Lords Sitting of 12 July 1934

Preamble
The House met at a quarter past four of the clock, The LORD CHANCELLOR on the Woolsack.

DINDINGS AGREEMENT (APPROVAL) BILL, [H.L.]
THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR THE COLONIES (THE EARL OF PLYMOUTH): My Lords, I beg leave to introduce a Bill to approve an Agreement made on behalf of His Majesty with the Sultan of Perak, and move that it be read a first time.
Moved, That the Bill be now read 1a.—(The Earl of Plymouth.)
On Question, Bill read 1a, and to be printed.

SHOPS BILL. [H.L.]
Returned from the Commons, agreed to, with Amendments.
PIER AND HARBOUR PROVISIONAL ORDERS (CLACTON-ON-SEA AND SAINT MAWES) BILL.
Read 2a (according to Order).
ROTHERHAM CORPORATION (TROLLEY VEHICLES) PROVI- SIONAL ORDER BILL.
Read 2a (according to Order).
CLYDE VALLEY ELECTRICAL POWER ORDER CONFIRMATION BILL. [H.L.]
Read 2a (according to Order), and (pursuant to the Private Legislation Procedure (Scotland) Act, 1899) deemed to have been reported from the Committee.
GLASGOW CORPORATION ORDER CONFIRMATION BILL.
Considered on Report (according to Order).
LONDON MIDLAND AND SCOTTISH RAILWAY ORDER CONFIRMATION BILL.
Considered on Report (according to Order).
MARRIAGES PROVISIONAL ORDERS BILL.
Read 3a (according to Order), and passed.
MEXBOROUGH AND SWINTON TRACTION (TROLLEY VEHICLES) PROVISIONAL ORDER BILL.
Read 3a (according to Order), and passed.
ST. HELEN'S CORPORATION (TROL- LEY VEHICLES) PROVISIONAL ORDER BILL.
Read 3a (according to Order), and passed.
SOUTHEND-ON-SEA CORPORATION (TROLLEY VEHICLES) PROVI- SIONAL ORDER BILL.
Read 3a (according to Order), and passed.
NOTTINGHAM CORPORATION (TROLLEY VEHICLES) PROVI- SIONAL ORDER BILL.
Read 3a (according to Order), and passed.

BRITISH SUGAR (SUBSIDY) BILL.
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 view of the past history of the subject this is a comparatively simple Bill and a short Bill. It is to provide for the continuance of the subsidy on beet sugar on the existing basis. Your Lordships will remember that in 1924 when the scheme was first started the subsidy total was equal to 21s. 9d. per cwt. It came down four years later to 14s. 6d. and now it is down to 7s. 3d. If the price of sugar rises above 6s. per cwt. the subsidy will actually go lower—to 6s. 6d. This Bill operates for only eleven months. We have chosen that curious period of eleven months in order to bring the accounting year into line with factory working. Some noble Lords may ask why this subsidy is wanted for the beet, sugar industry at the moment, when it has made such remarkable progress. In 1924, when this scheme was
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started, the price of raw sugar was 21s. 9d. In 1933 it touched 4s. 3d. The total amount of assistance—the figure I gave before was only subsidy—was 23s. 8d., including duty preference. It is now down to 12s. While it is perfectly true that efficiency of growing amongst the producers has increased enormously, so that last year the yield went up to an average of nine tons per acre, which compares favourably with most Continental countries, and while increased factory efficiency is very considerable, the sugar extraction having increased very largely, still there is no likelihood of getting over that tremendous gap created by the fall in prices.
There has been some complaint of delay in announcing our general policy with regard to this industry. Your Lordships will appreciate that we were held up by the possibility of there being discussions on this subject at Ottawa, which made it impossible for us to commit ourselves. Shortly after that the present Minister of Agriculture came into office and naturally he desired time in which to make up his mind as to his line of future policy. When we came into office, and felt that in devising any future policy it was essential to obtain some unity and some organisation in the industry, we found the most bitter state of warfare between refiners and factories; Now, thanks to giving them time for negotiations—and I would like to take this opportunity of paying tribute to the very real statesmanship shown on both sides in those negotiations—we are in the position of being able to say that the refiners and the factories have submitted a scheme under the Agricultural Marketing Act. At the same time we can state that the growers also have formulated a scheme.
The position in the industry is that there has been a public inquiry into the scheme submitted by the sugar interests, and that there is an inquiry going on at the behest of the Chancellor of the Exchequer, presided over by Mr. Wilfrid Greene, to advise the Government on its future general policy. Those two inquiries are quite separate. The public inquiry was into the merits of a particular marketing scheme, and the inquiry set on foot by the Chancellor of the Exchequer concerns the future conduct of the industry, the future amount of State aid and the manner in which that State aid, if any, is to be

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granted. This Bill does not commit your Lordships further than eleven months. Before anything more can be done the scheme under the Agricultural Marketing Act will have to be submitted to your Lordships for approval, and with regard to the organisation of the industry and the amount of State aid that is to be given, legislation will have to be introduced next year before this Bill runs out. I beg to move therefore that this Bill be read a second time.
LORD RHAYADER: My Lords, before the noble Earl concludes, will he tell us what is the estimated cost to the Exchequer for the eleven months?
EARL DE LA WARR: The cost will be approximately £3,250,000.
LORD RHAYADER: That is without the remission of duty?
EARL DE LA WARR: That is what is included in the Bill.
Moved, That the Bill be now read 2a.—(Earl Be La Warr.)
LORD OLIVIER: My Lords, I have listened with a great deal of sympathy, and I think your Lordships will also feel a great amount of consideration, for the noble Earl who has had to move this Bill, because he is bringing forward a Bill which everybody who has studied the subject knows ought not to have been brought in at this time at all, but ought to have been brought in a year ago and more. The position is that more than two years ago the Chancellor of the Exchequer solemnly promised that before any question of renewing the subsidy was raised there should be a proper inquiry into the whole circumstances of the industry. All of us who had been interested in the sugar industry, as I have been for forty years, were very glad of that because we did hope that the result of that inquiry would be to bring our sugar policy, not only for England, but for the whole of the Empire, under one systematic principle. We may be approaching that, although the noble Earl told us just now that we have two different Committees sitting considering two different sides of the matter, which does not look very hopeful. He tells us that before anything further is done the results of those Committees will be submitted to us, and I suppose we shall be
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asked, on account of the impossibility of coming to a decision, to prolong this subsidy again for another twelve months for precisely the same reasons as those for which it is proposed to prolong it to-day.
I was not at all impressed—I do not know whether any of your Lordships can have been—with the reasons which the noble Lord gave for the failure of the Government to make good their promise that they would have an inquiry before this matter was again submitted to your Lordships. So far as I can make out, the only substantial reason was that the Minister of Agriculture had found it very hard indeed to reconcile the competing interests of the enormous refining monopoly of Tate and Lyle, Limited, in this country with the interests of their competitors. Undoubtedly Tate and Lyle, Limited, are an extremely strong corporation and very difficult to deal with. However, they seem now to have come to some sort of agreement with their competitors in the refining industry, although they have not altogether come to agreement yet with the producers outside of England. In fact, as I say, this Bill ought to have been cleared away twelve months ago, and we ought to have been in a position now to deal thoroughly with the whole sugar question. This Bill is now brought in with really no argument to support it except that the Government have got into a mess, that they have not been able to carry out their programme, and that by way of a stop-gap they must carry on the system which they had it in their power to remedy more than twelve months ago—a perfect demonstration of an indefensible situation. I think that anybody who has gone into the sugar situation with any care knows perfectly well—and I am sure the Minister of Agriculture will admit this—that the present system of subsidy is quite unjustifiable as a policy. It gives an enormous subsidy to the sugar-producing industry at home, which, as I have again and again urged in this House, cannot be regarded as an economical industry.
I very much wish that we had had an opportunity of getting from the noble Earl his views and opinions upon certain particular points which remain, I think, at issue in connection with that. He said en passant that the British agricultural production now had risen to nine tons an acre, which compared very favourably

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with Continental production. That is not my information. My information from persons well acquainted with Czecho-Slovakian and German production is that their average is from thirteen to fifteen tons per acre. I pass that by; but there can be no question whatever that as regards glucose content, the production of sugar per acre is very much higher on the Continent and in all the cane sugar producing countries than it is, or can be made, in England. That is the economic basis. On the other hand, we have again and again been told that the value of the beet sugar crop to the farmer in England is very great. I wish the noble Earl the Parliamentary Secretary would give us an analysis of what is the actual advantage to the British farmer in that respect. Of course, the noble Earl will say that that is being gone into by the Greene Committee. I suppose it is being gone into and we must wait until the Greene Committee can give us their Report.
I do feel that this Bill is a somewhat base-born Bill, and that it has no business to be here at all. It reminds me of the story of a certain grass widow; she was a grass widow in the sense that her husband was in prison serving a sentence of seven years imprisonment. This lady did not desire to relinquish her family duties and she produced every year a child. She said: "No one can cast a stone at me; I am a married woman and these children are born in wedlock"—just as the subsidy, although it was regarded with great suspicion by many of us on this side, has been paid for the last six years entirely under the sanction of the law. In process of time the husband's term approached expiration and his time for coming out of prison was at hand. The lady's spiritual adviser said to her: "Now, really you must regulate your household matters. I think you have given reason for considerable suspicion of your conduct, and you must promise me to lead a regular and decent life in future." She said: "I solemnly promise that I will have a proper inquiry into my relations with my friends, and I promise that nothing suspicious and nothing illegitimate shall occur in future." The husband came out of prison, and the first thing that he did was to divorce his wife. Nevertheless, a year after there appeared another contribution of illegitimate origin, precisely as, after the expiration
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of legal authority, you have this extraordinary Bill without any justification whatever, carrying on a system which has been demonstrated again and again to be economically thoroughly unsound and thoroughly undesirable.
I say that confidently. I am quite confident that the result of the Greene Committee will be to show that. Therefore I say that we protest entirely against this Bill being brought in, not on the ground that the Government, being in that fix owing to their own negligence, did not have to bring something in, but because we think that it is an outrage upon Parliament that the Government should have got into this difficulty. They say they have had great difficulty in studying this matter. I say, with forty years knowledge of the sugar industry, that there is almost no industry in the world in which the statistics and the facts are better documented and in which it would have been easier to come to a rapid conclusion as to what really was the economic basis of a proper subsidy for sugar. Therefore we on this side protest most strongly against this Bill, as other noble Lords on other Benches will no doubt protest as the result of a general economic analysis of the situation.
However, passing from that, I want to express my great regret that the Government are now dealing with this matter in so absolutely piecemeal and disjointed a fashion. As we have been told, we have the Greene Committee and we have a public Commission enquiring into the sugar marketing scheme. We have also a whole system of very energetic negotiations being carried on by the Colonial Office and the Dominions Office with respect to the position of our Colonial and Dominion producers. As a man interested in the Colonies of the West Indies I feel the very greatest gratitude to the Secretary of State for the Còlonies for all he has done and attempted to do for the sugar industry of the Colonies, but those who have followed the matter know what tormented and unhappy arrangements he has to make, with preference upon preference, quota divided by quota, preference diminished when sugar goes up to a certain point and diminished more when it goes to a certain other point—a frightfully complicated arrangement which must be extremely difficult for the sugar pro-

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ducers in our Dominions. The whole question of the sugar production of the Empire ought to be dealt with as an industry for production to satisfy the needs of our consumers, and on a single basis, and it ought to be dealt with on the lines which in their agricultural policy at home this Government have been gradually approaching; that is to say, on the lines which I myself advocated four years ago of coming to a fixed minimum price for the producers founded on the economic cost of production. I hope that the Greene Committee will advocate those lines.
The Minister of Agriculture has gradually persuaded the country to accept what my West Indian friends and myself have been urging for the last forty years. My only expression of dissatisfaction is that what is being done is being done piecemeal, and I hope that the Government will tell us shortly that they are prepared to take up Imperial sugar production on a single basis, not regarding our Colonies as competitors who have to be rationed with preferences and quotas, but taking the British sugar producing industry as a whole, giving it economic prices, and the sugar to be bought and handled by the Government on behalf of the nation as it was during the War. We are coming to that, and I gladly acknowledge that this Government and the Ministry of Agriculture and others have gone further in that direction than any previous Government. I am well aware, too, that they have done it in the face of my friends on my right, against whom I have maintained the case of the Colonies for many years.
This Bill, however, ought not to have been necessary. It is a Bill which is discreditable to the Government because of their procrastination and delay in dealing with this matter. It is also discreditable to them because it is a piecemeal, haphazard measure, already with two heads to it, and cannot by any possibility give us a promise that the sugar situation will be settled, as the noble Earl suggested, by the time that the next question of subsidy must arise. It is not many months before the contracts for next year must be made. The contracts will have to be made this autumn for the sowings next spring. Does the noble Earl think that we are going to have a settlement of the sugar policy of the
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Government before the contracts are made for next year? And will he say that we are not going to be let in again next year as we were last year? We cannot oppose this Bill—it has been passed by another place—but we do on this side of the House protest most strongly against the ineptitude with which the Government have handled the matter, and the false pretences under which the Bill is now being brought in.
LORD RHAYADER: My Lords, I find myself in agreement with the noble Lord who spoke last in opposing this Bill, although for slightly different reasons. I almost think that the noble Earl must have felt a little embarrassed under the compliments of the noble Lord, who told him that he was carrying out the policy which he (Lord Olivier) advocated four years ago, in the different schemes he has presented to us. That, I believe, to be true. The Government are carrying out a Socialist policy, which ought to receive the wholehearted support of noble Lords on the Opposition Benches, but they certainly are not carrying out the Liberal policy. We have consistently advocated opposition to this subsidy. The noble Earl should, of course, be a happy man to-day. His schemes are ripening fast.
EARL DE LA WARR: Hear, hear.
LORD RHAYADER: Last week we had the Hops Scheme, and in another place beef arrived on the scene yesterday.
EARL DE LA WARR: Hear, hear.
LORD RHAYADER: To-day the noble Earl, whose appetite grows with what it feeds upon, produces beet and milk. He is advancing faster in his rake's progress than I ventured to foretell a short time ago. But I thought he was not entirely happy, to-day, in dealing with the beet sugar subsidy, and the reason for that is clear enough. I agree most emphatically with Lord Olivier in saying that this Bill ought not to be here to-day. This matter should have been dealt with twelve months ago, and we ought not to be having a Bill to prolong the beet sugar subsidy for another year. The Government should have come here to-day to admit that the effort which was made, not on their responsibility alone, to establish beet sugar growing in this country as a profitable industry, had, after ten years full experiment, failed. It has

