HL Deb 26 February 1919 vol 33 cc347-66

VISCOUNT DEVONPORT rose to ask His Majesty's Government whether they are taking steps, and if so what, to bring about an immediate reduction in the prices of food and other supplies to the consumer; and to move for Papers.

The noble Viscount said: My Lords, during the three days' debates which have taken place in this House on the subject of industrial unrest many reasons have been assigned as to the causes, but probably the outstanding one of all is to be found in the increased cost of living. I think this has contributed more than any other cause towards what we call industrial unrest. As regards wages, until now the demand for increase of wages has been based almost entirely on the increased cost of living. There has been no general demand for new conditions such as are now presented to us, but the advances that have taken place since 1915℄all of them℄have been of the variety that I may call war bonuses, and the insistence on the granting of these bonuses has been based exclusively on enhancement in the cost of living. In consequence of this, wages have more than doubled, and if I may quote a figure which was given the other day by Lord Emmott℄I think we can accept it, because he is a careful speaker and an authority upon the subject with which he was dealing℄he mentioned that the increase in wages per year is between £700,000,000 and £1,000,000,000. If that has been governed as I suggest it has been, by the price of food, it is a very important question for us to consider when and how a reduction can be brought about.

During the last eighteen months the Government have been in entire control of the purchase of all food supplies and practically of their distribution, in so far as they have fixed the selling prices through the various stages of commerce from the wholesalers down to the final distributor. Prices have been advancing all the time. Wages show that. And it is not to be wondered at considering the circumstances in which the Government found themselves in their buying operations. The Government have been the sole buyers. They had a limited sphere for their operations. They have not had at their disposal, as was the case in pre-war days, the whole of the markets of the world, but they have been limited more or less to a narrow area, consisting mainly, though not entirely of course, of North America. I would like to say that I am convinced that were it not for control, in spite of its difficulties and handicaps, prices would have gone very much higher.

We have now got to the stage where war conditions no longer prevail. We are released from the submarine menace, and shipping, although not absolutely free, has had restored to it a considerable amount of freedom of which it was deprived wider war conditions. Therefore I say we are entitled in these circumstances to expect, and indeed to look for, some modifications as regards prices, and certainly as regards control. I dare say your Lordships have noticed that in the last few days there have been many official communications passing from the Ministry of Food to the Press on this subject of prices and control. Certain modifications—some of great importance—have been already announced. I think these modifications in themselves go far to support the argument that has been used that a revision was urgently needed. I think it has been delayed in some cases far longer than has been justified. I shall, perhaps, touch upon that in a moment or two in order to prove what I say. I propose to show that inherent in the situation to which I have referred are reasons and difficulties of purchase which account for high prices. At the preseirt moment a much greater scope exists for effecting a More sweeping reduction of control prices, and the general opinion which prevails so much is correct, that the most abbreviated period of a continuance of control will best promote the interests of the country.

The Government position is this. They have stated, I believe, that they are the best judges of the moment when control should be removed, but a contrary opinion has prevailed for some time among the shipping people especially, and also among the mercantile community—and there is abundant evidence to show that control in many things should be relinquished. To demonstrate that, I will briefly deal with the position of the stocks of some of the leading commodities, those which are vital. Many of these stocks are increasing, and in addition to that the visible supplies—that is, supplies that are available, and yet are not within the United Kingdom—are so great that if the trader were free to operate, as he was before control was imposed, it is fair to assume (and it is stated generally) prices would fall much below those at present ruling.

Take first the case of wheat. The stocks of wheat in the United Kingdom on January 1 were over twelve million quarters, that is double the amount of stocks in 1917, and half as much again as we had in 1918. Lord Crawford, who is an expert on all questions pertaining to the stock of wheat, will remember quite well the serious position which with we were con- fronted about January 1, 1917. I unfortunately had to bear the brunt of that when I first became Food Controller. We had large quantities of wheat bought at the other end of the world, in Australia—about 3,000,000 tons—but it proved to be ungetatable. Consequently unless some very immediate and effective steps were taken I do not hesitate to say that by the month of April this country, in 1917, would have been, not breadless, but in such a condition that there would have been certain and constant distribution of it. I think Lord Crawford will agree with that. Now the stocks in this country are large, and they are, I am told, rapidly increasing, and there is available all the wheat the Government bought and never brought home. Lord Crawford will be able to tell us what is the position of that supply. It was bought by the Asquith Government in 1916, and as far as I know it remains there still. I have not verified this, but I shall be glad to be informed whether the Government in the following year also bought the Australian wheat crop. If that be true, the stocks of wheat in Australia at the present moment must be enormous, and my noble friend will do us a great service if he will tell us the exact situation as regards the wheat in Australia.

