§ THE EARL OF DENBIGH
My Lords, I rise to ask His Majesty's Government whether they are taking, or propose to take, any steps for encouraging or assisting the establishment of a British beet-sugar industry as a matter of national importance, and so taking advantage of the present exceptionally favourable opportunity of making ourselves less dependent on German and Austrian supplies.
I do not think I need make any apology for bringing this subject again before the House, because it is one that is exciting a great amount of interest in the country at the present moment. While I entirely disclaim any desire to raise anything in the shape of what might be called Party controversies, we cannot get rid of the fact that unless something is done by His Majesty's Government in the way of helping or encouraging the establishment of the sugar industry in this country we shall have to wait many years before anything practical can come about. I raise the question at this particular moment because, as your Lordships are aware, this is a season subject and plans must be made beforehand; and although I am afraid that matters have been allowed to drift too long and that nothing can be done this year, still it is very unfortunate to realise that a great deal of valuable time has been wasted and nothing can be done towards tackling this subject and producing sugar in this country until the autumn of next year.
It is now some seven years since I first brought this subject before your Lordships' House. I then pointed out how the passing of the Sugar Convention in the year 1902 brought this matter within the range of practical politics and made the sugar industry in this country a commercial possibility, and I asked for the support and sympathy of His Majesty's Government. We got a certain amount of sympathy in the way of words, but we never got anything more substantial for some considerable period, until about two or three years ago the Government, realising the great progress which had been made in the experiments and in the campaign of education which we conducted in the country, agreed not to place an Excise on the sugar which was being made at the one solitary factory at Cantley, in Norfolk. The situation practically is this. The result of the work which we have done in the last six or seven years has been such as to prove that the sugar 485 industry, which is one of such magnitude and importance upon the Continent and also in the United States of America, can be most certainly established in the British Isles if it is handled properly and taken up by the Government of the day as a serious and national question. It has only been by considering the matter in that way that it has been made a success in those countries where it now flourishes.
This industry is one of great complexity and of many ramifications, and it cannot be started in the way that an ordinary industry can be, simply by providing capital and building a factory. There are so many interests involved, and agriculture comes so largely into it that there is no gainsaying the fact that it is a national question and ought to be treated as such. It resolves itself into the provision of capital for the building of the necessary factories, and it also depends upon what price the factories can afford to pay the farmers for the raw material. You have these two interests involved. You cannot get the farmers to contract largely for the provision of the raw material unless they can be absolutely certain that a factory will be built in their neighbourhood and will be managed and financed in such a way that they can be safe to regard it as a more or less permanent institution and one in which they can have absolute faith. On the other hand, it is extremely difficult to get the necessary capital for building large factories, which cost a considerable sum of money—and, mind you, it is only the large factories which are a real success upon the Continent. Indeed, it is almost impossible to obtain the capital necessary for building these large factories unless the capitalists who are asked to provide the money can be absolutely certain about a continued supply of the necessary raw material. And so we have been going round and round in a sort of circle, not getting any more forward than we were before.
I have several times addressed your Lordships on this subject and I have no doubt been regarded more or less as a public nuisance by my friends, which I am afraid is very often the case with those who bring forward a new idea that is not very clearly understood. I may say this, too, that in more speeches, letters to the Press, and articles than I care now to think of, those who have been associated with my-sell have tried to hammer into the British public the extent to which we were depen- 486 dent upon the supplies which came from the countries with which we are now at war. In the year 1913 no less than 1,200,000 tons of sugar came from Germany and Austria alone. That is a very large item, and it is rather curious to look hack now and realise that when we began this campaign of education there were very large numbers of people in this country who did not realise that anything in the shape of beet-sugar was consumed, or even that sugar could be made from beet at all. However, that is all ancient history. What we have to do now is to consider the present situation.