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been the most costly, and I venture to say the most futile, of all the experiments which have been made in connection with agriculture since the War. The right attitude would, have been to say that the experiment, having been entered upon in good faith more than ten years ago, had been tried out, and that now they had come to the conclusion it was useless to prolong the experiment further.
The scheme first appeared in Mr. Philip Snowden's Budget in 1924. I heard the Budget speech, and I am happy to think that I offered the same opposition even at that time to this proposal, which I foresaw was going to be very costly, and which I was convinced must be a failure. The Conservative Party supported the Socialist Party, and although Mr. Snowden, for other reasons, ceased to be Chancellor of the Exchequer in the following year, in 1925 the scheme was entered upon, the ten years guarantee was given, and the experiment has gone on from that time. We opposed it at the time, and I venture to recall this because we have been blamed for various things we have done, and I want some credit where we have done well. We pointed out that there was no world-shortage of sugar which would justify a large experiment to set up sugar growing in this country, where sugar growing had never been profitable. We declared that in our judgment it could not possibly be made to be a profitable industry in this country, that it could never flourish here without much Government help in the shape of Votes by Parliament. We declared that we thought that the cost of the experiment would be enormous, and we held that the gain to agriculture would be small, and that for the nation it must mean a net loss. Well, that has all come true. It is, I know, a very ungracious position for one to take up to say: "I told you so," but as we are taunted to-day by the present Minister of Agriculture with our consistency in this matter—indeed, he has gone so far as to say in another place that the only reason for the continuance in existence of the Liberal Party is that they might repeal the beet sugar subsidy—I think I may be allowed to defend myself. Consistency is, after all, not a bad virtue, though I can well understand that it is not one that appeals much to members
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of the present Government. Even insistence, on rigid economy in the expenditure of public money is not a disgraceful thing for a great Party to have in its programme.
Now let me take the objections which we made to the scheme one by one. We declared that the subsidy would not achieve the object of establishing the industry on a paying basis in this country, and that without Government support it would collapse. We were out-voted. For ten years the subsidy has been paid and in March last the Minister of Agriculture said in the House of Commons:
"In no country in the world can the beet sugar industry be maintained on a profitable basis unless supported by substantial artificial aid."
Well, our case is proved. Ten years have passed, and at the end of it the Minister of Agriculture confesses that they have not been able to achieve the very end which ten years ago was intended—namely, the placing of the sugar beet industry in this country on a profitable paying basis. And the logical position to-day would have been for the Government to come here to say that, having tried for ten years to do this thing they find it cannot be done, and they should have given up the attempt. Ten years is a long period.
The cost to the Government during the nine years that have already passed is admittedly close upon £40,000,000—some say a little less, but we may take £40,000,000 as the cost to the Exchequer. And you are where you started—no further forward. You grow your beets a little better, you have your factories established—that is true enough; but you are not on a paying basis, and you are not within sight of being on a paying basis. I am sure the noble Earl will not get up and say that he sees any means by which this industry can be put on a paying basis. The Minister of Agriculture has admitted it. And how should it be? I have here particulars of the production of sugar in various countries. In Great Britain the production of sugar per acre is 22 cwts.—it is quite a good figure; it is not as good as the Continent, but still it is reasonably good—in Jamaica it is 27 cwts.; in Trinidad, 54 cwts.; in Java, 119 cwts. What is the use of pouring out millions to grow sugar in this country with that small possible production per acre against this vast pro-

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duction in other parts of the world? But, instead of coming and confessing failure—not their failure; they did not initiate the scheme—they are to blame to-day for continuing it. They had no choice until now, but they should have come to-day and said: "We have tried out the experiment and failed."
And incidentally may I remind the noble Earl what happened in connection with the debate about hops last week? He very kindly tried to reassure me. I felt a good deal hurt.
"When sorrows come they come not single spies,
But in battalions"
and the noble Earl's measures are arriving so fast that I am frequently wounded. He tried to console me. He said that the Hops Scheme is only for five years; at the end of five years it can all be re-examined and the subsidy can cease. We heard all that in 1924 and 1925 about the beet sugar subsidy. We have heard it all about the dye-stuffs. I do hope that the members of the Government will give up the pretence that any of these schemes which they are setting up are temporary schemes. Once you enter upon this road of allowing interests to build up behind Government subsidies it takes long and hard work and a growing sense of their futility—which is not decernible in the nation at present—to get rid of the burdens so created.
We said the scheme would not only not achieve its purpose of making the production of sugar beet a profitable industry, but that the cost would be far too great, even if it succeeded. We were told that as an outside estimate the cost might reach £20,000,000. They did not expect that, of course; they expected the subsidy to diminish every year, and that it would have disappeared long before ten years, were over. But at any rate £20,000,000 was an outside estimate of what the scheme would cost. It has cost £40,000,000, and the prolongation will cost £3,500,000 in direct subsidy, and I suppose another £2,500,000 in the rebate—probably about £6,000,000 in all. The amount of sugar produced in the ten years has been less than 40 million cwts. The subsidy therefore has amounted to £1 per cwt. of sugar, and the price of sugar is round about 5s. or 6s. a cwt. This country is paying a subsidy of between three and four times the value of the sugar in order to grow that sugar in this country.
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I have here a very interesting quotation from a speech made by the President of the Board of Trade—a few years ago, it is true, but still full of sound sense, as many of his speeches are. This is what Mr. Runciman said on December 14, 1927:
"From the general point of view it would actually pay us to use this money to buy our sugar in Rotterdam, to ship it across from Rotterdam, distribute it in this country free of cost, give everyone of these men who would be thrown out of work £3 a week for the period they were out of work, and then there would be £1,500,000 in one year left to distribute among the farmers of the country.… This is the worst example I have seen of crazy finance."
My Lords, those were the measured words of the present President of the Board of Trade. It is quite true that he is, I presume—though I cannot penetrate Government secrets—a party to this Bill which is brought in to-day. But I am afraid that the fact that he has submitted does not, unfortunately, lessen the craziness of the finance. I have other quotations here, of which I will quote this one from a speech by Sir Herbert Samuel:
"The Government could pay all the farm workers £2 a week, all the factory workers £3 a week, all the farmers £3 per acre to grow something else than beet; the beet sugar companies' dividends might be guaranteed at 8 per cent., and the same amount of sugar might be bought and distributed free to the nation, charging only the Customs Duty on the amount of sugar."
Is it not crazy finance to be carrying on an experiment of this kind?
I appeal to noble Lords to think this matter over. Forty million pounds is a large sum of money, and you are going to go1 on pouring it out for this useless purpose. My noble friend Lord Olivier was speaking to you about the West Indies, which he knows well. I wonder he did not tell us of the effect of the growth of sugar in this country on the West Indies. It has not helped the West Indian sugar trade that you have set up this rival industry here. It was hardly playing the Imperial game. It was not one of those industries which have been long established in this country, but the setting up of a new industry to rival the West Indies, who live almost exclusively by their sugar. And that is not the end. We had a shipping subsidy promised a few days ago. The sugar policy has, according to the Chamber of Shipping Report of last November, lost the ship-

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ping industry between £300,000 and £400,000. Is it sense first to subsidise the growing of sugar in this country in order to prevent the carriage of sugar from the West Indies and thereby deprive the shipping industry of the freights they get by carrying sugar, and then to subsidise in turn the shipping industry? It seems to me indeed crazy finance, and that is what the President of the Board of Trade called it.
I leave the financial side. Is it a benefit to agriculture? The Minister of Agriculture is quite frank:
"It is a plain issue. It is not as cheap to produce sugar in Britain as to buy it from abroad"—
with that we all agree—
"but it is the price which you are paying in order to help agriculture in this country."
If you had £40,000,000 to spend you could have helped agriculture a good deal more than by trying to grow an unsuitable crop in this country. There are plenty of suitable crops. If you had subsidised them, I might have objected on other grounds but not on the ground that you were not helping agriculture. In this case you have spent your money, and you have done little or nothing to help agriculture. This beet sugar growing has not appreciably increased the agricultural output of the country. The beets are grown as a substitute for other roots, and there is a diminishing production of those other roots with the increased production of sugar beet.
I have here a rather interesting quotation from a man who is a farmer in the sugar beet area of Norfolk, Mr. William Borthwick, who used these words:
"Sugar beet gives additional employment in harvesting in October, November and December, and outside labour is employed in those three months. But by the end of the year beet has disappeared from the fields, whereas the work of cutting up swedes and mangolds and feeding them to live stock goes on until May. The result is that since the introduction of sugar beet many regular workers, who have never known unemployment in their lives before, have had to go on poor relief from January to April."
It is by no means an additional crop and it is not additional labour. It is the substitution of one root crop for another, and the substitution of one set of labourers for another. The whole number employed is almost negligible. A few
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extra men perhaps in the factories—what are they? Five thousand on part time and about 2,000 on full time, and that is the total in the factories. On the farms it means nothing. The farmers have got their subsidy—I hope it has done them some good—but it is the only thing they have got out of it. The Government have declined to face these facts. I have tried to state them hastily and perhaps too dogmatically—not intentionally, but because I do not want to take up time in justifying all of them as I go along; but we are continuing this policy for another year, and I view it with apprehension.
Then we are to have the marketing scheme, which came trippingly off the noble Earl's tongue. He has got the hop growers and the brewers together, and now he is getting the refiners and the sugar beet growers together, and these strong monopolists will wield great power. They will settle their internal differences; but what about the public outside and the National Exchequer? It is high time—I want to appeal to the noble Earl particularly on this—we had a full inquiry into the whole history of these ten years and into the present position of sugar, and it might be wise, as the noble Lord, Lord Olivier, suggested, to cover the whole sugar position in the world. The inquiry that is taking place is not enough. I have not seen the terms of reference of that inquiry. It is an inquiry with a lawyer-chairman—I have nothing to say against that, no doubt it is a very good thing—but we want a full and complete inquiry into all the circumstances of the last ten years and into the present position of sugar. The present inquiry is more in the nature of a Departmental inquiry than anything else. We want the fullest investigation of all the circumstances in all parts of the world, and we want to know whether really there is any hope left. I have said there is not. I may be wrong, but we ought at any rate to have some emphatic statement.
We have had the statement of the Minister of Agriculture that there is no hope of making beet sugar growing in this country pay, and that there never has been any hope of that. But we ought to have an authoritative declaration on the matter after a full inquiry into the whole thing. It should be made under the direction of some impartial

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person who will devote the necessary time to it, and, though it would add a little to the expense, that would be trifling compared with what we are pouring out on this sugar subsidy. The Government were returned on a programme of economy. I was at the time a member of the House of Commons and helped to create this Government. At first they did well enough. Sacrifices were demanded and made, salaries were cut down, heavy taxes were laid on—we are still paying them—but it was not for this purpose that I helped to put the Government in power. It was not in order that they might squander money on the, hopeless experiment of growing sugar at a profit in this country. How can you allow this wasteful drain to go on?
Yesterday I was here in the House listening to the President of the Board of Education, Viscount Halifax, speaking on his Department. It was a most interesting speech. He told us of half-a-dozen important reforms for the children which he wished to give effect to as opportunity offered; but he could not raise the school age from fourteen to fifteen, he could not give nursery schools, he could not meet the demands for the health services which are required by the children, because there was no money in the Exchequer and the Government were bound to be careful in spending what they had got. Surely here is an opportunity for a real economy? There is no money for the children, but there is money for this foolish experiment in growing a crop for which our climate is unsuited. The expenditure—I close on this—is crazy finance, and the Government, pledged to economy, stand condemned for continuing it beyond the appointed period. Ten years were promised, the ten years have passed, the experiment has failed and the Government should not prolong its life for a single day.
EARL DE LA WARR: My Lords, I do not think any of us would quarrel with the noble Lord, Lord Rhayader, for speaking with such feeling on a topic on which we know his Party has always been completely consistent. From the very beginning they have opposed the beet sugar subsidy, and he expressed surprise, a surprise, indeed, which I myself share, at the attitude of the noble Lord, Lord
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Olivier. I seem to remember that this scheme was prepared for us by the Labour Government in 1924 through Mr. William Graham, and I also seem to remember that the noble Lord, Lord Olivier, was a very notable figure in that Government.
LORD OLIVIER: It was to expire after nine years.
EARL DE LA WARR: If the noble Lord is really complaining that it is being continued for one year I think he could have told us that at rather shorter length than the time which he occupied in his speech to-day when he questioned the whole principle. His only quarrel on the point of time was that we had not brought forward another permanent policy a year or two ago.
LORD OLIVIER: I did not question the whole principle. The principle was that it was to be an experiment for nine years, and that experiment had worked itself out well before the nine years.
EARL DE LA WARR: We are discussing a particular Bill, and that Bill is to prolong this work by eleven months. That is all that is before the House today. The noble Lord gave us a long speech on the whole principle of the scheme. But I do not think we should be surprised at the attitude of the noble Lord, Lord Olivier. The noble Lord, Lord Rhayader, has told us that this is a Socialist scheme. I think to some extent it is. If your Lordships had had the pleasure of working as closely with noble Lords opposite for as long >as I have you would know that there is nothing like the Labour Party for putting up a good and healthy opposition to any scheme of Socialism when it actually comes down to putting it into force. The main quarrel of the noble Lord, Lord Olivier, with us is on the question of time and he says that we should have been bringing forward our permanent policy a year ago. At the same time he congratulated us, and we thank him for his congratulations, on having adopted what was virtually his policy. I am not prepared to say with great exactitude whether we have done so or not, but the noble Lord tells us he has been urging this policy for no less than thirty years with extraordinarily little effect, and the Government are now being accused of putting it into effect in a period of two years.

