§ VISCOUNT ASTOR rose to call attention to the possible dangers of giving combined producers of a commodity statutory powers under the Agricultural Marketing Act, 1931, to restrict production and restrain trade compulsorily; and to ask the Government what steps are being taken. The noble Viscount said: My Lords, I propose to-day to avail myself of the opportunity which is given to members of your Lordships' House in a way which is not possessed by members of another place of raising matters of public interest and importance. I have indicated in the terms of my Notice some of the points which I want to raise, more particularly the new powers which are being given to restrict production and also to interfere with trade—very drastic 389 and very far-reaching powers indeed. It brings us an entirely new conception as to the conduct of business, which is very dangerous, I think. It may be right, and it may be necessary, but at all events I suggest that we ought not to embark upon the use of these powers, or allow them to be adopted, without full consideration of the implications, and without having our eyes opened.
§ Just over a year ago your Lordships passed the Agricultural Marketing Act. It went through almost without discussion; there was a Second Reading on a Monday, the Committee stage on Thursday and Friday, and the Bill was passed the following Wednesday. I cannot believe that your Lordships realised the far-reaching implications and consequences of that Marketing Act when you let it go through without more detailed examination and criticism. We had not then a National Government. We had a Labour Government and a Labour Government is very much more zealous for bureaucratic control than Governments of other complexions.
§ VISCOUNT ASTOR
Well, they used to be any way. At any rate I think the noble Earl will agree that they do not accept the economic laws of supply and demand in the way that we do. This Act is based entirely on the negation of those laws. There is another point which we ought to bear in mind. For a period of years now we have had falling prices. World prices of commodities have gone down and down. That has hit traders and producers very much and in bad times, in times of real slump, people will snatch at almost any remedy. They will snatch at remedies which they would turn down without a moment's consideration if times were normal. When the Marketing Act was passed the National Farmers' Union were bitterly hostile. As far as I have been able to ascertain the National Farmers' Union, representing the organised agricultural producers of this country, were only won over to the operation of this Act by a combination of a bait and a threat, by the suggestion that they could only have Protection if they consented to work the Marketing Act. I am afraid I cannot absolve the noble Earl, Lord De La Warr, entirely in this matter. I could quote some of 390 his speeches with interest. The noble Earl says "Hear, hear," so he accepts that. The farmers were won over reluctantly to the acceptance of this Marketing Act, not on its merits, but because it seemed to be the only chance of getting a form of Protection.
I have searched the laws of other countries and I cannot find any instance of an Act like this in the laws of other countries. I cannot find that any country has an Act as drastic as this. There is no such Act in Denmark, nor is there in Holland. It is true that in one of the Dominions there was an Act which was not altogether dissimilar, but that has been repealed. The only Act, as far as I have been able to ascertain, which had any similarity to this very drastic Act was one which has been repealed, so that to-day no country has these terrifying powers which are now being brought into operation here. I cannot help thinking that the measure was passed through a confusion between co-operation and compulsion. The whole Act is based on compulsion although it was introduced as a measure to encourage co-operation.
There was a further confusion of thought—a confusion between preparation for marketing and the actual control of distribution. Let me explain what I mean. Everyone who has studied agriculture or trade will agree that it is in the interests of producers and consumers to standardise and grade the products put on the market. A great deal has been done in that direction under marketing schemes for apples, eggs and other things. That is most desirable and I think it ought to be supported and developed, but it is entirely different from the powers contained in this Act. I will show presently that inevitably the Government must be brought in when a central body is given complete power to control distribution, and I think that is not proper for a marketing scheme. On the question of co-operation I should like to remind your Lordships that Sir Horace Plunkett —than whom no one has done more for co-operation in the British Isles—wrote a letter to The Times a year ago protesting against this very clause in the Act to which I am calling the attention of your Lordships to-day. He was in favour of co-operation but entirely opposed to the compulsory powers in the then Bill which are now embodied in the Act.
391 I do not want this afternoon to detain your Lordships by going in detail through the powers of the Agricultural Marketing Act; but I would point out that there are powers to regulate sales, to tell a producer where he is to sell his goods, what kind or variety of goods he is to produce, to fix prices at which he may sell, to prohibit ally price being cheaper than the minimum price fixed under the Act, to regulate the quantity sold—which means, of course, the quantity which may be produced—and so to limit production and to pervent new producers coming into the field. A central body is given power to prevent a new man coming into an industry. These are the real danger points in the Marketing Act—the price-fixing power and the power to limit production. Neither of these powers is essential to a genuine measure to encourage cooperation.
For a time I was at the Ministry of Food and it is partly from the experience I gained there of the control of foodstuffs that I have been brought to realise the danger of a measure like this. We found at the Ministry of Food that when Government or a central body comes in and starts fixing prices there is no end to it. You have to go on fixing further prices. You may start by fixing the prices charged by retailers. You have then to fix the prices charged by wholesalers and producers. I know perfectly well that that is part of the policy of a Socialist Government and of the Labour Party—price fixing at every stage; but I hesitate to believe that it has really now been adopted as part of the policy of the Party to which most of your Lordships belong. There were other lessons to be learned at the Ministry of Food. One was that where the Government steps in to fix prices it is easier for inefficiency to continue. Government by action cannot kill the less efficient. Government, when it fixes prices, has to fix them at such a figure as to enable inefficiency to make a profit. You wipe out the ordinary rules of competition which knock out the inefficient. You also have red tape.
