VISCOUNT CHAPLIN rose to call attention to the following statements by the Controller of Food in his speech in the House of Lords on February 19 last—
I have no close estimate of what the food consumption would amount to in value for the whole country, but it probably exceeds £700,000,000, or at the rate of over £60,000,000 a month. … It is hoped—and I trust this is not merely the expression of a pious wish—that all direct and indirect administrative costs will be covered by margins received in connection with the sale of commodities";
and to ask the Controller of Food the following questions: Is it intended that the cost of administration is to fall on the producer of food either imported or home grown, and what share would fall on the producer of home-grown food; and, if not, by whom is the cost of administration to be borne.
§ The noble Viscount said: My Lords, I am sorry to intrude again so soon upon your Lordships' attention, but I can relieve your Lordships by saying at once that I do not rise for the purpose of initiating a debate. What I want, rather, is some explanation from the noble Lord of the statements which he made the other day in 122 reply to questions from myself. I am sorry to say that I hear so deficiently very often that I was not able to follow exactly what he said, and it was only when I saw it in print afterwards that I thought that in some respects it required further explanation. I have set out in my Notice on the Paper the statement which the noble Lord made, and I think there will be a natural desire on the part of most people to know precisely what it means.
§ Under these proposals, are the Government themselves to be engaged in trade? Are they to purchase commodities in the first place, and then re-sell them? Is that the way in which these margins of profit which are to cover the whole administration of £700,000,000 worth of food, the cost of which in itself must be something almost fabulous—is that how it is to be done? If it is not, then I should be very glad to hear an explanation from the Food Controller. I own that at present I feel very much in the dark upon the question that I have put to the noble Lord. I can hardly understand on what ground, with anything approaching to fairness, the cost can fall upon the producer of home-grown food. It seems to me that that would only be an instance of imposing on the food producer an amount of heavy taxation which is not borne by any other class of the community. It is upon that point, and upon the remaining part of the Question that I have put to him, that I desire information. As I say, I have not raised the matter for the purpose of initiating a debate, and therefore I have expressly omitted the ordinary Motion for Papers. I shall be grateful to the noble Lord if he will give me some reply which will enable us to understand exactly what this new and very large and important proposal of the Government really means.
§ THE FOOD CONTROLLER (LORD RHONDDA)
My Lords, the noble Viscount is, I think, unduly suspicious. I did not intend to convey the impression that I propose to make any charge at all upon the producer, and I should hardly have thought there was anything in my reference last Wednesday to what may be called the marginal cost of distribution which could lead the noble Viscount to suspect that I cherished any design against the agricultural producer. The Ministry of Food has now become the purchaser, on behalf of the nation, of the vast majority of our imported foodstuffs. The cost, insurance, and freight of these commodities, and to 123 some extent the expenses of their distribution to the retail traders, constitute in the first instance a charge upon the Ministry of Food. The incidence of this charge follows the ordinary economic rule, that all expenses paid by the merchant on and after importation are added by him to the price of the commodity, and are thus eventually paid by the consumer and not the producer. The same rule applies to the marketing of home produce. Beyond the expenses involved in the preliminaries of sale, which have always formed part of the cost of production, it is not intended that any cost of administration shall fall on the producer of food either imported or homegrown.
§ VISCOUNT CHAPLIN
May I ask a further question? Perhaps I did not sufficiently explain myself. Is it a fact that the marginal profits are to arise as regards home-grown food from this—that the Controller is to purchase from the producer the home-grown food at a price less than that which he is able to obtain in the market afterwards?
§ LORD LAMINGTON
My Lords, I understand that meat imported from Australia and elsewhere is sold here at the full maximum price, which leaves a large margin of profit, I suppose, to the Department of the Food Controller. There is also, of course, the question of wool, which is rather analogous. I see that the noble 124 Lord shakes his head. He does not know anything about wool. I heard to-day that there is a large margin of profit on imported meat, even after paying all the charges to which he referred, when he sells at the price at which the meat is sold in this country. I presume that there is some profit which does accrue to the Government at the cost no doubt of the consumer.
§ LORD RHONDDA
My Lords, I do not know that there will be any profit. I have already explained to the noble Viscount and to the House that the price paid for any commodity is based upon the cost of production plus a reasonable pre-war profit. I do not know that I can give the noble Viscount any further information Whether there will be a profit on the sale I do not yet know. The noble Lord opposite stated that we were purchasing certain important articles and making a profit on them. He did not name any article, except wool. As the noble Lord knows, wool is entirely outside the scope of the functions of the Ministry of Food. It is very possible later on—I hope so—that there may be a profit made out of the price fixed for some imported food commodities, and, if so, it will go partly, I should assume, to provide the expenses of administration and possibly to meet the loss that may be made on other commodities.
§ House adjourned at five minutes before six o'clock.