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The fact of the matter is, in putting through this scheme, it is very much better to work with the approval and agreement of an industry than to come down with full governmental powers to force that industry into reorganisation. I think it is worth the while of the State to wait for a year or two in order to get an industry reorganised in a way that is acceptable to the great multitude of interests within that industry rather than to hurry forward with ill-conceived schemes. There is also the point of the comparison of efficiency between the beet industry of this country and that of the Continent. The noble Lord, Lord Olivier, questioned the figures to which I referred. I have them here exactly, and they are as follows. In the United Kingdom our average is nine tons per acre; in Germany it is 9.9, in the United States 9.6, and in France 9.1. I think, therefore, I am amply justified in claiming that our figures compare very favourably with those of other countries.
I now come to the noble Lord, Lord Rhayader's main contention that we should confess failure and give up the whole experiment. I wonder what the noble Lord, Lord Rhayader, would suggest doing with the 40,000 growers of beet in this country who, at the present moment, are very largely dependent upon this industry, and with all the men who are dependent upon it and who, if it were abandoned, would be thrown on the "dole." I think he implied that that would be very much better than what we are doing. We can afford, to disagree on the point as to whether it is better to have men working and earning their living in full possession of their self-respect than that they should be thrown on to the street with nothing whatever. The noble Lord said: "Let farmers cultivate other crops," but, if we brought forward schemes to assist the growing of other crops I think the noble Lord would find other reasons for opposing them. There is no general scheme for assisting agriculture which has been brought forward during this Parliament which he has not found some very good reason for opposing.
LORD RHAYADER: I am not opposed to helping agriculture. I have never opposed giving help to agriculture. I have always tried to help it, but I do not think
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ladling out Government money is necessarily the best way of helping agriculture.
EARL DE LA WARR: The noble Lord, I know, is very sympathetic to agriculture, but he is most anxious not to do anything that anybody else suggests to assist agriculture. I think that is really very much what it comes to. He asked, why not grow more roots for bullocks? What are bullocks fetching? At the present moment something between 36s. and 38s. per cwt., and no doubt in a few days we will have the noble Lord criticising the decision of the Government to give some assistance to the beef industry.
LORD RHAYADER: I would rather you gave the beef industry these millions than spend them on the growing of beet sugar.
EARL DE LA WARR: In a few minutes we are to have the pleasure of discussing the milk policy of the Government. I do not know if the noble Lord intends to oppose that form of assistance. Would the noble Lord suggest that some of these 400,000 acres which are now under beet cultivation should be handed over in order to increase milk production and bring about a yet further increase in the number of milk sellers in the country? It is all very well to say, with a sweep of the hand, that you should grow other crops. I remember myself at one time in your Lordships' House saying that, but to-day I should not like to have to mention those other crops which can be grown at an economic price at the present time.
LORD RHAYADER: That is exactly what was said to the farmers of the country twenty years ago—grow new crops. My complaint is in regard to the continuing of this subsidy to the end of the ten years.
EARL DE LA WARR: The noble Lord is of opinion that we should take the tremendous step of throwing all this land out of cultivation and all these men out of work on the ground that the industry is uneconomic. I would like the noble Lord to tell me what industry in the world is working at the present time on strictly economic lines. How many industries in the world to-day are operating without some form of exchange assistance, some form of tariff, or some form of quota behind them? Even the

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shipping industry, so beloved of the Liberal Party, has now had to seek State assistance. Therefore I make no apology for asking that your Lordships should allow this Bill to go through in order to continue the carrying on of the beet sugar industry.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

MILK BILL.
Order of the Day for the Second Reading read.
EARL DE LA WARR: My Lords, I venture to think that His Majesty's Government can feel that in this Bill they are putting before your Lordships a really balanced policy for the milk industry. It can be divided into three parts. The first is an attempt to save the industry and to stave off ruin by putting a bottom into the market. That scheme we reckon will cost something over £1,500,000 per annum. That payment will operate over a period of two years and after that period, if prices have risen to a certain height which I will mention later, these payments will have to be repaid to the Exchequer. The second and third parts of the policy constitute an attempt to increase the consumption of milk in this country. The first method of doing that is by cleaning up the herds from the fell disease of tuberculosis which is unfortunately so common among our cow population. The second method is a scheme of milk publicity, of spending £500,000 a year for the next two years very largely on increasing the supply of milk in schools for school children.
If your Lordships turn to the Bill you will find that Clauses 1 to 8 deal with the first part of our policy. There you will find provision is made, as I have said, for putting a bottom into the market. There is to be a guaranteed price to the Milk Board for all milk sold for manufacturing purposes of 5d. per gallon in summer and of 6d, in winter. That will mean that, whereas at the present moment the Milk Board are receiving something between 3d. and 3½d. per gallon for milk which is to be manufactured into cheese, henceforward that sum will he made up to 5d. in summer and 6d. in winter by a grant from the Exchequer. That position will continue for two years.
LORD STRABOLGI: Would the noble Earl make it clear who gets that? He said it went to the Milk Board.
EARL DE LA WARR: It goes into the general funds of the Milk Board and the Milk Board are responsible to the farmer.
LORD STRABOLGI: They pass it on without charge?
EARL DE LA WARR: They pass it on. Provision is made for repayment in the event of prices rising to such an extent that the Board is receiving 6d. for manufacturing milk in summer and 7d. in winter. If that occurs repayments will be made to the Exchequer through the Board. This advance makes provision not only for all the milk that normally goes to the Board but for all milk manufactured into cheese by farm cheese makers. The quantity of milk in the second category is something over 50,000,000 gallons per annum. This policy has been criticised as being a policy of subsidies just for that type of milk which is least required—namely, manufacturing milk, the milk which is, in fact, responsible for pulling down the price of liquid milk. But this advance is just as much an assistance to the liquid milk market as it is to manufacturing milk, because as your Lordships are aware the milk is paid for at the moment on the basis of there being regional pools. Each region has its pool price settled and then provision is made for certain inter-regional compensation to level up the various regions. Within the pool what is responsible at the moment for pulling down the price of liquid milk is the low price "received for manufacturing milk. Large deductions have had to be made from those who are selling their milk to the liquid market in order to help the price paid to those selling for manufacturing processes. Under this scheme the amount of the deductions would be limited by virtue of the fact that the price of manufacturing milk cannot go below 5d. in the summer and 6d. in the winter.
Now I come to the second part of the Bill which is contained in Clauses 9 and 10. There we find provision made for the cleaning up of the herds. We put the reasons for the need of this step under three headings. The first is public health, the second is the saving of the wastage of the dairy herds that goes on at the present moment to an appalling

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extent, and the third is salesmanship. It must be clear to all of us that so long as there is in the minds of the buyers distrust of the product put on the market we are not going to sell as much milk as we should sell. Therefore, from the public health point of view and the farming point of view, it is essential that the Government and the farmers between them should co-operate in a campaign for the cleaning up of our herds from the scourge of tuberculosis. For that purpose there is to be a grant of £750,000 from the Exchequer over a period of four years. The details of the scheme have still to be prepared, but it is proposed to give assistance to what we call attested herds. These will be herds completely free from tuberculosis. It will be necessary for a producer who wishes to enter that scheme to have two successful tests of his herd with a six months interval to show his herd to be completely free. As soon as he has done that he can apply to the Ministry for an official test, which of course will be at the expense of His Majesty's Government, and if that test is satisfactory he will be able to enter the scheme for the attested herds. He will receive what will probably amount to a premium on his milk of a penny a gallon. That will account for something over £400,000 of the £750,000 which we have provided for this scheme.
Then, my Lords, there is the position of the certified producers and the Grade A (T.T.) producers, and the question of whether they should come into the scheme. I must ask your Lordships not to press me upon that point at the moment, because discussions are actually in progress. I can only say that I think those discussions are going very satisfactorily, and on behalf of those at the Ministry who are carrying on the negotiations, I would like to express their thanks to the certified and Grade A (T.T.) producers for the manner in which they are endeavouring to meet them. After the attested herd we have another grade of herd—another scheme which will be administered by the Milk Marketing Board, a scheme for accredited herds. Those herds will have to submit twice a year to full clinical examination and their production will have? to attain to the Grade A standard. There will be a premium again of a penny per gallon from the funds of the Milk Marketing Board. I may say in that connection that again
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there are details of this scheme to be settled and therefore the exact figures must not be taken too definitely.
There is one point which I think is bound to come up in discussion and may come up at a later stage in Committee on this Bill. That point is that complaint is being made in certain quarters of the provision that when this period of four years has expired the Minister is to have the right to ask for the scheme to be continued by the Milk Marketing Board. Some complaint, as I say, is being made of that provision, but it has not been made by the Milk Marketing Board. The Board have fully accepted the conditions of the scheme. They must feel, as certainly we feel, that a very large sum of public money is being made over to the milk producers in order to enable them to do things in the production of their commodity which will assist them very considerably to increase its consumption, and we feel that as a condition of that very large grant they should be prepared to carry on the work at the end of the period and not just let it run to waste.
Now we come to the last section of the, policy, which is provided for in Clause 11 of the Bill—a grant for what we call publicity. Actually it is not intended that very much of that amount of £500,000 a year for two years shall be spent on what we ordinarily understand by advertisement. Rather we would like to see this money spent by giving the best publicity of all to milk, and that is by cheapening it in the schools. At the present moment there are over 800,000 children who are buying their milk in the schools for a penny per day—a third of a pint. We are endeavouring to work out a scheme, and I think I can say that we have very nearly completed it, whereby those children will be able to obtain their milk for a halfpenny a day. I think your Lordships will admit that that is a tremendous advance. There may be some of your Lordships who would like to see it given for nothing. Well, perhaps one day we will come to that, but at the present moment, I think your Lordships will admit that a very big step forward has been taken.
We have in the past been criticised by some of your Lordships for adopting a policy of restriction of production, and I think those of your Lordships who have

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made that charge against us will be the first who will want to congratulate us on here pursuing a policy of increased consumption. I am really not quite sure that sufficient attention has been drawn to the very important departure in national policy which is here envisaged. Up to now we have felt inclined to spend a very considerable number of millions of pounds a year on public health, and on the other hand, we have spent a great deal of money quite separately on the assistance of agriculture. Here, for the first time, we are bringing the two policies together: we are assisting the farmer in the very best way possible—namely, by getting more milk into the stomach of the child who needs that milk. Again I say that I look forward with very great pleasure to the congratulations that we must receive on this from noble Lords opposite, from the noble Viscount, Lord Astor, and from others who quite rightly feel that wherever possible we should pursue a policy of increase of consumption rather than one of restriction of production.
In moving that this Bill be read a second time, I am quite aware that I have perhaps dealt with it rather shortly, but I felt that your Lordships have had the details of it before you for some time. If there are any further questions that arise in your Lordships' minds, of course I shall be here to endeavour to answer them. I beg to move.
Moved, That the Bill be now read 2a.—(Earl De La Warr.)
LORD MARLEY: My Lords, this Bill is a great evidence of the extraordinary energy of the Ministry of Agriculture. The noble Earl has, of course, played a number of tricks on your Lordships' House with this Bill, and very cleverly. He has made virtues of a whole lot of necessities, the details of which he has carefully kept from your Lordships' House. Of course he realises that what we are suffering from in the matter of milk—and he has said so—is under-consumption and not over-production. He then said that there is a change of policy and that the Government are going in for increasing the consumption of milk. Of course he does not tell you why they are doing that—that we are tied by the leg to the Dominions by the Ottawa Agreements, and that he dare not attempt in any way to limit the imports of milk pro-
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ducts from the Dominions because of the Ottawa decisions, and therefore his only way out is to attempt to increase consumption in this country.
He did not tell you that we take the whole of the milk products—the whole of the cheese and butter—which New Zealand produces; 100 per cent. of them comes to this country. He did not tell you that we take 90 per cent, of the Australian butter and cheese, and so on. He did not mention that that is the reason why he is attempting this change of policy on the part of the Government. And the reason that he did not mention it is that he knows perfectly well—and if I am wrong upon this I hope he will assure your Lordships' House—that the Dominions have given no guarantee that they will not increase their production and therefore increase their exports to this country when they get the better price which will result from the guaranteed minimum price for manufacturing milk. There is no guarantee of that, and the Dominions are perfectly free to increase their production and spoil the whole of the Ministry's scheme at any time they like, as far as I can understand it.
Then the noble Earl says that we have got to improve quality and increase consumption, and he proposes to spend money on doing those two things simultaneously. Now let us have this perfectly clear: Is he going to vise our money to advertise immediately by an increased consumption of the rotten milk which is now being distributed, or is he going to wait until the milk is really good before he advertises by an increase in its consumption by school children? You can not have it both ways. If the milk is bad, and he has told us it is—
SEVERAL NOBLE LOEDS: No.
LORD MARLEY: If he has not he ought to have done so. I will give quotations which will prove my facts up to the hilt. If the milk is bad, and the noble Earl should have said that the quality of milk in this country is probably less good than that in any modern civilised country—
EARL DE LA WARR: I hope the noble Lord will make it quite clear that that is what he says, and not what I said.
LORD MARLEY: I am saying what I say he should have said. He should have

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given these facts, because they have been given by other members of this House, and have not been controverted, and I am going to make them perfectly clear. First with regard to this question of quality. The noble Earl told us something about the quality of the herds in this country. If your Lordships will read the Report of the Committee on Cattle Diseases you will see that Great Britain has the highest percentage in the world of tuberculosis infected herds. I know perfectly well that the Report tries to gloss over that by saying that it is not believed that it is higher than in other countries, but certainly not lower, or words to that effect, but it says that
"the generally accepted conclusion is that at least 40 per cent. of cows in dairy herds are infected with tuberculosis"
adding that that is a statement "which does not appear exaggerated." The Report continues:
" This percentage of infection may be compared with a percentage of something over four in the United States"—
ten times as high in Great Britain as in the United States!—
"and approximately twelve in Canada.… We have no evidence to show whether the disease is increasing or diminishing in Great Britain, but the widespread neglect of adequate precautions against its increase makes the latter improbable."
They do not like to say which it is, but the inference is that as it is improbable that it is diminishing, the probability is that it is increasing.
A member of your Lordships' House, Lord Moynihan, speaking at a meeting at the Mansion House nearly two years ago on the subject of milk, and the results from the 40 per cent. tubercle infected herds, used these words. He said:
"It is also true that a very large amount of surgical tuberculosis is caused by the drinking of contaminated milk. I have some figures here which show that 59 per cent, of cases of glandular enlargement and 35 per cent, of bone and joint disease in England and Wales are due to the drinking of contaminated milk. In Scotland things are far worse;"—
we ought to have had a Scottish debate on this—
"there, over 90 per cent, of glandular enlargements and over 60 per cent, of diseases of bones and joints were found to be due to the drinking of such milk. What we are accustomed to call 'surgical tuberculosis,' that is tuberculosis of the glands, bones, joints, skin, intestines and so forth, is due in large measure to impure milk."
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This is the milk which the noble Earl is now going to advertise should be increasingly consumed in this country. Then:
"It has also become quite clear that a certain proportion of that form of tuberculosis which was supposed to be due to the contact of an individual with an already contaminated individual—that is to say, human tuberculosis—is also due to the drinking of milk. Therefore, against milk a heavy indictment may be brought: that it is the cause of a large proportion of surgical tuberculosis and of a certain proportion of medical tuberculosis."
What is the noble Earl going to say to all this? Is he going to advertise to bring about an increase in the consumption of liquid milk by the children of the workers in this country when he knows that the effect of an increase in the consumption of liquid milk from existing herds must mean an increase in the percentage of the distributed milk which is not pure and free from tuberculosis? I think some of the measures which the Minister proposes for cleaning up the herds are good. There is for example the matter of the changed methods of nomenclature. What a fatuous decision it must have been to term Grade A, milk which is the lowest graded milk in this country. It is the worst of the graded milks; and when you take the next grade up, Grade A (T.T.) ordinary people think it is Grade A but somehow lessened in quality; and when it comes to "certified" milk they think it is milk on which there is a certificate which is not as bad as it might have been. The change which is being made was overdue and the old grades were allowed to exist because the producers did not want to be labelled as producing anything but the best milk. We welcome the change which is being made and which is long overdue.
Then there is going to be a campaign, which the Minister has stated in another place will take a long time and towards which he is contributing £750,000, to ensure the proper inspection of tuberculous herds. I want to ask whether he will agree to give to the country a statement at regular intervals as to the progress of the emergence of clean herds, as a result of our expenditure. Could we have a report every six months of the progress of the scheme, showing us the lowering, month by month, in the percentage of infected cattle from which British milk is produced? If we could know that by spending £750,000 we have