One of the lessons we learned in our control of food during the War was that prices tended to go up. I fully recognise that we have to have an increase in prices and I think that is desirable, but we do not want an excessive rise because 392 if we get that there is a real risk that the majority of voters in this country will treat our efforts to help agriculture in the same way as the clauses of the Corn Production Act were treated—by repealing them. The conditions of war and peace are entirely different. During the War the Ministry of Food did all it could to increase production when fixing prices. The Marketing Act and the schemes produced so far are an attempt to limit production—the absolute opposite. The one thing we wanted to do was to stimulate production.
§ LORD MOUNT TEMPLE
Will the noble Lord allow me? Is it right to say that it is to limit production? Is not the wording "more efficient production"? I suggest that it is hardly fair to say "limit."
§ VISCOUNT ASTOR
The noble Lord, if he looks, will find powers to regulate the quantity which may be sold, and if you regulate the quantity a man may sell, you must limit the quantity he can produce. I shall quote later a scheme produced under the Act giving chapter and verse for the powers to limit production. There is another point. During the War it was relatively easy to bring in this very drastic measure of "Dora" control. There was no foreign competition. The submarines limited the importation of competitive foodstuffs. Now, it is inevitable that with a minimum price you have to prohibit the importation of any competing article at a lesser figure; you must restrain trade; create an artificial blockade; you do not put up a tariff but you prohibit importation altogether.
There is a further inevitable step. If you say to a producer that he shall not sell what he produces at a lesser figure than a figure fixed by a statutory board, you have to guarantee him a market and ensure that somebody will take his produce off his hands. You cannot say to a grower of potatoes that he shall not sell below a certain figure and then not see that his potatoes are taken off his hands. If he cannot get whatever it is the sum may be, he will dispose of them at any figure. Inevitably, therefore, if you fix a minimum price you have to guarantee to take all the articles which the producers of that particular product grow 393 off their hands. It is because of that that the next step is also inevitable—namely, you have to prohibit imports of commodities in order that there may be a guaranteed sale of the whole output of the producers in your own country. I am perfectly certain that most people in this country and perhaps some members of your Lordships' House, have not followed the consequences and the implications of the policy inevitably associated with the Marketing Act and the corollary—namely, the system of quotas.
There are three requirements, it seems to me, in production, in trade and commerce: efficiency, fair profit and fair price. How are we to achieve those? In the past we have done so under the capitalist system by encouraging initiative and competition. We have got efficiency by competition which knocked out the inefficient, and it is that competition which has given us not only efficiency but a reasonably low price. Recently we have seen an entirely new conception in Russia. There, under Communism, competition has been wiped out, the State has come in, taken over the whole of industry, production and distribution. In Russia efficiency is achieved under absolute Government control and any individual who does not come up to the standard is put on one side. Land not used in the national interest according to the opinion of those at the centre is given over to other purposes. But under this Act we have a third conception, which I suggest is much more dangerous than even the Communist view of the conduct of business. Under the Marketing Act we prevent competition. We do not have full Government control, but there is the maximum of interference, and the inevitable result of the Act is to protect inefficiency.
I venture to suggest that if that is the way in which the Marketing Act is going to work out it is a more dangerous form of conducting our business even than Communism. Let me examine the way in which these powers can be used by bringing to your notice the first scheme produced in England under the Marketing Act, the hop scheme. Under that a central monopoly board is established and that central board has power to tell each producer of hops where he is to 394 sell his hops and the price he is to be given. There is power to limit production under the hop scheme. An amazing power under that scheme is that the central board have power to burn surplus hops. That is a very extraordinary thing, because these powers are available for other things, bacon, eggs, poultry and fruit, and here under the Marketing Act a central board is given power to destroy the surplus. Those are pretty desperate and far-reaching powers. The whole aim of the Agricultural Marketing Act is to "trustify" producers. Across the Atlantic in the United States of America the whole aim and efforts of the Legislature have been to control any attempts of a trust to restrain trade. Here we reverse that. Under the Agricultural Marketing Act we say to producers: "Provided you trustify yourselves you can restrain trade." I venture to suggest again that those are powers that I do not believe your Lordships fully realised were in the Agricultural Marketing Act.
Then in the Act there is a consumers' committee. Now, there is a very interesting point on that. If you look at Section 9 you will find that "persons who purchase the product, or commodities" (which are regulated) "for the purpose of any trade or industry carried on by them" are specifically excluded from this consumers' committee. That is to say that, where hops are concerned, the brewers are not allowed representation on the consumers' committee. The brewers are placed entirely at the mercy of a monopoly of hop growers. If you look at the Dyestuffs Act, which was passed in 1920, you will find there an entirely different procedure was adopted. There the consumers' committee was to consist of five persons concerned in the trades in which the goods are used, three persons concerned in the manufacture of goods, and three others. That is to say that those industries that were dependent upon dyestuffs in that case—or in this case hops or milk, or whatever it might be—were given specific representation on the consumers' committee. I think they ought to have it. They are vitally concerned in this question of production and the prices which are charged.
Take, for instance, the question of pigs. If there is a scheme for the control of 395 pigs under the Agricultural Marketing Act, does it mean that the bacon curers are not to have any say as to the price which is to be charged? Take the ease of milk. We are told that there is to be a scheme under the Act for dealing with milk. Does that mean that the makers of cheese are to be specifically by the Act kept off the committee which is to be concerned with the fixing of prices? I cannot help suspecting that there is there a tinge of that suspicion of private manufacturers which one found in the minds of the late Government.
