WHEAT BILL.

HL Deb 19 April 1932 vol 84 cc21-76

Order of the Day for the Second Reading read.

THE PARLIAMENTARY SECRETARY OF THE MINISTRY OF AGRICULTURE AND FISHERIES (EARL DE LA WARR)

My Lords, in moving the Second Reading of this Bill I do not think it is necessary to labour the condition of the arable farmer. It has for some time been almost universally admitted that something has to be done to relieve his present position. In August, 1930, Mr. Baldwin, speaking officially on behalf of the Conservative Party, adopted the policy of the wheat quota with a guaranteed price. In the same month Mr. Snowden, now a member of your Lordships' House, made an announcement on behalf of the Labour Government. He said: ….as soon as the conclusions of the Imperial Conference are known, the Government will undertake whatever practicable steps can be devised to put cereal growing in this country on an economic foundation. And I myself seem to have some slight recollection during the months that followed that announcement of working with the then Labour Minister of Agriculture at a wheat quota scheme in an endeavour to find a practicable means of carrying out that pledge.

LORD ARNOLD

Does the noble Earl suggest that the Cabinet of the late Labour Government had approved of a wheat quota scheme? No public announcement to that effect was ever made.

EARL DE LA WARR

The position was that we were definitely committed to the preparation of a scheme, and the scheme that was being prepared is well known and has been mentioned in public by Dr. Addison himself—a wheat quota scheme with a maximum price as an essential part of it.

LORD PARMOOR

I do not like to interrupt the noble Earl, but I am sure he is under a misapprehension about that. I will not say more. I dislike very much discussing what goes on in a Cabinet meeting, but in my opinion the noble Earl is under an entire misapprehension.

LORD ARNOLD

Hear, hear.

EARL DE LA WARR

I do not know whether it is worth while wasting time on past history. Let us come to more recent times and look at the Third Reading debate on this Bill in the House of Commons. Let us see what Major Attlee said, speaking officially on behalf of the Labour Opposition. He said that the Opposition entirely agreed that there was a case for assistance, and they entered upon the discussion of the Bill, not in au attitude of point-blank hostility, but with the idea of seeing how far the Bill could really be made a decent and workable instrument to take its place in the reconstruction of this country. That does not sound like a very serious disagreement on the principle of the measure. And if, for a moment, I might take your Lordships back to the point that has been raised by the noble, and learned Lord, Lord Parmoor, I would quote from a speech by Dr. Addison in which he said: In so far as the Government's scheme has been described up to now Viscount Snowden has conceded to a Conservative Minister, without the accompanying conditions, a thing which he obstructed by every device of postponement and objection that he could invent for more than twelve months when it was put forward by a colleague in the Labour Cabinet.

Loan MARLEY

What is the date of that?

EARL DE LA WARR

It was made during the last few months.

LORD ARNOLD

I will not interrupt the noble Earl again, but I will deal with this matter in my own speech.

EARL DE LA WARR

If I might suggest it to the noble Lord, I think he has made a most admirable decision. Finally, the Government come before Parliament with a scheme that has been agreed to as to all the details of its machinery by the interests concerned—the milling interest, the flour importing interest, the corn merchants and the farmers. If I might be allowed I would like very much to add my tribute to, and my thanks for, the invaluable assistance which we have received from the representatives of those interests, without whose assistance we could never have hoped to prepare in so short a time a scheme based on the practical realities of the industry.

It is perfectly true to say that there are a number of dangers in the policy we are now laying before Parliament. There are many keen and experienced agriculturists who feel that by the adoption of this policy we are committing the country to the permanent encouragement and extension of a crop that cannot be grown economically in the country, at the expense of the consumers of bread. But I venture to suggest that they are completely overlooking a very fundamental fact in the situation at the present moment; that is, that it is fair to say that there is no single great wheat exporting country in the world that does not contain within its boundaries a vast mass of wheat producers who we know are at present on the verge of ruin and, therefore, producing at a financial loss. There is no expert in the world to-day who, if he valued his reputation, would venture for a moment to prophesy what course wheat prices are going to take over the next two years. Who, therefore, dares to attempt a definition of the word "economic" in relation to wheat prices at the present moment? That is the point overlooked by those who have this fear that I have mentioned.

I venture to suggest to your Lordships that those who are responsible for the drafting of this scheme have demonstrated, by the details that are contained in this measure, that they are fully aware of the difficulties and dangers which confront us in the adoption of this policy and have made every endeavour to face those difficulties and dangers What is the scheme that we lay before your Lordships to-day? The aim of the Bill is to give to the farmer, the wheat grower, a secure market and a standard price. The secure market is provided, as your Lordships will see if you turn to the Bill, in Clause 1, subsection (3). The provision is that wheat unsold after the end of the month of June—that is in the last two months of the cereal year—must be purchased to the extent of 12½ per cent. of the ascertained production if an order is made by the Minister. The conditions of the trade give us every indication that this provision amply covers the demands of the situation, because the normal surplus at that time of year is very much nearer 2½ per cent. or 3 per cent. than the 12½ per cent. that is provided.

The standard price your Lordships will find in Clause 2, subsection (2), the price of 10s. per cwt. or 45s. a quarter. Wheat will continue to be sold on a free market until at any rate the period which I have mentioned, the end of June. That means that the wheat grower will still be responsible for the sale and the marketing of his wheat, and will still have an inducement to produce the best quality and market it in the best possible way. At the end of the year the Minister will determine what has been the average price for the year, and the difference between the standard price and the average price will constitute the premium, or, as the Bill calls it, the deficiency payment which is due to the grower. Perhaps, if I give your Lordships an example, it will make that clear. The standard price is to be 10s. a cwt.; the approximate world price to-day in round figures is 6s. a cwt.; the difference between those figures, which is 4s., will constitute the deficiency payment. The sum required for making this payment world be obtained by payments from the millers and the flour importers into a quota fund to be administered by the Wheat Commission. Your Lordships will find that point dealt with in a simple little clause on page 6, Clause 3, which is very brief and to the point, and I think your Lordships will agree it is perfectly clear in its intention. Briefly, the purpose of the clause is this, to ensure that the payments by the millers and the importers into the quota fund (the liability to pay into the quota fund) shall entail exactly the same expenditure on them as if they were subject to a quota system for the physical admixture of a fixed percentage of home-grown wheat.

Turning to Clause 2 of the Bill, your Lordships will see in subsection (3) a most important provision, which amounts to an automatic check upon the undue expansion of wheat growing in this country. There is a limit in that subsection, to the financial application of the scheme, to 27,000,000 cwt., or 6,000,000 quarters, of home-grown wheat. The amount at the disposal of the Wheat Commission for payment to the wheat growers will be that maximum quarterage of 6,000,000 multiplied by the deficiency payment of what is at the present moment 4s., a sum that amounts at present prices to approximately £5,400,000. In no circumstances can that sum be exceeded through the extension of wheat cultivation above the limit of 6,000,000 quarters. If more wheat than that is grown then the same sum of money will have to be divided over a larger number of quarters. Therefore there will be an automatic reduction in the amount payable to the grower and an automatic check on the undue expansion of the wheat crop. The scheme will be administered by a Wheat Commission appointed by the Minister. That is provided for in the First Schedule of the Bill. The duties of that Commission will be to collect quota payments from the millers and the flour importers, to issue wheat certificates to the growers as earnests of bona fide sale and purchase, and to distribute the deficiency payments when they are due. This scheme has been sometimes criticised and almost derided because of its complications. It is true that this is a complicated scheme, but I would ask your Lordships to realise that we are dealing with a very complicated and technical trade, and you will find that the criticisms on the complications of the scheme do not come from those who really know the trade and who are going to be engaged in working out this scheme.

Certain obvious questions inevitably arise in the lay mind as to the reasons for these complications. Why, it may be asked, if we are to have a quota scheme at all, not make provision for the direct physical admixture of a certain percentage of home-grown wheat in every miller's grist? Because, for geographical and other reasons connected with the trade a great number of the mills of this country are not suited to the handling of large quantities of home-grown wheat, and if we were to adopt a scheme for wholesale physical admixture it would mean imposing immense unnecessary transport charges on the industry, and causing very considerable general disorganisation not only of the milling but also of the baking trade of the country. We may be asked, if we cannot adopt the direct physical admixture scheme, why not go in for the very much simpler technique of the Customs Duty? For this reason, that by our scheme we are imposing an increased charge only on our home-produced wheat, the liability for which is limited to 6,000,000 quarters, an amount, which is approximately one-fifth of our total consumption, and for the further reason that while we are increasing at present prices the return received by the home producer by between 60 and 70 per cent. We are actually only increasing the charge on our total wheat consumption by some 10 per cent., and imposing no charge whatsoever On the poultry feeder and the live-stock feeder.

Your Lordships must admit that it is a very remarkable achievement to have designed such a scheme. It means this, that if wheat had been put under the scheme for the 10 per cent. tariff there would have been as great a rise in the price of wheat all over the country with only a 10 per cent. rise in the price of wheat to the producer; whereas by this scheme we are able to give to the producer five times as much increase. The actual effect on the price of bread at its very maximum could only be a farthing on the 2 lb. loaf or a halfpenny on the 4 lb. loaf, and that is to be achieved by this scheme whilst giving to our producers a secure market and this guaranteed price. It does so whilst retaining the benefits of cheap imported wheat for the consumers of this country. That is the first function of this scheme. Secondly, it is carried out at no cost to the Exchequer—a most important provision at this time. It does actually contain within itself an automatic check on the undue extension of the wheat acreage. It further provides for the reconsideration of the price in three years time; and, lastly, it may well prove to be a foundation on which the various interests concerned will build an even more complete organisation covering the production, milling and importa- tion of wheat into this country. I say, therefore, that the scheme does meet all the main objections that have been raised by the various critics of the Bill. Some have contended that there should be a declining price from year to year in order to make it clear to the producer that this is not a permanent scheme. They have suggested that that decline in the price arrangement should go on much longer than three years. I suggest to those critics that at this time of monetary chaos, when none of us can prophesy the value of money, it is very much better to stick to the actual settlement of the price during the next three years so that during that time we can watch both agricultural development and general economic development throughout the world.

Those are the main principles which have guided us in the production of this scheme. I would like to suggest to your Lordships that mere criticism of this scheme on behalf of such opponents of it as may exist is not sufficient. They have to be prepared if they wish to oppose this Bill to face the situation in the countryside and to meet the necessity for putting forward at least some alternative. During the last ten years no less than 2,000,000 acres of arable land in this country have gone out of cultivation. Over 120,000 men have left the countryside, to go where at this moment none of us can imagine. Is this the time to decree that yet further thousands of acres, hundreds of thousands of acres, of land should go out of cultivation, and that yet further tens of thousands of men should be rendered destitute—on what ground? On the ground that wheat is an uneconomic crop. If I may pursue that point I challenge noble Lords opposite to name any country, Canada, Australia, America, the Argentine, aye, even Russia, where the bulk of the wheat is being produced at the present moment, and to say it is being produced there at a profit. Are we quite sure that it is going to pay us to permit the further destruction of our countryside in order to avail ourselves of what may be the purely temporary possibility of purchasing cheap wheat? Temporary, I say, because the prices that exist to-day are due mainly to temporary causes of over-production and temporary causes brought about by chaos in regard to the general world-price level.

