tax at this hour and would like to support the Motion.
§ Question put and agreed to.
§ Committee report Progress; to sit again Tomorrow.