In order that your Lordships should see that I am not expressing fears which other people do not feel I would like to draw your attention to what happened the other day. I am going to quote from The Times of May 6. A case was heard in the High Court of Justice, King's Bench Division, before the Lord Chief Justice, Mr. Justice Avory, and Mr. Justice Macnaghten. There Mr. Davis moved on behalf of a gentleman for a rule nisi for a writ of prohibition to prohibit the Minister of Agriculture from proceeding, with an alleged scheme for the marketing of English hops. Let me read some of the things which counsel said:Counsel contended that the scheme seemed to provide for everything except the marketing of hops. The producer was to be prevented from marketing his own hops; if he delivered them to the hoard he was deprived of his property in them without compensation; the board was not bound to buy his hops or to sell them … If the hoard did sell the producer's hops he was not entitled to the price, but only to a proportion determined by the board of all the hops, good, bad, and indifferent, sold by them.The result was that the efficient producer of first-quality hops would find himself subsidising the producer of inferior hops for which there was no market. ….Counsel submitted that the scheme was not a marketing scheme, but a scheme … which deprived the producers of their rights in and over their own property. …It is not surprising that the Lord Chief Justice granted that rule. I have quoted that in order that your Lordships should see that I have not been exaggerating when I indicated the very serious consequences connected with the Agricultural Marketing Act.
I have there examined the first scheme which was produced in this country. You probably know the reasons which 396 have caused hops to be the first commodity to be dealt with under the Agricultural Marketing Act. There is a glut of hops. There are two reasons for that. First, during the War there was control of hops and no importation of foreign hops. So the growth of hops was increased and kept up. Since then you have had the importation of foreign hops, and, in addition to that, the consumption of hops has gone down. That is an occurrence which happens every day in all forms of business. You have ups and downs; you have surpluses and you have deficiencies, and the ordinary laws of supply and demand work out. One year you have a profit, another year you have a loss, and gradually the supply adjusts itself to the demand. You do not have to bring in these drastic new "Dora" powers to deal with a situation like that. The real difficulty where hops are concerned is due to the fact that an attempt has been made to keep all hop-growers alive and in existence. If you have an over-production it is inevitable there should be a reduction in acreage. The other day, Lord De La Warr used a phrase, which I challenged—"a balanced industry." It seems to me there is exactly the same fallacy here. If you have x acres under hops, then it is all right, but if that acreage is reduced then you have an unbalanced industry, even though that reduction may be turned over to fruit or anything else.
Let me examine this in detail. Let us assume, for the sake of argument, that there is over-production of any article. Normally, under the ordinary economic laws of supply and demand that over-production gets righted through the less efficient producers giving up and turning over to something else. But that is not the procedure which is suggested under the hops scheme which has been published. Under that scheme every grower of hops is given a quota—a quota based on the production of the previous two or three years. And, in view of the fact that there has to be a total reduction, the production of each hop grower is reduced proportionately. The efficient hop grower has to bear the same reduction as the inefficient hop grower. What is the effect of that? It means that the efficient hop grower has to carry the inefficient. By efficiency and inefficiency I refer to the price at which they can 397 market their commodities. This leads to real wastage. You say to the efficient producer that he has to reduce his output and thereby you increase his overhead expenses. That is obvious.
You say to every hop grower that he has to reduce his acreage by a certain amount. I think I saw somewhere that the total acreage had to be reduced 8,000 acres. It is immaterial what the figure may be. Normally, the thing to do would be to take out of hop growing the 8,000 acres which were least capable of producing the hops at the market price; but that is not the proposal of the hop scheme. Every producer has to have an equal reduction of acreage—half-an-acre here, an acre there, two acres somewhere else. There is no chance whatever of using that half acre, that acre, those two acres, which are to be taken out of hop cultivation. Under the ordinary laws of supply and demand you would use that acreage for other purposes. If you have a hop field of 40 acres and you tell the hop grower that he is not to grow this half acre, acre, or two acres, obviously he cannot economically grow apples, pears or raspberries on that restricted acreage. The net result of this hops scheme, this attempt to meet over-production or a glut, inevitably must be a real wastage of acreage which otherwise might be available for growing another product. I venture to suggest that I may not have been so much wrong when I said that in comparison with a scheme like this even the very drastic system adopted in Russia is less likely to lead to waste and inefficiency—not that I favour that system.
What is one to say about this scheme? I am going to quote from the National Farmers' Union Record for April, the official publication of the National Farmers' Union. I find in that publication that this hop scheme is not the product of the National Farmers' Union. I find that it was not produced by the branches of the National Farmers' Union. I find that it is the product of a Member of Parliament—I do not want to mention names—that it was discussed at an informal meeting not under the auspices of the National Farmers' Union even, and that it was presented to the Ministry of Agriculture by certain gentlemen in their individual capacities. That is what I read in the National Farmers' Union Record for the month of April.