I observed in the papers the other day an official communication from Mr. Roberts, the Food Controller, saving that it would be impossible to bring home more than 1,000,000 tons of this wheat during the cereal year. I do not think that statement should be accepted. I have made several inquiries in the last few days among shipping people with whom I am constantly in touch, and they assure me that there would be no difficulty at all in bringing home a much greater quantity than that suggested. In the Argentine there are apparently large quantities of wheat and also of maize, which are offering at prices much below those at present being paid by the Wheat Commission in the United States, whence they are drawing the main portion of their supplies.

I expect most of your Lordships noticed a very important letter which appeared in The Times last week from Mr. Runciman, a former President of the Board of Trade, one who has considerable experience in mercantile affairs and in shipping. What he said in effect was this—that wheat is now sold by the Government, landed in this country, at 94s., but if buyers were free to operate on their own account it could be landed at 28s. lower; that is to say, 66s., including freight; and he made a similar statement in regard to maize. I do not pretend to be an expert on these questions, but I think we ought to have some reply to that statement, because it is urgently necessary in the interest of the financial stability of this country that we should get down the price of wheat at the earliest possible moment, if for no other purpose than to get rid of that milestone around the taxpayers' neck—the £60,000,000 per year by reason of the loaf being artificially reduced to 9d. by subsidy. That is a terrible burden of over £1,000,000 a week, and therefore if there is anything in Mr. Runciman's contention—and I expect there is a great deal—it surely would be expedient on the part of the Wheat Commission to avail themselves of these cheap wheat supplies in order that we may get rid at all events of that heavy financial responsibility.

But it was stated that there was a reason why these cheap markets should not be resorted to exclusively for our benefit, and one reason was this—that the cereals are being bought by the Wheat Commission on an inter-Allied basis. The Department that issued this official communication—I expect it was the Wheat Commission itself—went on to say— And clearly we could not have all the cheap wheat ourselves and leave the expensive sources of supply to our Allies. If this means that we are prevented by some arrangement with the Allies from taking advantage of cheaper markets, it would be interesting to know how long this engagement is to last. In war time we had to submit to everything, and we did so with a good grace, but I think now that the war is over there would be a degree of impatience evinced by people if, because of inter-Allied arrangements, we were stopped from getting full advantage of buying in the cheapest market.

I pass on from wheat to meat. The stocks of imported meat in the United Kingdom are accumulating very rapidly. I think they are about 100,000 tons, and in New Zealand and Australia there are about 150,000 tons of meat awaiting shipment.. The storage there is full to repletion. During the war, of course, the tonnage difficulty has been such that we have not been able to get the advantages of the meat supplies that Australasia at all times is willing to offer, so that at the present moment they have this enormous accumulation in their storage. In addition to that, they have a larger number of animals than ever before awaiting slaughter, pending increase in storage accommodation, because it is obvious that when storage accommodation is full to repletion they cannot go on slaughtering. Again, there is the position of our own flocks and herds. I am told that they are increasing. I know that they are being drawn upon, but only in a very modified way as compared with pre-war days. We are taking out of our flocks and herds in this country no more than 40,000 tons a month, while in pre-war days the amount would be double that, or perhaps even more.

Another thing I would refer to is tea, although I am glad to notice that an intimation has been given by the Government that control over tea is to cease in the coming month. It has been obvious for a very long time that the stocks of tea were such that continued control was unnecessary, and had been unnecessary in this country for the last month or two, during which time the stocks have been almost as high as at any previous period. Now I believe there are 142,000,000 lbs., and in addition to that there is available for shipment in the countries of production a similar quantity. Control no doubt has been held up unduly, but since the Government have intimated that they are going to release the control of tea—I think in a month's time—I do not press this matter very strongly.