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reduced the percentage from, say, 45 per cent. of infected cows to 43 per cent. in six months, we will willingly double and treble that expenditure, if thereby we can get a proportionate decrease in infected herds, and finally reach the pastoral heaven which was outlined by the noble Earl, when all our cattle will be completely free from tuberculosis.
Then there is a proposal to pay premiums for pure milk. I know that members of my Party have not supported that scheme in another place, but I believe it to be a very good preliminary measure. I happen to have seen this scheme carried into effect in the great Midland dairying combine, which has its centre in Birmingham. There there was a premium paid for each gallon of milk which came below a certain bacterial count test and had more than a certain percentage of fat content, I remember visiting that scheme and seeing the figures of the thirty best farmers who were entitled to the premium because their milk had, as a result of a count of the number of bacilli to each cubic centimetre, got a premium. When I visited the same place two years later the very farmers who had got a premium for the cleanliness of their milk at the beginning were now out of the running altogether because milk of that type of cleanliness would not have been clean enough to earn a premium. In other words, the result of the premium had been enormously to reduce the number of bacteria per cubic centimetre and to improve the fat content.
The scheme provided for the giving of advice by skilled scientists to those farmers who found themselves falling back in the race, and who wanted to secure that they would come up again on to a premium-receiving basis. It was an admirable scheme. At first they did not like it, but afterwards they willingly accepted and applied for the services of the scientific expert, and learnt that, by adequate and rapid cooling, by the use of special milking cans with the orifice at the side, by the washing of the udder and cleaning the coats of the cows and so on, they were able to quality for premiums and get back again on the list. I am very-much in favour of that scheme, and I hope that that will be one of the means by which the Ministry will get to work during the cleaning up period.
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Now, with regard to the consumption of milk. It is true that consumption of milk is very low indeed in this country. But I am not surprised, when we know that our herds are ten times as contaminated as they are in the United States, where the consumption of milk is twice as much per head as in this country. Similarly, in Canada the consumption of milk is three times as much per head as in this country, and in Scandinavia, where some of the best milk in the world is produced, the consumption of milk is six times as much as here. And I am not unaware of the immense value of the drinking of raw liquid milk, and even of skimmed milk, to school children. The benefit has been proved again and again by tests and experiments, where children's height and weight and reaction to teaching have been affected. These are good things, but the milk must be pure. How is the Minister proposing to deal with the increase of the consumption of milk1? By spending £1,000,000, mainly, apparently, on advertisements in the newspapers. There may be other ways—I do not know, he has not told us how he proposes to advertise the milk service of the country.
EARL DE LA WARR: I could tell the noble Lord; I will do so later.
LORD MARLEY: I am glad of that. But of course the indication is that a great deal of it will be by advertising in the newspapers. But the best way of advertising milk is by the children whose health is improved by getting free or very cheap milk in the schools. That I believe to be the best way, and that is to be done when the milk is really good enough for those children. The Minister has told us that he hopes to found the whole scheme on improving the price of manufacturing milk, and that that must be done before the other two aspects of the scheme can be carried through. He has not told us whether he expects that it is going to lower the price of liquid milk. Perhaps that is another point on which the noble Earl will enlighten your Lordships. Does he expect, and can he guarantee, that as a result of the expenditure of this money there will be a lower price of liquid milk to the consumers?—a, very important point.
I said at the beginning that this was a sort of trick Bill. It is a trick Bill.

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The noble Earl has tried to "get away with it" by bribing mass groups of people to let this measure go through. He buys the support of the producers by guaranteeing a minimum price of manufacturing milk. He buys the support of the Dominions by promising that he is not going to interfere in any way with the imports of milk products in this country. He buys the support of the Press by promising them a share of £1,000,000—£500,000 a year—on advertising matter. He buys the support of the ordinary citizens by promising healthy herds, and he buys the support of what I think I might call the good people, the kind-hearted people, the charitable people, by promising free milk for school children. Well, the whole thing is a trick, and you cannot get away from it. And I might say that the one group that he never deals with at all, with all this expenditure of our money, consists of the agricultural workers. What are the agricultural workers going to get out of it? There is no sign that they are going to get any benefit out of this scheme.
It is a trick, a sort of jig-saw puzzle, from which certain people will get something. The producers of manufacturing milk will get something, the newspapers will get a bit, I suppose we shall do a little towards improving herds, but very little according to the Minister himself. I hope the noble Earl will be a little more clear than the Minister was in another place as to how long he supposes it will take before we get tuborcule-free cattle. I do not think that this sort of trick measure is really going to do what the nation wants. I believe the nation wants, first of all, a prosperous agriculture, with the workers sharing in that prosperity. There is no sign of that in this measure. Then, I believe that we ought to have only really good milk, absolutely guaranteed, supplied to school children. There is no sign of that in this measure. There is no sign that it is only going to be T.T. milk which is supplied to the school children according to his proposals. I think if we are to have these things we have to control also milk imports by quality and quantity.
I think the only way in which we shall ever get a move on in getting pure milk in adequate quantities for the nation is by preventing the sale of non-tested milk by any retailers at all. There ought to be notices put up in every retailer's shop,
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compelling him to say: "I am selling non-tested milk, I am selling milk which might very well be contaminated." I remember reading the report of one of the medical officers of health of a county close to this Metropolis, in which he said that during the summer the whole of the supply of milk to one of our best known southern watering places was—I quote his own words—"in a state of incipient decomposition." That is the medical officer's report—not a mere idle utterance, but the printed annual report of a medical officer of health. That means that these people were selling milk which they knew to be contaminated. Can the Minister give us any promise that we are going seriously to deal with this problem and force retailers, if they are not selling T.T. milk to put up a notice: "I am selling milk which may be, and very probably is, contaminated, and therefore I warn people who buy from me that they are risking the infection which Lord Moynihan has pointed out may result from buying milk which is not tested"? That is the only way we can deal adequately and basically with these problems, and this Bill contains nothing which deals with them.
THE EARL OF LUCAN: My Lords, may I remind your Lordships that there is a Royal Commission at six o'clock, and it would perhaps be convenient for us now to adjourn during pleasure.
House adjourned during pleasure.
House resumed.

ROYAL COMMISSION.
The following Bills received the Royal Assent:

Finance,

Palestine Loan,

Adoption of Children (Workmen's Compensation),

Land Settlement (Scotland),

Petroleum (Production),

Renfrewshire County Council (Eastwood and Mearns) Water Order Confirmation,

Dundee Corporation Order Confirmation,

Ministry of Health Provisional Order Confirmation (Morley),

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Ministry of Health Provisional Order Confirmation (Steyning and District Water),

Ministry of Health Provisional Order Confirmation (Milford Haven),

Ministry of Health Provisional Order Confirmation (Burnham and District Water),

Provisional Orders (Marriages) Confirmation,

Mexborough and Swinton Traction (Trolley Vehicles) Order Confirmation,

St. Helen's Corporation (Trolley Vehicles) Order Confirmation,

Southend-on-Sea Corporation (Trolley Vehicles) Order Confirmation,

Nottingham Corporation (Trolley Vehicles) Order Confirmation,

Prince of Wales's Hospital, Plymouth,

Walthamstow Corporation,

Maidstone Waterworks,

Stockport Corporation,

Stockport Extension,

Newport Extension,

London County Council (Money),

London Passenger Transport (Interim Financial Arrangements),

Newport Corporation (General Powers).

House adjourned during pleasure.
House resumed.

MILK BILL.
Debate resumed on the Motion for the Second Reading.
LORD CRANWORTH: My Lords, I rise to express a hope that your Lordships will, as you doubtless will, give a Second Reading to this Bill, and also to utter a note of warning. The first of the three parts of this Bill has been described, and I think not unjustly, as "Paddy the next best thing." The best thing, anyway from the point of view of those who introduce the Bill, is that we should so regulate our imports that the people who produce the milk of this country should, at a moderate profit and with a fair and satisfactory rate of wages, supply the demands for milk in so far as they adequately can. It is impossible to do that, as the noble Lord has said, on account of our Agreements with the Dominions
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and our pacts with foreign countries. I think your Lordships will in all probability agree that our Dominions owe a certain consideration to us in this matter. Many of us do not like such tests as are imposed, but in some cases they seem to be almost the only alternative, and I venture to think that not only ought the industry to be grateful for the help that is being given, but it most undoubtedly is grateful.
When you come to the second part—the question of cleaning up the herds of this country—I wish to offer a note of warning. We have all noticed from time to time that the medical profession urge on us the duty of cleaning up our milk supply and they point to the impurities that exist in a certain, I believe a very small, section of the milk produced. I think that we must, and do, all admire the zeal with which they pursue this admirable course. But I have a criticism, or even two criticisms, to make with regard to that. In the first place I should be happier if when they criticised the uncleanly methods of British farmers they also turned attention occasionally to the people overseas as well. I do not believe, in spite of what the noble Lord, Lord Marley, says, that the production of milk overseas is any better than it is here. I should like to call attention to the fact, of which doubtless the noble Lord is aware, that in Switzerland and Denmark cows go into buildings in the early autumn and never come out again until the spring, whereas cows in this country come out nearly every day and the steadings are thoroughly cleaned.
Some of your Lordships may recall that two or three years ago—or it may be three or four years—my noble friend Lord Hastings and I drew attention to the import of skimmed sweetened and unsweetened milk into this country. We drew attention to the analysis of one of the big brands. The analysis was not in dispute. It showed that practically the whole value of that compound lay in the sugar in the skimmed milk. Have we ever had help from the medical profession there? I do not think we have. I do not recollect getting any help from the noble Lord, Lord Marley. But in the case of hundreds and thousands of children in the poorer classes that is the only form of milk they ever get. In all probability the harm done to those children by drink-

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ing that condensed sweetened milk is far greater than if they drank the dirtiest milk produced on any farm in this country. When you hear some people talk you would think—I was inclined to think it when I heard the noble Lord, Lord Marley—that it is as safe to drink a cup of prussic acid as it is to drink in this country a glass of milk. Yet I venture to suggest that there is probably no commodity in this country which it is safer to drink than a glass of any milk whatever.
Let us get to the facts. The noble Lord mentioned—it is quite true, it is in the Blue-book—that there are somewhere possibly in the region of 40 per cent. of reactors among cows in this country. That Is a disability which they share, I am told, with the majority of your Lordships, and in all probability with the noble Lord, Lord Marley, himself. He is in all probability a reactor just as some cows are reactors. On the same evidence there is said to be one cow in three, or possibly one in four, that is a giver of tubercular and dangerous milk. Probably 80 per cent, of those reactors can be discovered by careful and regular clinical examinations. In a year or two those reactors and dangerous cows will become fewer and fewer until in all probability they become almost non-existent. I think the scheme now being considered for accredited herds is an eminently desirable one, for the herds to be accredited will have to pass through a minimum number of clinical examinations a year, but I think it is a still more important recommendation of the Animal Diseases Committee that all herds should be subject to periodical clinical examination. Accredited herds, at all events at first, will consist of those herds the owners of which are pretty sure that they are clean at the start and that they will not lose many on clinical examination. If there are any cows about which they feel doubtful they will probably pass them on to neighbours before clinical examination takes place.
There are other points in regard to which I would ask for the very careful consideration of the Government. The first is as to the expense of the scheme. We have heard about the success of the United States, who in ten years have reduced the number of reactors in their country—it is only in fact, I believe, in certain parts of the country—by about
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60 per cent. The cost of that was over 150,000,000 dollars. We heard about economy at an earlier stage and we ought to consider the cost. The second point is with regard to the reliability of the test. The method now in vogue is a double intradermal test. It is said that a good man can tell by the size of the wound and by its appearance up to about 98 per cent, of the reactors, a bad veterinary surgeon very much less, and a novice a comparatively small proportion. Any of your Lordships who have herds will know from personal experience how desperately unreliable these tests are at the present moment; how an animal will one day prove to be a reactor and a week later not, and so on. If you are going to increase very largely your veterinary staff, it is hardly likely that the standard of veterinary skill will increase in the way in which it ought to increase to make this test as reliable as it should be.
But the third reason is to my mind very much the strongest, and that is the strides made by scientific knowledge. In the case of bovine tuberculosis science has made just as great strides as it has in other branches of medicine. I do not know how many of your Lordships have read this book which has just been published. It is called "Spahlinger contra Tuberculosis." It contains a host of reliable names throughout, giving evidence, lay, medical and veterinary. It describes the course of Spahlinger's experiments in Switzerland and in Norfolk, which were successful. Finally the Government of Northern Ireland were so impressed by these tests that they decided to hold a Government inquiry into them. They held that inquiry, and on December 17, 1932, they published a Report of an official demonstration made in Belfast, which showed that 100 per cent, of the calves immunized by Spahlinger's vaccine had triumphantly resisted an infection of tuberculosis which proved fatal to non-vaccinated calves in a few weeks.
This has been very carefully gone into. To the medical man there may very well be reasons which prove that all that is stated in this book is not true, but as I say it is full of names of the very highest repute that there can be, and if one quarter of what is said is true, it is obvious that this is a thing which is not to be lightly set aside in a sentence or

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two, as was done in the Report of that Committee, but deserves the attention not only of the Minister of Agriculture, but also of the Minister of Health, because if it were proved to be true, vast expense would be saved in money and a very much better cure would be effected. I ask the noble Earl in charge of the Bill to consider these three points which I have mentioned, and I ask him to proceed with caution. If he does not proceed with caution he may put out of business thousands and tens of thousands of men who are carrying on their business admirably and cleanly, and in return he may not get a better supply of milk for the nation at large.
There is only one other object of the Bill upon which I wish to say a word, and that is that of increasing the demand for milk. The noble Lord, Lord Marley, seemed to think that the £1,000,000 to be spent was going to be spent in newspaper advertisement. As a matter of fact that £1,000,000 is going to be spent in providing milk for schoolchildren at half the price at which they get it now. I thought that there was probably not one amongst your Lordships—not one in this House—who would not consider it a desirable thing to take the surplus milk of this nation and give it to the schoolchildren who wanted it. I have heard people say that that is Socialism. All I can say is that if it is Socialism, it is the sort of Socialism that I like. I very much regret—and I think it was due only to a misunderstanding—that the noble Lord, Lord Marley, said that he objected to any such thing.
LORD MARLEY: I should like if I may to make this perfectly clear. I said that I objected to this money being spent on newspaper advertising, and I said that the best form of advertising would be the health which would result to the children who got the cheap milk. Those were my words. I am within the recollection of the House.
LORD CRANWORTH: Do I understand the noble Lord to say that he was mistaken, and that if this money is in fact going to provide milk for the children and is not to be spent on newspaper advertising, he will be in favour of it?
LORD MARLEY: I should be entirely in favour of it provided the milk is clean milk and not infected milk.
LORD CRANWORTH: With that note of caution, which I am sure the noble Earl will bear in mind during the four years that are to come, I sincerely hope that your Lordships will give this Bill a. Second Reading.
LORD STRACHIE: My Lords, although in one sense I welcome this Bill yet there are certain parts of it for which I cannot say I care very much. I do not much like this continual giving of subsidies. Here we get more subsidies, and before the discussion on this Bill commenced we were hearing of other subsidies for the sugar industry. Then again only yesterday an announcement was made in another place that there was to be a subsidy of £3,000,000 for beef. Why is it that we are always having subsidies instead of having straightforward protection of our industries against foreign competition of an unfair nature? Apparently the reason is that which was given in The Times this morning in its leading article, that it was because of Ottawa and of Argentina—that it was perfectly impossible for the Government to raise the price of beef so as to make it profitable, simply because the Government had committed us to the Ottawa Agreements, and therefore, as The Times pointed out, the only alternative was to throw the charge upon the British taxpayer. I think that is very unfortunate. I think we ought to do nothing to make the British taxpayer feel that he is paying expensively for the benefit of agriculture by this direct taxation for subsidies.
Then I cannot help thinking that it is unfortunate that for the first time for a great many years the Ministry of Agriculture in framing this Bill have omitted the clause usually inserted in such Bills by which it is provided that all Orders made under the Bill should be laid before both Houses of Parliament. That has been the practice of the Ministry for a good many years up to now, and one is rather surprised that the practice is not followed on this occasion, all the more so as the noble Earl told us in moving the Second Reading that he would not go into the details of a good deal of the Bill because those details would be carried out by Orders made by the Minister. If that is so, it is all the more reason why this House and another place should have some control over those Orders before they come into force.