398 What is the origin of this scheme? I find that during the past month the Member of Parliament who appears to be the author of this scheme, has gone around the country accompanied by representatives of the Ministry of Agriculture, conducting a vigorous propaganda among the hop growers. Those gentlemen have explained in general what the hop growers ought to do and the enormous benefits that would be available for them if they would work this Act. I have read some of their speeches delivered up and down the country. It is natural and obvious that before submitting this scheme to the National Farmers' Union the gentleman in question would have consulted the representatives of the Ministry of Agriculture. He was going round the country with them. I do not say that the Ministry agreed to every letter and comma in the scheme, but it is obvious that when it was published it did not take the Marketing Department or certain members of the Ministry completely by surprise. The amazing thing is that the Ministry did not nip this scheme in the bud before it was ever produced, which shows how far bureaucracy goes when you give it full powers. I have purposely gone into the details of this scheme because—
§ VISCOUNT ASTOR
No, by the Lord Chief Justice, in the High Court. Still, there is to be an inquiry, and it is to be submitted to the Ministry of Agriculture and then there is to be a poll. I am only dealing with the scheme as it was originally submitted to the Ministry of Agriculture. I do not want to go into the details of another scheme that has been produced under the Marketing Act in Scotland dealing with raspberries. If it were necessary to convince your Lordships of the danger of this Act I could do it. I notice that violent protests are being made by fruit growers in the fruit growers' newspapers against the raspberry scheme. Not unnaturally many of the fruit growers desire to dispose of their own products, and they are pre- 399 pared to do that without the raspberry scheme as the hop growers are without the hops scheme. The marketing scheme is not, as I say, for marketing purposes; it is to restrict production, to set up trusts, to kill competition, and to force the efficient to subsidise the inefficient. It is based on a confusion between preparation for marketing and the control of distribution. I am all in favour of the first, but I consider that the second is very dangerous.
In the Notice which I have placed on the Paper I refer to the power to restrain trade. I think it is necessary that we should try to see the significance of the Agricultural Marketing Act and its implications. If you fix a minimum price, if you decide where a producer is to sell his product, if you tell him that he may not sell below that fixed minimum price you have to guarantee him a market. You have to undertake to take off his hands the product he has grown. You have to buy it from him. So you get Government control. Supposing the central purchasing body is not able to dispose of the product at the price at which it buys it and there is a loss, what is to happen?
There is the further point that if you fix a minimum price for food, for articles grown in this country, you have to prohibit the importation of any competitive articles which may be sold here at a lower figure. That is to say, you have to prohibit imports altogether. If you tell the cheese-maker that he shall not sell his cheese for less than a particular number of shillings you cannot allow the cheese-maker in another country to sell his cheese here at a lower figure. It is because of that fact that we hear so much about quotas. I want to say at the outset that I am a supporter of tariff duties. If you compare tariff duties with quotas I say emphatically that quotas are far more dangerous and much more calculated to put up prices than tariff duties are. You can estimate the probable effect of tariff duties on prices. No man can foretell the effect of a quota on prices. I think it is necessary that anybody who still sticks to the policy of Free Trade should realise that quotas are a far more drastic form of Protection that tariff duties are or could be.
Let us examine these prohibitions of trade which are called quotas which in- 400 evitably must follow from the Marketing Act, and let us examine them in terms of bacon. If you have a quota for foreign bacon you can restrict the amount of bacon which comes into this country. That is to say, the English bacon grower knows that the extent of the competition which he has to bear from foreign sources is restricted and limited. The whole object of quotas, as of tariffs, is to protect the home producer and enable him to put up prices. So that one of the first results of the Marketing Act plus quotas is to put up the home prices. On the other hand, you are saying to the Danish producer of bacon that he is to be allowed in future to sell less than he is selling now, and the amount he is to be allowed to sell is specified and restricted in the quota. But at the same time as you tell him you are to restrict the sales, you give him a guaranteed market within the quota. It is obvious that within the quota the Dane is going to put up the price. You give him a sure market and no competition within his quota. The Danes will not compete with each other; there will be one selling agency. The Danes will not fear competition from Poland or Czecho-Slovakia or the American bacon exporter. They-are guaranteed a market in England—that is to say, they can put up the price, certainly to the same extent as the British producer puts up his price. You eliminate foreign competition altogether.
It seems to me that as between the various forms of Protection—tariff duties, quotas and import boards—quotas are far and away the worst; in fact I believe that if we were to find ourselves saddled with a comprehensive system of quotas, import boards must follow inevitably. I think you would be driven to have one single monopoly, a Government buying agency. As we know, quotas have not been brought forward on their merits, but as a device to escape the odium of what are called food taxes, which are associated in the popular mind with tariff duties. I have indicated—and I think anybody will agree—that quotas must put up the price of food, or whatever be the article that is protected, far more than a tariff duty would do. The result of the combination of the Marketing Act plus quotas is to restrict internal competition and prohibit foreign competition. I can- 401 not help thinking that the result will be to force prices up. Prices will soar, and I see a real danger to agriculture in that. I said just now I thought it was necessary for prices to rise. World prices of world commodities are too low, but if we take artificial action to force prices up unreasonably and unnecessarily I believe there is a real risk of the consumers, who represent the majority of electors, turning down all the efforts which we are making to protect and help agriculture.