I said just now that one of the great difficulties with which we have to contend is the price which the factory can afford to pay the farmer. The farmer, as your Lordships know, is a most conservative person, and it is extremely difficult to get him to undertake new methods and practices to which he is not accustomed. Therefore it is necessary to be able to assure him that if he undertakes what to a certain extent is a new system of farming and embarks largely upon a new crop, which he has got to learn and which involves a considerable amount of trouble in looking after, the profits which he is going to reap will make it worth his while. The price which the factory can afford to pay the fanner depends entirely on the working cost of the factory and on the price which the factory can get for the finished article, the sugar; it is well known that in recent years there has been so much competition in the world of sugar that at times there has been considerable over-production and the price has dropped really below the cost of production. The capitalists on the Continent, well acquainted with all the ramifications and difficulties of the industry, were prepared to face the situation; but when it came to getting capital over here it has proved impossible on a large scale unless it could be shown that the price of sugar would be such as to enable the factory to make a decent profit for itself after paying such a price to the farmers as to ensure the necessary raw material.
The present situation is that, owing to our dependence upon the Continent, everything which we said would happen in the event of a European war has most unfortunately come true, and we find ourselves faced with a cutting off of large supplies of what is a most necessary and important article of food, with the result, as your Lordships know, that the price has risen 487 to a very high figure. If there were at the present moment factories in this country, they would probably make a very large sum of money and it would be a very flourishing industry. The one factory which does exist—I do not think I am divulging any secret—is probably being saved from disaster by the fact of these high prices having come about. But what people are asking now is, Supposing we put up money to build factories and to try and spread this industry in the country, what is going to happen at the end of the war? Is everything to be resumed in the matter of importation of sugar as if nothing had happened? Is German and Austrian sugar going to be admitted free as it was in years gone by? It is, I admit, a very difficult question; but still there it is, and it is a question that has to be faced. I am very sorry, my Lords, if it raises a difficult and controversial question, but I do not see how it can be avoided. There is another matter which is being considered by His Majesty's Government—namely, the establishment of an industry for providing aniline dyes—and it has been strongly urged there, I believe, that unless the Government can harden their hearts either to take some steps themselves in the way of providing the money or else of securing the country against the unlimited dumping of aniline dyes at the close of the war, it is very difficult to start that industry.
There is no doubt that a considerable change of opinion is taking place in the country at this moment on this subject. I noticed the other day a striking letter in the public Press from Lord Cromer, who said he thought that it would be necessary, as the result of this war, to depart very considerably from what had been up till now regarded as strict ethics by the supporters of Free Trade. And I noticed the other day a speech by Lord Rosebery, in which he said very much the same thing but in considerably stronger terms. Therefore I urge upon your Lordships that there is a considerable change of opinion taking place with regard to this matter, and it would be very satisfactory if we could know what the intentions of His Majesty's Government are on the subject. Personally I do not care what is done so long as something is done.
There are different ways of helping the industry. I believe there have been suggestions that the Government should build factories themselves and find the 488 money. It would be very difficult, I think, to find the money under existing circumstances unless the Government assist in that sort of way. But I should be sorry to see the Government embarking as the managers and owners of large factories of this description. Government institutions have not hitherto been highly successful in the management of concerns of that description, and it would be far better that the management should be by private individuals and in the ordinary commercial way. If the Government do undertake anything of that sort, then they ought to take the earliest possible opportunity of parting with the factories to commercial companies and letting them carry them on in the ordinary way. Something might be done perhaps in the way of guaranteeing the interest on the necessary capital. And then you come back again to the one question to which everybody wants an answer. What is going to happen at the close of the war? Will German and Austrian sugar be again admitted in the way it has been in years gone by? If I have raised an inconvenient question I hope noble Lords opposite will forgive me. I have not brought the matter forward for the purpose of causing any difficulties but simply for the sake of asking for information, because unless we can get some sort of assurance of what the Government attitude is upon this subject it is extremely difficult to make any progress whatever. The matter is now generally regarded as one of considerable importance, and therefore I beg to ask the Government the Question which stands in my name.