I pass to the question of prices, which is far more vital. How are prices affected be control apart from or in addition to purchase price? I first ask the question. "What is the object of control?" I think when control was imposed the object was to secure an equal distribution for all alike; secondly, to establish uniform prices, so that all could buy at the same price and no one get more than he was entitled to. At the same time the idea was to prevent inflation of prices, speculation, and manipulation, and it was considered that with the Government as sole buyer competition would be eliminated and purchasers would be assured in consequence of better terms. I myself had the privilege of first introducing Mr. Hoover to the Government to explain his policy. That was before he was appointed Food Controller, but it was obvious that he was going to be so appointed. The point that he insisted upon most emphatically was that there should be only one buyer in the market, not only as regards this country, bat as regards the Allies. The object, of course, was to eliminate competition. The people in this country readily assented to control, not only in relation to purchases but also as regards the fixing of prices, because they assumed that they would thereby he protected from exploitation, and that the Government itself would stand in the position of protector of their interests. The implied understanding was that any advantages that might accrue to the Government by reason of the skill or magnitude of its operations would be to the advantage of the consumers also.

I am sorry to say that I shall have to point out to-day that the increase in prices in many cases—in fact, in almost all—is attributable in part at least to Government action by reason of their charging consumers for the commodities they buy a very much higher figures than is fair and reasonable having regard to their cost price and the consequent expenses attendant on buying. The first example I will take will be that of bnported meat. In August, 1914, the Government made a contract with the Argentine shippers for beef. I think it was a very good contract. They paid 5⅗;d. a lb. for the beef for Army requirements, and the cost here I am told was about 7½d. per lb. including freight, insurance, and handling charges. At the time the contract was made the shippers were afforded the privilege of shipping on their own account a quantity equivalent to 20 per cent. of that shipped on Government account, and that of course was disposed of here by them for civilian consumption, and I have no doubt that they did remarkably well out of it. When the Government took over control themselves it became necessary, of course, for them to secure this 20 per cent., because they were the only distributors in the market, and they paid these Argentine packers, who were really the American packers, 10½d. a lb. for this meat. The Government now sell to the trade the same meat at 1s. 2¼d. per lb., which gives them apparently the enormous profit of 3⅗d. per lb. If we allow a margin—and I am prepared to hear that that must be allowed—for handling expenses, &c., it still leaves a profit that the Government are taking which I think requires considerable explanation.

Let us pass on to Colonial meat. That also was bought by contract from the Australian and New Zealand Governments. The Government bought chiefly mutton and lamb, and the f.o.b. contract price for mutton was 5¾d.—it costs here I am informed 9d.—and the cost of lamb on the other side was 6⅛d.—and here it cost 10d. I can speak with some intimate knowledge of this class of meat, because I had a good deal to do with it when I was Food Controller. The contracts, however, were made, before food control was established, by the Board of Trade who have ever since had the handling of the matter up to a certain point. When I was Food Controller this meat used to be sold to the wholesaler by the Board of Trade at 10d. per lb. I believe at the present moment it is handed over at cost price, but the Ministry of Food is charging the wholesaler in Smithfield 1s. 3d. per lb. That gives a profit to the Government of 5d. per lb. on lamb, and 6d. per lb. on mutton. No wonder that prices are high if the Government take for themselves a stupendous profit of that kind.

My Question was on the Notice Paper before the Government intimated their intention to reduce the price of meat by 2d. per lb. They say that this will involve no charge upon the Exchequer. I think that is self-evident. I contend that the reduction should not be 2d. per lb. but should be double that, or perhaps more. I submit further that this reduction should have been made months ago. The Government should not have saddled the consumer with a profit of 5d. and 6d. per lb. They have no right to do so, and, if industrial unrest proceeds from high prices entirely, conduct of this kind must contribute something towards it.

Apart from this, there are reasons why high prices should be still further and instantly reduced. We see almost daily a statement in the papers of the numbers of men demobilised. It was 1,000,000, then it grew to 1,250,000, and I saw to-day in the paper that it had got to 1,700,000. That has a tremendous effect on the meat situation. A soldier when serving as such is entitled to 12 oz. of meat per day, when he gets it. That is 5¼ lbs. per week. The moment he becomes demobilised he only gets 19 oz. a week. That means that every man who is demobilised puts into circulation, in effect, 4 lbs. of meat. That in it self ought to have an enormous effect upon the situation, and I assume that the Government have taken note of it.