One alternative to this policy has been put forward. That alternative is that the Government should encourage the transfer of production to other crops and commodities. I do not think anyone who has studied the agricultural situation for a moment would deny that the policy of the transfer of production to other crops and commodities besides wheat is in many ways a desirable one for this country to pursue, but do not let us deceive ourselves. Having a complete lack of policy in the immediate situation which is facing us is not going to lead to the transfer of production to other crops and commodities. Rather is it going to lead to the increased neglect of the existing arable land of this country. The farmer to-day is pledged to his last penny and even if he has the heart or desire he certainly has not the credit to engage in any schemes of transfer at the moment. Such a change in the system of farming requires confidence; it requires credit; it requires a balanced industry; it requires careful planning and organisation both of production and of marketing in other sections of the industry to which we want our farmers to transfer their efforts. This Bill supplies those conditions. It has already spread a great wave of confidence over the areas which we are discussing. By its provisions it automatically increases the credit of the arable farmer whilst the standard price and the market security guaranteed to the arable farmer will give time for the development of other items in our policy, the planning and organisation of other sections of the industry.

This Bill must be taken in perspective as part of the whole Government policy. It is part of our general policy, some of which reached a certain stage yesterday when the Reorganisation Commissions for milk and bacon were announced. We are also working in conjunction with the National Farmers' Union on the organisation of the potato industry and we are developing that most important side of our work, the standardisation and organisation of the production and marketing of meat, of fruit and vegetables of eggs and poultry. But if that work is to be successful it is essential that we should establish the basic conditions of credit and confidence and balance within the in- dustry. It is essential that we should give these conditions to the farming industry at the minimum cost to the consumer. That we have done within the provisions of this Bill. I beg to move.

Moved, That the Bill be now read 2^a.—(Earl De La Warr.)

LORD MARLEY

My Lords, I am sure the House will have admired the courage and the skill with which the noble Earl has introduced and explained this measure—not that skill was necessary in an explanation of the Bill, because I do not agree with him that it is a complicated measure. It seems to me to be singularly simple in essence, though some of its wording is complicated, and in my opinion unnecessarily so. I think the House will realise that the noble Earl had some difficulty in extricating himself from the position of having been Minister in the previous Government as well as in the present Government, and in attempting to support a measure now which is radically different from the proposals which were under consideration in the previous Administration—a measure which is not only radically different, but which he realises is fundamentally at variance with other aspects of this problem which he has supported in the past. I should think he will be sick to death of wheat and flour before he has finished with it. If the task of the Ministry results in any serious effect on himself, I am quite sure his epitaph will not be "No flowers by request" but "No wheat and flour by request."

The House will, I think, realise that some sympathy is due to the officials of the Ministry of Agriculture because during the past two years, and for all I know the past ten years, they have had policy after policy which they have prepared and worked out only to have them turned down by successive Cabinets. It seems as though it is impossible for a British Cabinet of whatever Party to come to any considered, long-term agreement on agricultural policy. Of course the noble Earl knows—he has had access to all the documents—that there have been draft after draft, report after report, and Royal Commission after Royal Commission which has considered and attempted to deal with this difficulty and never with any success of a lasting and durable character. Finally we come to the present Bill which is so utterly and hopelessly inadequate to deal with the problem before us and so greatly at variance with any previous proposals for a solution that the time must come, if it is not with us at present, when the inadequacy of the measure will be realised.

EARL DE LA WARR

I do not want to interrupt unduly, but I think it would be well that not only your Lordships' House but the public should realise the exact position of this matter in the Labour Government. I do not want to deal with the question of policy, but the noble Lord was mentioning details, and the reason why the details of this scheme are different from the details of the, last scheme is that when we started with the details of that scheme, after discussion with the industry, that scheme became modified, just as discussion would have had to go on with the industry if the last Government had continued in office when some modifications, I am convinced, would have taken place. The reason why discussions did not take place was that the Labour Government was calling for the preparation of a scheme but was never able to make up its mind sufficiently to get in contact with the industry.

LORD MARLEY

That does something, my Lords, to clear up the statement that this was a similar measure to that under consideration by the Labour Government. I said that this measure was inadequate. In The Times of yesterday there was a criticism by Sir Arthur Hazlerigg, who said the present House of Commons knows little and cares less about the problems of agriculture. It is a well-known fact that in your Lordships' House there are many members who know a great deal about agriculture. I can only hope they will speak up to-day and not let this sort of measure go through without the criticism to which it ought to be subjected by those concerned in the industry.

The noble Earl told us that this Bill grew out of measures which were under discussion by a previous Government. This Bill arose because when the present Government came into office the Minister of Agriculture made a premature announcement that the Government had adopted a quota policy and a very well-known supporter of the Government, Mr. Thomas, put his foot deeply into it when he announced that they were not going to stand the intolerable dictation of the milling interests, with the result that the milling industry opened an attack on the Government's policy, through advertisements in all the newspapers, leading to the complete withdrawal of that policy and the substitution of the present measure. I hope there is no disagreement on that reading of the position. Of course, as the noble Earl said, it is agreed to by all the interests concerned. If you surrender to all the interests concerned they naturally agree— there is no doubt about that. The withdrawal of the Quota Bill and the substitution of the non-quota Bill is clearly the position at present.

I have a quotation from a paper called The British Baker, which says: It is not without significance that the word quota is omitted from the title of the Bill. The complicated scheme for the sale of certificates to millers and importers has been thrown overboard. Even when this is allowed the Bill may be described as a step towards the Socialist or more precisely the Fascist State. I should like to think, my Lords, that it was a step towards the Socialist State, but if it is a step it is a very meagre and small one and not towards the State that I should look upon as Socialist. The present Bill was conceived in a hurry. It is a wasteful Bill. The wording of it is extraordinarily complicated, though the meaning is simple. It is an unjust Bill and a Bill which I venture to suggest gives the minimum value to agriculture. It has been hurried on and hardly given adequate consideration merely that it may deal with the 1932 wheat problem. One would think that the wheat problem had only just arisen. The noble Earl referred to the reduction of acreage in the last few years. The reduction of wheat acreage has been going on for 70 years at least. It was 70 years ago that the wheat acreage reached a total of some 4,000,000 acres. To-day—I speak subject to correction—the acreage is only 1,400,000.

EARL DE LA WARR

Lower than that.

LORD MARLEY

It is lower than that already. The reduction has been a steady reduction. It is not a new problem. In the same way the price problem has affected the industry for just as long. During the last 70 years prices have varied from something like 100s. per quarter down to something like 20s. per quarter. As the noble Earl rightly said, nobody could possibly prophesy what is going to be the course of wheat prices in the future. Great Britain, as a country, is probably among the highest wheat producers in the world of bushels per acre. I find that statistics show that Great Britain is only beaten by Denmark in the amount of wheat which is produced per acre. She is far ahead of Canada, the United States, the Argentine and Australia, and according to one of the most famous of the agricultural scientists who are helping this country at the present moment, Sir Rowland Biffen, Great Britain could easily increase her production from 32 to 40 bushels per acre; in other words, by intensive cultivation and improved varieties that improvement could be made. In his evidence before a Committee which sat about ten years ago he said that "England is naturally one of the best, if not the very best, wheat growing countries in the world. Its climate and soil are ideal." Hence its high production "without"— significant words — "without much trouble to the farmer."

It would be understandable if this policy outlined by the noble Earl were designed to increase the wheat production or acreage on some economic basis. That is a policy which has been supported by many agriculturists, as for instance Sir Daniel Hall and Sir Charles Fielding, and by many Royal Commissions, one after another. If such a policy of increased production of wheat in this country were linked up with something like the development of the use of an all-English loaf, which was recommended by Lord Linlithgow in the Report of the Linlithgow Commission a few years ago, there might be an understandable reason for the policy. If the noble Earl and the Government supported, for example, restriction on imports of flour into this country, in order to give more employment in the milling industry and in order to increase the supply of offals, it would at least be an understandable policy. That was the policy recommended by the Agricultural Tribunal of Investigation in 1923 or 1924. None of these things, however, are included. The Bill does nothing to increase and improve wheat production. The explanatory Memorandum expressly lays it down (and the noble Earl affirms this) that it is desired not to encourage any extension of wheat cultivation to land unsuitable for the crop.

EARL DE LA WARR

Undue extension.

LORD MARLEY

The Memorandum does not say that. It says: "without encouraging the extension," and so the noble Earl is not in agreement with the Memorandum.

EARL DE LA WARR

I must ask the noble Lord to be accurate in his quotation. It is "to land unsuitable for the crop."

LORD MARLEY

I had better read out the words, it is so much easier. The Memorandum says: "without encouraging the extension of wheat cultivation to land unsuitable for the crop."

EARL DE LA WARR

The noble Earl has now completed the quotation.

LORD MARLEY

I quoted those words before. My point is that the Bill does not encourage the extension of wheat cultivation, and when we ask for a definition of the words "land unsuitable for the crop" the Minister himself begs the whole question by announcing in the House of Commons, in answer, that the way to deal with it is to ask this question: "Does it pay to grow wheat, prices and production costs being what they are?" That means that the Bill does not intend to encourage wheat production on any other land than that already under cultivation. If it means anything else, then it is a pity that the Minister and his chief assistant are not in agreement. I would point out that there is a penalty for increased production, because, as has been pointed out, there is a lower deficiency payment if production increases beyond the anticipated supply. I work it out that the total allowance will be 1,350,000 tons. It is quite easy for that amount to be exceeded, even on the existing acreage. I notice that in 1930 the acreage under wheat actually increased by 16,000 acres, and it was only because there was an exceptionally poor yield of wheat per acre that the total was as low as it actually was, but this maximum laid down by the Government was actually exceeded by hundreds of thousands of tons in 1927, 1926 and 1925. So that it is a definite discouragement of any increased wheat production.

May I here ask the noble Earl if he could arrange with the Ministry for some co-ordination of statistics? Looking at the statistical abstract of the United Kingdom and comparing the figures with the "Agricultural Statistics" issued by the Ministry, I find in the Agricultural Statistics that the figures for the United Kingdom are omitted altogether and that the figures given instead are for Great Britain and Ireland. The Ministry may not be aware that Ireland has been divided up and that now the United Kingdom is only Great Britain and Northern Ireland. If, therefore, the Ministry would include in their Agricultural Statistics the figures for Great Britain and Northern Ireland and realise that they might just as well include Canada and Australia as Southern Ireland in the statistics for the United Kingdom, it would be a helpful thing. For all I know Ireland may not even be a Dominion before long, but the point is that co-ordination of these statistics would be extraordinarily valuable.

As I have said, the Bill does not deal with or encourage wheat production. It would be understandable if it did. It would be an equally understandable policy if the Government intended to deal with the real problem before the country, and that is the price of wheat. That is a monetary policy—a policy which would prevent the continual fall in prices, which has affected almost every product, and has, as the noble Earl pointed out, affected every country in the world. Surely there is room for a monetary policy on the part of the Government which would follow out the recommendations of the Macmillan Committee, prevent a continued fall in prices, and secure a general rise in the price level back to the 1928 standard. After all, that is the real cause of agricultural depression, and I may remind your Lordships that this very point was emphasised in the recommendations of the Economic Sub-committee of the International Economic Conference of 1927 at Geneva. It has been brought up again within the last few days by the New Zealand Government, who are putting on the agenda for the Ottawa Conference a proposal that the question of a monetary policy with a view to raising the price level may be considered by the Conference. No doubt Mr. Thomas, who is leading the Government delegation to Ottawa—or perhaps not leading it, but being taken over there by others—will be able to deal with that aspect of this important problem.

The United States have recognised the difficulty, and in their new Reconstruction Finance Corporation to carry out their "reflation" policy they have allocated 50,000,000 dollars for agriculture alone, with a view to attempting to raise the price level, which will secure to the United States farmers a rise in price by means other than those proposed in this Bill. The Government has not only no monetary policy, but it continues to congratulate itself warmly on the fall in the price level day by day and month by month. Again in the figures for last month we see a further fall in the price level of two points, and the Government is always announcing how pleased it is that it is keeping the price level down. The Government does not touch on monetary policy in this Bill. It does not seem to realise that the fundamental fact in agriculture is the price level, and the price level, which could be dealt with by monetary policy, cannot be dealt with adequately by applying to 4 per cent. of agricultural production a policy of raising prices purely at the expense of the consumer.

