§ 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, I beg to move that this Bill be read a second time. Before I deal with the specific proposals of the Bill perhaps your Lordships will allow me to mention the main principles of the Government's meat policy because really it is quite impossible to understand this Bill, its purpose or its method, unless it is read in conjunction with the White Paper on meat policy generally. If your Lordships do so you will see that the situation in the meat market, particularly in the beef market, has led up inevitably to the Bill which is before your Lordships to-day. I do not think it is necessary in this House to stress the need for something to be done in regard to the beef situation. I need only remind your Lordships that whereas in 1930 the index figure for fat cattle was 133 to-day it is 99. It has continued to decline over the last six months during a period when the general agricultural index figure has been rising. As your Lordships are aware, the beef 1137 market affects practically every agricultural district in the country. The proportion of beef to the general output of agricultural produce in Great Britain is something over 16 per cent. and the value of beef sold last year, in spite of the appalling fall in prices, was over £36,000,000.
The present situation has been laid at the door of the Government's policy which attempted to regulate this market by means of quantitative regulation. It has been said that that policy has failed. That policy has not failed. What has happened is that it has not been really possible to work it because there have been certain essential elements in the beef market which it has not been possible to regulate. Up to June this year we were not free to regulate Dominion imports. Therefore, at a time of reduced imports from the Argentine, we have a steadily increasing figure of imports from the Dominions, and notably from New Zealand. In June of this year we regained our freedom. It would have been quite possible then, if we had adhered strictly to our Treaty rights, to impose heavy quantitative regulation on the Dominions accompanied by increased restriction of imports from the Argentine. That, of necessity, would have meant a very severe blow to the trade of those countries, with possible repercussions on the trade of this country. It would also undoubtedly have had serious reactions on relations between the Dominions and this country and the Argentine.
Therefore a fresh proposal was discussed. That proposal, which has been spoken about a great deal in the country, has been called the levy system. The idea of that was that a levy should be taken on all imported meat, a certain amount coming from the Argentine with an agreed preference to Dominion imports, and that the fund thereby established should be used for financing and assisting our beef producers here. That system would of course have had the advantage of enabling this country to continue to benefit from cheap meat imports whilst at the same time it would have been possible to give that freedom of market for which both the Dominions and South American countries have expressed a desire. Of course, even if a levy system were to be instituted we may take it that the countries paying a levy would themselves desire to have some degree of restriction of 1138 imports continued in order to keep a bottom in the market. Of necessity that would be a very limited form of quantitative restriction simply for the purpose of keeping a bottom in the market and not for the purpose of raising prices.
The position is that we are free to take the course of strengthening restrictions but we are not free to impose a levy. As, however, it is apparent that it may well prove in the end—though we have no definite evidence for saying so—to be more acceptable to overseas countries to work on the levy system rather than on the quota system, but at the same time it has not been possible to come to any conclusion on the point, the Government decided that rather than go in with a sledge hammer and insist upon their strict Treaty rights, they would prefer to give to themselves and to overseas countries further time for consideration. Accordingly we have the policy embodied in the present Bill. I want to make this point quite clear because from it your Lordships will see that resort to the method of subsidy is not a measure for the relief of agriculture. If we had been simply concerned with the relief of agriculture we should have utilised another method. It is a measure designed to give further time to settle a problem which must have very grave reactions on our Imperial and foreign relations. Therefore we come to this policy of a subsidy over the six months accompanied by certain moderate restrictions in order to maintain the price. If we are not able in those six months to come to any agreement, then it is of course perfectly clear that our hands will be just as free then as they are to-day.
So much for the main reason which led us to adopt the subsidy policy, a policy which we know has been subjected to considerable criticism. There have been other criticisms levelled at the head of His Majesty's Government. It has been said that at the initiation of the agricultural policy of the present Government it was made very clear that assistance was to be given to the industry only in so far as it was able to demonstrate that its methods of marketing were efficient, and it has been suggested that we are now pursuing a policy of the completely unconditional subsidising of the industry. I would like to assure noble Lords that nothing is further from the truth. We would be the very first to 1139 realise the folly of such a policy. We realise full well that this country would not begin to submit for a moment either to subsidising or protecting for ever such a vital industry as this industry of agriculture without insisting on its working at full efficiency. We also realise, from the point of view of the industry, the terrible insecurity of pursuing such a policy, because if the public would not stand for it, that means that sooner or later the industry would be deprived of that assistance, and men who had been tempted back into the industry would be only let down at a later stage.
We realise what can be done to assist the industry by various efficiency measures. Your Lordships have had before you for some time the Report of the Commission presided over by the noble Lord, Lord Bingley, and I am quite sure that your Lordships would desire me to express on your behalf a tribute to the tremendous work and energy which were put into the preparation and presentation of that Report, and our sense of gratitude to the noble Lord for his masterly analysis of the situation. The noble Lord's Report has been criticised as not presenting a complete meat policy. It is the responsibility of the Government to make up their mind on their final policy for dealing with the situation, but without the tremendous work which was put into that Report it would have been infinitely more difficult to prepare anything.