I pass on to butter. Here again the Government, through the Dominions, purchased the entire output of New Zealand and Australia. The price they paid in Australia was 175s. and in New Zealand 181s., and they also bought large quantities from Argentina, for which they paid 165s. The cost of freight, insurance, and handling charges is estimated at 36s. per cwt., but the Government are selling at 252s. per cwt. That gives them a profit of more than 4d. per lb. before they distribute it to the dealers, who transmit it finally to the consumer.

There is the case of tea. The Government took over the entire production of Ceylon and India. The prices were fixed on the average price that was realised by the grower for the three years previous to the war. A liberal estimate of the full average price paid for tea in the country of production at Calcutta and Colombo, f.o.b., was 9d. per lb.; and when freight, handling charges, insurance, and brokerage are added, the cost here would not exceed ls. per lb. The bulk of these teas are sold to the great distributing firms at. 1s. 4d. per lb., with a rebate, I believe, of a small sum. These rebates are rather difficult to follow. They are in some cases ½d. and in some cases, I believe, as large as 1½d. But take them at any figure between those poles, and it will be seen that the Government here again are making a large profit on a very heavy commodity, as tea is—not less than 2½d. a lb.; and in many cases double that. But the appetite of the Government seems to grow on what it feeds on. The other day they permitted a sale of tea for export to take place. The prices were allowed to take their own range, and on many transactions the Government netted a profit of over 1s. a lb.

I could quote many examples relating to other commodities, especially those that form a staple part of the working man's dietary. I will take another commodity, the case of wool. That plays a very large part in the making of clothing. The Government is taking a net profit of 30 per cent. on all the wool it distributes to the factories for manufacturing purposes. Unless it can be explained in some way, this seems to me to be a dreadful profit to be taking on a raw material. Of course, the Government may justify themselves by saying that these profits in here to the public purse, or that they are a set-off against losses incurred in some other direction. But in whichever way they explain it, I maintain that it constitutes a tax on food and clothing, and I do not think that the Government are justified, either constitutionally or in any other way, in imposing upon the people a tax. Their duty is to transmit their purchases to the consumer as near to cost price as possible, covering, of course, their working expenses. I doubt very much whether Parliament itself knows about the heavy charges being imposed by the Government. I have spoken to many members of Parliament about it recently, and very few of them have the faintest idea that the Government is making these large profits on its purchases. Looking at it from the constitutional point of view I would submit that the only authority to levy taxes—which these certainly are—is Parliament itself. The Government by the annual Finance Act receives its only authority to levy taxes, and in no other way can they be constitutionally levied.

I have not the slightest doubt that my statement will be contested in many particulars, but there is an easy method available for placing the matter beyond controversy. To-day we had a Bill before us setting up a special Commission on coal prices, profits, and wages. The whole basis of wages is prices, and I submit that this taking of big profits by the Government is a fair matter for inquiry, and I should be quite willing, as far as I am concerned—and I know many others would be also—that the whole thing should be a matter for investigation at the hands of a Select Committee. It is certainly a very serious matter, especially as wages have been so much affected by the cost of living, that we should find that much of the enhancement of the cost of living has been caused by Government action. I am quite certain the country did not know this and would not approve it, and the least we can expect is that we should have some sort of a statement as to what the results of these operations have been. At present we are considerably in the dark. The Government may have made profits of millions—they must have made them. If they are going to urge that it is legiti- mate and that the money inures to the public purse, at all events, if we carry it no further, let us have some sort of statement as to what the yield has been, and then we shall be able to form an opinion for ourselves.