I say again it would be an understandable policy if the Government would realise the purely economic position of wheat, and would see that it is impossible for wheat production in Great Britain to compete with wheat production in other parts of the world. It is impossible to compete with the fact that the yield per acre in the great prairie production of the world—in Canada, in the Argentine, the United States, in Australia and in Russia—is increasing at an incredible rate by means of the use of new machinery and by biological development. It is getting increasingly impossible for this country really to produce wheat economically. It is getting increasingly difficult for any adequate competition to exist between wheat grown in Great Britain and wheat grown in Canada. I see that the biological development of new wheats has secured within the last few years an extension of the wheat belt in Canada to 100 miles further north than was possible five years ago. Similarly with the technical advance. The use of tractors and of the combined harvester-tractor is making it utterly impossible for us really to compete with other countries.

The Government might have recognised that, and have secured that the energy and skill of British farmers were directed into paths more economically useful—the production, for example, of pig and bacon foods, of potatoes, of milk, of live stock. I see that The Times in a leading article yesterday quoted Sir Arthur Hazlerigg as saying that ….if the Cabinet were composed of vegetarians who hated meat they could not do less than they are doing for the help of the live-stock industry. I do not know whether the Government is composed of vegetarians, but it is a fact that, as far as this Bill is concerned, it is simply an attempt to foist off skill and energy on to an uneconomic crop, at enormous cost to the people, without giving one thought to the possibility of transferring that skill and energy into more economically useful channels. The noble Earl says the Bill allows the Government three years in which to look round and decide on their policy—three years, whereas this Bill could have included definite encouragement to those farmers who are not able to produce wheat economically, whereby they would have been induced and helped to transfer their production to other and more useful channels such as pigs, potatoes, milk, and so on.

LORD BANBURY OF SOUTHAM

Would you put a duty on meat then?

LORD MARLEY

It is not for me to tell the Government how they should carry out their policy. That is for the Government to decide. But there are many ways of doing it, and the noble Lord, who has become such an extremely good and useful Socialist during the last six months when he has seen the work of the National Government, might realise that it would be easy to secure the control of the imports of meat and secure the control of the meat-producing industry in that way.

LORD BANBURY OF SOUTHAM

I am afraid I am not a Socialist yet.

LORD MARLEY

I am very sorry to hear that, but we shall hope to welcome the noble Lord on this side before very long.

THE UNDER-SECRETARY OF STATE FOR WAR (EARL STANHOPE)

Lord Marley has become a Protectionist.

LORD MARLEY

It is a question of the definition of the word "Protection." We on this side mean by "Protection" tariffs. We consider that they are utterly unscientific and utterly useless in helping the reorganisation and planning of industry. What we mean is that industry has to be planned, has to be thought out, has to be definitely considered as a whole from the point of view of the needs of the consumers and the possibilities of the producers. If by that is meant Protection I am a Protectionist. If by "tariffs" is meant Protection then emphatically I am not a Protectionist, never was, and I trust never will be.

EARL DE LA WARR

Is it that the noble Lord thinks that tariffs would not raise prices as effectually as his scheme?

LORD MARLEY

My point is that the question of the price level should be one for decision by the Government, and tariffs do not carry out that in a scientific way. Tariffs merely have the effect of raising prices to the consumer without giving him increasing purchasing power with which to buy the products which he wants. They have the double effect of raising prices and preventing the purchase of further goods because they give no increased purchasing power. Surely that is obvious to the noble Earl and does not need explanation from me. The noble Lord, Lord Bledisloe, writing on this question a few years ago, said: From a purely economic point of view it will probably be better business for the British farmer to devote his energies as largely as possible to the live-stock industry and to aim at meeting the demands of the population for meat and milk. Here is another case where the Government has lost an opportunity of doing something for agriculture by failing to deal with that problem. I have no doubt that the noble Viscount, Lord Astor, who has so strenuously supported something on these lines in recent communications to the Press, will deal with that in his criticism.

We have heard a great deal about the Labour Government from the noble Earl. He told us that this scheme grew out of the policy under discussion by the Labour Cabinet. Let us get down to the facts. I was not a member of the Labour Cabinet, thank heaven! but the Labour Cabinet had under consideration in June—and I do not think there can be any dispute about these facts; I am sorry for the noble Viscount who was in the Cabinet—

LORD PARMOOR

My noble friend need not be sorry for me, but I am one of those who think that Cabinet discussions ought not to be disclosed and I took that objection when the noble Earl, Lord De La Warr, began to speak.

LORD MARLEY

The noble Earl will bear me out when I say that it is the fact that the Labour Cabinet in 1931 had under consideration a draft agricultural policy. There surely can be no disagreement as regards that. Furthermore, that draft agricultural policy did include definite proposals to transfer agricultural effort from cereal production to other more valuable lines, including pigs, potatoes, poultry and so on, and it did include the organisation of home marketing and a consideration of the question of import boards. I am not saying that it was adopted by the Cabinet. I am saying that it was under consideration by them. The draft proposal before the Cabinet, after many previous drafts—the noble Earl knows this as well as I do; I presume he had access to the documents—did include the definite decision to help to transfer effort from cereal production to these other forms of production.

Similarly this draft proposal did include measures to restore confidence among the arable farmers in the depressed arable areas by means of a plan whereby there should be a quota payment. Of course the noble Earl knows that. It was not as much as that in the present Bill. It was less, and it included a reduction each year, and it was to come to an end in four or five years. There can be no dispute about these facts. It was to come to an end for the very reason that its coming to an end would secure that farmers engaged in cereal production should realise that they must transfer their energies to other forms of production, and that if they did not they would be in difficult waters at the end of the four or five years. The proposals definitely included plans whereby the agricultural worker should share in any additional prosperity enjoyed by agriculture, by means, of course, of an increase in the powers of the Central Wages Board.

This Bill excludes each one of those factors. The Bill is nothing but a subsidy to a small section of agricultural producers and it demands nothing in return Nom cereal farmers. As The Times said in its leading article yesterday, it does not amount to very much in any case. The Conservative Party have always been in difficulties with their agricultural policy. I have been reading again their publication of 1926 called "Agricultural Policy," in which they said: A subsidy may sometimes be justified as a purely temporary expedient or if it is required to start a new industry like beet sugar, but any general scheme of subsidies for agriculture is open to the gravest objection. … In view of the extreme variations all over the country in the quality or productive capacity of the land, it is impossible to devise any scheme of subsidies which will not result in the payment of a bonus to the farmers who do not need it and for which no return will be received by the nation. That is just what this Bill does. The subsidy will go equally to those who need it and to those who do not. And the subsidy will be greater to those who do not need it than to those who do. That is a peculiar fact about this Bill.

Moreover, the subsidy will undoubtedly increase the price of milling offals. I believe I am right in saying that already we are selling milling offals to Denmark at something like £2 a ton cheaper than we are selling them in this country. I see that Sir Ernest Shepperson said in another place that he was paying more for the offals sold back to him than he received for his original wheat. What is the Government doing to deal with this situation? Surely that is a way in which the live-stock industry might have been helped—by dealing with this question of milling offals. But there is not a word in this Bill dealing with that side of agriculture. The whole thing is left out and the middle men in the industry are left enthroned. The milling industry is just as honest as any other industry and probably more efficient than most, yet the milling industry have insisted that there shall be a free market for English wheat and they get it, and they get the privilege of passing on to the consumer any increased cost which results.

There is no check on the spread of prices. There is no check on the price of bread and the cost of wheat. We are told in the Corn Trade News that the price of wheat up to last year was up 5½ per cent. as compared with 1914, but the price of bread is up 55 per cent. If wheat is more or less the same as it was in 1914 why should bread be 30, 40 and 50 per cent. more? We are told that it is due to the increased cost of labour. But during this period there has been an enormous improvement in the efficiency of production and the application of machinery. Bread ought to be cheaper and not more expensive as compared with 1914. I do not see why the Government have not considered this aspect of the problem. They might have secured their subsidy to the farmers and yet have secured a cheapening of bread if they had dealt with that aspect of the problem. But there is no word of this. Under this Bill the consumer's views on the Wheat Commission are voiced by just four people, or possibly five if you include a baker as a consumer, out of a total of seventeen! What voice will they have in this question of the price of bread? The Food Council has no power; and it is simply a gift to the milling industry whereby, hiding under the complications of the wording of the Bill, there will be no particular limit to the increased cost of bread and no means of securing that the public understands whether the increased cost of bread is or is not necessary in the case of each loaf.

The definition of bread, which I am sorry the noble Earl did not give us, is included on page 25 of this Bill: 'Bread' means the article produced by baking flour together with water and salt fermented with yeast, without the addition of any other substance, so, however, that no such article shall be deemed to be bread unless it is in the form of a loaf weighing not less than fourteen ounces. What nonsense to include that sort of definition in a Bill of this kind! It is an insult to the intelligence of the country that that kind of definition should be included. The increase in price, the noble Earl has stated, will be in the neighbourhood of one halfpenny on the 4 lb. loaf. I do not see that there is any particular reason why it should not be considerably more than that. Let us take an example. He gave us, I think it was, £4,500,000 as the cost of the subsidy based on the average price to-day of 6s. a cwt. as compared with the standard price of 10s. I would remind him that last February the price was 5s. 1d. per cwt. We know that the price level is failing month by month. Why should not the average price be 5s. per cwt., in which case the subsidy would not be £4,500,000, it would be nearly £7,000,000, and that would mean a penny on the 4 lb. loaf? There is no limit to the amount of the subsidy if the price level continues to fall. I think the noble Earl might very well deal with that point. He skated over it when he told us the subsidy would be somewhere about £4,500,000. The subsidy might very well rise to £6,000,000 or £7,000,000 or possibly even more if we reach the full amount allowed of 27,000,000 cwt. and if the price level keeps down to about 5s.

As to the way in which the money is collected, Clause 3, subsection (1) is so extraordinarily complicated and so badly worded that I venture to think no member of your Lordships' House is capable of understanding it in its present state. The noble Earl said it was a perfectly clear and simple little provision. What does it say? For the purpose of meeting the expenditure to be defrayed by the Wheat Commission under this Act, every miller and every importer of flour shall be liable to make to the Wheat Commission … an amount calculated and prescribed in accordance with the provisions of this section so as to represent, as nearly as may be, a sum equal to what would have been the price deficit in respect of the quota of home-grown millable wheat used in the production of that hundredweight, if the anticipated supply of such wheat for the cereal year in which that hundredweight was delivered had been used at a uniform rate per hundredweight of flour in the production of the estimated supply of flour for that year. That is really a had piece of drafting, and I do hope that members of your Lordships' House who are interested in this question will insist that that subsection shall go back and be drafted in a way that will make it comprehensible to agriculturists and others concerned.

The effect of this Bill will be to place upon the backs of the poorest people the burden of finding the whole of the subsidy. The Linlithgow Committee pointed out that any increase in the price of the loaf must gravely affect the food bill of the poorest people. Where wages are especially low, as among agricultural labourers, the result, they said, must be particularly serious. And the results will be particularly serious. I know that it does not seem much that the food bill of poor families shall be increased by a few pence. I was in Shropshire the other day and I went to see one or two big families I know. There I found that with wages of 29s. a week the bread bill was averaging something like 10 to 12 4lb.-loaves. That means that the increased price of bread to them will be something like 6d. at one halfpenny increase in the cost of the loaf, or 1s. if the price goes up by a penny. That means less money available for spending on other goods. I can assure the noble Earl that bread is the staple article of food of many of our poorest families.