The noble Lord has mentioned such vital questions as market information, the guarantee of stable and regular supplies to the market, and the necessity for a reorganisation of the market system in this country on a gradual basis. He also referred to a question in which I am myself personally very interested, having had the honour to be Chairman of the Committee of the Economic Council which went into the matter—the question of central slaughtering. There again, the Government are fully aware, of the tremendous savings which could be made by the introduction of such a system. There would be savings in the capital cost of erecting the slaughter-houses, savings in the cost of their running, increased ease in handling home-produced meat if it could be ordered from the dead meat market virtually over the telephone, as can be done in the case of foreign meat at the present moment, and the tremend- 1140 ous value of an improved system of grading which would be rendered possible by such an improvement.
That the Government are not unaware of all this is made perfectly clear by paragraph 9 on page 3 of the White Paper, where it is laid down that an essential function of the Commission which will have to be appointed to help the Government to administer their long-term scheme, will be to co-operate with any body which may be concerned with the improvement of our marketing and slaughtering system. At the same time, just as we realise the tremendous advantages, so we realise the tremendous difficulty of the problems which are connected with this question. We realise all the existing interests which will have to be dealt with, some of them possibly rigorously, but they must be dealt with—and indeed Parliament would not allow anything else to be done—on a fair and a just basis, with proper consideration for the services which they have given in the past and may be able to give in the future.
This brings me once again to the present Bill. I hope I have said enough on the question of the assistance of the industry either by quantitative regulation or by levy, or by the improvement of our measures in the marketing and handling of meat, to show your Lordships that we are fully alive to the necessity for a long-term policy, and that it is only because we realise the importance of such a policy being devised on the very best lines possible, and indeed the importance of Parliament being given adequate time for the consideration of any measures which may be introduced at a later stage, that we now introduce this temporary six months measure. This Bill, as I have already mentioned, gives virtually a straight and perfectly direct subsidy to be repayable out of any levy fund which may be established at a later date if our policy is found able to go in that direction. Accordingly your Lordships will find that, by Clause 1 a Cattle Fund is set up into which a sum not exceeding £3,000,000 is to be paid.
In Clause 2 your Lordships will find provisions for payments out of that Fund, and for payments to be made after such date as is found possible after the end of August. We were asked to put in a 1141 definite date. We hope very much that the payments out of this Fund will not have to be delayed, and we are pressing forward as hard as we can to see that there is no such delay, but I think it would be most undesirable to put a definite date into this Bill at the present moment and run the risk of disappointing producers. Under subsection (2) of Clause 2 will be found the rates of payments that are to be made—namely, not exceeding 5s. per cwt. on live weight and 9s. 4d. on dead weight. The next few subsections have to do with various conditions of payment. Subsection (7) lays it down that every order under the clause shall be laid before the Commons House of Parliament.
Clause 3 brings us to the regulations for the marking of imported cattle, and Clause 4 is an important clause referring to the Cattle Committee, which shall be an advisory body to help the Minister in the administration of this Fund. It is important because I think one can safely say that the personnel of the Cattle Committee will very likely, at a later stage, be turned into the Beef Commission, which will be a most important body, as your Lordships will see from a study of the White Paper. Clause 5 deals with the interpretation of the producer of cattle. It includes also a definition of the cattle on which payments will be made. Your Lordships will see that cow beef has been left out, and I think it will be generally agreed that what we want to encourage in this country is the production of first class beef, and that a very great deal of harm undoubtedly has been done to the beef market by the proportion of cow beef that is being sold, and indeed, because of the situation in the dairy world, has to be sold.
That concludes a brief description of the Bill, but if your Lordships will allow me just a few minutes more I would like to deal with certain details of administration. I am afraid that the full details cannot be announced yet, as the Advisory Committee are still sitting, and I do not think we shall get their final Report before to-morrow; but I can assure your Lordships that a public announcement will be made before the House rises, at any rate in another place. I have already told your Lordships that under Clause 4 of the Bill a Cattle Committee will be 1142 appointed. The scheme for administration is being worked out with the assistance of all the various interests concerned—the farmers, the dealers, the auctioneers and the market authorities— and I would like to take this opportunity on behalf of the Department of thanking those interests for the whole-hearted assistance which they have given to us.
Clause 2 of the Bill provides, as I have told your Lordships, for payments out of the Cattle Fund, and it will be laid down that the various classes of live cattle or carcases will have to comply with standards prescribed in regulations made under subsection. (1) of Clause 2. The scheme that is being devised will, therefore, provide for the examination and weighing of the animals or carcases in question, for the recording of their weights, and for certification that they have complied with the provisions laid down. Those certificates will provide the necessary evidence on which payment will be made to the respective producers from the Cattle Fund. The system of examination and certification will interfere as little as possible with the normal channels of trade, and it will cover the various methods of sale of animals. It is estimated that one million animals will be dealt with under the Bill, and that about 20 per cent, of the marketings will be on a dead-weight basis in the large towns.