There is another aspect. We are now, I hope, at the end of the cycle of falling prices. I cannot tell, of course—nobody can tell—but we have had falling prices so long that I think it likely they may soon tend to rise. But let us examine the position. What would have happened supposing we had had a marketing scheme in operation seven years ago when prices were still high. Examine what would have happened then. You, would have had this central board of producers fixing minimum prices. World prices drop a little, say, from 20s. to 18s. or 15s. Nobody knows whether that drop is going to be continued, and consequently the whole aim of the board of producers is going to be to stabilise prices, as it is called—keep them up artificially, and not let them go down. A year after, prices go down a little more, to 12s. or 10s. Still the board of producers try to keep prices here above world prices. There is another drop to 8s. or 7s. or whatever the figure may be. Then inevitably the consumers are going to demand a reduction of prices. When you have this conflict between organised producers to whom you have given these great powers of the Marketing Act and the general consuming public, inevitably the Government is going to intervene and fix prices. I cannot think of anything more serious or more dangerous than to have the Government and Parliament fixing prices at all stages of all classes of the food of this country. We did it during the war. I think we should be very cautious in creating machinery which must mean that the Government has to intervene at some future time and fix prices.
I have been compelled to deal—and I indicated in the terms of my Notice that I intended to deal—not only with marketing but also with quotas, because the one is a necessary corollary of the other. 402 I hope the noble Earl who will reply for the Government will tell us the extent, to which we are being committed in this development of quotas, the inevitable corollary of the Marketing Act. I cannot help thinking it is bad for traders and bad for producers, and dangerous for agriculture. At the moment I am convinced, reading many of the discussions which take place at farmers' meetings, that farmers themselves have forgotten for the moment the interests of the consumers, and that there is a real danger of their forcing up prices excessively high. Some rise is necessary, but we have to see that we do not enable that price to be forced up too high. I would urge the Government even now not to try to go as fast as possible, but, in dealing with marketing, to extend the excellent principle of grading and standardising produce. That is all to the good. It helps the producer and the consumer, but let them not try to bring in to their full the "Dora" powers given under the Marketing Act. As regards protecting some home producers from the competition of foreign producers, I would ask them to examine more sympathetically tariff duties as being preferable to the system of quotas.
I have spoken as one who is convinced absolutely and genuinely of the importance of agriculture. I want to develop agriculture, but I realise the danger of proceeding along the wrong lines, the danger of creating a reaction. I have tried to examine the trend and the tendencies of the Government's policy as I have seen it. If I am wrong the noble Earl will indicate where I am wrong. If I am right, then before we go too far I hope we shall stop. I apologise for having spoken so long. The reason I have gone into such detail is that I am anxious that we should not drift into a position where trade will be caught in a vice without being fully aware of the consequences of our action.
§ LORD DANESFORT
My Lords, I am sure from what the noble Viscount said in the earlier part of his speech that the matters with which he has been dealing are sub judice, and that as yet no decision has been given by the tribunal before whom this question has been brought. That being so, I venture to think it is extremely unusual, perhaps I might go further and say extremely im- 403 proper, either in this House or elsewhere, to discuss questions which are the subject of pending judicial proceedings. I find some difficulty in arriving at any conclusion at what the object of the noble Viscount is. Does he expect this House or does he expect the Government while matters are still sub judice to take action? That I conceive would be quite impossible. Or does he expect those words which he has uttered to-day to reach the mind of the Lord Chief Justice and the other members of the tribunal before whom this case is being heard and possibly have the effect of convincing that tribunal to go in the direction he wants? I think the Lord Chief Justice would do nothing of the sort. He may or may not know that the matter has been brought forward in this House, but if he does he certainly will not read the speeches and if he does he will not be the least influenced by them. I therefore for my part feel that it is extremely unfortunate that this matter should have been brought up pending judicial decision. It is not in conformity with the practice of this country to discuss a matter which is sub judice, while the decision has not been given.
§ LORD MOUNT TEMPLE
My Lords, I do not wish to intervene in the debate for more than a few moments or to stand between the Parliamentary Secretary of the Ministry of Agriculture and your Lordships' House, but I cannot quite agree with my noble friend Lord Danes-fort that the noble Viscount, Lord Astor, has done anything improper by bringing this matter before your Lordships' House. After all, the appeal to the law, I take it, is on a technical point as to whether the hop marketing scheme is according to an Act of Parliament or not and surely we are not to be prevented from discussing the scheme because of some technical question which may be before the Courts of Law. The general principle put forward in the extremely able speech of my noble friend Lord Astor is one which I think we are quite able to discuss apart from a technical point which may very properly be under judicial investigation.
I rather think that my noble friend is perhaps a little unduly pessimistic. In the first place this Act is a recent Act which was passed less than twelve months ago. I know that in another place at any rate, because I was on the Com- 404 mittee, we spent weeks and weeks in Committee upstairs going through the Bill, not merely clause by clause but word by word and almost comma by comma, and this is the result. It may be the unfortunate result, but it is the result of the combined wisdom of a very recent Parliament and at any rate in Committee in another place great modifications were made in the original Bill and large numbers of members belonging to the same political Party as the noble Viscount, Lord Astor, were brought round to the conclusion that, although there might be in this Act many possible dangers which we feared politically, yet the state of agriculture was such, and is such, that we were prepared to face those dangers in order to do something for agriculture.