The cost of administering the scheme comes out of the money which the farmers receive. The administration will be expensive. The noble Earl gave us no estimate of the cost of administration. He gave us no idea of how much a quarter we may expect will be used for the cost of running the scheme. I see that farmers in Yorkshire have estimated it at 10s. a quarter. That seems to be an exaggeration; nevertheless it will be interesting to have the Ministry's estimate so that we shall know what reduced share of this subsidy the farmers will actually get. I spoke of this Bill as a bad Bill. It includes no date to end the subsidy. It is a subsidy pure and simple. It encourages no change over to a more economic production. It gives no control of bread prices, and the agricultural workers get no share of such benefits as cereal farmers receive. I venture to suggest that the Bill is not worthy of the wealth of agricultural knowledge which we are told the National Government possess, and we on this side of the House shall oppose it to the extent of a Division, because we believe it is not the sort of measure that will really help agriculture.

LORD CRANWORTH

My Lords, as I come from East Anglia it will be no surprise to your Lordships to find that I whole-heartedly welcome this measure, because, for the last ten years, I have seen the gradual but ever-quickening decay and ruin of the countryside in which I was born and have lived most of my life. I have watched the wages of the agricultural worker go down and down till now they stand at the pitiable figure of 28s., and, what is worse, there are thousands and thousands of agricultural workers who do not get that 28s. or any wage at all, because, low as that wage is, it is even now by no means an economic one. I have seen the farmers use up the capital that they themselves and their ancestors before them have built up through agriculture on their farms. And may I remind your Lordships that not the worst farmers but the best farmers are the ones who have suffered the most. It is the best farmers who are now in the worst position.

The noble Lord, Lord Marley, said that this Bill was produced in a hurry. In my constituency, which is a constituency he knows, hurry is not the word which they use in connection with this measure. The condition of the landowner may be seen on every side in the state of his own home and, still more, in the condition of the works for the maintenance of which he is responsible. His farm buildings, his gates, his field drainage, everything that he would wish to see kept as it used to be kept are no longer in the state they used to be in. And what of the land itself, the land which belongs to the nation, as noble Lords opposite say? That land is now in the same condition as the men who farm it. It is starved. For years it has been living on its capital and year by year it has lost heart. This Bill which we have now before us is, I think, the first real attempt to stop the rot that is going on there. I say to your Lordships that it is the first step because there is no easy fortune to be made in growing wheat at something under 45s. a quarter. There may be, there are, some favoured areas where it does represent a fairly easy profit, but in by far the greater part of the country wheat can barely be grown to cover expenses at that figure. But it will do this. It will give the farmer one stable rock on which he can depend while this Bill, or this Act, as it will be, is in force, and it will enable him to turn his attention to those other lines which noble Lords opposite have so often pressed upon him. This is a Bill the object of which is quite simple. I agree with the noble Lord, Lord Marley, that the complexity of the wording of the Bill fills the average reader with more awe and admiration than it does with understanding. Nevertheless, I think the working of the measure, which is much more important than the wording of it, will turn out to be an easy task.

If I may occupy the time of your Lordships for a few minutes I propose to do so in meeting some of the criticisms that have been made not only here but elsewhere in regard to this Bill. The first criticism, and I venture to think it is by far the most important criticism, is that this Bill imposes a tax on the staple food of the poorest people in these Islands. I am not going to deny that there is truth in that argument. Although probably to most of your Lordships bread is not one of the major items of weekly expenditure, I am not going to deny that it is an important item in the poorer houses of this country. But I think that that is an argument that may be, and in many cases has been, largely exaggerated. The Minister of Agriculture said in another place—I presume that he spoke advisedly—that at present prices the extra cost on a 4 lb. loaf was 61 per cent. of a halfpenny—that is to say, approximately a halfpenny more during 7½ months of the year and nothing more during the other 4½, months. I am given to understand—I do not know whether the noble Lord will agree with me—that the average consumption of bread in a household is a 4 lb. loaf per head per week. If that is the case, a man and his wife with three children will be taxed to the extent of roughly 1¾d. a week. I do not wish to say that there is no taxation in that, but I think it may very easily be exaggerated. In fact I am not certain that I have not heard a bigger figure mentioned this afternoon.

There is a further point and that is that the price of the loaf does not seem always to vary with the price of wheat. I would like to give your Lordships a few figures on that point. On May 9, 1927, wheat was 54s. a quarter. The price of a 4 lb. loaf was 9½d. On July 29, 1929, the price of wheat was still 54s. a quarter but the price of the loaf had gone down to 9d. Taking the other end of the scale, on July 27, 1931, the approximate price of a quarter of wheat was 22s. 10d., a great deal less than half, but the price of the loaf was 6½d. On February 29 of this year the approximate price of wheat per quarter was 25s. 10d. and the price of the loaf was then 7d. There are some further figures which I should like to give to your Lordships. In 1913 I understand that of the price of the loaf 60 per cent. went to the farmer and 40 per cent. to the baker and miller. To-day those figures are exactly reversed—40 per cent. goes to the farmer and 60 per cent. to the others. During the last two years there have been a number of changes in the price of the 4 lb. loaf. In 1930 in January it cost 9d., in August 8½d., in December 7½d. In March of 1931 it was 7d. and in December of that year it was 6¾d. Those were the average prices of the loaf in the United Kingdom as compiled by the Council of Agriculture.

The price has changed in London nine times. I venture to suggest to the noble Lord opposite that if he were to ask some of the poorer housewives in his neighbourhood, as I have asked in my neighbourhood, how often there has occurred that catastrophe which he has pointed out of a change in the price of the loaf—a catastrophe of course when it rises, but an inestimable boon when it falls—he would not, find a housewife who was able to tell him. I think her answer would probably be the same answer that I got: "Oh, it has varied several times, I think, during the last few months, but never to any appreciable extent." I may be wrong, but I think that is the answer he would probably get.

The second criticism I come to is the criticism that a subsidy of £6,000,000—it is, I admit, still a subsidy even in its present form—is too great a sum for the nation to afford for the benefit of a comparatively small part of the population. That £6,000,000 or thereabouts is a simple sum reached by multiplying the difference between the two prices by so many million quarters. But is there nothing to set on the other side? I think there is. I venture to suggest that when this Act is in full operation there will be at least 50,000 more people employed on the land, 50,000 people who with their families would have cost the State somewhere in the region of £70 each. That is apart from any indirect result such as the saving of uneconomic work that goes On in every county on the roads. There will be increased employment among implement makers who are sorely in need of more employment. There will be increased work for the producers of fertilisers and increased employment of makers of binder twine. If there should turn out to be, as I venture to suggest there will be in certain places, more straw than is needed, then there seems to me to be an opening—I believe there are indications of it already—for starting a new big industry in this country in the production of straw boards of which we are importing a vast quantity into this country.

There is another feature to which I would refer. What about the loss of Income Tax and Super-Tax to the Treasury? In my part of the world, no matter how big an income a man may have from other sources, provided he farms a farm of any size the incidence of Income Tax, let alone Super-Tax, interests him no more. If all those are added together I believe you will find the balance of £6,000,000 not only no longer exists but is in fact transferred to the other side. The noble Lord asks why the people in East Anglia do not turn to other methods and I have often seen it asked how it is that land is not laid down to grass and beasts fattened thereon. All the land in East Anglia that can be profitably laid down to grass has been, and a great deal has been laid down to grass which it was not economical so to do. In my experience it costs generally £4 an acre to lay land down to grass—more if you have expensive work in fencing and laying on water. What is the use of spending £4 an acre when the land is not worth £4 after you have expended it? The soil in East Anglia is for the most part shallow, the rainfall is the smallest in the country, and there is comparatively little soil that will grow grass worth having.

LORD MARLEY

If the noble Lord will excuse me, I did not suggest as a criticism that the land should be laid down to grass. The whole of Denmark is arable and that is the greatest dairying country in the world.

LORD CRANWORTH

I thank the noble Lord, but there are plenty who have written and spoken with regard to laying down East Anglia to grass. The last criticism with which I wish to deal is one which the noble Lord specifically mentioned, and that is that this measure benefits the farmer and the landowner, but that no benefit is to come to the agricultural worker. I am sorry the noble Lord introduced that argument because, when I hear it and read it, I cannot but think what a sorry thing politics are. It is not so many years ago, when the Agricultural Workers' Wages Act was introduced, that on every political platform in England the Socialist Party said what a grand measure it was—"this is the farm workers' charter." And why was it the farm workers' charter? It was because it ensures that whenever any benefit comes to agriculture, from whatever source, the agricultural worker will get his fair share of it. We have now a benefit given to agriculture and none, it is said, is to go to the agricultural worker. Has the Agricultural Wages Act failed? If you come to our part of the world you will not find an agricultural worker who does not know that but for the Agricultural Wages Act farm wages would be a great deal lower to-day.

Passing from those criticisms I have two little criticisms of my own which I think are justified and on which I think I shall have the support of the noble Lord, Lord Marley. With regard to the estimated supply of 6,000,000 quarters there is apparently no method whereby that amount can be revised and I cannot but think that that is a great pity. I do not believe there will be any great, though there will be some, extension of the area. As the noble Lord pointed out there is another method of increasing the yield. In much of East Anglia the land is played out. It wants rejuvenating and even today that is being done. The sale of fertilisers has gone up enormously this winter and it will go on going up. I think it is true that in two or three years the actual supply of wheat may exceed the estimate by some considerable figure. I can well see that the benefit to the farmer should not exceed a certain amount, but let the House imagine circumstances which I think are extremely likely. The price of wheat goes up to 35s. or 36s.—and I would point out that for every 4s. that the world's price goes up the price of the loaf goes up a halfpenny. If the world's price goes up to 35s. and the actual supply goes up to 9,000,000 quarters, which to my mind is far from unlikely, the result will be that the subsidy will be reduced by half, but the price the farmer gets will be in the region of 41s. 6d. I venture to suggest that if the farmer actually gets some considerable amount less than the 45s. which he thinks this gives him the result will be deplorable, and I hope that your Lordships will place in this Bill some machinery whereby, taking all the circumstances into account, if it prove necessary, the estimated supply may be increased, or again diminished, by the Minister.

As to the other criticism I have to make, I find myself somewhat in agreement with the noble Lord over wheat offals. I would have thought there was an opportunity in this Bill to have done something for the stock breeder by giving him cheaper offals. One of the greatest grievances in my part of the world has been that we have had to pay more for the waste products of wheat than we have received for the grain, and that is in fact the case to-day. The answer may be that there is something in our treaty obligations which prevents what I should have regarded as a happy insertion in the Bill. If so we have, I believe—and I shall hope for some reassurance from the Minister—the word of the millers, who have shown the utmost good will and cooperation in their attitude towards this Bill, we have their assurance that they will do their best to see that the price of wheat offals to the stock graziers is not seriously raised.

In conclusion I would suggest to your Lordships with regard to this Bill that money is not the only thing—that the only consideration should not be whether it is more profitable to grow pigs or poultry in some other part of the world. I think the human element must enter into this as well. I may be prejudiced, as coming from that part of the world, but I believe that the men and women of East Anglia are second to no section of the population of this country. Their record is known to many of you and it speaks for itself. Much of their land their ancestors won for them from the sea and from the swamp. A great portion of the very soil was made by generations of cultivation, and by the application of clay and farmyard manure. I venture to believe, and I think your Lordships will agree with me, that the task of succouring those men and giving them some small portion of prosperity is one which is very well worth while, and I am proud and glad to think that it is a task to which this Government have in this Bill set their hands.