My Lords, I am sure that all agriculturists in this country are under a debt of gratitude to the noble Earl for having made the subject of sugar-beet growing a practical question and one to which anybody having anything to do with agriculture has to give a great deal of consideration. If sugar-beet growing in this country becomes an established part of our agricultural system it will be in large measure due to his unremitting efforts. But I am bound to say that it is not a very hopeful sign after all the years he has been advocating this and after he has acquired so much knowledge on this particular subject, that he should hold the view which I think he expressed to-night—that it is an industry which will not succeed in this country unless there is some form of State assistance behind it.
§ THE EARL OF DENBIGH
I beg the noble Lord's pardon, but I should like to correct that impression. If I conveyed that idea it was not what I meant. I did not mean to say that it is not an industry that can succeed. My point is that it is one which it is very difficult to start. Anybody who knows anything about the industry will concede the fact that after it has been going for a certain number of years the cost will certainly largely diminish. There is the question of the organisation of the labour and the acquiring of knowledge and the gaining of confidence by the farmers. Therefore the question of starting the industry and putting it well on its legs is the chief difficulty.
I withdraw what I said. I did not understand that. I fully realise the difficulties to which Lord Denbigh calls attention. In starting things of this sort you are bound to be faced with enormous difficulties; and especially in a case of this kind you cannot make a start without a great deal of capital. As the noble Earl said, people's attention was very much drawn to this question by the situation in which we found ourselves at the beginning of the war and the sudden cutting off of the greater part of our European supply; the thing came up then in a form much more urgent than that in which it had ever presented itself before. I have always felt that this is a subject which requires the most detailed investigation. We are greatly indebted to the National Sugar Beet Association, of which the noble Earl is president, for the information that they have given us on this subject, but a great deal more information is still required. The question as to the suitability of our system of agriculture to growing sugar-beet on a large scale has to be gone into and examined with the greatest care. Fortunately we have now a certain amount of data—not as complete as one could wish, but still a good deal to go on with. I felt that it would be our duty at the Board of Agriculture to make ourselves thoroughly acquainted with the matter, and to be able to publish to the country what our view was with regard to sugar-beet growing as a desirable form of industry. I realised that we could not do that without collecting a great deal more knowledge than we possess at the present time, and I have therefore taken steps for the most thorough and searching inquiry possible to be made into the whole question. I have asked 490 Mr. Orwin, of Oxford University, the Director of the Institute for Research in Agricultural Economics, to undertake this inquiry on our behalf, and the inquiry is at the present moment proceeding. I am sure that we could not have an abler man than Mr. Orwin, and that the results which we shall eventually get from him will be of a kind On which we shall be able to base a definite opinion.
I have never regarded this matter from the point of view of whether the industry could or could not be fostered by State aid. I have always thought that the crux of the question is whether sugar-beet is a crop which will ever commend itself to the farmers of this country. In drawing comparisons between this country and other countries for this particular purpose one has to remember that there are certain features about British agriculture which do not apply elsewhere. There is, first of all, the feeding industry, which to a more or less extent the growing of sugar-beet is bound to replace. The feeding industry is a much larger and more important thing here than it is on the Continent. The second point is that almost all, if not all, of the countries which go in for sugar-beet growing on a large scale have at their disposal what is an essential thing—namely, an easily available supply of usually cheap, in some cases very cheap, labour. The country which of all the European countries is coming to the fore in this respect and increasing its sugar output most rapidly is Russia, and that is a country which has a large supply of cheap labour. That is one of the things which the farmer has to take into consideration. I am only putting some of the difficulties which present themselves to us.