The Committee, as I understood it, wanted to try to get something done in this country on the lines of the co-operative system which has been such a success in Ireland, and which was supported by Sir Horace Plunkett to whom tribute has been paid to-day. The reason for bringing forward the Bill, which became the Marketing Act, was that the British farmer, fortunately in one respect is very individualistic, but unfortunately in another respect is so individualistic that he will not co-operate with his fellow farmers to get a decent price for the stuff he produces. The middle-man gets most of the profit and this Act is a genuine attempt to enable the farmers—in the end by compulsion, if necessary—to come together and to secure for them a decent price for the product which they put on the market. I would point out to my noble friend, when he suggests that nothing can be done to modify any bad features in this Act, that no scheme can come into effect without an affirmative Resolution of both Houses of Parliament. If either House of Parliament disagrees, for instance, with the hop scheme when it comes up, that scheme falls to the ground and another scheme will have to be put forward for consideration by both Houses of Parliament.
It is not the case that a scheme can be imposed on industry by a bureaucratic Government Department. No scheme can be even put forward in Parliament unless it has been approved by more than two-thirds of the people engaged in the industry and unless it concerns more than 405 two-thirds of the commodity which those people engaged in the industry produce. I quite agree with the noble Viscount that there are many insidious socialistic principles embodied in this Act, but the plight of agriculture was so bad last year, and is so bad, that we ought to judge each scheme on its merits, and if we consider it will bring about more efficient marketing and secure a better price to the producer of the fruits of the soil then we ought to adopt it even though it may violate some of the principles which we have held throughout the whole of our lives.
§ THE PARLIAMENTARY SECRETARY OF THE MINISTRY OF AGRICULTURE AND FISHERIES (EARL DE LA WARR)
My Lords, after the last speech to which we have listened I really feel that there is very little left for me to say, but I might perhaps, in confirmation of what the noble Lord has just said about the consideration that was given to this Act before it was finally put on the Statute Book, point out that this Act was given very full consideration in another place and that, although it passed through your Lordships' House in a comparatively short time, there was considerable discussion and there was actually a Division challenged and a vote taken. Neither amongst the speakers in the debate nor amongst those who voted for or against the Bill can I find the name of the noble Viscount, Lord Astor, so no doubt the passion which he at present feels about this piece of legislation had not begun to generate in his mind at that time. He appeared to be seeking to make political capital out of the fact that the measure was brought in by a Labour Government. If one thing is more pleasing than another in regard to the position which I hold, the position of working for agriculture, it is that in both Houses of Parliament we find amongst members extremely little political prejudice and a very great desire to do as much as they can for agriculture on the merits of the case.
The noble Viscount said that the whole Act was based on compulsion. The only compulsion contained in this Act is the compulsion of the majority of the producers of a commodity to ensure that the minority of producers of that commodity do not ruin the majority of their colleagues. He went on to say that this 406 compulsion would be used to restrict production in the industry. I would challenge him to show in one single instance the manner in which this Act will enable producers to restrict production. Whether you have a Marketing Act or not it is an economic fact that where there is overproduction of a commodity production will have to be curtailed. That is going on at the present moment with regard to the crop which he mentioned—namely, hops. The position is that if there is over-production there is a surplus, and so far as that surplus has to be dealt with under a marketing scheme it is for the marketing board to endeavour to find a means of disposing of that surplus to the best advantage, and to find a fair method of assessing the way in which the loss due to the existence of that surplus should be borne amongst the producers. Of course a lower price has to be taken for a commodity with a surplus than for a commodity which is in full demand. A lower price will indirectly bring about decreased production of the commodity.
The noble Viscount must forgive me if I do not attempt to carry this argument into a discussion of the particular crop to which he has referred. The noble Lord, Lord Danesfort, has already told your Lordships that a rule nisi has been granted in the High Court and the matter is therefore sub judice of the High Court. What the noble Lord told you was not the full case but merely what one particular counsel told the Court and, as we all know, counsel have their instructions. They are told what to say and they accordingly say what they are paid to say. Why the noble Viscount should blame the Ministry of Agriculture for not interfering with this scheme I cannot imagine, particularly as the charge he made was that it was our bureaucracy that made us forbear to intervene in the details of the scheme. Of course we have nothing to do with the scheme until it is officially submitted. In so far as our officials can be of use to agriculturists in explaining any portions of the various legislative Acts affecting agriculture it is their duty to be as helpful as they can be, but beyond that we really take no responsibility. Perhaps I might say that this particular case of hops is really a good example of what tremendous safeguards there are before any scheme can be put into opera- 407 tion. But I will not detail safeguards to your Lordships again, because the noble Lord, Lord Mount Temple, has already drawn your attention to them.
Where I suggest the noble Viscount goes wrong is in assuming that, because in one case the Marketing Act has to deal with marketing of a crop in which actual over-production exists and in which therefore any scheme for orderly marketing must incidentally discourage disorderly or over production, all other schemes dealing with other commodities must also tend directly or indirectly to limit production. I would like to try to impress on the noble Viscount that, in our view, if we are to increase the production of agricultural produce in this country organisation is essential and that organisation cannot be made effective unless it is operated under some such Act as the Marketing Act. The whole purpose of organising agricultural marketing is to make possible greater consumption of British-grown foodstuffs through reduction of wasteful charges of distribution and through increasing the ease with which they can be handled by large-scale buyers. That is the way to get at increased production—through increased consumption. Neither increased production nor increased consumption can be obtained unless the market is attacked by organised industry with an orderly plan able to guarantee goods of first-class, uniform quality in quantities which can be relied upon.