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I regret to see that by Clause 3 it is evidently intended, though it is not said directly as was done previously under the Milk Marketing Order, that those who are to get the cheese subsidy are to be only those with twelve cows or more. That will completely exclude all the smallholders under county councils, and I think that it is regrettable that the small men should not have an opportunity to get the subsidy as well as the larger men. It may be said that those men do not make cheese. That is quite contrary to my own personal knowledge, because as an active member of the British Dairy Farmers' Association I can say that at the exhibitions of that association we always have exhibits for smallholders who make cheeses not exceeding eight pounds, showing that the smallholders do make cheese and are anxious to compete—and very good cheese they very often make, too.
As regards Clause 9, the object of which is to secure pure milk, the noble Lord, Lord Cranworth, has dealt with that to a great extent. As I have mentioned Lord Cranworth, perhaps I may take this opportunity of saying how much we as landowners in this House ought to congratulate ourselves that the noble Lord is now a member of the Milk Board. That will no doubt be of the greatest advantage to us, but I go further and say that it will be of greater advantage to the owner-occupier, who has got very few people to look after him. If anything goes wrong as regards the marketing of milk in this country, he is the man who is going to suffer first, because he has not got his landlord to go to as the ordinary tenant-farmer has. As regards the question of pure milk, I would only say that I listened to the statement made by that eminent surgeon of Leeds attributing all sorts of diseases to the drinking of milk, though I con Id not see that he brought forward any evidence to prove that that was the case, and I was very glad at that time that the noble Earl, Lord Iveagh, made a most effective answer to the speech of that noble surgeon in this House.
As regards the manner in which that money for securing pure milk is going to be distributed, on a previous occasion, as I received no definite pledge from the Government upon this matter, I suggested that it would be very de-
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sirable that the people who have to find the money should say how it should be distributed in order to arrange for the procuring of a supply of pure milk in this country—that is, by clearing up our flocks and herds where there is disease. It could be done by the county councils and the big county boroughs, as being the people who are in touch, through the agricultural committees, with the question of diseases such as tuberculosis.
Then there is one point as to which I am not very clear, and that is that under certain conditions money is to be repaid to the Government by the Milk Board—money which they spend. I suppose it will come out of the accumulations of the Milk Board. It is stated, sometimes, that they already have large accumulations, but at the same time if it is to be paid by the Milk Board indirectly it is going to affect the farmers. Generally, I may say that I think it is very fortunate that the noble Earl has brought in this Milk Bill. It is very good as far as it goes though I cannot agree with certain details, but I do not suppose any one in this House will wish to oppose the Second Reading.
VISCOUNT ASTOR: My Lords, during the course of the debate we have touched upon a variety of subjects, such as publicity, increased distribution of milk in schools, the quality of the milk, and so on. I only want to touch very briefly on one or two points. Before coming down here I refreshed my memory by looking through the debates in another place some twenty years ago, and in those debates I urged the Government, I regret to say without success, to bring forward legislation entirely on the lines of Clause 10 of this Bill. Not unnaturally I heartily support that clause, and I only regret that it has taken twenty years before that very sound legislation found its way on to the Statute Book.
EARL PEEL: You have done very well.
VISCOUNT ASTOR: Clause 10 deals in the main with the question of clean milk. I want to add a word about diseases and milk. It is obvious there is general agreement that a certain amount of milk is unsatisfactory, and even dangerous, but it is very easy to emphasise the danger to children by over-emphasising that particular point. It is probable that of the

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percentage of cows who react to the tuberculin test only 2 per cent, give tuberculous milk, and that of the whole tuberculous population only 5 per cent, suffer from bovine tuberculosis. Only the other day I ran across figures which show that the danger, so far as there is danger, appears to be diminishing very rapidly. The deaths from non-pulmonary tuberculosis, and on the whole that is the infantile death rate, in 1911 was 14,600. Last year the deaths had dropped to 5,400, or about one-third of what it had been. That is a very remarkable improvement, and it does indicate a very decided improvement in the quality of the milk available for children.
There has been a considerable amount of controversy in the Press as to how this tuberculous milk should be dealt with. There is one school which advocates pasteurisation, and another school which advocates cleaning up the herds, and I want this afternoon to put a point before the noble Earl. For some time there have been tuberculin-tested herds. People who receive an official licence are entitled to sell graded milk because they have tuberculin-tested herds. Cows which react to the tuberculin test have to be sold or sent out of the herds. Similarly, any cows before being admitted to a tested herd have to pass the test. It is obvious that if you are to get a herd tubercle free, and increase the number of tubercle-free cows, it is absolutely vital that you should have a reliable test. If you do not have a reliable test you get re-infection in your herds. You may pass over a cow, and she is passed as tubercle free, and then you may find at the next test that you have not only one animal but two or three animals which do not pass the test. We want reliable methods by veterinary surgeons in conducting the test, and also reliable tuberculin. Unless you have skilled veterinary surgeons of qualified experience to carry out this very difficult and delicate test, you will not get similar results.
It is, however, about the tuberculin that I want to say a few words. There are two essentials where tuberculin is concerned. You want the potency or strength to be adequate, and the strength of all tuberculin used for this test to be the same. I hold in my hand a memorandum by the Tuberculin Committee of the Medical Research Council,
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and in two places it is emphasised in the memorandum how important it is to have satisfactory tuberculin. Let me read two extracts. The first is this:
"It is obvious that any attempt to improve our methods for the detection of tuberculosis in cattle is useless unless we can be quite certain that the tuberculin employed for the purpose is sufficiently potent."
And over the page is said this:
"It cannot be too clearly realised that a guarantee of potency is essential if any real progress is to be made in our endeavour to control bovine tuberculosis."
The fact that this very efficient and important Council found it necessary to emphasise that showed what those who are concerned in the matter know quite well, that every tuberculin on the market is not of equal potency. It is obvious that if you test cows with different tuberculin you get entirely different results. You will not establish confidence in the minds of the public or of the farmers unless you secure reliability in the tuberculin used.
There are two suggestions which I would put before the noble Earl. Either he should standardise tuberculin, or if, owing to administrative difficulties, that is impossible, then the Government should restrict the use of tuberculin for licensed herds to specified brands of known and adequate potency. If they do that I am certain that the process of cleaning up our herds would be accelerated, and we should get more farmers to test their herds and also greater confidence on the part of the public. There is one other point. Somebody in the debate to-day referred to the fact of tubercle-free herds being tested twice a year. I venture to suggest that the noble Earl should consult his technical experts to find out whether it would not be desirable to have more frequent testing. My impression is that it would be an advantage if you had a shorter period than six months—I do not speak as a technical expert, I am merely putting it before the noble Earl as a suggestion—more particularly where a cow is brought into the herd even if she has passed the test. One of the difficulties in dealing with this has been that there are two Departments concerned—the Ministry of Health and the Ministry of Agriculture. I have been on numerous deputations and had any amount of correspondence with both of them. They

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always ride off by saying that if we can get unanimous agreement between all the parties they will do the thing, and the result is that nothing is done.
The noble Earl hoped that I would congratulate him on this Bill, which was aimed at stimulating the production of milk.
EARL DE LA WARR: Consumption.
VISCOUNT ASTOR: I thought he meant production. I think, as a matter of fact, the Government's, policy is likely to stimulate production, and I am not sure that in effect the Government are not going to have a more serious difficulty a year hence by an increased glut. The noble Earl and his distinguished colleague are extraordinarily fortunate in the fact that this year we have had a drought in summer. Grass produces milk and rain produces grass. This year we have not had rain, the pastures are parched up, and I know that in many counties—I was consulting the farmers in my own county the other day—the production of milk has quite recently dropped by something like 25 per cent., thereby diminishing the glut. There again you have a conflict of interests between the Department represented by the noble Earl and the Ministry of Health. The Minister of Health is going round praying for more rain. Whatever the Minister of Agriculture is doing in public I have no doubt that in private he is praying hard for a drought in order to reduce the production of milk. It is quite evident that where praying is concerned the Minister of Agriculture has his prayers answered more effectively than the Minister of Health.
The Government have had to act because of what is called the milk glut. What is a glut? A glut is a supply which is greater than the demand that the market can absorb, and, when a market cannot absorb the supplies put upon it, usually one attempts to deal with it by reducing the supplies. It might have been possible, I think, to reduce the supply of milk coming on the market, to try to remove the more expensive producers of milk. The noble Earl knows perfectly well that endless inquiries have indicated that the cost of production varies by more than 100 per rent. It might also have been possible to eliminate rather more rapidly the producers of diseased or dirty milk, and that would have tended to reduce the amount of milk
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coming on the market. But the Government have not done either. As I understand it, the effect of what the Government are proposing to do is to make the surplus milk profitable—this milk which goes for manufacturing purposes. As soon as you tell a farmer that he is going to get a profit on any commodity that farmer will increase his output, and other farmers will come into that particular branch of the industry. My fear is that in 1935, as the result of this policy, there may actually be a greater glut—quite apart from any effect of the drought—than there was in 1934. I have already heard of certain landowners who have been more or less compelled by their tenants to spend money in putting up cow-houses where no cow-houses existed before, because their tenants were going to produce milk. They had not done it before, but they were going to produce milk because of the attraction of the money which is behind this Bill.
I am not going to say anything about control. It was my privilege to give evidence before the Grigg Commission, and such views as I had I put before them. I am not one of those who are opposed to all schemes of control, but I am not sure that, so far as milk is concerned, the Government, acting on the advice of the Commission, went quite far enough. I think it is possible that still the Government of the day, whatever its complexion may be, may be driven to nationalising the wholesale distribution of milk, possibly through some public utility society. I do not know whether that is going to be so or not. But I am not going to-day to raise that very interesting point, except to say that when you embark on measures of control it is very difficult to know where you are going to. I hope very much that the noble Earl will look into the question of the reliability of the tuberculin tests, because I think it is most important.
LORD ROWALLAN: My Lords, in rising to address your Lordships this afternoon I crave the consideration which your Lordships' House is accustomed to extend to those who do so for the first time. I was very glad to hear the noble Viscount who has just sat down talking about the reliability of tubeculin. The standardisation of tuberculin is a goal which has been before the veterinary profession for many years. I hope that the noble Earl

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in charge of the Bill will do something to ensure the standardisation of the potency of tuberculin. But I would go further than that. The noble Lord, Lord Cranworth, spoke of the difficulty of obtaining the services of veterinary surgeons who were thoroughly conversant with the administration of this test. I should like to see the use of tuberculin for official purposes confined to those who hold a post-graduate diploma showing a practical knowledge of this delicate test. I feel quite sure that if any large scheme of free testing is introduced in this country it will take many years before you can overcome the ill-effects that will result. The inevitable consequence will be that, with the large numbers of people, who will go in for the tests for the first time, there will not be a sufficient number of experienced veterinary officers to carry out the tests, so that you will get anomalous results, and the same men who start out full of enthusiasm will have their ardour damped. Thus the position will be more difficult than it is now because the confidence which many farmers have at the present time will be lost.
In my own County of Ayrshire we are very fortunate in having a county veterinary officer who has the confidence of every farmer in Ayrshire. One result is that we have no fewer than seventy-one farmers who hold licences for the production of tuberculin-tested milk, and sixty-four of those farmers are men who are entirely dependent on their dairies for their livelihood. It is not a rich man's hobby in the West of Scotland or the whole of the South-West of Scotland. It is a practical proposition from the farmers' point of view, because they know that there is a demand, a premium on the market for tuberculin-tested animals: and although they may not receive an adequate return for their milk in the liquid milk market, particularly the special destination market, they reap their reward in the premium on tested stock. Anything that can be introduced which would discourage those farmers' efforts would be a disaster to them.
I hope that the noble Earl will use his influence with the Minister of Health to try to prevent too high a standard being put on agricultural buildings which are necessary for the production of accredited or attested milk. At the present time in Ayrshire there are at least
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seventy, and possibly 100, farmers whose herds are free from tuberculous disease, and have been free for many years, but who are discouraged from taking out a licence partly by the lack of a remunerative market for their milk, and partly by the fact that they would have to go to Very considerable expenditure on their farm buildings in order to put them into a condition in which they would receive the imprimatur of the local sanitary authorities. I shall give you one instance, not in my own county but in a neighbouring county, to show that buildings are a help but not an essential. For something like thirty years a farmer whom I know very well, a personal friend of mine, had had no tuberculosis or abortion on his place. His buildings were possibly the most backward in the whole of Scotland. Some two or three years ago the buildings were condemned and a completely new byre, to conform to the higher standards, was put up. Some eighteen months ago he had his first case of tuberculosis and contagious abortion also appeared in the herd. Buildings are a great help to the production of clean milk, but they are not essential, and I hope that in anything that is done to bring up the conditions for accredited certificates too much stress will not be laid on buildings.
I was glad to hear the noble Lord, Lord Marley, talk about the experiment of the Midland dairies in giving a premium for clean milk. I have had the same experience at a creamery which was started by my family, and which I took in hand after hearing Mr. Edwin White read his most interesting paper at the World Dairy Conference in 1925. I found that the creamery was getting 30,000 gallons a month, of which 6,000 gallons were manufactured into cheese. Gradually by means of clean milk tests, paying a bonus to 25 per cent, of the farmers at the top and making a deduction in the case of 25 per cent, of farmers at the bottom, and publishing the results regularly so that all could see, we attained an average turnover of 145,000 gallons a month, of which only 5,000 gallons were manufactured into cheese. That was built up through the confidence we were able to inspire in small retailers in the City of Glasgow and in neighbouring towns. We had a practical monopoly of the small retailers, who knew they could rely on the quality of milk sent out from this creamery.

