§ THE EARL OF DENBIGH
My Lords, I rise to ask His Majesty's Government whether in view of their expressed desire to promote remunerative employment in agricultural districts and check the exodus to the towns, they are now prepared seriously to encourage the establishment of a sugar beet industry in the British Isles, and thereby ensure that a portion of the £18,000,000 now paid annually for imported sugar shall be available for labour in rural districts at home; whether they realise that the main obstacles to the introduction of the capital necessary for the erection of factories are; (1) the threatened imposition of a heavy excise duty on any home-grown sugar; (2) the attitude of individual members of the Government towards the Brussels Convention and the possible re-introduction of bounty-fed sugar; and whether His Majesty's Government will now, by a rebate of excise for a term of years, accord to an English sugar industry the same en- 546 couragement as has been given to Irish tobacco, and also give such an assurance on the subject of the Brussels Convention as will tend to remove the feeling of uncertainty now prevailing.
I ventured last year to draw the attention of the House to this question, and I am afraid I spoke at rather an unconscionable length. I can assure the House that I have no intention of making a long speech this evening. I have given notice of this Question on account of the additional interest which is being taken in the sugar beet industry in this country, and also on account of the desire which has been expressed by members of the Government to do something to stop the depopulation of the agricultural districts. I believe that this industry, if once started in this country, would do much to remedy those evils which are so much complained of. Agrculturists generally are very anxious that some step forward should be taken. I called your Lordships' attention last year to the fact that there were something like 50,000,000 tons of beetroot grown every year on the Continent, and that there were from four to five million acres under beet. The cultivation of sugar beet increases the fertility of the soil and gives a larger yield of succeeding crops, and it provides a most valuable cattle food in the residue of the beet-root. We have to face the fact that the raw sugar beet is not a good cattle food, and cannot be economically grown for any other purpose except the making of sugar; therefore you cannot expect people to grow large quantities in this country experimentally, except for that purpose, and for the making of sugar you want factories. That is the position in which we stand at present.
All experiments show that English beet is quite equal, if not superior, to that grown by continental nations, but we are faced with the want of capital. In order to put up a sugar factory, a capital of at least £70,000 would be required. I pointed out last year the great difficulties in starting this industry; I demonstrated that new factories established here could not hope to compete at the outset with the old-established factories on the continent, and I asked His Majesty's Government 547 whether they would promise a rebate of excise duty in order to enable the industry to get upon its legs and be firmly established in this country. I received a certain amount of sympathy from His Majesty's Government, but I was met with a blank refusal, the reason for that refusal being that my proposals were described as savouring of protection. I can only say that that is not an excuse which is likely to commend the present fiscal policy of His Majesty's Government to the agriculturists of the country.
The noble Earl the President of the Board of Agriculture then tried to prove that sugar-beet could not yield a profit of more than £3 per acre, and that the farmers, therefore, would not think it worth while to cultivate it. But the farmer's profit depends upon the price he can get for his beet, and the price which the sugar factories will pay for the beet will depend upon the price they get for the finished article. If you are going at the outset to charge the full excise duty, either the factory must forego a considerable amount of profit, thereby rendering it more difficult to get the capital, or else they cannot afford to pay the farmers a price which would constitute an inducement to them to start beet-growing.
After having been told that His Majesty's Government would not listen to this proposal because it savoured of protection, it was very interesting to us later on in the session to find that this concession had been allowed in regard to the growing of tobacco in Ireland. When I inquired how it was that the Ministerial conscience had permitted this concession, I was told by the Lord President of the Council, first, that there was no analogy between the case of tobacco and sugar-beet, and, secondly, that His Majesty's Government only wanted to prove that tobacco could be grown and that, as soon as that was done, they had the fullest intention of taxing it up to the full capacity. We will wait and see what the Irish Council has to say about that. We admire the Lord President's wide knowledge on so many subjects, but I have no doubt he has not had very much time to give to the technical details of a new agricultural industry. I can assure him that, if he 548 thinks that the matter has been definitely proved and that the industry is certain to be a success in this country, simply because we find we can successfully grow small plots of sugar beet, he is suffering from faulty information and is very greatly mistaken. There is a great deal to be done yet before it is proved that the beet-sugar industry can be established. The first factory put up in this country will be absolutely experimental. Of course, we know what the machinery is that is used on the Continent, and we know the methods adopted for making sugar from beetroot; but, as it will be an entirely new departure, the first sugar factory put up in this country must be an interesting, though a most important, agricultural experiment. If it is successful it will lead to many more, and I respectfully suggest that it is surely worth while for His Majesty's Government to strain a point in order to assist the establishment of the first factory.