The noble Viscount asked why could we not press forward with our standardisation and grading work. We are pressing forward as fast as we can with the increased emphasis we place on the grading and standardisation of agricultural produce. But there is a limit to what we can do simply by tackling the subject from that point of view. The individual can produce first-class stuff on his own, but in many cases the individual cannot afford to grade it or pack it suitably to meet the requirements of the market, and he cannot give a large buyer that guarantee of continuity which is essential if the demands of the market are to be satisfied. Therefore, I say that organisation is absolutely essential if we are going to do any effective work, and I repeat that organisation cannot be made effective unless it is conducted in many cases—I do not generalise about 408 every commodity—under the powers of the Marketing Act.
The noble Viscount says that farmers in other countries have organised without legislative compulsion. That is so. It is true that in Denmark, which we always hear spoken of as the most progressive country in regard to co-operative development, they have not these legislative powers. Why? Because they do not need them. They have the compulsion of having to serve an export market. The Danish farmer knows he is not going to get his butter and cheese to the British market unless it goes to the co-operative factory; and I challenge the noble Viscount to dispute this—that in no single country has co-operative action made any really effective contribution to agricultural prosperity—I will not say he cannot mention individual cases of success—excepting for purposes of export for which it is easy to organise co-operative effort. We have an infinitely more difficult problem in this country of organising agricultural producers because they do not have to get their goods through the bottle-neck of the port. Put in a nutshell what we tried to do in the Marketing Act is to create artificially by legislation those conditions that exist for the farmer abroad who is exporting goods to the British market.
Does the noble Viscount really want us to return to the sort of effort of agricultural organisation that has been going on for the last twenty, thirty or forty years with practically no effect? Can he point in this country to any really successful co-operative effort of a character sufficient to alter the agricultural system in this country? The noble Viscount has been concerned with the work of the National Milk Publicity Council. Why is it that the income of the Council is only about £7,000 a year? It is that on the basis of voluntary contributions the milk producer knows that the contribution he makes to publicity such as that can only be used to advertise milk generally, and will just as likely help to sell his neighbour's milk as be of any use to him. The only hope even for such a modified scheme is that every producer should contribute fairly according to his production.
Why cannot milk prices in this country be sucessfully negotiated under a 409 national scheme? It is for the reason that those endeavouring to negotiate those prices on behalf of the farmer in the past have known that a large proportion of the milk has probably already been sold at a lower price than that for which they are endeavouring to stand out. Why do milk producers in cheese areas disorganise the fluid milk market? It is because they are unable, or were unable before this Act, to get together in any organised form to guarantee supplies to the cheese factories. It was for these reasons that the National Farmers' Union, having fought this Bill when it was introduced, changed their minds, and not merely, as the noble Viscount says, because of the bribes that he suggests I and other members of the Government held out to them; though admittedly the fact was of importance that this Government was in a position to tell the farmers for the first time that, if they did organise, we would see to it that unregulated and disorganised importation from abroad would not be allowed to break up the efforts which they had made to organise themselves in this country. Why have bacon factories failed in the past? Because, among many other reasons, they have not been able to have any guarantee of supplies. I do not expect there are many of us who are interested in agriculture who have not had the unfortunate experience at some time of investing our money in bacon factories which we have seen ruined, partly, among other reasons, because they have had nothing but farmers' old sows to deal with.
I have tried in a few words to put before your Lordships a few of the points which make this compulsory power over the minority so essential if agricultural co-operation is to be made effective. There is one last point. I would like to ask the noble Viscount what really it is that he wants to do for agriculture. The other day I had the privilege of introducing here the Wheat Bill, and the noble Viscount, for reasons which were very logical and most interesting, criticised that measure. One of the main criticisms that I have always heard of the policy of artificially stimulating particular crops, has been that you are not really going to help agriculture that way because you have to make agriculture more efficient and to improve its market. Therefore I did hope at least that the 410 noble Viscount would be prepared to support the Government who, while helping particular growers who are specially depressed, are at the same time endeavouring to bring methods of organisation into the marketing of agricultural produce.
I would suggest to the noble Viscount that negation is not sufficient. I have read the noble Viscount's book, and I was very interested—we must all have been who read it—in the many facts that he laid before us about the agricultural situation, but I read his book in vain for a single grain of hope of really dealing with the situation with which we are faced. Certainly on this problem of marketing, where he talked very pleasantly about the benefits of co-operation, he showed us no way whatsoever of getting the farmers to combine. And now here he comes and attacks the one Act that has, after thirty or forty years of fruitless propaganda, at last made it possible for the farmer to organise his marketing successfully. In the past farmers have been criticised because they did not organise. I venture to suggest that until they had this Act on the Statute Book they were really very wise because they had not powers at their command with which to make their action effective.
The noble Viscount has spoken of dangers. I have tried to answer the noble Viscount on the main danger that he foresees, the danger of restricted production. The noble Lord, Lord Mount Temple, has answered him to a great extent by pointing out the tremendous safeguards that are contained for the minority of producers, for the consumer, and for the rest of the community in this Act. But, more important than all that, again I ask the noble Viscount what is the alternative, and I suggest to him that he has to choose between effective organisation and the existing chaos. Organisation admittedly means power; power admittedly means the power to do harm as well as the power to do good; and it is for those in the industry, whether we are working in the Ministry, or whether we are in Parliament, or whether we are out in the country among farmers, to see to it that we help to direct this power into the most useful channel.