VISCOUNT ASTOR

My Lords, I submit that we can only discuss the merits and demerits of the Bill before the House if we examine it in the background in which it is set. The first point that one has to bear in mind is the fact that the chief thing before the country to-day is economy. Before the last Election, the then Government carried through a series of drastic cuts, which affected the pay of the police, of His Majesty's forces, of the teachers, and others, and after that there was an Election, and this Government was elected as an Economy Government. We have therefore to see that in any legislation which we discuss we do not carry through anything which brings about wasteful expenditure. I am perfectly convinced that the country to-day is prepared to spend money on the development of agriculture. How much that expenditure should be I do not know, but if I were responsible for agriculture I should have no hesitation in asking the country to spend £20,000,000 a year in developing agriculture, and I am sure that the country would agree to the expenditure of such a sum.

There are two ways in which agriculture can be helped. It can be helped either by direct subsidy out of the taxpayers' pockets, or by improving the price of agricultural products, which of course has to be paid by the consumer. Then there is a second point to bear in mind. We have now adopted Protection, and we have to see how far the Government's agricultural policy fits in with the policy of Protection. The basic elementary principle of Protection is that one should protect the finished manufactured article and not tax the raw material. Thirdly take the most important matter and that is the future prospects of agriculture. I think everybody is agreed that in the main, if we want to get the maximum development of agriculture in this country, we have to look to the development of animal products. The reasons are obvious. I think that the past has shown that the climate and soil of this country are more favourable to the production of animal products, and to-day the animal products of this country are worth sixteen times as much as the wheat products of this country. Animal products are found grown by farmers all over the country, in Wales, in East Anglia, in Scotland, in the West and in the Midlands, on every type of farm, large and small.

If we look to the future expansion of agriculture, we find that if the whole of the cereal products imported into this country were grown here that would only increase our agricultural production by £30,000,000, whereas if we were to replace our imports of animal products by producing them here we should increase our production by £140,000,000 as compared with £30,000,000 of cereal products. It is quite obvious that the future of agriculture in this country must depend in the main on the development of livestock products. That does not mean at all that those who support that policy contemplate the abolition or extinction of wheat, oat and barley growing. The case of Denmark has been cited. Denmark with all her wonderful production of animal products has increased her cereal production and her arable acreage. We have in this country some of 'the best wheat land in the world and some of the best farmers. I wish to make it absolutely clear that in my opinion we have some of the best farmers, but after all successful farming is farming at a profit and that is really the test which one has to apply when examining the prospects of an industry.

Another question which one has to bear in mind is that a large amount of the grain grown in this country is fed on the farm. Sixty-eight per cent. of the oats grown in this country is fed on the farm. Twenty-two per cent. of the wheat grown in this country is fed on the farm where it is grown. A very considerable proportion of the wheat sold off the farms is sold for the feeding of live stock. Only some 60 per cent, of the total wheat production goes to milling. That is to say, wheat is important as an animal food and when we agitate for the development of the live-stock industry we do not contemplate anything which would extinguish wheat or cereal growing or arable farming. Therefore the more we are able to expand and develop our animal products the more, inevitably, we must develop cereal growing and arable farming. But it is also necessary that in helping the production of grain we get grain cheap. If we put up the price of oats or barley, or spend money unnecessarily on wheat we are going to prejudice the development of the corner stone of agriculture, which is animal products.

I agree that wheat growers and arable farmers have a special claim for assistance but I think the nature of that claim is apt to be exaggerated. Those who advocate special treatment for the Eastern Counties are apt to forget that coal, railways, steel and engineering have also had a very bad time and that the arable farmers of the Eastern Counties are not the only ones who have suffered. For myself I am prepared to support a subsidy to the wheat growers of the Eastern Counties only provided that it is a temporary subsidy, and that is a point on which I am not quite certain yet—whether the Bill is going to provide a. temporary or a permanent subsidy. I would support a temporary subsidy but I should not be prepared to support anything in the nature of a permanent subsidy.

Let me now examine what the Government has done in connection with agricultural policy with this setting that I have indicated. What are the prospects of the development of animal products today as compared with those of six months ago? In the opinion of many farmers interested in live stock and live-stock products (and I agree with them) their prospects to-day are worse than they were six months ago before the Government announced their policy. Worse, because the Government began by taxing imported foodstuffs. Thirty-seven per cent. of foodstuffs are being taxed and the cost of production is going up or is likely to go up. Then there is another thing. I have said that I feel convinced that the country is prepared to spend a considerable sum of money on helping agriculture, and I have indicated the sort of sum which I, and I believe the country, would be prepared to justify, but the Government up to date are spending £14,000,000 to help the purely arable farmer, and that leaves only a ridiculously small sum for helping the rest of the agricultural industry. which has not yet been helped.

A noble Lord just now interrupted Lord Marley and asked him what he would do for meat—whether he would be prepared to put an import duty on meat. I do not think that Lord Marley was prepared to do that. I should be. I should be prepared to put protective duties on animal products, but I should not put protective duties on feeding stuffs. That is where I differ in the main from the policy which the Government have brought forward. I think you have to examine agriculture as a whole industry. You have to take a national view of it, and not deal with it sectionally. I have no confidence whatever in the ultimate value to agriculture of the newer forms of Protection. Quantitative control, import boards, quotas, and so forth, are, I think, more calculated to put up the price of food and the cost of living, and therefore to antagonise the majority of urban voters in this country than ordinary protective tariff duties would be.

We come next to the question of the temporary aid which many think should be given to wheat growers and to the Eastern Counties, and that brings us to the examination of this Bill. This Bill, I think, contains a very dangerous and an entirely new principle, and I am very much surprised that more of your Lordships have not commented on this new principle. This Bill guarantees an annual, permanent—because I think the Bill, as now drafted, is permanent—perpetual profit to one industry, regardless of world prices and competition. I was in Russia last summer, and many of us are apt to condemn the challenge to the ordinary economic laws and principles which are associated with the Soviet and Communist form of government; but I do venture to suggest that for Parliament to guarantee to an industry, or to a branch of an industry, an annual profit is a new and very dangerous principle, more especially when that profit is not based on the cheapest cost of production. The aim of this Bill is to give a fair profit to those farmers who are only able to produce wheat at 45s. The result of that must inevitably be to stereotype the production of wheat at 45s. on many farms. There are a certain number of farmers who can produce wheat at less than 45s. They may be unenterprising, and, if so, they are not going to change their method of production in order to be able to produce it more cheaply, though in so doing they might be getting a larger profit. They are satisfied with an assured profit at 45s. To that extent we are stereotyping methods, and we are also preventing a change over.

I think the noble Earl, Lord De La Warr, indicated that he contemplated and that it was desirable to develop livestock products. In so far as we induce farmers to stick to grain by giving them a subsidy and preventing their changing over to animal products we are putting back the clock and acting contrary to the avowed policy of many members of the Government. The result which the Government wish to achieve by this Bill is to give a fair profit to those farmers who can only produce wheat at 45s. In doing that the Government, I am afraid, are creating vested interests which are going to be very powerful politically. I am afraid that at the end of three years, when this question comes up for reconsideration, it is going to be more difficult for the Government of the day to withdraw the subsidy than it would be for the Government to-day not to start it; that is to say, assuming that world prices have not gone up very considerably. I was taking part in a discussion not long ago at the Farmers' Club, and I was very interested in a comment made by a farmer from East Anglia. He said this question of wheat growing is no longer an agricultural or economic question; it is entirely a, political question. We have to bear that in mind.

I have indicated what the desired results of the Government were by this Bill. There are also certain unwanted and undesired results which are inevitable. I indicated just now that the over-ruling consideration which we have to bear in mind to-day when discussing this or any other Bill is to see that there is no extravagant or wasteful expenditure of public money. I think everybody who has studied this matter knows that it is possible to produce wheat at a profit at 40s., at 35s., at 30s., at 25s. I hold here in my hand—I am not on a Second Reading going to go through them—reports from Leeds University, dealing with the cost of wheat-growing in Yorkshire, reports from Cambridge University, dealing with the cost of wheat-growing in the Eastern Counties, a pamphlet by Mr. Orwin, another pamphlet from the Oxford School of Agriculture, and so on. But these impartial documents, based on ascertained facts, show conclusively that it is possible to produce wheat at a profit at a very much lower figure than 45s. That is to say that one effect of this Bill is to give an unnecessary and excessively high profit to a certain number of wheat growers, and that is going to be done out of the public pocket.

Then there is another type of farmer who is now making a profit, who is going to get a second profit out of the public pocket as the result of this Bill. There are many farmers who grow wheat because they require straw—dairy farmers and many others. I am one myself. I grow wheat because I require the straw for my dairy cows. I make a profit on the sale of my milk. I am not going to pretend, as so many farmers do, that I always lose money. I have made a profit. I made a profit after paying interest on capital. I have worked out the figures for last year, and, as far as I can make out, I should under this Bill be receiving out of the public pocket an extra £170 bonus, a free gift, in addition to the profit which I have already earned. I imagine I am only typical of a large number of dairy farmers. The inevitable result of this Bill therefore is that the public will have to pay a large number of farmers a second and additional profit, which the Government do not want to give them, but which they cannot prevent giving them because of the drafting of the Bill.

Yet another section of agriculture is also going to get a second profit, the poultry keepers. There are many poultry keepers who grow wheat because they want the wheat to feed their poultry. As I understand the working of the Bill, it is perfectly possible for a poultry keeper who is making a profit to begin by selling his wheat to the miller and then buying it back again. The wheat will leave the farm, and then come back again. That poultry keeper, who is already making a profit, is going to get a second profit out of the public pocket as the result of this Bill. So there are three sections of farmers—those who grow wheat at a very much lower price than 45s., those who grow wheat for straw, and for whom the grain is a by-product and who make their profit on dairy farming or in other ways, and those who grow wheat as a feed for poultry, who must inevitably get a second, an additional and unwanted profit. To that extent, therefore, this Bill runs counter to the mandate on which the Government was elected, and which we all support—namely, absolute and rigid economy.

But there are other undesired and unwanted results which I am afraid must inevitably follow from the grain policy of which this is a part. I notice that the Minister for Agriculture, speaking in another place recently, said: "I am prepared to see mechanical development." Others have indicated that the 45s. guarantee is going to compel a considerable number of farmers to mechanise. It is going to give them the necessary money to mechanise. The Minister of Agriculture in the same speech also said: "You are going to reduce the number of people in that industry by mechanisation." That is an inevitable consequence of mechanisation. Were it necessary I could give the sort of figures that follow from mechanisation, but I think everybody would agree that mechanisation does reduce the number of workers employed on a farm. The Government have had to hold up the Small Holdings Bill. I myself would support a policy of mechanisation, but I would couple with it the development and creation of small holdings, because I think if you have mechanisation alone there is a real danger of actually reducing the number of people living on and by the land. It is because of that that I would couple a policy such as is indicated in this Bill with a speeding up instead of a holding up of the policy of small holdings.

Then there is another inevitable result of this Bill. Noble Lords who have spoken have indicated that the Bill is likely to increase the cost of bread. I suggest that we should not ask ourselves whether it is going to mean an increase in the price of bread for six months of the year of a farthing, a halfpenny or an eighth of a penny. The point which we cannot get away from is that it is going to take something like £4,000,000 to £6,000,000 sterling out of the public pocket in increased bread prices. That £4,000,000 to £6,000,000 is not going to fall from the sky. It is coming out of the pockets of the bread eaters. At the end of the war I was Chairman of an important Inter-Departmental Agricultural Committee on which there were representatives of the Ministries of Agriculture of England, Ireland and Scotland as well as many other well-known agriculturists. We said this: If the State guarantee to farmers remunerative prices for wheat farmers will require a larger profit on milk which is more troublesome. That is to say, that one of the effects of guaranteeing a profit to wheat growers is not only that you will put up the price of bread but there will be a tendency to put up the price of milk. We have to bear those in mind as some of the social results which may follow from this Bill.