THE EARL OF CRAWFORD

My Lords, I reply in general terms to the Questions put by my noble friend by saying that the Ministry of Food desires to reduce prices, that it has done so materially already, and that it will do its utmost to continue that process. Before dealing with the specific arguments brought forward by Lord Devonport, I will refer to the actual reductions which have recently taken place. As regards meat, an all-round reduction of 2d. per lb. has been ordered as from March 3, and it is hoped that before long a further reduction will follow. I will refer to the bread question later when I deal with another aspect of the controversy. As regards cheese, a reduction of 2d. per lb. has been announced, and the possibility of a further reduction is under consideration; this, however, must depend upon the prices at which imported cheese can be obtained, and the price to be fixed for milk at home. Milk, again, will naturally fall during the coming months from the winter prices, but it is improbable that the price will fall below the summer prices prevailing in 1918. Condensed milk has been reduced by 1½d. a tin.

The margarine industry will be decontrolled as from the early days of March; the price will be lowered by 1d. or by 2d. per lb. That is made possible by two facts, both of them to the credit of the Ministry of Food. One is that ample supplies of raw material have been accumulated so that the industry can start with a secure outlook upon the future; and the second is that great and successful efforts have been made to develop the plant and equipment of margarine manufacturers. There a reduction in price is imminent. Tea is to be decontrolled in three or four weeks time; and it is probable that a reduction of anything from 2d. to 4d. per lb. can be ensured. The price of fish has fallen; and a substantial reduction is hoped for before long in the price of canned salmon. Dried fruits have come down by 2d. a lb. on the principal fruits; and currants have been reduced by 4d. a lb. Mill offals have been reduced by 10s. a ton; some reduction seems probable in cereal products, and I believe also in beer, though I am not sure.

Those are specific examples of reductions which have already been effected. I admit that the existing prices are still high, but I wish in justice to the Ministry of Food to point out what I think is very often forgotten—namely, that food prices have been more effectively regulated in this country than other prices, and that rises in food prices—from, say the middle of 1917 until the Armistice—have been relatively smaller than the rises in other articles of universal use, such as textiles, leather, soap, oil, candles, and coal. And if we compare the range of prices in Britain with the prices prevailing abroad, I think one gets an interesting comparison which shows that here at any rate we have managed to control our prices more effectively than others have done. I dislike quoting long rows of figures to your Lordships, but if I may take four main subjects of consumption I desire permission to do so—namely, beef, bread, sugar, and butter. Take beef. In this country the price of beef is 1s. 6¾4d.; in the United States, 1s. 9d.; in Paris, 2s. 2d.; and in Milan, 3s. Bread is complicated, of course, by varying forms of subsidy which exist here and with our Continental Allies. In this country bread is 9d.; in Paris, 10d.; in Milan, 1s.; and in the United States 17½d. Sugar in this country is 7d.; in Paris, 8¾d.; in Milan, 1s. 6d.; in the United States, 5½d. Butter here is 2s. 6d., in the United States, 2s. 11½d.; in Milan, 3s. 4d.; in Paris, 4s.

You will observe that in only one item of those four fundamental food commodities is the price paid in this country higher than the prices paid in Italy, in France, or in the United States; and these are typical of other, though subordinate, food prices. Our difficulties in this country may be considerable, but I think we have surmounted them more successfully than they have been overcome elsewhere. There has been a good deal of controversy, and I think some misunderstanding also, about the attitude of the Treasury, which has been charged with obstructing the reduction of prices on the ground that such a reduction would reduce appropriations in aid of the Exchequer. That is really not the case. The Treasury has readily consented to dispose of stocks below their cost price, though insisting that reasonable conditions in such disposal shall be observed. It is worse than useless to make reductions in prices unless those reductions can be maintained. We could sell the whole of our sugar stocks to-morrow at a reduction of 2d. or 3d. a lb. if we liked; we could sell in twenty-four hours at that reduction the whole 60,000 or 80,000 tons if we wanted to. But one must remember that such a course would involve a serious, and, perhaps a paralysing loss to numbers of small people who hold stocks.

It must be remembered that the Ministry of Food has constantly pressed private traders to take stocks. I myself during the last two or three years have constantly pressed the baking trade or householders to take flour stocks in order to relieve congestion at our ports. It is quite easy for us to smash prices. We could smash prices in sugar, or flour, or any article which is not perishable; but the result would be great distress, and possibly ruin, to some of those small people who have made their stocks, very often at our instance, in order to obviate difficulties in regard to port congestion and so forth. But quite apart from the loss of profit to individuals and small people, we must not cut our prices prematurely. That would accentuate all the existing difficulties. It would be disastrous in every way, and until we can be sure that there will be no reaction from a reduction of these prices, I submit to your Lordships that it would be most unwise to take action in that direction.