We are attempting as a Government to build up a planned and organised in- 411 dustry capable of realising its responsibilities, producing for the market what the market wants in the form that the market demands it, and on that basis we believe that we are most effectively proceeding for the increased production which the noble Viscount and all of us most want to see. Fundamentally, if we are going to get any increase of production in this country agriculture must have security. The Government by their acts during the last few months have attempted to give to agriculture one form of security, but we are also determined to help it to get into a state of efficiency and organisation so that it can satisfy the markets, and thereby prove to the public, no matter what Government happens to be in power in the future, that it pays them to safeguard the interests and the position of the farmer. And the only effective way, we believe, in which we can do that, as we know from experience, is to organise the farmer and to allow him to organise effectively through the powers that are given to him under the Agricultural Marketing Act.
§ VISCOUNT ASTOR
My Lords, with your permission I would like to deal with some of the points raised. First of all Lord Danesfort. I think the noble Lord will remember that I dealt very fully with the Act. I tried to deal with the dangers as I understood them. I merely quoted the hop scheme to substantiate that what I had been saying myself was possible under the Act. I fully realise that the scheme is not through. I simply quoted it to show that I had not misrepresented what might be done under the Act, and I was trying to indicate what I considered to be the dangers of the Act. The same powers may be extended to other things, eggs, milk, bacon, and fruits. He said he did not know what the object of the debate was. One of the few things that we really can do effectively in this House is to discuss matters of public interest, and there is nothing which is interesting the public so much at the present moment as agriculture. We have not had many real, ample discussions on agriculture. I think this is the first opportunity we have had of discussing what the noble Earl, Lord De La Warr, calls the organisation of agriculture. I really do not think he should criticise 412 me for raising this point for the first time. And certainly I do not remember that there has been any attempt to examine quotas. I am very sorry that the noble Earl has said nothing about quotas, which, as I pointed out, are an inevitable corollary of the Agricultural Marketing Act.
Lord Mount Temple referred to the safeguard in the poll of growers. It is going to be very difficult for all the growers, who have to vote by postcard, to understand all the details and the implications of a complicated scheme such as the hop scheme. They go to a meeting, they are told "This is the way to get better prices, vote for it, and you will get a better price." It is quite obvious that they will vote without fully understanding the implications, the dangers and the difficulties. That is one of the reasons why I purposely raised this debate. The noble Earl twitted me for not having made a protest a year ago. I grant that I have a measure of responsibility, like all of your Lordships who did not protest then. I say quite frankly that I had not thought out all the implications, but I foresaw some of them. In fact, I told the noble Earl at a private conversation I had with him that there were certain parts of the Bill concerning which I had considerable apprehension. They were those very points which I have indicated as the real danger points in the Act. I do not object to the Act as a whole, but I have tried to indicate that there are certainly two powers—that to fix prices and that to limit production—which I consider to be really dangerous and hazardous.
§ LORD MOUNT TEMPLE
My Lords, I do not dissent from the noble Viscount, indeed, I am not sure that I could; but will he point out where there is the power to limit production? It may be there, but I have not discovered it.
§ THE SECRETARY OF STATE FOR WAR (VISCOUNT HAILSHAM)
My Lords, I do not want to intervene, but I hope that my noble friend Lord Astor will not deal at very great length with this. I, as in some sense the custodian of the rules of your Lordships' House, ought to point out that he has no right of reply upon 413 asking a Question. My noble friend was challenged upon one or two points and I think your Lordships will consider that it is only reasonable that he should have an opportunity of answering them. But perhaps I ought to enter a protest against there being anything like a formal reply to a debate when, according to the rules of the House, no right of reply exists.
§ VISCOUNT ASTOR
My Lords, I was not attempting to reply and I indicated at the outset of these remarks that I was only speaking with the consent of your Lordships. I was not going to provide an alternative for the noble Earl and when he threw out the challenge I did not see how I could satisfy him. I am fully conscious that I have taken up a great deal of time and I was purposely only trying to deal with the different points that have been raised. To return to the point that I did not vote or protest against the Act, I thought that where a Socialist measure was concerned I could leave the rights and liberties of the subject in the hands of the noble Viscount, Lord Hailsham, the noble Lord, Lord Banbury, and others, who would protect the rights and liberties of the subject without my doing anything.
The noble Lord, Lord Mount Temple, asked me about the powers to restrict production. Take the hop scheme. If he will study that scheme he will see that the central board has power to fix the quota—namely, to say what amount of hops shall be marketed. That is restricting production because there is to be no market for anything beyond the quota.
§ VISCOUNT ASTOR
It is a scheme under the Act using the powers of the Act. If the noble Lord looks at Section 5 he will see that one subsection deals with the regulation of the quantity which may be marketed and that another deals with schemes and may require producers to sell certain quantities. If you regulate the quantity which a producer may sell you surely limit his production. On the question of there being any precedent, honestly I prefer to take the opinion of Sir Horace Plunkett as to the powers essential for co-operation to the opinions of those who are supporting this measure. I believe that Sir Horace Plunkett had 414 a far better idea of what was necessary and inevitable. As I have said, I will resist the noble Earl's challenge to produce my alternative. I can only express regret that he has not dealt with the very important point that I raised and which we find indicated in the terms of my Notice—quotas and restraint of trade —because that is a very serious instrument. My whole object in raising this discussion to-day is that we should have discussion and debate before we found ourselves implicated in, or tied up with, some of these new methods of dealing with trade and industry.