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I hope something may be done to persuade milk marketing boards to institute a series of laboratories for the testing for bacterial content as well as butter fat content of all the milk in their areas. It would not cost an outrageous sum, and it would do something to remedy the defects of the position created by putting a bottom to the milk market, as referred to by the noble Viscount, Lord Astor, if a sliding scale were introduced before the pool price was struck by which the men who were not doing their duty in providing the higher quality of milk from the bacterial standpoint were substantially penalised. Lord Cranworth talked about Dr. Spahlinger's experiments. I should like to know whether it is possible to detect by the ordinary means the presence of tuberculosis after injection. I think it is common knowledge that a great deal of the use of the bacillus Calmette Guerin in inoculation in this country was discredited because, after inoculation, the animal was a permanent reactor to the tuberculin test and consequently, if by some chance the efficacy of the inoculation failed, there was no further means of detecting which were reacting animals and possible carriers and which were not. I am not sure whether Dr. Spahlinger's treatment and inoculation will not prevent the testing of the inoculated animal at a later date by the normal means of the tuberculin test.
There is one point I should like also to mention in Lord Marley's remarks, and that is his statement that Scotland is very backward in the cleanliness of its milk. I challenge Lord Marley to produce any area in this country which has a bigger proportion of tuberculosis-free milk produced in it than the South-West and Western counties of Scotland. I believe I am making no exaggerated claim when I say we are far ahead in Lanarkshire, Ayrshire, Dumfriesshire, Dumbartonshire, and Stirlingshire of any county in Great Britain and of most countries overseas. I believe that in the treatment of our milk in the South-West of Scotland, at the creameries, we are years ahead of Denmark or any Continental country. I could bring figures to prove that from remarks made by the principal of the West of Scotland Agricultural College and others who have experience of Continental methods and West of Scotland methods.
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Lord Marley also said it was unfair to ask children to drink more milk while we could not rely on the cleanliness of the supply. I should like to call your Lordships' attention to an experiment carried out not long ago to test the efficacy of raw as against pasteurised milk in the West of Scotland. Milk from known reacting cows was divided, and one half was pasteurised and one half was fed raw. The calves were given their mothers' milk for the first five days, after which they were put on pasteurised. The raw group were kept on raw milk all the time. At the end of one year every one of the calves which had been fed on pasteurised milk after five days reacted to tuberculosis, and not one of those which had been fed on raw milk. There is no short road to health, but I believe the shortest is by drinking raw the milk produced by the cleanest methods from healthy cows. I hope these few points I have brought up this afternoon will receive the consideration both of the Minister of Agriculture and the Minister of Health.
LORD STRABOLGI: My Lords, I am sure I am expressing the unanimous opinion of your Lordships, when I say we have had a most interesting maiden speech from the noble Lord, Lord Rowallan, packed with facts and information and, if I may say so, also of a very lively and flashing description. He defended his native shires in Scotland against my noble friend Lord Marley, but, without detracting in any way from the high opinion which I share with the whole House of his performance, I would point out that he should not attack Lord Marley but should attack the authors of the Report on Cattle Diseases, and the witnesses, because my noble friend only quoted from them.
I do not want to detain your Lordships for more than a very brief time, and I rise really to make only two points and ask one question. If I may ask the question first, it is this: Would the noble Earl, when he comes to reply, elaborate a little more what is really proposed to be done with regard to the subsidy or the assistance for the cheap milk for the children in schools? I do not ask him to say what has been decided, but what the Government are aiming at, what it is they propose to do. The noble Earl stated it was proposed to provide milk at such a price that children would

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get it at one half-penny per day. Taking it at a third of a pint per child a day I work that out at about 1s. a gallon. I do not know what the Ministry are going to allow for the cost of distribution. This is really a most important point. I think it is necessary to have some figures on that matter so that we can see what is going to be paid for this milk for school children to the farmers or the Milk Board.
That brings me to the first point I want to make and it is this. We really are tackling this matter, if I may most respectfully say so to your Lordships, from the wrong end. The noble Viscount on the Cross Benches (Lord Astor) also referred to this aspect of the matter. We are attempting to meet a glut caused by under-consumption of milk, and one of the proposals of my noble friends on this side of the House, and one which our Party as a whole make, is that the Government ought to go a little further and should distribute milk free to school children. It is really not fair for the Government to say that that would be a terribly expensive business. It would cost nothing like £9,000,000, as the Minister of Agriculture, the noble Earl's colleague, suggested in another place. If we pay the 5d. a gallon over all the year—I am not talking about 6d. in winter and 5d. in summer—and take a penny per gallon for distribution we could give a free supply of 90,000,000 gallons of milk, which is the amount involved, to the school children of the elementary schools of the country for £2,250,000—that is 5d. a gallon passed on to the farmers and one penny for distribution. If we take it at 2d. a gallon for distribution then the amount is £2,625,000 in a year. That is the price of a modern cruiser of the County class. Such a cruiser would in fact cost a little more than that as first cost, and the Board of Admiralty are asking, according to report which is not denied, for another twenty cruisers to be put into commission. For the cost of one cruiser a year we could give a free distribution of milk to all the children in the elementary schools of the country, and we should get a better strategical result. I make a present of this to the militarist school. I believe the effect would be not only to improve the health of the people generally but also to improve the physique of the future soldiers if ever we had to call upon them.
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The other point I want to make is this. The noble Earl talks about this as Socialism. I think he believes this is a measure of Socialism. If I may use such an expression in your Lordships' House, it is a bastard form of Socialism. As Lord Marley has pointed out in another way, certain limited numbers of people get the benefit, but not the whole community. We are going to spend eventually very large sums on improving the value of herds; we are going to improve the value of land; we are going to benefit certain fortunate dairy farmers who are well capitalised and well organised, but we are not passing this benefit on to the community as a whole except that we hope to get purer milk and some cheapening of milk for school children. That is all, and that is really not Socialism. I do not know whether the noble Earl or I have been longest in the Socialist Party, or which of us has made the most profound study of it. I am prepared to say he has, but on this point I would ask him to pursue his researches a little further.
It is really a problem of poverty with which we are faced—and this is my last point. Your Lordships may have seen the remarkable investigations made by two well known Professors of the University of Aberystwyth into the conditions in Cardiff, which were quoted by Mr. Williams, the Member for Don Valley, in another place. The figures are so striking and they drive home such a very apposite lesson that I ask your Lordships' pardon for quoting a few facts very briefly. They divided up the milk users of this great City of Cardiff, which may be taken, as a typical city for this purpose, into good middle-class; comfortably-off people, good working-class people—that is, regularly employed well-paid artisans—thirdly, the people living in the new housing estates who have to pay so much in rent or hire purchase for their houses that they have to reduce their expenditure in other directions; and fourthly, the poor working class, not slum dwellers. Those are the four groups of families in regard to which statistics were obtained, and it was found that the good middle-class people took of liquid milk every day 3.88 pints per person; the good working-class took 1.87 pints; those in the new housing estates took 1.32 pints, and the poor working-class took 1.10

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pints. That means that the good middle-class homes took about three and a-half times as much milk per person as the poor working-class, and the poor working-class homes either did without milk altogether or took the wretched skim milk in tins which is imported from abroad. The most awful thing about this terrible problem is that the statistics show—and there are many others which could be quoted and which are unchallengeable—that the more children there are in the poor families the less milk they get. It is a terrible problem. How are you to cure it? Only by improved wages and standard of living, thereby increasing the spending power of the people. I am not going into how you could do that, but that is the answer to your problem.
I apologise for intervening at this late hour, but I have been as brief as I could. I must say that this matter needs far more careful examination than has yet been given to it by the Government. I know the difficulties of the Government. They have to compromise; they are a mixture of different Parties, with different points of view, and they have to meet their friends. You have a neo-Socialist at the head of the Ministry, and a full Socialist as his assistant, the noble Earl, and you have a Chancellor of the Exchequer who is anything but a Socialist, and so you get a bastard Socialism which satisfies no one, and which at the end of two years may have done more harm than good.
THE EARL OF IVEAGH: My Lords, I feel that I should say a word on this question as the noble Earl in charge of the Bill mentioned the negotiations going on between the certified Grade A (T.T.) producers. Your Lordships probably realise that at present the English certified Grade A (T.T.) producers are not under the Milk Board. I think it is obvious to everyone that it would be very incongruous if we were left out of the scheme that is adumbrated by this Bill. At the same time we are out, and it is essential, I think, for us to see that in coming in we do not betray ourselves either financially or under regulations. It might very easily be that the regulations set up under this Bill might take away the possibility of carrying on our trade. After all we have no produce our milk day by day, and if we were to be de-
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prived of our licence suddenly because of some new regulation that did not quite suit our circumstances, it would be rather a disaster—I should say a complete disaster—just at the moment when you want to increase the volume of this milk. I am convinced that if you can make this kind of milk more profitable than the other kinds of milk, you are likely to see a greater increase in that way than in any other way. I think, too, we are only acting in the public interest when we are in negotiation with the Ministry.
I would like to say only one other word and it is this. I think it was the noble Viscount, Lord Astor, who talked about the various strengths of tuberculin and the possibilities of the test, and some other noble Lords have represented that the test is not infallible or had had some doubts cast upon it. I would like to appeal to the Government in their administration of this Bill to see that research is adequately supported. I am quite convinced that many of our troubles arise from trying to put into operation theories which are almost but not thoroughly established. The fact is that there is an enormous amount of un-established theory about tuberculosis, about the various forms of tuberculosis, how cattle pick up the disease, and about how it is transmitted to human beings. All that ought to be searched out scientifically before we make any drastic alterations. I do not want to delay your Lordships any longer, but I hope that the Ministry of Agriculture will consider what I have said and give support to research, and that the result will be the production of the sort of milk that we all require.
LORD PHILLIMORE: My Lords, I make no sort of apology for being late in this debate. This Bill was given very little consideration in the other House and I think that your Lordships may well afford a little time for the discussion of it. There are certain aspects of the subject which have not been discussed. The only information I gathered from the noble Earl about the application of the £750,000 which he mentioned was that there would be two classes of people who would benefit. First, there, would be those with tuberculin-tested cows, with herds completely free from tuberculosis, who, I understood him to say, would get a subsidy of a penny a gallon. Secondly,

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there would be accredited herds subject to clinical inspection and a standard of cleanliness similar to that involved in the production of Grade A milk. The owners of those herds also would get a penny a gallon subsidy. If I understood him aright the man who has to pay the far greater cost of tuberculin testing and of ridding his herd of bad reactors will get no larger subsidy per gallon than the man who has to pay only the cost of clinical inspection, a far lesser cost, and who has to come up to a certain standard of cleanliness which I do not gather will be as high as in the first case. I urge upon the noble Earl that before this Bill goes to Committee he should put all his money on rewarding those who have herds which really produce clean, tubercule-free milk, in so far as we know how to produce it to-day, and not to dissipate the small sum at his disposal in producing for us a milk which will have a designation necessarily rather deceitful in that it will not be as good milk as could be obtained.
Another question which I wish to ask is, who is going to administer this Bill in the counties? We have not heard a word about that. Are the county authorities going to be charged with the administration of the Bill or with parts of it? Are the county authorities to receive grants in aid, and are they to add to those grants in aid? Are certain duties to be laid on the county authorities of providing for clinical inspection of the herds of all the farmers in their county who ask for it? If so, will the subsidy be regulated county by county according to the number of herds, or the number of the population, or in what way? None of these rather difficult problems have been dealt with at all in the debate so far. In my county, which is rather a poor one, we see a very considerable expenditure before us, amounting perhaps to a penny or twopenny rate—or more, for all we know—and we have not the foggiest idea whether the Government intend to meet the whole of that expenditure or part of it. I hope that in his reply the noble Earl will deal with those points quite specifically.
EARL DE LA WARR: My Lords, a great number of points have been raised in this debate and it is getting late, but I think it would be the desire of your Lordships that I should endeavour to
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answer as many as possible. Before doing so I am quite sure that your Lordships would wish me to reiterate the sentiment expressed by the noble Lord, Lord Strabolgi, as to the value of the contribution to the debate made by the noble Lord, Lord Rowallan. He speaks as one who really knows the subject right through. Not only is he able to talk about it very thoroughly but it is clear that he knows as well. I am sure I shall be expressing the view of your Lordships when I say that we hope that he will intervene frequently in future in our agricultural debates. He mentioned, in common with the noble Viscount, Lord Astor, and the noble Lord, Lord Cranworth, the question of tuberculin tests. I should like to say at once that for the purpose of the final test of herds only standardised tuberculin will be used. I will go further and say that it is hoped that in future, when legislation makes possible the control of certain therapeutic substances, tuberculin will be one of the first substances to be dealt with.
Coining now to rather more general questions, I could not help being a little surprised at hearing the noble Lord, Lord Marley, criticise the Government, as I understood, for not controlling imports from the Dominions. I can quite understand that criticism being levelled at our heads, but when it came from that side of the House I did hear it with some slight surprise. The actual position in regard to the Dominions has been perfectly clearly explained. At one time we did offer to the Dominions on provisional lines a scheme which would have made it possible to raise the prices of dairy produce brought into this country. They did not feel that it would be to their general interest to adopt that scheme and therefore we have adopted our scheme of isolating the market. I should like to correct the impression that the noble Lord, Lord Marley, gave, that the Dominions are going to benefit from this scheme. I am afraid that they will not do so. Any price improvement that may take place as the result of the scheme will be limited entirely to those participating in the milk pools of the various milk marketing boards in this country.
With regard to the scheme for milk in schools which was mentioned both by the noble Lord, Lord Marley, and the noble Lord, Lord Strabolgi, first of all the milk which is to be sold in the schools