The great obstacle to the introduction of capital for this industry, apart from the question of price, is the attitude of various members of the Government towards the Brussels Sugar Convention. It is unnecessary to refer to the long negotiations and arguments which eventually led up to that Convention; but I should like, in view of the attempts which are made by many supporters of His Majesty's Government to secure a return to the sugar bounty system, to remind your Lordships that by nobody have these sugar bounties been more emphatically condemned than by Leaders of the Party opposite. The Prime Minister, speaking on this subject, said—I regard bounties as merely another form of protective duties.… These bounties appear to me to be bad, they disturb trade, hinder the development of the country, and, above all, punish the very nations which employ them; so I do not know what there is to be said in favour of them.Mr. Gladstone was equally condemnatory of bounties. He said—We do not regard with any satisfaction the system under which an artificial advantage is given in our markets to the products of foreign labour. … Some people say it is a good thing because the consumer gets the benefit, but no benefit founded on injustice and inequality can bring good to the consumer.549 In view of those extracts and the inherent badness of the bounty system, and also of the fact that it is to the Brussels Convention and the abolition of the bounties that we owe the possibility of being able to start the sugar beet industry in this country, I do not think it is unreasonable to ask His Majesty's Government to give us some clear declaration of their intention on the subject.
I do not ask them to pledge themselves to any definite adherence to the Convention as it stands, but I do ask them, when negotiating on the subject, not to agree to any provisions permitting the re-establishment of bounties or of what is known as the cartel system. The cartel system which prevailed abroad is very nearly as harmful to the sugar industry in other countries as direct bounties. Under this system sugar factories combined together for raising the price to the home consumer, so that they were able to sell their surplus to the British consumer at a price very often below the cost of manufacture. They were only able to maintain this system by the fact that they had import duties which were very largely in excess of the excise duties, so that it did not pay to import sugar from outside for the purpose of competing with them. But by the Brussels Convention the surtax was limited expressly to 2s. 6d. per cwt., and therefore, the cartels have been practically knocked out. There is no doubt that when the Convention is reconsidered very strong influences will be brought to bear to re-establish the cartels and, to a certain extent, direct bounties. If these influences win the day, those who may have invested capital in the establishment of sugar factories in this country would be entirely at the mercy of foreign trusts, and I do not think it is unreasonable to ask that His Majesty's Government should give some assurance that they will protect investors in this country from that unfair competition.
Unfortunately, soon after the Brussels Convention was signed there was a very short beet crop on the Continent. The consumption did go up on the Continent in consequence of the Convention, because sugar became cheaper to the continental consumer, but then the short beet crop took place, and there was a 550 sudden abnormal rise in price. Naturally the opportunity was rather too good a one to be lost, and certain politicians in this country ignored all the teachings of their leaders on the subject of artificial cheapness and the inequalities of bounties, and attributed the rise in the price of sugar to the machinations of the wicked Tory Government. The result is that various members of His Majesty's Government have declared, in the strongest terms, that they intend to do all they possibly can to upset the Brussels Convention on the first opportunity. Therefore, your Lordships will recognise what a state of uncertainty His Majesty's Government have created in this matter.