I have one or two points in regard to criticisms made by those who oppose the grain and wheat policy. The noble Lord, Lord Cranworth, speaking on behalf of the purely arable farmer in the Eastern Counties, stressed the importance of wheat to that part of England. A very interesting report is to be published this summer—I only wish it were out to-day—of an investigation into a thousand typical farms in the Eastern Counties which is being made by the Agricultural Department of Cambridge. Obviously even if I knew the contents of that report I could not indicate its conclusions, but I can quote from an interim report which has been issued concerning this investigation into one thousand typical farms in the Eastern Counties. It is a very responsible investigation. It is pointed out in that report that good prices for animal products are more necessary for the ordinary farmer in the Eastern Counties than good prices for wheat; that 68 per cent. of the gross income of the ordinary farmer is represented by animal products, whereas wheat only represents 5.3 per cent.

Let me give your Lordships two quotations from this very interesting report. This first is: A 10 per cent. rise in the price of dairy produce would increase gross incomes by over 2.38 per cent., while a 10 per cent. rise in the price of wheat would increase gross incomes by only 0.53 per cent. That is to say, for the ordinary average farmer in the Eastern Counties the success of dairying and live-stock products is more important than the successful development and cultivation of wheat. The second quotation is this: A 10 per cent. rise in the price of feeding stuffs would cancel the effect of a 30 per cent. rise in the price of wheat. That is to say, the result of the Government's policy of taxing feeding stuffs and putting an import duty upon barley and oats is actually prejudicing farmers in that part of the country where cereal growing is supposed to be so vitally important.

The noble Earl, Lord De La Warr, used a phrase which is not infrequently used. He talked of a "balanced industry," and spoke of this particular proposal being required in order to maintain a balanced industry. I wish the noble Earl had gone a little more into that and had explained to us what he means exactly by a "balanced industry," and why it is that with 1,800,000 acres of wheat you will have a more balanced industry than with the 2,600,000 acres of 1918 or the 3,600,000 of 1874. He did not attempt to explain why 1,800,000 acres would give us a balanced industry, whereas if we had 1,500,000 or 2,000,000 or 2,500,000 we should not have a balanced industry. I think the mistake which the Government have made is that they have gone in for an arbitrary figure for each section and branch of the industry.

I inherited a farm which was losing money. It was a balanced farm. There was a little bit of everything grown upon it. The first thing I did was what most farmers do if they are losing money—I tried to find out where the money was being lost. It was a damp and low-lying farm and I found out that poultry was one of the sources of loss. So I gave up the poultry. I might have said: "I must have a balanced farm and a balanced farm necessitates having poultry." There are people who say that you must have some poultry and some of a number of other things on a balanced farm. I think there is a very real danger if we examine agriculture sectionally instead of examining it nationally.

Then we are told that the grain policy of the Government, the taxing of barley and oats and the help which is now being given to wheat, is merely a first step and that we are to look to the second step really to pull us through. I indicated just now that the first step the Government are taking to help agriculture is already costing us £14,000,000, and I am afraid when the time comes to take the second step and give the necessary assistance to animal products the expense will be so great that there will be a real danger that the majority of the voters, the industrial workers who really are not concerned primarily with agriculture, may do what they did in 1920, when they repealed the clauses of the Corn Production Act. If we put up the price of bacon and meat and dairy produce unnecessarily—because we have begun to do so by putting up the cost of the raw material used in animal husbandry—there is a very real danger that we may put up the cost of living to such an extent that the industrial workers will ask for an increase in wages, which the industrialists may not be able to give them because of the condition of world markets to-day. There may, therefore, be a real danger of the majority of voters in this country—urban and industrial voters—turning down the help which the Government are trying to give to agriculture.

I have tried to show that the policy of the Government, so far as it has been enunciated, and of which this is a part, conflicts with the elementary principles of Protection—namely, that one should not tax the raw materials of the industry if it prejudices the maximum expansion of agriculture as a national industry. There is a real danger of the help which I think everybody would be prepared to give temporarily to arable wheat farmers becoming permanent and unnessarily extravagant and burdensome. This Bill cannot be made watertight, and, therefore, inevitably it must lead to unnecessary expenditure of public money. When we come to the Committee stage I shall propose to put two Amendments on the Paper. One is to terminate the operation of the Bill at a definite date, and, secondly, I think after the first stage is passed, it would be quite fair and reasonable, and much more defensible, to insert clauses guaranteeing wheat growers against excessive loss when wheat prices fall more than the prices of ordinary commodities. I am not going to justify or explain those Amendments now; I merely indicate the sort of amendments I think might be put in the Bill.

I hope the Government and those of your Lordships who support this Bill do not feel that anything I have said has been said in any carping or captious way, or from any desire to make trouble. I am sure you will agree that it is necessary, in a big question like this, to hear both sides. I think it is bad for any measure to go through without being carefully scrutinised and examined. I am as keen as any member of your Lordships' House to develop agriculture in this country. I look upon it as one of the vital industries of the country. I have indicated the real risks which in my opinion lie before agriculture, and if, because of the policy which the Government have introduced, I have had to speak, in criticising the measure, in terms of disapproval of the Government, I do not want to put the whole of the blame upon the Government, because, after all, they have only been carrying out what I recognise has been the official policy of the agricultural community for some time past. The difficulty is that farmers have not realised that during the past fifty years the world has undergone an enormous change. We have come into a new world. We have cheap transportation, inventions, the discoveries of biologists, mechanisation, the war—all these things have given us entirely new world conditions, and, therefore, what might have been right twenty-five or fifty years ago is not, I submit, necessarily right to-day.

I am not going to indicate an alternative. There is an alternative. I have hinted at it in my speech. I hope your Lordships realise that there is very real support for the alternative which I have in mind. It would give us a bigger food production than that which is possible under the Government proposal. It would give us an increased food production at a lower expenditure of public money. It would give us increased efficiency, and it would at the same time give us an increased rural and agricultural population. I hope even at this late period the Government may be ready to modify their policy so as to help the development of live stock and live-stock products. Whatever steps they may be willing to take I hope they will agree to put a definite term to this Bill.

LORD STRACHIE

My Lords, I welcome this Bill so far as it goes, because it will increase the amount of arable land and prevent more land going out of cultivation. I cannot say that I agree with the way in which this Bill has been drafted, or with the system. It seems to me to be more or less a quack remedy. The noble Earl in his speech seemed to me to make a great many contradictions. I noticed that other noble Lords seemed to have the same view. For instance, he said the object was to get a market for the wheat grower. I agree with that. Later on he said it was undesirable to have any expansion of the present amount of arable land. I suppose he meant that. I do not know what else he meant if he did not mean that.

EARL DE LA WARR

May I correct the noble Lord? I did not say it was undesirable to have any expansion.

LORD STRACHIE

I am sorry I cannot hear what the noble Earl says. Other noble Lords besides myself, I assure him, have great difficulty in hearing him when he speaks like that. I took these words down and they will be seen in the OFFICIAL REPORT to-morrow. He said it was undesirable to have more expansion. He went on to say how there were 120,000 men who had left the land, and he also said there were thousands of acres which were now derelict. We are continually being told that we ought to do something for unemployment and to get more men on the land. At the same time the noble Earl deprecates expansion. I cannot understand why. The noble Earl did in inarticulate manner deny my statement that he was contradictory in what he said. Again he referred to the 6,000,000 quarters and made another statement which seems to me rather extraordinary. He said the more corn that is grown the less will be the price. That means the less price the farmer will get. I know something about farmers, and they are very discontented with the 45s., but according to the noble Earl when there is any expansion, and probably there will be an expansion, this price will go down perhaps to 40s. or 35s. That seems to me a most extraordinary and unsatisfactory state of things.

The Bill is so complicated and long I thought perhaps I might find some explanation of it in The News-Letter, the new National Labour Fortnightly, which was issued on the 16th April (last Saturday) and contained an article headed "The Government's Agricultural Policy. The Wheat Bill. By the Right Hon. Earl De La Warr (Parliamentary Secretary to the Ministry of Agriculture)." That is of course a high opinion. In that article the noble Earl, under the heading "All Parties Agreed," says: The necessity for some action to assist the farmers of arable land has been generally admitted, and all sections of the National Government have supported the Bill, including those who felt unable to support the Import Duties Act. When I read that I thought it was the most extraordinary statement, because I remember so well reading in The Times that the Lord Privy Seal, Lord Snowden, had made a very striking speech against quotas. I read that speech and I referred to it in a letter which I sent to The Times. I am sorry the noble Viscount, Lord Snowden, is not now in his place. I told him I was going to refer to this matter, so it is not my fault that he is not here. Perhaps he did not think it worth while to remain. Probably he knew what I was going to say.

Speaking at a conference to promote Free Trade between nations, Lord Snowden made this most remarkable statement. He said he was entirely opposed to tariffs, restrictions and quotas. He said that—"entirely." The noble Earl opposite apparently had not read Viscount Snowden's speech at that conference. He looks at me as if he wants to get up and contradict me.

EARL STANHOPE

May I ask the date?

LORD STRACHIE

It was in The Times a week ago yesterday.

EARL STANHOPE

I do not mean the noble Lord's letter, but Viscount Snowden's statement.

LORD STRACHIE

That was reported in The Times on April 2. His statement was that he objected to restrictions, tariffs and quotas. He made that absolute statement, and yet the noble Earl in this News-Letter says: ….all sections of the National Government have supported the Bill, including those who felt unable to support the Import Duties Act. He says that "all sections support this Bill," that is the quota, although Viscount Snowden says the opposite. I do not think it fair that the noble Earl should make a statement of that kind in a paper that circulates among ignorant people who think that the National Government is absolutely agreed. I think your Lordships may also be interested in this. He said: The scheme is admittedly complicated, but so are the industries with which it has to deal. It is designed to ensure to the farmers a secure market and a standard price of 10s. per cwt. whilst retaining the benefits of cheap imports; it will therefore he carried through at the minimum cost to consumers. That is a most delightful state of things. I think we should all be strong Protectionists if that is what is meant by tariffs.

Then the noble Earl went on to say: To proceed by the direct method of the tariff would involve an increase of price in the whole of our wheat consumption, including, of course, poultry food. I do not see how that squares with the quota scheme. He says further: The quota scheme is concerned with home-grown wheat only, and the liability is limited in the Bill to one-fifth of our consumption. One-fifth of our consumption! If that is the case I cannot see that there is going to be any great advantage for these people. I suppose that is the reason why the noble Earl said that the greater the expansion the less the price would be.

Later I see a cross-heading, "The Test of Experience." Under that heading I thought the noble Earl was going to tell us what has happened in other countries. I have been told—I do not know whether it is really the case or not—that it has been tried in other countries and has not been successful. It has been entirely objectionable and not at all desirable. I notice that he says: Who to-day is prepared to define the word 'economic' in relation to price? Canada, the Argentine, America and Australia, are all producing wheat at a cost approximately 40 per cent. more than the price for which it sells. That seems an extraordinary statement. If that is the case there must be subsidies or veiled bounties to enable it to be done. I am one of those who are anxious to see a great deal more land returned to arable and a lot of pastures, which are very rotten indeed, ploughed up again. Of course there is a great deal of land which it is impossible to maintain in a state of pasture.