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will be milk approved by the medical officer of health, and where the medical officer of health in not the same man as the school medical officer, then it will also have to be approved by the school medical officer. I am quite sure, therefore, that the noble Lord, Lord Marley, will regret having thrown such an unfounded charge at the head of the Government as that we are going to force dirty milk into the schools.
LORD MARLEY: I do not, and I am very glad that you are not doing so.
EARL DE LA WARR: The charge was made without any inquiry whatsoever into the actual facts of the case, and I think the noble Lord might at least have put that remark into the form of a question rather than in the form of an attack upon the Government. The noble Lord, Lord Strabolgi, asked some further questions on the subject of milk in schools, and in one he asked exactly how the scheme was to be worked. He is quite right in assuming that the intention is that the milk shall get to the children at a halfpenny for one-third of a pint; one-third of a pint is the amount which is at present being handed out for a penny. As to the distributive margin, that is a matter which is at present under negotiation between the Milk Board and the distributors. The total price of the milk, as the noble Lord quite rightly said, will come out at a shilling per gallon. I am afraid he is rather optimistic in hoping to get the distributive charges down to a penny or twopence per gallon. I think if he realised what is entailed in distributing milk in the necessarily very small quantities per head, he would realise that not even twopence would cover the cost.
LORD STRABOLGI: Is there a calculation of what it would cost? It is a very interesting point.
EARL DE LA WARR: I think I shall have to say that it would really vary very much according to the number of children there were actually in the school. I should be very unwilling to commit myself to a figure. We come finally to the main part of the speech of the noble Lord, Lord Marley, which, as far as I could see, was an attempt to discredit-totally the beverage of milk in this country. If I were mainly a Party politician I should myself very much like to have
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that speech printed and distributed in all the rural constituencies which I understand the Party of the noble Lord, Lord Marley, is hoping to win at the next General Election. But apart from chaffing in the course of Party politics, there are men living out in the countryside working day in and day out, attempting by the sweat of their brow to scratch a living out of the land. The noble Lord, Lord Marley, has set himself up to abuse those men and their product. I am quite prepared to admit—I think every noble Lord on this side of the House is prepared to admit—that the milk produced in many areas and from many farms can be improved. Of course it can; the very existence of this scheme is an admission of the fact. But it is quite unnecessary to go on from there to libel the commodity of milk in the way that the noble Lord has done.
LORD MARLEY: I protest entirely against this point of view. I am within the recollection of noble Lords. What I said was that bad milk and tainted milk is a bad and dangerous drink, and I maintain that unless the milk is properly looked after, and is produced under clean conditions from herds which are properly tuburculin-tested, it may be an actual danger. I am not a medical man, but certainly I have heard it said by a medical man—possibly in this House by Lord Moynihan—that he would rather put a barrel of gunpowder in his nursery than a glass of milk. I think that is a ridiculous exaggeration, but nevertheless it does give a point of view, not mine.
EARL DE LA WARR: I am quite content to wait until to-morrow to read the speech of the noble Lord, Lord Marley. I think we shall find that he went very much further than at the present moment he says he did. The fact of the matter is that really not one of us would be here to-day if milk were anything like what the noble Lord, Lord Marley, has described. Certainly the experiments which have been carried out in the schools in Lanarkshire and all over the country would not have given anything like the results which they have given if there were the slightest foundation for the charges of the noble Lord. If I say that, I do not want to be understood as saying that I do not think that it can be improved. We all recognise that it can, and this Government scheme is an ad-

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mission of that fact and an expression of the determination of this Government—which mark you, is the first Government which has ever taken action of this drastic character—to effect an improvement.
The noble Lord, Lord Marley, in speaking of these schemes, both the scheme for cleaning up the herds and the scheme for cheapening milk in schools, was really talking as though someone else before us had gone very much further than we, and we were modifying the scheme. Actually we are pioneers in this, and the National Government is the first Government ever to have taken a step in this direction. I am perfectly prepared to admit that we could go further; I am perfectly prepared to admit that it may be desirable to develop this scheme of supplying milk in schools yet further. It might be very desirable eventually to work out a scheme of supplying completely free milk in schools.
LORD MAULEY: Hear, hear.
EARL DE LA WARR: Why not? But that is no reason for failing to give credit to this Government for bringing forward a very useful pioneer scheme, the first scheme which has ever been brought forward to deal at all with the problem which is facing us in this direction. My Lords, I hope you will agree to the Motion that this Bill be read a second time.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

COUNTY COURTS BILL. [H.L.]
Order of the Day for the Second Reading read.
THE LORD CHANCELLOR (VISCOUNT SANKEY): My Lords, I beg to move that this Bill be now read a second time. I need detain your Lordships for only a minute or two. This is a pure Consolidation Bill, and I need not describe its provisions in any detail at all. It does not seek to make any changes of substance in the existing law, but a much-needed improvement in its arrangement. The Acts relating to County Courts have not been consolidated since 1888, when a County Courts Act was passed which has 188 sections. During the last fifty years that Act has been drastically amended by the County Courts Acts of 1903, 1919,
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1924 and 1934, and by several other Acts as well; and the time has come when its provisions as amended ought to be embodied in a single Act. To achieve that result is the primary object of this Bill.
The law as to County Courts is at the moment scattered over some twenty Acts of Parliament. Altogether this Bill enables eight Acts to be completely repealed and twelve others to be repealed so far as they relate to County Courts. But the importance of the consolidation lies not so much in the number of Acts to be repealed as in the complexity of the existing provisions relating to County Courts and the enormous number of persons who are obliged to thread their way among them in order to discover their legal rights. In the Bill these provisions are collected together and re-arranged as simply and clearly as the subject matter allows. I commend the Bill to your Lordships as a piece of consolidation which will be a great reform of the law and of real use to a great number of our fellow countrymen. If your Lordships give it a Second Reading, as I ask you to do, I shall move that it be referred to the Joint Select Committee of both Houses which has been set up to deal with Consolidation Bills.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
On Question, Bill read 2a.
THE LORD CHANCELLOR: I beg to move that this Bill be referred to the Joint Select Committee of both Houses already set up to deal with Consolidation Bills.
Moved accordingly, and, on Question, Motion agreed to.

POOR LAW (SCOTLAND) BILL.
Order of the Day for the Second Reading read.
THE UNDER-SECRETARY OF STATE FOE WAR (LORD STRATHCONA AND MOUNT ROYAL): My Lords, at this late hour I will endeavour not to detain you longer than is necessary, but the Bill is of great importance to Scotland, and it would be improper were I not to draw your attention to some of its very important provisions. In 1921 a temporary Poor Law Act made it legal for the first time in Scotland to give relief to the able-bodied

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unemployed. That Act and a number of subsequent enactments which amended it still remain as temporary provisions. The new Unemployment Act makes provision on a permanent basis for the assistance of the great mass of the unemployed by the Unemployment Assistance Board, but some of the unemployed will remain with the local authorities. The time has thus arrived for incorporating the present temporary law relating to the able-bodied unemployed in the permanent structure of the Poor Law. This is done by Clauses 1 and 2 of the Bill.
In making that law permanent it is proposed, firstly, to give to the able-bodied poor who have been refused all relief the right of appeal to the Sheriff which the ordinary or disabled poor have, a right that was denied the able-bodied poor in the temporary Act of 1921. This is done in Clause 2 (1). Secondly, it is proposed to give the able-bodied poor the advantage of receiving training to fit him to enter or to return to employment in the same way as the unemployed dealt with by the Unemployment Assistance Board under Part II of the new Unemployment Act. Thirdly, local authorities are empowered under Clause 7 (2) to require, in particular cases, a person to perform work, as a condition of receiving outdoor relief. The work will be at a work centre provided by the authority or at a Poor Law institution. At present local authorities have only two alternatives: to grant unconditional relief, or to send the applicant to the poorhouse. The Scottish poor relief system is mainly an outdoor system and it is often not a satisfactory solution to send a man to a poorhouse. The new proposal offers a middle course which we think is in the interests of the men themselves. Training and performance of work are to be subject to regulations made by the Central Department and laid before Parliament. An important part of the Bill—Clauses 4, 5 and 6—is concerned with protecting the interests of poor persons and strengthening their present rights to appeal against decisions of a local authority. These rights at present are (a) appeal to the Sheriff when all relief is refused, and (b) complaint to the Central Department when insufficient or unsuitable relief is given.
The clauses may now be referred to briefly. The purposes of Clauses 1 and 2 have already been dealt with. An
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important change is proposed in Clause 3. In the present law the amount of relief afforded rests with the authority of the settlement area. The authorities may take different views as to the amount of relief necessary, with the result that persons in the same locality and in exactly similar circumstances may receive different amounts of relief merely because their settlements are in different areas. It is proposed to remove that anomaly by placing the whole duty of relieving a case, including the fixing of the amount of relief to be given, upon the authority of the area of residence. But the settlement authority could not be expected to repay whatever sum the residence authority might think fit to grant without the settlement authority having any control over the expenditure for which they might be liable. It is accordingly proposed that the residence authority will be able to recover not more than the settlement authority would have paid if the applicant had been relieved in the area of settlement. If authorities cannot agree as to the amount to be recovered the dispute will be decided by the Department. It is a natural corollary to this arrangement that the power of the local authority to remove a poor person to a settlement area should be restricted. Otherwise an authority could escape the implication of the clause by removing persons in respect of whom they are able to recover only part of the cost of relief.
I have already dealt with Clauses 4, 5 and 6. Clause 7 is an essential part of the Bill in its relation to the Unemployment Act. The object of subsection (1) is to enable the local authority to take constructive action towards making unemployed persons fit to enter or return to regular employment. The Poor Law authority need not itself establish courses. They may contribute towards the cost of courses provided by another local authority or by any other body. This provision would enable the authority to co-operate with the Ministry of Labour, the Unemployment Assistance Board and education authorities, and so on. The purpose of subsection (2) is to enable local authorities to deal with special cases of difficulty, for example, persons suspended from Part II of the Unemployment Act for contravention of conditions attached to unemployment

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assistance and analogous cases amongst those who do not come within the scope of Part II of the Unemployment Act. At present the only alternative to the granting of unconditional outdoor relief is admission to the poorhouse. The subsection would give authorities a middle course between those offers. It should be emphasised that the provision will apply to exceptional cases only. The work to be provided will be at a work centre or a Poor Law institution. Men cannot be called upon to undertake the normal work of other departments of the authority.
Clause 8 aims at the break-up of the present general or mixed poorhouse where many types of inmates requiring different methods of treatment are found. Among the classes for whom separate accommodation is desired may be mentioned the sick, the children, the aged and infirm. With regard to Clause 9 it is well known that in every poorhouse inmates at present perform work in the institutions and it will be generally agreed that suitable work is a necessary part of the life of inmates who are fit to perform it. Performance of work is an important matter, and should have statutory authority. It is proposed therefore that the provisions for work by inmates should be governed, not by rules made by local authorities, but by regulations made by the Department and laid before Parliament.
Clause 10 contains an important provision dealing with the boarding-out of children. The system of boarding-out with private persons children who have come under the control of authorities has long been a feature of poor law administration in Scotland, and it is generally recognised that the system has been amply justified by results. The system has developed without specific statutory authority. This clause is intended to give that authority and to secure that boarding-out will in all cases be under the best possible conditions. To that end it is proposed that all arrangements for boarding-out shall be made subject to regulations made by the Department of Health.
Clause 11 deals with exceptions to the general principle of Scottish Poor Law administration—that local authorities are required to have regard to all resources available to the applicant for his support.
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That principle is already qualified by certain statutory exceptions in the National Health Insurance Act, 1924, and in the Determination of Needs Act, 1932. Under the National Health Insurance Act, 1924, local authorities are required to disregard the first 7s. 6d. of Health Insurance benefit. Certain authorities have, however, been disinclined to observe that provision. The argument was used that as the statutory provision was in a Health Insurance Act and not in a Poor Law Act, it was not part of the Scottish Poor Law. Such an argument was highly fallacious, and to remove any possibility of misapprehension it is proposed to incorporate the provision regarding the disregard of the first 7s. 6d. of health insurance benefit in the present Bill.
It is further proposed to require that the first 5s. of sick pay from a friendly society or trade union shall be disregarded. A similar provision regarding sick pay from a friendly society has been in the English Statutes for a long period and the object is to place the recipients of poor relief in Scotland in a similar position to that of recipients in England. A new provision is introduced regarding the treatment of wounds and disability pensions. The first £1 of pension will be wholly disregarded and its observance will be compulsory upon the local authority. At present local authorities have a discretion under the Determination of Needs Act, 1932, to disregard one-half of the wounds and disability pension, and the exercise of discretion has resulted in unequal treatment of pensioners in the different areas.
In regard to Clause 12, that merely deals with the duties of inspectors of the poor and other officers. Clause 13 makes regulations whereby the Department would administer the Bill. The other clauses are not, I think, of any great importance, and are more or less self-explanatory. It would be untrue to say that this Bill was an agreed measure: it is safe to say that in the form in which it arrives at your Lordships' House its value is generally recognised and generally accepted; and I think it is universally recognised that it is a great step forward in the public provision for the poor of Scotland.
Moved, That the Bill be now read 2a.—(Lord Strathcona, and Mount Royal.)
LORD MARLEY: My Lords, there are certain aspects of this Bill, which I con-

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fess I have only barely studied, which are good, particularly those which deal with the right of appeal by poor persons, now extended to grades other than those which previously enjoyed that right. But I must put in a formal protest and objection to Clause 7, which includes under the Poor Law persons similar to those who come under unemployment insurance, and particularly subsection (2) under which able-bodied persons may be compelled to go to work centres and do work. I put forward a purely formal protest along lines similar to the protest that I made on behalf of my Party in connection with the Unemployment Insurance Bill.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

THE CHACO ARMS EMBARGO.
VISCOUNT CECIL OF CHELWOOD VISCOUNT CECIL OF CHELWOOD rose to ask His Majesty's Government whether they can state what is the exact position with regard to the embargo on arms for the Chaco war and whether it is the fact that it is the attitude of the Italian Government which is hindering the completeness of the embargo; and to move for Papers. The noble Viscount said: My Lords, I would not have troubled your Lordships at this hour with this new Question if I could have seen any prospect of being able to raise it on another and more suitable occasion, but it is very near the end of the Session, and I think it is important that something should be said here on this subject before we separate for the holidays. The question arises in reference to the unhappy war in South America over the Chaco. It came first before the League in 1928, when, by the action of the League, I think under the leadership of M. Briand, peace was restored for a short time, but the war broke out again in 1932. Some day perhaps we shall know what was the secret history of that renewal of the fighting, but at present we can only have our suspicions. At any rate, it did break out again in the spring of 1932, and became very acute.
The League decided to intervene in 1933, and appointed a Commission to investigate the subject which, after some delays—caused again by influences which I am not in a position to describe because we really do not know all of what they
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were—at last in November of last year did proceed to South America, did draw up terms of peace, or at any rate terms for the cessation of hostilities, after hearing all that the parties had to say, and urged them upon the parties. The matter came before the Council immediately afterwards and was debated there. I need not describe the nature of the terms proposed by the Commission, but I propose to read a few lines of their Report, though they are fairly well known, describing the nature of this unhappy struggle. They say:
"The conflict may find no definite military issue, but it has already produced one result—suffering and impoverishment for both peoples, which cannot but increase as the war goes on.
"The struggle in the Chaco is a singularly pitiless and horrible one. The soldiers are fighting in the bush, far from centres of population, and in an exceedingly trying climate. The sick and wounded frequently receive inadequate attention, owing to the difficulty of improvising, with limited resources, a medical service proportionate to large effectives. Moreover, behind the lines, while the struggle goes on, both countries are growing poorer, and their future seems darker and darker."
I think that that, from a perfectly impartial source, is a terrible condemnation of the kind of thing that is going on, and one does wonder, even allowing for the folly and madness, of people engaged in war, why it should go on.
In connection with that I am anxious to draw your Lordships' attention to one other passage in the Report, because it throws a light on the whole thing:
"The armies engaged are using up-to-date material—aeroplanes, armoured-cars, flame-projectors, quick-firing guns, machine-guns and automatic rifles; the automatic weapons are available in great quantities, but the other arms are few. The arms and material of every kind are not manufactured locally, but are supplied to the belligerents by American and European countries."
That seems to me an exceedingly ominous sentence, and it indicates one of the great evils of the present time, the immense pecuniary benefit that may arise to private individuals from the progress of horrible events such as those which are now going on in the Chaco. I think that is a very serious state of things.
When the matter came before the Council of the League we were represented, most admirably if I may say so without impertinence, by the present