Before I sit down I should like to point out how the industry is going ahead in America. In the United States in the last thirteen years the sugar produced has risen from 20,000 tons in 1894 to 433,000 tons last year, and although that has been the result of a very heavy protective tariff and is not a fair comparison with anything that is likely to obtain in this country, still it shows at any rate the importance which is attached to this industry in other countries. The other day an interesting report was published by Reading College upon experiments that were carried on in Buckinghamshire, and in that report reference was made to the great success which had attended those efforts and to the impossibility of doing anything further without factories There was a large and important meeting of farmers at Ripon not very long ago and they made particular inquiries into this industry. Steps have also been taken in Lincolnshire, and the East Suffolk Chamber of Agriculture have issued important information upon it On all hands agriculturists in this country are considering this industry, and are waiting for some encouragement from His Majesty's Government. Something like £18,000,000 goes out of this country every year in payment for imported sugar. If only £1,000,000 of that sum could be spent in the agricultural districts here it is not difficult to see what a great amount of good would be done.
There is much talk of getting people back to the land, and we are told that the remedy is in small holdings; but one of the great difficulties in regard to 551 small holdings is the fact that in many instances a man cannot live on his small holding alone, and it is absolutely necessary for him to have some other means of subsistence. In the beet industry you have it, because it is the only important agricultural industry which provides employment in the winter as well as in the summer. In the summer they have employment on the land, and in the winter in the factories. Again, you have already established labour colonies, and the humble individual in the neighbourhood of these colonies who grows cabbages for the market finds himself considerably injured by the State-aided cabbages which are thrown on the market. But in this beet industry you compete with nobody in this country, and a remission of excise would not tend to raise prices to the home consumer. It would be impossible for the most advanced free trader to say that under such a system your food would cost you more. I earnestly suggest that what has been done for Irish tobacco might perfectly well be done for English beet.
His Majesty's Government are believers in stimulating influences. I do not know whether it would be wrong to suggest that the Irish concession was granted under the influence of Irish ginger. Will it be necessary for English agriculturists to resort to similar means before His Majesty's Government will move in the matter? I hope that the question will receive the attention which it merits; that, at all events, His Majesty's Government will give earnest consideration to it, and do everything possible to let us have practical evidence as to whether or not the industry could be made successful in this country.
My Lords, the noble Earl in the course of his speech made what was to us, on this side of the House, a very interesting admission, namely, that in his opinion the Irish Council Bill will pass through your Lordships' House. In this House, I represent the Irish Office as well as the Treasury, and I am very grateful to the noble Earl for the comfort he has given me on this point to-night.
552 This is not the first time that the noble Earl has raised the question of the sugar beet industry. Last year he brought the matter forward, and I gave him a direct statement in reply. He has asked the question again now, but has brought forward no new fact and no further combination of circumstances to show why the Government should reconsider the decision they came to last session. In replying for the Government on that occasion, I pointed out the difficulty the Government might have of withdrawing the rebate if once they had allowed it, and that view was endorsed by the noble Marquess the Leader of the Opposition, who said that the doctrine that infant industries might be encouraged by the State during the earlier stages of their career was one which must be applied with very great caution indeed, because experience had shown that those industries were apt to have the secret of eternal youth. It is obvious that industries which are unable to stand upon their own merits must be a source of anxiety to any Government, and experience shows that, once a rebate has been granted, it is not found possible to withdraw the rebate on the date originally intended.
I will not go into the free trade arguments of the question, because I am well aware that I am addressing a protectionist House; but I will repeat one argument which I used on the last occasion, namely, that if we grew sugar in this country by means of a rebate, and undersold the West Indian planter, we should be dealing a very severe blow, probably a death blow, at our West Indian trade. At present this trade shows every symptom of being an increasing and prosperous trade, and last year 500,000 cwts. more of West Indian sugar came into this country than the year before. Another argument is this: the existing duty on sugar is 4s. 2d. per cwt., and, so far as I know, there is no probability in the near future that the Chancellor of the Exchequer will be in a position to mitigate that tax. But if we built up a sugar industry in this country by means of a rebate, the Chancellor would have to continue the sugar tax simply in order to give the rebate.