Again, I cannot understand what the noble Earl means by millable wheat because I notice that it is said in the Bill that "'millable wheat' means wheat which conforms to the standard prescribed by regulations made by the Minister." We do not know, and the noble Earl has not told us, what those regulations are going to be. It seems to me that if the definition of "millable wheat" is going to be strict the scheme will only benefit those farmers who least want it, those who are farming good land in Essex or Sussex or any of those counties where wheat even now can be grown at a profit. On the other hand, the man who wants more help, the man who has got poor land, will be ruled out.

I cannot understand why the Government have brought in such a Bill as this. Personally, I am a Free Trader, but in the present crisis I cannot see the slightest objection to a 10 per cent. duty all round for revenue purposes. We have just had a statement in another place from the Chancellor of the Exchequer showing that the country is still in a most parlous condition, that the Income Tax cannot be reduced, and that in fact there can be no reduction in taxation at all, not even as regards beer which everyone expected. That shows that it is very necessary to have more revenue and I know that there are a large number of Free Traders who, like myself, are entirely satisfied that there should be a 10 per cent. duty all round for revenue purposes without these various distinctions. The Chancellor of the Exchequer does not dare to take off any taxation at all, and it is evident there will be the greatest difficulty in keeping the Budget balanced. Therefore for revenue purposes I say, without fear of contradiction from a large number of Free Traders, that it is necessary to have a 10 per cent. duty all round and that we should not have quack remedies like these. It would be much better if the Government would take their courage in their hands, but I suppose they are afraid to do so owing to differences in the Cabinet.

LORD ARNOLD

My Lords, the time for discussion on the Second Reading of this Bill is nearly ended and it will not be very long before the measure passes on to the Statute Book. The noble Viscount, Lord Astor, spoke of moving Amendments in Committee. I shall be very much surprised if there are any Amendments accepted, and as for the Third Reading debate, if there is one, it will be in my view largely a waste of time. This Bill will pass on to the Statute Book just as for hundreds of years every Bill which helped landlords—and this Bill will help landlords—has passed on to the Statute Book almost automatically. It is true that if your Lordships discharged the supposed function of a Second Chamber, which is to see that a measure is in accordance with the will of the people, this Bill would not pass. I think there can be no doubt that if this Bill were submitted to the people of the country it would be rejected by an overwhelming majority. Clearly people in the urban districts would be against it, because it is going to make bread dearer, and there are also a large number of agriculturists who are against it because it is a Bill which is going to help only a minute fraction of agriculturists. I think there is no doubt that the Bill would be heavily defeated if a referendum were taken upon it. Therefore, as I say, if your Lordships were discharging the supposed function of a Second Chamber you would reject this Bill.

As a matter of fact it will not be rejected, because this Chamber is not concerned with the will of the people. It is concerned with the will of a Tory Government. This is a Tory Government. The order has gone forth for the Bill to be passed, and passed it will be, though it may be, and has been, riddled through and through with criticisms to which there is no reply. The real reason for the Bill is that supporters of the so-called National Government are pledged to do something for agriculture. It does not really matter what it is so long as they can get up on the platform and say they have done something and that there is going to be a new era for agriculture. That is the real reason for this Bill. It is, of course, part of that manifestation of protectionist mentality which is the mind of the present Government. The position is that the Tory Party for years past has been a prey to an unlimited and unbridled lust for tariffs and Protection which has seized upon them like some malignant fever. This Bill, my Lords, is only another evidence of that. Lord Strachie says—why do not they put a 10 per cent. duty on wheat? They dare not do that yet.

LORD LOVAT

Is the noble Lord in favour of 10 per cent. all round?

LORD ARNOLD

The noble Lord knows that I am wholly and entirely opposed to any such thing. I was saying that the noble Lord, Lord Strachie, had asked why they did not do it. The reason is that they dare not, and so somebody has evolved this scheme which avoids an out-and-out duty on wheat, but will nevertheless impose considerable burdens on the people.

Before I go further I would like to deal with the opening observations of the noble Earl who moved the Second Beading. The noble Earl gave what purported to be the record of the late Labour Government in regard to this quota and compared it with the record of the present Government. I have a great regard for the noble Earl and I am sure we all admire the assiduity, the efficiency and, I think I can say without exaggeration, the ability with which he discharges his task; but if he will permit me to say so he is not very well versed in certain Parliamentary proceedings—he was never in the House of Commons—and I deprecate personally a discussion on the floor of Parliament—I do not care in which House it is—of what may or may not have gone on in Government circles regarding matters which have not come to any public decision. I deprecate that just as I think it is most undesirable that the Cabinet oath should be broken, as it was several times last year. I have said and I repeat that there was not and never had been any public statement on behalf of the Labour Government that it was in favour of the wheat quota. I was not in the Cabinet and therefore I am free to speak of what I know.

The noble Earl tells us that the matter was discussed. No doubt a great many questions were discussed, but the wheat quota was never approved by the late Government and no public statement to that effect was ever made. I should have left the late Government at once if there had been anything of the sort. I did leave the Government in March of last year, and in May I introduced a Motion on the wheat quota. At that time Lord Parmoor gave no indication that the Government approved the quota and as far as I know no such statement was ever made and no such approval of the Cabinet was ever given. I hope there is no ambiguity about that. As I say I think it is much to be deprecated that statements about measures which do not come to Parliament should be made on the floor of Parliament. I would further say that no resolution approving a wheat quota has ever been passed by the Labour Party Conference. The noble Earl knows that there is a very large and influential body in the Labour party which is bitterly opposed to the quota in any shape or form.

Leaving that should like to say a word or two about the position of the noble Viscount, Lord Snowden, who is not in his place. I am not altogether surprised that the noble Viscount is absent because he is in a very difficult position with regard to this wheat quota—a position absolutely unprecedented in British politics. There was what is called the go-as-you-please arrangement—your Lordships know what I mean—whereby certain members of the Government were allowed to retain their seats in the Cabinet, not their self-respect, and to oppose tariffs and Protection in any shape; but that go-as-you-please arrangement did not apply to the wheat quota. The wheat quota was first announced as a part of Government policy on November 26 last. The go-as-you-please arrangement was not evolved until the beginning of February, so that for over two months the Free Traders in the Cabinet were committed under our Constitution to the wheat quota. To do Sir Herbert Samuel justice he has said more than once since the go-as-you-please arrangement that, although he does not like the quota, he feels he must support it. But what is the position of the noble Viscount, Lord Snowden? Reference has been made by Lord Strachie to a speech by the noble Viscount at the recent International Conference dealing with Free Trade. The noble Earl, Lord Stanhope, asked the date of that speech. I will tell him. It was in the early days of April, this present month. The noble Viscount who under the Constitution is committed to the wheat quota goes to this International Conference, condemns quotas, says they are worse than Protection and is present there when actually there is a resolution passed which is to be sent to the Government of which he is a member protesting against quotas. Anything more extraordinary—anything more preposterous, using the word in its literal connotation,. I can scarcely conceive of. If anything like this had happened under the late Government the noble Lord opposite (Lord Banbury) would have been speechless, if one can imagine him ever being speechless.

VISCOUNT ELIBANK

May I ask whether that is an argument against the Bill?

LORD ARNOLD

I am taking the opportunity, as the noble Viscount, Lord Snowden, has already intervened, of exposing—I consider it to be a public duty—what I feel should be made plain in the interests of the proprieties of public life. The noble Viscount is trying to have things both to be and not be at the same time. Why is he not here to vote? According to what was done by Sir Archibald Sinclair in the House of Commons he should vote for this Bill, and then you would get the spectacle of the man who would rather go to the stake than tax the bread of the poor voting for a Bill which will make the food of the poor dearer. The truth is that the noble Viscount has not the courage of his convictions, nor of his embarrassments. If he had the courage of his convictions he would resign from the Government instead of going up and down the country as if nothing had happened, and as if he were perfectly free, when he is as a matter of fact under the Constitution committed to the quota.

I leave the noble Viscount and come back to the Bill. I am not going to analyse the Bill in detail. The hour is late and I do not think it serves any useful purpose. A very great deal can be said against the Bill. I would like to point out that the explanatory Memorandum attached to the Bill in the Commons conveys an entirely wrong and, as I hold, a wholly unjustifiable implication. It says that "No charge upon the Exchequer or local rates will be created by the Bill." Technically that is true, but the implication there, that this Bill does not make a public charge, is entirely false. If that was in a company prospectus I think that very serious notice might be taken of it. It is utterly false. Technically it is true, but in essence it is false. This Bill will create a charge upon the public. It will create a charge particularly upon the poor, who will have to pay more for their bread. Lord Cranworth gave certain statistics about loaf consumption which may apply in certain parts of the country but does not apply in others. Dr. Salter, a very experienced man, gave statistics about social matters which have not been challenged. In moving the rejection of the Bill in another place he said that there are districts where this Bill will impose upon families as much as an additional charge of 1s. 3d. per week for bread, and in extreme cases would amount to the equivalent of about 1s. in the pound Income Tax.

This Bill breaks every canon of taxation. It is not very productive; it is economically unsound; it will affect the health of the people, and from the point of view of the principles of taxation it is open to the gravest possible objection. It is admitted that it does really amount to as much as a 10 per cent. tariff. The statement has been made that it is as much as a 15 per cent. tariff, but 10 per cent. is enough. We have in this country for nearly a century enjoyed the blessing of the best and cheapest bread in the world, and this Bill, coming on top of other protectionist measures of the Government, will jeopardise that supreme blessing, and those who are responsible for doing so are taking a very grave responsibility upon their shoulders.

The Bill only helps a very minute proportion of agriculture. Only about two and a half per cent. of the total agricultural production will be helped by this Bill. I suppose the value of the total agricultural production of this country is still between £200,000,000 and £250,000,000 per annum. This Bill applies to only about £5,000,000, and so it applies to only a minute proportion of agriculture. It is not going to put agriculture on its feet, and, as Lord Astor has pointed out, it definitely injures certain branches of the industry. Certainly it injures the poultry industry, which will have to pay more for its feeding stuffs, and the poultry industry is the most promising branch of agriculture to-day. Then there is no prospect whatever of wheat rising permanently to the guaranteed price in this Bill. Not the slightest. There is no prospect of wheat ever again being permanently 45s. per quarter. Indeed it may well go below the present price, even to 18s. or 16s. per quarter. I think the noble Earl will agree that there is not the remotest chance under the Bill of wheat remaining permanently at 45s. per quarter, and the reply to Lord Astor, I think, is that the Ministry of Agriculture has admitted that the Bill is likely to be a permanent one. There is not the slightest chance of his time-limit Amendment being acceded to.

The noble Earl who introduced the Bill says that at the present time Canada and Australia are not producing wheat at a profit. How can we here, with our small farms, produce wheat at a profit when Canada and Australia, with their large farms and mechanised farming, cannot do so? The truth is that the market is running against us the whole time. There is another point. If you are to proceed upon this wholesale system of subsidies I do not see why oats and barley should be left out, because if wheat is to have this assistance there is also a strong case for giving it to oats and barley. The noble Earl, Lord De La Warr, made a speech the other day which amused me very much. He said he had been at a meeting of bulb growers, who, although they have a tariff, are still not satisfied and want more. He said candidly that he came away from the meeting with feelings of absolute disgust. He is somewhat inexperienced, certainly in regard to Protection, but if he remains with his present friends he will have to get over that disgust. I can tell him that that is Protection. They always want more, and there is no limit to the greed of those who support the present Government.

The position is that the whole Bill is thoroughly unsound. I will deal with one other point before I summarise my conclusions. This Bill is not necessary from the point of view of what is called the rotation of crops. Naturally enough those who support the Bill have tried to make the most of that point, but I am advised that a very large proportion, probably five-sixths, of agricultural land could by degrees be turned over to something else, and that in the end it would be a more profitable thing to do than to bolster up something which cannot be bolstered up. As to the remaining one-sixth, it would not become useless, but even so it would be far cheaper to pay a subsidy to the remaining one-sixth. With regard to the five-sixths, everything should be done to encourage changing over to more remunerative forms of agricultural production.