There is no doubt that the sugar-beet crop requires a good deal more labour expended upon it and much more supervision by the farmer than is the case with root crops. We have to find out whether the return that the sugar-beet crop would give the farmer would be sufficiently larger than the return that he now gets for his root crops to make it worth his while to under take the greater amount of trouble which he would be occasioned. It is on those lines that we shall be able to see whether or not sugar-beet is a crop which British farmers will take up. Therefore what I am aiming at is to get definite data which will show the comparative values of the two crops. The 491 actual value of the root crop, of course, depends chiefly on the price of meat. When meat is dear the root crop is more valuable, and vice versa. The value of the beet crop to the farmer will be the price that he will get from the factory. If you can have two tables prepared showing the comparative value of these two crops to the farmer—showing what the beet crop is worth to him under the scale of prices that a factory might be expected to give, and the value to him of the root crop at the prices between which beef ranges—then you will be able to see to what extent it is worth the farmer's while embarking on the cultivation of this new form of crop. Until we have that, I do not think that very much progress can be made. The first thing that you have to do in this country—and it is the difficulty which has been faced in the attempts that have gone on so far—is to make it perfectly plain to the farmer exactly what he is going to get from the crop. Similarly, you also want to show to the man who is proposing to set up his factory the sort of price that he will have to pay to the farmer to make sure of getting a steady supply of sugar-beet. Until we have those things clear, I do not think you will get either the farmers to come forward and undertake to grow sugar-beet in considerable quantities or the necessary capitalist to put up the factory.
Let us assume for the sake of example that the data show that unless 25s. a ton is paid for sugar-beet the value of sugar-beet is not very much greater than the value of a crop of mangolds. Then the problem before the man who is going to put up the factory is whether, in view of this price, it is worth his while to put up a factory. If he says that he can undertake to give that price to the farmer, then he is at once in a position to be able to ensure his supply. The difficulty up to now is that there has not been any sufficiently definite arrangement made to make the farmers feel that it is worth their while to grow any more beet than they grew the year before. That is the difficulty which has occurred in Norfolk and Suffolk, the chief counties concerned. I think the Board of Agriculture should supply the necessary data on which the farmers and the people who are considering the provision of a factory may be able to work, so that they may, using these figures, arrive at a price which suits both parties. If we get that, I think that is going to be the best prospect 492 of advancing the industry. As I have said, Mr. Orwin is at work. He has completed part of his Report. I am asking him to continue his investigations, and I hope we shall be able before many months to publish something pretty conclusive. Even if we were to start at once with the construction of a factory I am given to understand that it would not be possible under existing circumstances to complete it in time to deal with the crop that would be sown during these next few weeks or months.
That being so, I am inclined to think that we shall not be really losing time if we spend a little longer on the detailed investigations of the problem.
§ *THE MARQUESS OF LANSDOWNE
My Lords, my noble friend (Lord Denbigh), at the outset of his remarks, told the House that he had on previous occasions brought this matter before us but had never succeeded in extracting from the Front Bench opposite anything more than a sympathetic reception for his observations. I am afraid that he has not got very far beyond that point this evening, because with the exception of some well-deserved compliments which the noble Lord opposite paid him he has not yet obtained any encouragement worth naming from His Majesty's Government. The noble Lord the President of the Board of Agriculture told us that this question needed detailed investigation, and that his Department required a great deal more information than they at present possessed. There are, as the noble Lord truly said, a number of points which have to be considered attentively before we can recommend our agriculturists to embark upon a system of farming which certainly does involve a very wide departure from anything to which they are used at present. The question of soil and climate has to be considered. And there is another point which I think should not be lost sight of—namely, whether it is not the case that the cultivation of beet greatly benefits the subsequent crops which are taken from the same area. I am told that Continental experience and such experience as we have been able to collect in this country go to show that that is the case, and I am quite sure that the noble Lord will not allow that point to be lost sight of. But I venture to make this 493 observation. The noble Lord takes a certain amount of credit to himself for having set on foot this inquiry by Mr. Orwin. But my noble friend brought this subject forward in 1910, and again in 1911—
§ THE MARQUESS OF LANSDOWNE
And, I rather think, on other occasions. What has the Board of Agriculture been doing all this time? Why did not they then start this investigation? There was an immense amount of material available had they chosen to take advantage of it, and I think we have a right to complain that, after having again and again had this subject urged upon them with great force and with great moderation by my noble friend, they should only now be beginning to make an inquiry which obviously is so desirable. The only other observation I should like to make is this. I feel convinced that whatever the result of the inquiry is, even if it should be to show that this beet industry can be profitably introduced into this country, some encouragement will have to be given in the initial stages in order to induce the capitalist and the farmer to embark upon the experiment. My noble friend made it quite clear that he has not in view a permanently State-aided industry; that is not what he and his friends are asking for. But in no industry will a capitalist put down the necessary plant and embark the necessary capital unless he has some reasonable security for obtaining a return for the money which he invests. It was suggested when this matter was last before your Lordships that a grant from the Development Fund was a not unreasonable way of giving the necessary assistance, and I hope that that will be borne in mind by His Majesty's Government. All I will add is that I trust that the noble Lord will see to it that there is no delay, and that this inquiry, which might have been begun long ago, shall be prosecuted with all possible expedition.