553 The noble Earl has asked what our attitude is towards the Brussels Convention, and he animadverted on the action of certain politicians in the matter. It was not alone by politicians, let me remind the noble Earl, that the Brussels Convention was disliked. It was loathed and detested by all the sugar-using trades. There are still at the Treasury protests in no measured terms from important bodies representing those trades. I will read to your Lordships an extract from one of the communications received at the Treasury, which will show what the attitude of the sugar-using trades was—Despite all the professions of the authors the price of a prime necessity to the poor has been doubled, and the purchasing power of the worker's wage has thus been lessened; great industries are threatened with ruin, honest traders have their position jeopardised, and the gaunt army of the unemployed has been increased.This is from a gentleman who was president of a Mineral Water Manufacturers' Association, and it is a specimen of other protests showing the manner in which sugar-users generally regarded the Convention.
I myself have a particular reason for disliking the Convention. I own a number of shares—not many—in Indian tea companies. When the Brussels Convention was signed, as noble Lords will recollect, Russia was one of the countries which refused to come within the scope of the Convention. Russia felt herself injured to a certain extent by the action which we took in joining the Convention, and therefore she put a countervailing duty on tea grown in India and Ceylon. Therefore we, the shareholders in tea companies, and the unfortunate tea planters in India and Ceylon, had to pay for the benefits conferred upon this country by the Convention. I do not desire to dwell further on this point. I think we on this side of the House have given it as our opinion that there were errors in the conditions of the Brussels Convention; but that is, after all, past history. I think it would be in the power of any one of us on this side to make perhaps a bitter speech on this subject, but I will refrain from doing so.
§ "The EARL OF DENBIGH
May I ask the noble Lord whether his argument is 554 that he repudiates what has been said by the Leaders of his Party on the subject of bounties, and that he rather approves of bounties.
I am not speaking on the subject of bounties at all. I do not see that it comes into my argument. I say that the members of His Majesty's Government adhere to the opinions which they have given with regard to the Convention. The noble Earl then asks what is to be the attitude of the Government when we come to consider the Convention, as we are bound to do, in the y ear 1908. I do not suppose that he really expects a definite reply on that point, and clearly he can hardly expect that on a side issue the Government are likely in this House to make a declaration of their policy on this question. After all, this is a matter of taxation, and it is essentially, therefore, a House of Commons question; and I have no doubt that when the time comes the Chancellor of the Exchequer will make a declaration on this point in the House of Commons and will obtain the verdict of that House upon it. As I have said, His Majesty's Government adhere to the opinions which they have expressed, and I think those opinions are pretty well known.
Then the noble Earl asks whether we will give the same encouragement to sugar beet growing as has been given to Irish tobacco. It appears to me that the noble Earl is under a strange misapprehension on that point. I would like to ask him what facilities have been given to Irish tobacco growers that English beet growers do not already possess.
Until recently it was illegal to grow tobacco in Ireland at all, with the exception of certain small experiments on a small area. Permission for this was granted, and we extended the permission. Lately a Bill has been introduced—it is now before your Lordships' House—permitting tobacco to be grown in Ireland provided the excise conditions are imposed. Therefore, the beet grower in England is at present in a better position than the tobacco grower in Ireland, because he may freely 555 carry out these experiments. Naturally we say that if you are going to cultivate this industry on a large scale we shall impose the excise duty, as we are bound to do to protect our revenue. On his own showing the noble Earl is asking for a great deal. Last year the noble Earl stated that the rebate on the industry on such a scale as he wished to see in this country would amount to about £400,000 a year. I asked him at the time how long he wanted it for, and he replied "From five to ten years." I think anyone going into business with the credit of the British Government at his back and with a cash present from the Treasury of some £2,000,000 or £3,000,000 would became a Standard Oil magnate very shortly. I have no doubt that the noble Earl is impervious to these or any other arguments that I may be in a position to bring forward. I can imagine him saying to himself, What matter the interests of the consumer, what matter the interests of low persons like bakers and confectioners, of base-born knaves such as mineral-water manufacturers, or unfortunate beings like tea-planters in Ceylon or sugar growers in the West Indies and British Guiana—what matter all these so long as it is possible, with great care and considerable pecuniary risk, and with rebates on taxes, to build up, I would rather say to bolster up, a necessarily restricted industry in these islands? Surely that is not a very comprehensive view to take of the needs of the Empire.