I would like to say a word or two about what Lord Devonport said as to undue profits on the part of the Government. I recognised with satisfaction that Lord Devonport admitted that the Government was entitled to a moderate margin.

VISCOUNT DEVONPORT

To cover expenses.

THE EARL OF CRAWFORD

I thought the noble Viscount went a little further, and said there might be a moderate margin, which means a reasonable profit.

VISCOUNT DEVONPORT

I must contradict that. It is the last thing to which I should dream of assenting. Handling expenses and charges incidental thereto I agree, but profiteering on the part of the Government is, I think, an outrage.

THE EARL OF CRAWFORD

I thought the noble Lord was prepared to assent to the Government making a moderate profit, so long as it did not do anything excessive in that direction. I make a great distinction between the State earning a profit and the private individual; in other words, the State, acting on behalf of every citizen in this country, is entitled to do things which the private trader in certain circumstances may have to be forbidden to do. That is my personal view. I do not know whether it is right or wrong; if, as so many people claim, the State is not at liberty to make any profit, I wonder if that is to be axiomatic for the future, and whether it is to apply to telephones, post office, port authorities, and mines and railways, which may have become the property of the nation during the next generation. I think that, when the State is acting commercially, in justice to those with whom it must be in competition it should not suppress and abandon the honourable ideals of commercial life. I think an honourable profit is a test of commercial success, and if you once remove that test and tell State departments it does not matter if they make losses, which some people are inclined to do, then you get this trading reduced to a mere routine, to a red-tape machine, which will rapidly develop into a serious loss to the State, and thereby into a serious burden upon the taxpayer and a hindrance and impediment to industry as a whole.

The effort of the Ministry of Food throughout has been to cover costs. It may have made profits here, considerable profits perhaps, but it may equally have made losses in other directions, and it is not unreasonable to set one against the other. As to an Inquiry into this subject by means of a Select Committee, that of course is a matter which I cannot settle for myself, without considering it very carefully with the Food Controller. I think it will be quite sufficient if, with the assistance of the Controller and Auditor-General and Parliamentary Committees which are already in existence, this question of profits by the State, whether in food or in other trading capacities, should be investigated, but I must most respectfully remind your Lordships that the pressure upon these new Departments is tremendous. They were almost entirely recruited from volunteers. Their nucleus of trained and permanent Civil Servants is insignificant. With the return of peace these departments are gradually finding it very difficult to maintain their work at its high level of efficiency, because so many of their officials desire, naturally and properly enough, to return to their own businesses. Unless some advantage is to be gained to the public welfare from these Committees of Inquiry, I greatly hope that they will not be heedlessly forced upon these departments. The burden of such a fresh obligation would in many cases be serious.

Now let me deal with two questions relating to bread-stuffs. The first question which Lord Devonport asked was about Argentine wheat, and he referred to a letter written the other day, which asked in effect why we should buy wheat in Canada and North America when cheaper wheat can be bought in South America. That criticism was based on several assumptions, which seem to me to be ill-founded. It was based, in the first place, upon the assumption that we have got credits in South America to buy this wheat. We have not. Secondly, it was based on the assumption that all this wheat belonged to Great Britain. It does not, or if bought it would not. It also seemed to me to be assumed that the quantity was adequate to provide for all our needs. If we got it all, the quantity would not be adequate. It also assumed that tonnage was available to carry it all. It is not. And finally, that port and loading conditions in the Plate would make it possible to move this wheat, if we had tonnage and finance. Unfortunately, the industrial conditions in the Plate have been such that for weeks past whole ports in that great exporting country have been completely paralysed. If my memory serves me aright, during last week not 20,000 tons of grain was shipped from the Plate, an astonishingly small figure.