I have read the debates on the Bill through and through, and listened to speakers here, and I say this Bill rests upon a series of quite unproved assumptions. It has not been proved that this Bill will be of any real use to agriculture. It has not been proved that there is any possibility of wheat rising to a permanent 45s. per quarter. It has not been proved that the Bill is of any real value in the matter of rotation crops. It has not been proved that it is worth while from the point of view of national defence. It has not been proved why it is right to single out wheat and leave other cereals. It has not been proved that it will be of value in increasing agricultural employment. What has been proved is that the Bill is put forward on a dishonest prospectus and will lead to an increase in the price of bread. It has been proved that it will only apply to a very minute proportion of agriculture. It has been proved that the Bill lees absolutely nothing to effect that change over to better and more remunerative forms of agriculture, so much to be desired. That, being the case, I do not think anything remains which can be said for it.

I cannot conceive of any measure for which less can be said and against which more can be said. Nevertheless it will pass through this House by a big majority. However, the time will come when the people will find this protectionist Government out, and they will experience the follies and the futilities and the failures of Protection, and we shall see a different state of things. We Free Traders console ourselves with that. As regards the majority in your Lordships' House, we do not worry very much about that. I remember the words of Lord Morley—"The greater the majority, the greater the scandal."

EARL STANHOPE

My Lords, I cannot hope that any words of mine are likely to diminish the gloom of the noble Lord opposite. The task of a Jeremiah is never a very happy one, but the noble Lord put forward so many arguments against the Bill that I cannot help feeling that he rather rejoiced in the number of faults that he found in it. Certainly I am not going to make any defence of the Lord Privy Seal. He is quite capable of looking after himself.

LORD ARNOLD

Why is he not here?

EARL STANHOPE

I have no doubt that on a suitable occasion he will deal with the noble Lord quite adequately. This I can say, that I agree with the noble Lord, Lord Marley, when he said that, thank heaven, he was not a member of the Labour Government.

Certain arguments have been put forward against the Bill. The noble Lord opposite said that it would affect the health of the people. I puzzled my head as to what lie meant, and I came to the conclusion that he meant it might possibly lead to some slight increase in the cost of flour. I was rather astonished at that statement when I recalled the prices of wheat that prevailed when the noble Lord was to some extent responsible for the government of the country; because, whereas at the present moment the price of wheat is somewhere round about 26s., when he was responsible for the government of the country in 1930 and 1929 the price was 36s. in 1930 and 44s. 3d. in 1929. Therefore, if this is going to harm the health of the people, heaven knows what must have been the result of the noble Lord being responsible for the government. He challenged me to say that there was no possibility whatever of wheat ever again rising to 45s. One thing I shall never claim is that I have any gift of prophecy, and therefore I am not going to accept his challenge on that point. But I would remind him that people are not in the habit of producing any kind of goods at a loss, and, if it goes on for any length of time, they give up producing that article altogether. When the noble Lord knows that every country in the world is now producing wheat at a loss he must realise that that is either going to come to an end and prices will go up, or those people are going to go out of cultivating wheat altogether. Once you get a shortage the law of supply and demand will operate, and up will go the price of wheat, heaven knows to what figure.

The noble Lord, Lord Strachie, has left the House and therefore I do not think I need deal at length with his remarks, but he appeared to be strongly in favour of a 10 per cent. duty all round, although he called himself a Free Trader. That is rather typical of the policy of noble Lords who call themselves Free Traders, because I found Lord Marley anxious that we should have control of prices and that we should take such measures economically, dealing with the monetary policy of this country and of other countries, so that there should be a general rise in prices all round.

LORD MARLEY

I do not call myself a Free Trader.

EARL STANHOPE

I beg the noble Lord's pardon but I thought he belonged to the same Party as Lord Arnold, and I am rather puzzled as to what Party Lord Arnold belongs if he is not a member of the same Party as the noble Lord. I must leave the solution of the Labour Party's difficulties to themselves, because we have no time to deal with that to-night.

A complaint was made, I think by Lord Arnold, that if this Bill were ever put before the country it would undoubtedly be turned down. I am not going to quote a Labour Minister, because I know how much the rest of the Party dislike it, but I will quote a resolution passed by the National Union of Agricultural Workers and, still more remarkable, by the Transport and General Workers' Union, 93 per cent. of whom are urban members. This is what they resolved in 1931 before the noble Lord left office: That the Government be called upon to implement its promise to the agricultural industry by bringing in immediately its proposals for the establishment of a wheat quota, with a guaranteed price to the producers and a living wage to the workers. That is what is included in this Bill. The noble Lord shakes his head; I have no doubt he does not like it.

LORD ARNOLD

Not at all. There is nothing in it. You can always produce resolutions.

EARL STANHOPE

I am content to leave it at that. An argument was put forward, I think by my noble friend Lord Astor, in which he said that we give a guarantee of an annual profit on wheat. We give no such guarantee. There is a standard price of 45s. and that price is limited to 6,000,000 quarters. If the number of quarters is exceeded, then the total sum payable is divisible by the increased number of quarters, and the effect is that the standard price will go down. If the output of this country rises to 6,500,000 quarters the standard price would in effect be just under 44s., if to 7,000,000 quarters, just under 43s., if to 8,000,000 quarters, just under 41s. 3d. The reason for the steady reduction in the payment per grower is that we are anxious to avoid what the noble Lord on the Cross Benches fears—that farmers should be encouraged to grow wheat on uneconomic land. By "uneconomic land" I mean land where, although wheat can be grown, it can only be grown at a high cost, either because the output per acre is low, or because it requires very heavy manuring and further expenditure, making it uneconomic. Therefore we took the figure of 6,000,000 quarters.

We did so for a further reason. We did so because we were anxious not to put too heavy a burden on the people of this country, and we thought 6,000,000 quarters was a fair figure to take. Some noble Lords have said that it will give no increase in the output of wheat. That is entirely wrong. It will give an increase of something like 40 to 50 per cent., and we estimate—and I have worked out the figure myself and it came to rather more than the Minister himself gave—that there will be an increase of over 500,000 acres in the land put back to wheat. I am not going to pretend that wheat is a very large part of the agricultural output of this country, but I think no one will deny that wheat has been hit harder than anything else, that the fall in prices has been far heavier, and that, as has been said by Lord Cranworth, farmers have neither the heart nor the capital nor the energy under present conditions to turn over to any other form of agriculture. Until they have some chance of making a profit on their wheat that hope of further initiative and change is gone. And, at the moment, what can farmers turn over to? Are they making a profit on meat? Are they making a profit on pigs? Are they making a profit on milk? The noble Viscount (Lord Astor) is fortunate in making a profit on milk. I can only tell him that I am unfortunate enough to make a loss. Perhaps I am incompetent, but at any rate I share that same disability with a very large number of other farmers in my county, who also produce milk, and, I am afraid, do not make it pay.

The truth of the matter is this. Everybody agrees that ploughed land has had more difficulty than any other kind of land. Everybody will agree that any encouragement given to ploughed land has a more immediate response than encouragement given to any other kind of farming because it employs more labour and you get the result straight away. There is no hope for the wheat farmer in saying: "When these Commissions have reported on the potato industry, on milk production, and so on, and when we have been able to produce legislation and passed it, then we will help you." In this case the wheat farmer says he is already on his beam ends, and he cannot afford to wait. Therefore this Bill has been produced as a real help to the arable farmer, who, as everybody agrees, is the greatest sufferer.

It has been said by the noble Earl, Lord De La Warr, that this is only the first step in the rehabilitation of British agriculture. That is perfectly true. It definitely discourages the production of wheat on unsuitable soil by its limitation to 6,000,000 quarters. It also does so by its limitation of price to a maximum of 45s. standard price. When I say a maximum of 45s., that is, of course, for average wheat. The noble Viscount said that it would not encourage farmers to grow better wheat or make a bigger profit. Farmers have refused many things, but I have never discovered them to be unwilling to make a profit where it is possible. If a farmer is able to grow really first-class wheat and to use his gifts of salesmanship to sell it at the right moment at a price, we will say, of 35s. when the average price is 30s. then he will get—

VISCOUNT ASTOR

I am sure that the noble Earl does not wish to misrepresent me. I did not say that. I merely indicated that certain farmers would be ready to go on farming on their present methods and making small profits. I did not say anything about a farmer growing wheat rather than turning over to other methods to produce wheat more cheaply.

EARL STANHOPE

I see the noble Viscount's point. But he has missed my point, which is that the farmer who at present is growing wheat by uneconomic methods, as he would describe them, is probably a man who has not the capital to enable him to get the equipment necessary to turn over to other methods. That, of course, will have to come. Meanwhile you cannot afford to allow farmers and their men to go to ruin by simply saying that you must wait until they can afford to buy equipment.

At this late hour I must not deal further with the Bill beyond saying that if it is to work with its utmost efficiency it is absolutely vital that farmers shall get together and shall organise themselves and get into touch with the millers and the corn merchants. Too often in the past producers and distributors have been inclined to look upon each other as opponents and in a thoroughly unfriendly light. That must come to an end. It is a very happy augury that in connection with this Bill the farmers and millers, the corn importers and the corn merchants have all come together to help in drafting it and have agreed to work together and try to do so with the utmost efficiency. If this Bill lays the foundation for getting producers and distributors

Resolved in the affirmative: Bill read 2^a accordingly, and committed to a Committee of the Whole House.

to work together it will be one of the best things that have been done for British agriculture over a very long period of years. In my view it is the one chance which British agriculture has of restoring itself to a condition of prosperity. It is vital that farmers should organise and get into touch with the distributors. This does lead the farmer to register with the Wheat Commission. It also compels the miller to set up his milling corporation. We hope and believe that those central organisations will lead to local organisations, and that the seed which is planted by this Bill will spread to other forms of agriculture to the great benefit not only of farmers and distributors but of the nation as a whole.

On Question, Whether the Bill shall be now read 2^a?

Their Lordships divided:—Contents, 53; Not-Contents, 4.

CONTENTS.
Sankey, V. (L. Chancellor.)	Elibank, V.	Howard of Glossop, L.
	FitzAlan of Derwent, V.	Jessel, L.
Somerset, D.	Hailsham, V.	Lawrence, L.
Wellington, D.	Hereford, V.	Lovat, L.
	Hood, V.	Marks, L.
Bath, M.		Mount Temple, L.
Bristol, M.	Aberdare, L.	O'Hagan, L.
	Addington, L.	Phillimore, L.
Cawdor, E.	Alvingham, L.	Russell of Liverpool, L.
De La Warr, E.	Banbury of Southam, L.	Saltoun, L.
Iveagh, E.	Bayford, L.	Somerleyton, L.
Leven and Melville, E.	Clanwilliam, L. (E. Clanwilliam)	Southampton, L.
Lucan, E. [Teller.]		Stonehaven, L.
Morton, E.	Conway of Allington, L.	Strathcona and Mount Royal, L.
Onslow, E.	Cottesloe, L.
Plymouth, E.	Cranworth, L.	Templemore, L. [Teller.]
Radnor, E.	Dickinson, L.	Teynham, L.
Stanhope, E.	Dynevor, L.	Treowen, L.
	Fairfax of Cameron, L.	Wharton, L.
Churchill, V.	Hawke, L.	Wigan, L. (E. Crawford.)

NOT-CONTENTS.
Arnold, L.	Hay, L. (E. Kinnoull.)[Teller.]	Marley, L. [Teller.]
		Snell, L.

House adjourned at half-past seven o'clock.