I am bound to say that, whatever we may think of the views of the noble Earl, we cannot but admire the enthusiasm with which he has carried out these experiments and the energy with which he has pressed the case on successive Governments. It must always be an uncongenial task to endeavour to damp the ardour of an enthusiast, and I can assure my noble friend that this has been no congenial task to me. But I must say that if this industry is to be absolutely dependent upon a rebate of taxes, then the noble Earl is engaged on a forlorn hope. I am not quite sure that it would not be possible to build up this industry without a rebate, and I have some reason for this belief in a paragraph about the beet industry which 556 I read last night in the Labour Record, which states that—In Lincolnshire, promoters, encouraged by the support received, are now engaged in making provisional contracts with farmers for the cultivation of this root. When an adequate supply is assured, the manufacture of sugar will be begun at a factory in Doddington.Therefore I assume that there is a factory already in existence there.
If, as I say, this industry is to be absolutely dependent upon a rebate, the noble Earl is engaged on a very forlorn hope indeed. He has received little encouragement either from the present Chancellor of the Exchequer or from the late Chancellor of the Exchequer. It seems to me that the noble Earl's only hope is to possess his soul in patience until the benches on which we now sit are occupied by a Labour Government. Until then I doubt whether the noble Earl will be in a position to wring from a reluctant Treasury the vast sums of money which, on his own showing, are indispensable to the successful cultivation of sugar beet in this country.
§ VISCOUNT RIDLEY
My Lords, I do not know whether the noble Lord who has just sat down imagines that the cold water which he has poured on the noble Earl is really going to damp his enthusiasm.
§ VISCOUNT RIDLEY
The noble Earl has taken up this industry to the great advantage of agriculturists, and, even if he does have to wait till the happy millennium when we shall have a Labour Government in power, he need have no cause for relinquishing his labours or pressing this question on the Government of the day. I say this because—and I confess it with all humility—I have never heard a more inadequate answer to an important question given by any member of a Government. The only new argument which the noble Lord brought forward was that growers of sugar beet in this country would have opposition from our West Indian Colonies. I have had an opportunity this morning of refreshing my memory in regard to the 557 last circular issued by the West India Committee. That Committee is a representative body consisting of all those concerned with these important Possessions of the Crown, and, in the course of a paragraph dealing with this question, the West India Committee observe that they would welcome any step that would help the British grower, because the result of the Brussels Sugar Convention had shown that with stability of prices cane sugar could always be grown at a profit in fair competition with beet sugar, and they would be glad to see aprospect—I do not suppose they would expect that prospect with the present Government in power—of sugar beet being grown at a profit by farmers in England.
The noble Lord repeated the old argument that this proposal savours of protection. It would not frighten me if it did, but I venture to say that there is really nothing in the proposal which my noble friend has brought forward that cannot be supported by the most, extreme free trader. All that is asked for is some guarantee that the existing state of affairs as regards the Brussels Sugar Convention will continue. At the time when the Convention was passed there was considerable misapprehension as to what was desired by the West Indies. What they wanted was a levelling of prices. Prices used to fluctuate from 9s. a cwt. down to 7s.; but the Convention has inaugurated steadiness in the price of sugar, which has settled down to 9s. or 10s. per cwt. more or less; and I am confident what the answer would be if the noble Lord were to ask the traders whether they now wanted their industry again disturbed and made subject to these fluctuations.
With regard to tobacco growing in Ireland, the noble Lord who replied on behalf of the Treasury denied that any facilities had been given, and referred to a Bill which is now before your Lordships and which he justly observed merely removes the prohibition against tobacco growing in Ireland—a measure to which there can be no objection from any fiscal point of view. Indeed it is essentially a free trade measure. The noble Lord, however, forgot to mention that one-third of the excise duty on tobacco grown in Ireland has been re- 558 mitted for a period of five years. That concession was made by the late Government, but it has not been withdrawn by the present free trade Government, but has been renewed for a further period of five years.
The rebate applies only to a limited area of 100 acres. It is only an experiment, permission for which was granted by the late Government and which we carried on. We could not very well do otherwise.