Finally, pressing the Argentine claim is apt to ignore our commitments to our Dominions. It is quite true that Canadian wheat is much more expensive than Argentine wheat, but Canadian wheat is largely grown for Allied purposes. Tremendous, stupendous efforts were made in Canada to increase her acreage, and although the price of Canadian wheat on the seaboard may be a large figure compared with the f.o.b. price at Buenos Ayres, none the less I am not quite prepared to admit that this is a matter in which cheapness is the sole, or indeed the governing, factor; and this is well illustrated by the position, about which Lord Devonport asked a question, in Australia. We purchased very large quantities in that country, but we have also shipped large quantities. Lord Devonport said that he asked some of his shipowner friends about bringing it home, and they told him there would be no difficulty in doing so. I make a sporting offer to my noble friend. If he will introduce me to those shipowners, I will undertake that they shall have grain cargoes either to this country or Mediterranean ports, or be given an Indian option or a Suez Canal option. Every ton we can get in Australian waters will be loaded home for wheat or wheat flour. We have not found it so easy to get freight. The fact is that the Armistice has by no means solved the tonnage difficulty—by no means—and the grain, though of course it will be shipped as soon as possible, is not moving towards this country as rapidly as one would desire.

Here, my Lords, I wish, if I may, to make an observation to deprecate alarming and often misleading statements made on general food questions. They only make the public think that their interests are being neglected, and it seems a great pity that allegations of this character should be made. A day or two ago I read in a paper half-a-dozen lines which I should like to quote to your Lordships. It is a paragraph headed "Food Left to Rot"— In Australia, for want of shipment, hundreds of thousands of tons of wheat are at present stacked and going rotten and being devoured by rats. The same remark applies to our own country, where, in 1918, one-half of our yearly crops was given to the pigs, having been stored and held back so long that it went bad. Then take the case of Paraguay and the River Plate, where the same conditions prevail. Farmers and others remain idle because shipping has been messed about and used for all sorts of improper purposes. There are three allegations which seem to me to be so ill-founded as to be quite fantastic.

The statement that hundreds of thousands of tons are going rotten and are being devoured by rats in Australia is an extraordinary exaggeration. The statement that in this country the same remarks apply—that grain is going rotten in this way, and that one-half of our yearly crops was given to the pigs because it had been stored and held back so long that it went bad—I have no doubt is made in good faith, but it fills me with astonishment. The crops of the 1917 harvest—home-grown crops—amounted to over 8,000,000 quarters of wheat, over 7,000,000 quarters of barley, and over 26,000,000 quarters of oats. That is a total of 41,000,000 quarters of grain. It is alleged that one-half of it was stored and held back so long that it went bad and that it went to the pigs. In other words, that over 20,000,000 quarters of grain was fed to pigs. The last statement is just on a parity with others.

It is said that the same conditions prevail in the Plate; that is to say, the crops were held for so long that they went bad, and that farmers and others remained idle because the shipping has been messed about and used for all sorts of improper purposes. That is an allegation which cannot be sustained. Shipping in the River Plate, I think, was handled with extraordinary discretion and judgment. As many as fifty ocean-going steamers were in process of being loaded in a single day, and the quantities shipped from the Plate last year were, I suppose, unparalleled.

The idea that we held excessive stocks seems to me to be based on another misapprehension. During the war we did our utmost to accumulate stocks. These stocks were our best insurance against a continuance of the war, and in many ways they are a valuable insurance on reentering a time of peace. At the Armistice we held enormous stocks of ammunition which will be scrapped, but none the less their manufacture was imperative, because it was the most effective insurance that we could encompass. It is exactly the same with food, excepting indeed that the stocks we have accumulated help us to revive private trade. I have already referred to the fact that the heavy stocks of raw materials secured during the war and the development of the manufacturing industry of margarine has not only allowed a substantial reduction in price, but has practically given a great stimulus to this valuable trading business. That trade can now be de-controlled, because the competition which will reduce price has been effected.