*THE UNDER-SECRETARY OF STATE FOR THE COLONIES (LORD ISLINGTON)
My Lords, perhaps I may be permitted to intervene for a few moments in order to bring before the House another aspect, by no means the least important, in regard to this question of assistance to the introduction and establishment of a beet-sugar industry in this country. I gathered from 494 what has been said by the noble Earl and the noble Marquess that the main object in bringing this subject before the House was to elicit, if possible, some sympathetic reply in regard to financial assistance, at any rate in the early stages, for the establishment of factories in connection with the beet industry; and it was shown quite clearly by the noble Earl that the establishment on an economic and practical basis of the industry in this country could hardly be expected without some such financial assistance during the early years. Apart from the difficulties referred to by my noble friend the President of the Board of Agriculture and apart from the complexities which were dwelt upon by the noble Earl as surrounding this question, I desire to bring to the mind of the House the practical difficulties which at present stand in way of any Government in this country affording financial assistance in the direction indicated this afternoon. When Great Britain withdrew from the Sugar Convention in September of 1913, an undertaking was made by the Convention Powers that sugar and sugar-manufactured articles exported from this country to any of those countries would be admitted on the lowest rung of the tariff—in other words, under most-favoured-nation treatment. But that privilege wan granted to Great Britain on the understanding that Great Britain in her turn would by no direct or indirect means undertake bounties or subsidies for the establishment of a sugar industry in this country. It was laid down, I think, that if such were done a declaration at any rate should be made by Great Britain to all the Convention Powers, a declaration which would embody any departure in the direction of preference to sugar produced within the United Kingdom—
§ THE EARL OF DENBIGH
May I ask whether His Majesty's Government are of opinion that the situation as regards all such Conventions is in no way changed by the present state of war, and that things are going on afterwards as they did before?
§ LORD ISLINGTON
I was coming to that. Six months notice must be given by His Majesty's Government to any of those Convention Powers before any departure is made from the present arrangement. The noble Earl asks whether the present situation will make no difference. Of course it will make a difference to the extent of tearing up any agreement or treaty with 495 the Powers with which we are now at war. But the other Powers included in the Sugar Convention are our Allies and neutral Powers, and with those countries, both collectively and severally, it will be found that we are doing a very large business in regard to manufactures based upon the sugar industry. Therefore whilst I, like my noble friend Lord Lucas, fully sympathise with the position indicated by the noble Earl in regard to emergencies of the war and the shortage that must ensue from the withdrawal of supplies from Austria and Germany, I think the noble Earl will admit, even in face of that, that any departure from the undertakings laid down with the Convention Powers would run the risk, possibly the serious risk, of any of those Powers making arrangements less favourable to us in regard to their tariff system. My intervention in this debate has been solely to place this aspect of the question 496 before the House, because it is one that should not be lost sight of. It is one which must be the basis of very serious consideration by any Government who undertook to establish a sugar industry in this country based upon financial assistance. I would repeat what my noble friend said, that in view of all the difficulties it is much better for us to find out first to what extent the establishment of this industry will be of advantage to the farmers in this country. Until we have that necessary data before us it would be premature to enter actively upon any undertakings which, before they could be carried out, would have to be considered from the agricultural and also from the commercial point of view which I have ventured to point out.
§ House adjourned at Six o'clock, till To-morrow, a quarter past Four o'clock.