§ VISCOUNT RIDLEY
The granting of a concession of this kind is entirely within the province of a free trade Government, and all that my noble friend asks is that agriculturists in England should be given a similar concession.
They can already carry on experiments in this country as they please. They do not want any permission from the Government.
§ VISCOUNT RIDLEY
I am informed that sugar beet can be grown in small quantities in this country, but it has not been proved whether over a series of years sugar beet growing could be made a profitable industry. For the purpose of that experiment it is necessary to have some guarantee that the Brussels Convention will not be disturbed for a certain number of years; and, if possible, the concession which has been given to tobacco growers in Ireland should be given, also for experimental reasons, to sugar beet growers in England. The noble Earl at the head of the Board of Agriculture told us the other day that experiments were being made in regard to land in the direction of small holdings. I would suggest that the noble Earl might carry on experiments in sugar beet growing, if not on the remainder of his own land, at any rate on Crown lands, and endeavour to get capital invested in factories so as to start the industry on a sound footing. The Central Chain her of Agriculture have been pressing for some time for a Departmental Committee to consider this matter, but up to the present have received no response to that request. There are many ways in which 559 the Government could show an inclination to meet this reasonable demand. It is admitted that people are leaving the land, and that agriculture wants a new stimulus. I submit that there is no industry more useful than the sugar beet industry in making small holdings profitable. Surely it is not too much to ask the Government to grant some facilities in this direction, and, if they cannot take active steps themselves, at the very least to appoint a Committee to go into the whole question.
*THE UNDEE-SECRETARY OF STATE FOR FOREIGN AFFAIRS (Lord FITZMAURICE)
My Lords, I only rise to make a very few observations in answer to what has fallen from the noble Viscount who has just sat down. My noble friend who represents the Treasury has replied very ably and clearly upon those important aspects of the Question which affect his Department. But the Question is so worded that there is hardly any Department which might not be called upon to take part in this conversation. The Board of Agriculture is affected, the Treasury is affected, the Colonial Office is affected, and, as so often happens in these cases, the Foreign Office finds itself in a way affected also.
I am inclined to think, looking at this Question as a whole, that I shall not be in any way misrepresenting the noble Earl when I say that the real sting of it is at the end, which is not unnatural. It may be called a reconnaissance in force to try to ascertain from His Majesty's Government what their intentions are in regard to the Sugar Convention. I can only say that in the opinion of the Government the time for stating them has not yet come. This much, however, I certainly can say, that they will always look at this question from the point of view of free trade—that great principle to maintain which they consider that this Parliament was returned and this Government formed.
I hope I may be excused, as representing only the Foreign Office, from following the noble Earl who asked the Question into the various complicated issues which it raises. At the beginning of the Question we are dazzled with a vision of giving remunerative employment to a vast 560 number of people, and the noble Earl thinks he has the secret of, in some mysterious way, accomplishing that. My noble friend the President of the Board of Agriculture has been attacked because he thinks he can improve the position of the labourer by establishing small holdings. But his plans are small and insignificant before the dazzling schemes of the noble Earl for the cultivation of beet-root. The noble Earl holds out a most striking and remarkable prospect, and I hope he will be able at some future time to justify the faith that is in him.
§ THE EARL OF DENBIGH
Does the noble Lord assert that none of the money which is now paid for imported sugar would be spent in this country?
I venture to make no assertion of any kind. In the first place the Foreign Office has nothing to do with sugar; and, secondly, to prophesy is rash. The sugary vision of the noble Lord's Question becomes touched with acid as it proceeds, because there are suggestions as to the conduct of individual members of His Majesty's Government, and dark hints are thrown out as to the possibility of the Chancellor of the Exchequer imposing an excise duty on home-grown sugar. That brings me back to the point from which I started. If I had to reply to these points I naturally could only do so if I were able to explain to the House what the settled policy of the Government in regard to the Convention is. But, as I have said, the time for that has not yet come. The Convention will have to be considered by the Government in all its aspects within the present year; and in this House or elsewhere—by the Chancellor of the Exchequer I have no doubt—a full statement will be made, which I trust will be satisfactory to the country and to your Lordships.