One word in conclusion in reply to what Lord Devonport said about de-control. The Ministry of Food has every wish to revive private trade and enterprise, but international obligations, to which my noble friend alluded, still exist. These treaties cannot be denounced off-hand. It is necessary, when these high contracts are abrogated, that terms and conditions shall be arranged so that none of the contracting parties shall suffer unduly, But, quite apart from international obligations, we must be cautious from the point of view of defending our own domestic interests. Lord Devonport said that the object of control was to equalise prices and to secure fair distribution. I differ from him. The primary object of control was to secure supplies. The first article controlled in this country was sugar. The object of that control was not to equalise prices or to look after distribution—both of which in the autumn of 1914 were looking after themselves—but to make certain that supplies were forthcoming. The second great object to be controlled was wheat and bread-stuffs. That was solely taken in hand by the State because, owing to the higher range of prices and the growing menace of submarines, the corn trade was finding itself unwilling and unable to face the risks of maintaining our necessary supplies. Subsidiary objects followed no doubt, very important objects too, of equalising prices and maintaining a fair distribution.

All these three objects have, on the whole, been satisfactorily achieved. As soon as these objects can be safely entrusted to private enterprise de-control will follow. But premature action will, in many respects, do much more harm than good; and difficult as it must be for private enterprise to continue to acquiesce in being controlled by the heavy hand of the State, I am sure it is to the public interest as a whole that these matters should not be unduly rushed forward, and that de-control should not take place until one can be assured against a reaction in prices. I am quite certain myself that the Ministry of Food is fully alive to the advantages which will follow de-control and the liberation of private enterprise, but it is determined that it shall not be brought into effect until the public interest justifies it.

VISCOUNT CHAPLIN

My Lords, may I be allowed to say a few words in reply to the noble Earl? The noble Earl, towards the close of his observations, took objection to a challenge of Lord Devonport that the Ministry of Food have been making high profits, and he raised the question, Is this contention to hold good in future, and may we not look forward to a time when high prices can legitimately be made? I was sorry to hear that observation. It is an entirely new thing altogether. I hold, and I venture to say it has always been held in days gone by, that Governments, British Governments at all events, have no business to embark upon trade at all, and they have only done so in this case under the stress of this terrible war. I hope it is not to go out that in future trading on the part of Government may be looked forward to. Certainly we live in strange times, and we hear a good many proposals that I object to altogether, particularly to its being accepted at the present time that Government, as a habit, may legitimately be engaged in trade.

The noble Earl said the Ministry of Food had made profits and losses. But what has the Ministry of Food done on the balance? I have put a question on this matter on former occasions, but I have never been able to elicit an answer from the noble Earl. I did elicit a reply as to what they were spending fur six months of last year, and it was just under the rate of £400,000,000 per annum. When I asked that they should show us the other side he was unable to tell me anything at all, and from that day to this I have never had a reply to that question. The noble Earl told us that considerable reductions had been made in prices already. That quite true, and I was very glad to hear it. I hope that further reduction will be made in the future, and without much more loss of time. One thing he did not reply to. My noble friend Lord Devonport spoke of the price of imported meat, and said the price charged was due very much to control. He pointed out that on lamb and mutton, which I think he said came from Australia and on which the price was 6⅛, per lb., the Government were making 5d. per lb, profit on lamb and 6d. per lb. profit on mutton. We have had no reply on that point from the noble Earl. I think we ought to have heard something about it, for it is a remarkable case.

With regard to the diminution of prices which ought to accrue, Lord Devonport pointed out another thing. He told us that soldiers were allowed to have meat at the rate of 5½ lbs. per week. What does that mean? Already 1,200,000 of these men have been demobilised, and if you multiply that by 5d. you get a very amazing sum which might have been forthcoming for the reduction of prices. I do not want to delay the House, but I wish to say this about the Ministry of Food. I think the Ministry of Food—and I have shown it before in this House—are very largely responsible for the rise in the price of meat. I remember one of the debates we had here, and the question has never been answered, when we were told that it was only a question of 130,000 animals which had better not be killed under a certain scale of prices. Lord Milner was brought here, and we were told on the highest authority that that was the case. When I asked a question ten days afterwards in this House I was told that under that scale of prices there had been killed just under 1,500,000 animals, and of that number 275,000 were two year old. You do not kill two year old animals as a rule in England; if you do, you do not get one-third as much meat as if the animals were four years old. That was the policy of the Ministry of Food at that time. I do not know whether they have improved since, but I do know that we hear complaints of them in almost every direction that farmers are still hampered and do not know which way to look because of the restrictions still imposed, and that the sooner these restrictions are removed and the Ministry of Food comes to an end the better it will be for all people concerned in this country.