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Lord Privy Seal, Mr. Eden, who renewed what had been already proposed by the British Government, and urged very strongly the proposal that all the countries should at any rate cut off as far as they could cut off, this element of the warfare, by cutting off the supply of all arms to both belligerents. He urged that a telegram should be sent to all the Governments concerned, urging them to cut off the supply, to impose an arms embargo. He put it very strongly indeed, and he concluded as follows:
"The senseless loss of life, the utterly unjustifiable imposition of human suffering, and the meaningless destruction of the best resources in men and material of those two countries have endured already far too long. I do most whole-heartedly urge upon the Council to seize this opportunity of bringing them to an end. It is at once our privilege and our responsibility to do so. Let us therefore determine to take this first step, and take it to-day."
That, if I may say so, is the kind of language which we like to hear from our representative at Geneva, and I am glad to say that it had a very immediate response from the other members of the Council.
They all approved and, as I understand it, though the proceedings are a little obscure, there was universal agreement, that something of that kind should be done, but I think the actual proposal was not dealt with till the next day. At any rate, in a very short time telegrams were sent to all the Governments concerned. Broadly speaking, the response was favourable. America, though she had to pass legislation, or obtain legislative authority, to do so, agreed, and immediately imposed an embargo. This country, I am glad to say, promised to impose a complete embargo, and in the meantime suspended the licence on the export of any arms to these countries. Other countries agreed also, most of them promising to agree, or undertaking to agree, as soon as other countries had signified their intentions to do the same. This is the point on which I am really anxious to receive information from His Majesty's Government. There was one country which did disturb the harmony of the proceedings—I may be misinformed, and my noble friend will correct me if I am misinformed—by sending a reply stating that they reserved the right, in the first place, to name the States which they would insist upon agreeing when
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the matter came up for adoption and, in the second place, they put in this very remarkable and terrible condition, that all current contracts should be respected—that is to say, they should be allowed, in spite of the embargo, to fulfil any contracts that had been made and continue to supply those armaments under the conditions I have described.
Ultimately, on June 2, nearly three weeks after the matter had first been raised, this country—it is perfectly well known which country I am referring to, it is the country of Italy—added to the list of States which others had asked should assent, the States of Russia and Japan, knowing quite well, I should have thought, that in the case of these two additional States there was more difficulty in obtaining assent than in the case of the others. That is the position, unless I am misinformed—I hope I am misinformed—but at present it does look, and one is bound to say so plainly, as if this great attempt to discourage the war and prevent its worst features is being held up by the policy of one country and one country only. I hope my noble friend will be able to explain that that is not so, but if he does not I can only hope that there has been some misunderstanding in this country (Italy) for which we all have the highest respect.
LORD MARLEY: Would the noble Viscount explain what he said about Russia? I understood Russia at once agreed.
VISCOUNT CECIL OF CHELWOOD: I quite agree. Russia entirely agreed. I only meant there was supposed to be more difficulty at that time in getting the assent of these two countries. I was not thinking of Russia at the moment, I was thinking of Japan, and I am much obliged to my noble friend for drawing attention to the point.
LORD PHILLIMORE: Can the noble Viscount say whether Russia and Japan have, in fact, suspended any export of arms?
VISCOUNT CECIL OF CHELWOOD: I cannot tell you. No doubt my noble friend can tell you. What Japan has said is that she has never exported arms and so the question does not arise with regard to her. One would hope, if everyone else agreed, some arrangement with regard to Japanese possible export could be arrived at. But the country that is at present

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raising the difficulty with regard to existing contracts is Italy. That is the fact, unless I am misinformed. It really does amount to this, if this is true, that in respect, to these contracts the Italian Government is not prepared to come into line with all the other countries concerned—that is to say, she is not prepared to recommend or insist on her subjects foregoing the profit which would arise from these contracts in order to achieve this great international purpose. I earnestly hope that that is an entire misunderstanding of the Italian position, and I hope by raising the matter to-night I shall have given my noble friend the opportunity, if he can, of explaining that that is not so and that there is every reason to hope the Italian Government will come into line with the other Governments.
I hope His Majesty's Government will feel able to pursue the policy they have initiated in this matter. I am quite sure, as far as my knowledge of the country goes, they have the warmest support for what they have done and are doing in this matter. They may feel well assured, whatever other countries do, this country is resolved, as I believe it is, not to have any share or part in a trade of this kind, which is really a trade in human suffering and human blood, without which we should be certainly better and I believe more prosperous in the end. I hope in this matter we shall follow the precedent we set up 100 years ago in the matter of the slave trade, and that we shall definitely and altogether separate ourselves from a trade of this kind, which is fraught with human suffering and human blood.
LORD STRABOLGI: My Lords, my noble friend Lord Ponsonby has asked me to give whole-hearted support to the Motion of the noble Viscount on the Cross Benches and to the point of view put by him. Particularly my noble friends on this side of the House, and our Party, believe that even if this embargo breaks down through the action of Italy—I believe since then the Chileans are beginning to follow the example of the Italian Government—we, Great Britain, should continue to prohibit altogether the export of arms to Bolivia and Paraguay. We are very definite about that point. We believe there is no excuse, simply for the sake of profits out
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of slaughter, to allow our nationals to engage in this traffic. This is the particular case of Paraguay and Bolivia. People may say: "Why should we lose money and throw workmen out of employment? I emphatically answer "Yes, let other people reap the harvest of death if they wish, but let us keep our hands and consciences clean."
At one moment Sir John Simon, the present Foreign Secretary, appeared to have an inspiration of courage and imposed an embargo on the shipment of armaments to China and Japan. I always regret that he withdrew from that position when other countries said they could not agree. Let us in this matter do what we think is right, irrespective of other countries. That is real patriotism. I want to see my country standing up alone, if necessary, in this matter. Surely in time we will prevail, as we prevailed in the case of the slave trade, as the noble Viscount reminded us. On behalf of my noble friend the Leader of the Opposition, I wish to say we support the noble Viscount, whole-heartedly.
THE UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (EARL STANHOPE): My Lords, your Lordships will not wish me at this hour of the evening to go into the history of this whole question. I agree generally with what my noble friend on the Cross Benches has said on the matter, but I would emphasise that this country has twice given a lead in regard to this question. It came before the League in 1932, and it was on our initiative that the countries were then invited, and once again when it came up when the Commission of Three who went out to the countries to investigate had returned. The situation, I am afraid, is very largely what has been described by my noble friend. Thirty-two countries were asked to participate in the embargo, and in addition Japan, the Union of Soviet Socialist Republics, and Latvia were also asked to come in at a later date. Most of these countries have agreed. We ourselves agreed by telegram on the 26th of May, saying that once again we proposed to uphold the embargo by our own action, but we stipulated that twenty-one countries should also come in whom we considered were essential if the embargo was to be effective.
LORD MARLEY: Twenty-one named countries?
EARL STANHOPE: Twenty-one named countries. We have issued no licences ourselves for the export of war materials to Bolivia and Paraguay since the 9th of May last. There have been a good many offers made to armament firms in this country, but the licences have been held up. In principle the whole of the thirty-two countries invited by the League have agreed to impose the embargo, and so also have the Union of Soviet Socialist Republics and Latvia. Some of them only agreed subject to other countries coming in, which is a natural procedure on their part because, like ourselves, they feel that, the embargo, if it is to be made effective, must be supported by the big producing countries.
Japan was in a different position. Japan refused, saying verbally through her Consul-General at Geneva that she had decided in principle to abstain from any participation in League enterprises of a political nature. Therefore she regretted that she could not depart from this principle. But, as my noble friend stated, she has, in fact, not sent any arms to Bolivia or Paraguay and, therefore, I share with, him the hope that as she has not done so in the past she will not do so in the future. But merely on the question of principle, having left the League of Nations, she does not feel prepared to act with other countries on matters put forward by the League. Germany, on the other hand, agreed to stand by the embargo. Italy agreed provided Russia and Japan did so. As I have already stated, Russia has, but Japan, for the reasons I have given, has not. But Italy went somewhat further. She made a second condition, which my noble friend referred to, which was that current contracts should not be interfered with. In some cases, I think in the case of the United States, current contracts which had been made for a particular article before the actual legislation was introduced were allowed to proceed, but in every case, I think, except that of Italy, no further contracts and no running contracts could be allowed to go on. As we understand it, Italy has said not merely current contracts but re-current contracts should be allowed to proceed, which, of course, is a very different matter. We have made representations
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through our Ambassadors at Rome and also at Tokyo, but I am afraid at neither place at present with any great success.
There was a difficulty in the United States. The President was particularly anxious to put the embargo into effect, but there were difficulties, I understand, of a constitutional character. These were, however, overcome by the President making a Proclamation that the sale of arms and munitions in the United States to Paraguay and Bolivia should be forbidden. I understand that under their Constitution they had difficulty in preventing the export of arms, but, of course, if they stopped the sale of arms it comes to exactly the same thing, and I understand it has been quite effective. The President made his Proclamation on the 28th of May—in fact as soon as he was appealed to by this country on behalf of the League. There are also two other countries which are to some extent affected. Belgium has made her acceptance conditional on acceptance by all the States who were invited, of which Japan was one. Chile has done the same, and specifically mentioned Japan. Peru has said she will abide by the same conditions as regards re-exportation as Chile. Those are all difficulties of a minor character, and, if only Italy will come into line with the other countries, we have every hope that these difficulties will be overcome.
I may say that the Chairman of the League Committee of Three, M. Najera, has sent a letter round to all the countries who were invited to impose the embargo. So far the replies from a good many countries have not come in. We still have hopes that Italy may agree in the end to come into the embargo with us, and in that case we have real hopes of making it effective. As I say, at the present moment that is not the case, and we can only hope that Italy will shortly agree, as the rest of us have.
In regard to the future, it is not quite true, as the noble Lord opposite said, that this is merely a question of making money out of arms. It is more than that, because in regard to Bolivia at any rate, she makes a claim that this is contrary to the Anglo-Bolivian Agreement of 1911, by which both we and the Bolivians agreed not to impose an embargo on any article which is imported from one country to the other. We, of course, dispute that, and say that the Agreement

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quite obviously only referred to commercial matters and, therefore, we are fully justified in stopping arms, which are not in our view commercial. But she threatens that if we go on with the movement that we are endeavouring to bring into force she will impose the extra war taxation on British companies in Bolivia which so far they have escaped under the Agreement to which I have referred. It is obvious that to carry on with an embargo which is not effective and which is not bringing the war to an end would be a futile proceeding, and, indeed, harmful to interests that are perfectly innocent in the shape of British companies in Bolivia. Therefore, supposing, as I hope will not be the case, that we fail to get the embargo accepted by other Powers and put into effect, we shall then have to reconsider with other countries whether we are going to continue to impose an embargo ourselves. I may say that, although this large number of countries have approved the embargo, actually only Denmark, Switzerland, Holland, the United States and ourselves have taken steps to put it into effect. It is, therefore, only those five countries who have actually started the embargo.
LORD MARLEY: You mean by legislation?
EARL STANHOPE: By legislation or by action such as the refusal of a licence, as has been done in our own case. The others are merely standing by saying that when other countries agree they themselves will at once impose the embargo. As far as action is concerned to stop armaments, five countries only have taken any steps. Therefore your Lordships will see that, failing the acceptance of the embargo by Italy, the matter may have to be reconsidered, although I hope very much that may not prove to be necessary.
LORD MARLEY: Could the noble Earl say whether other Ambassadors have taken action similar to that of the Ambassadors of Great Britain in Rome and Tokyo, and whether all the twenty-one countries involved in the application of the embargo actually accepted?
EARL STANHOPE: I am afraid I cannot answer as regards the Ambassadors of other countries.
LORD MARLEY: There was no concerted action?
EARL STANHOPE: There was no concerted action. We took action at once on our own initiative in order to save time. The noble Lord will realise that speed was the essence of the matter in order to try and bring about the embargo as soon as possible. Therefore we took action immediately through our Ambassador, and I rather think I am right in saying other Ambassadors did the same, but of that I cannot speak with any real knowledge. As regards the other countries, as I said, everyone which was invited accepted in principle, with the exception of Japan.
VISCOUNT CECIL OF CHELWOOD: I am much obliged to my noble friend, and of course I shall not proceed with the Motion for Papers. I share Lord Marley's suggestion that it would be a very good thing for other countries to make representations at Rome as well as ourselves.
EARL STANHOPE: They may have done so.
VISCOUNT CECIL OF CHELWOOD: I know. I entirely agree that the British Government were right in acting for themselves and immediately, and in getting other countries to come in as they could. That was obviously the right course for them to take. I personally share the hope of my noble friend Lord Stanhope that the Italian Government will co-operate with other countries. I feel sure that that is really the better mind of the Italian Government, and I cannot help thinking there must have been some misapprehension in the matter which induced them to fail to take the action which is desired. I can only say this in addition, that I trust my noble friend will be very slow to agree to sending arms whatever other countries do, or to allow arms to be sent from this country, whatever other countries do. I am satisfied that, though it may cause inconvenience or even loss or hardship for a time, in the end we shall much more than recoup ourselves by the position that we shall have acquired in the world by action of that kind just as we did in the case of the slave trade. We did have to suffer very severely in the slave trade, but on the whole, even on the lowest calculation, it paid us over and over again to have done so.

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There is only one other suggestion that I would like to make to my noble friend. That is, that when the Assembly meets—and I imagine this is a matter which may easily be discussed in the Assembly—I hope that my noble friend or our representatives will be able to sustain the position they have taken up until now and be able among the 56 nations which form the Assembly to state what the real position is and what difficulties there have been up to that time. I desire to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

BUSINESS OF THE HOUSE.
LORD MARLEY: My Lords, I should like to ask whether there is any statement that can be made as to the business for next week.
EARL STANHOPE: My Lords, all the business for next week, so far as I know, is already on the Paper. I would, however, like to give notice that we propose to ask your Lordships to meet at three o'clock on Tuesday and at three o'clock on Wednesday.
House adjourned at twenty-one minutes past eight o'clock.