Approved centres will be established at which animals may be presented for examination, weighing and certification. Centres at which payment will be made on a live-weight basis will have to be equipped with adequate weighing facilities and penning and tying accommodation. The method of marking of imported cattle will be prescribed in an order made under Clause 3. In addition all animals certified by the certifying authority will have to be permanently marked in such a manner as to prevent an animal from being certified, and consequently payment being made in respect of that animal, more than once. In order to qualify for payment the animal will need to be certified by the certifying authority as being an animal of the prescribed class and standard, and the animal must have been sold by the producer claiming payment. These are the main purposes and methods that have been adopted for dealing with the 1143 present situation in the meat market, and I hope your Lordships will agree that the Government have adopted the wisest and most statesmanlike method of proceeding. We have proceeded in such a manner as to make it possible to give immediate relief, whilst not jeopardising our interests and our relations with foreign countries, and also giving ourselves time to prepare for Parliament, at a later stage, full, long-term proposals for dealing with the situation. I beg to move.
§ Moved, That the Bill be now read 2a.—(Earl De La Warr.)
§ LORD MARLEY
My Lords, the noble Earl has explained very clearly the general provisions of this Bill, and I am quite certain that every member of this House will realise that it is not the fault of the Ministry of Agriculture that we are in the present difficulties in the home meat trade of this country. It arises, of course, from the fact that you have got throughout the world unregulated production, not in touch with the consuming needs of the people in the various countries. We have got production merely for the purposes of private profit, without any consideration as to the human needs of the various consumers of the countries of the world, and such regulation as has been applied, and for which this Government must take some responsibility, has increased the difficulties of the Ministry of Agriculture. The result is that once again the Ministry found itself with child, and the Bill, after considerable labour, is now before this House.
The difficulties of the Ministry, of course, were rather skirted over by the noble Earl. It is true that we have difficulties with Argentine imports, but he did not mention that the reason for these difficulties is that there are large British investments in the Argentine, the interest upon which can only be paid by exports of beef, of which this country takes the principal proportion, and that if, therefore, you start regulating the imports of Argentine beef it merely means that the investors in Argentine stocks will get a smaller return on their investments and there will be a great many breakdowns in payments of dividend and interest. So in a way the Ministry is up against those citizens of this country who have invested their money in the Argen- 1144 tine. Again, as regards the Dominions we are tied by the leg by the Ottawa decisions, which have done so much to increase the difficulties of home producers here, and which the Ministry of Agriculture is now trying to get round with the minimum of disturbance. The third trouble of the Ministry, which the Minister did not really mention adequately, was the fact that there has been continuously for the last six or seven years a diminution in the consumption of beef. Speaking from memory it has gone down from about 68 lbs. to 59 lbs. per head, that is, a reduction of about 10 per cent., during the past six years. That is very serious. Of course, the reason for it is the decreased purchasing power of the workers, whose wages are less owing to the immense volume of unemployment resulting from the general economic situation, which has been getting worse instead of better.
The proposals of the Government in this situation are not satisfactory to us on this side of the House. The Government first of all proposed a levy on imports, to be used to pay a subsidy on home-produced beef. That means that the man who could only afford to buy the cheaper form of imported meat would have to pay more for his meat and bear on his shoulders the cost of reducing the price of home-produced meat for those fortunate enough to be able to afford that better commodity. But this levy cannot be imposed for the simple reason that we are tied by Ottawa as regards the Dominions until 1937—I think I am right—and as regards an agreement we have with the Argentine until 1936. So that the levy cannot in fact be employed for two or three years, and we are told that a measure to deal with the industry for six months will enable something to be done to carry it on over three years.
Then we are told that we now have freedom to regulate imports, and of course that is a very necessary aspect of reorganisation; but the Minister makes no mention of the fact that it is necessary that reorganisation should accompany regulation of imports. I listened very carefully, but I do not think the noble Earl mentioned that there was to be prepared a scheme for reorganisation which will work in co-operation with the regulation of imports and secure that the one did not apply without the other. I know he mentioned it casually, but he 1145 did not mention any definite arrangement by the Government for carrying that into effect. He said that the £3,000,000 subsidy was only to be temporary, and he told us that he hoped that in six months they would be able to apply either regulation of imports by agreement, or regulation of imports with a levy by agreement, or regulation of imports without any agreement. Well, I cannot help thinking that he must be very optimistic if he thinks that the Dominions and the Argentine are prepared to accept his invitation to commit economic suicide, and I do not believe they will do it. But, of course, if the Government can do this, that is admirable, and for that reason I think that there is a justification in the suggestion made by the Minister that they are entitled to something to deal with the industry during the six months while they are trying this out.
But for a moment I want to look at the whole industry of agriculture from a slightly different angle and ask whether the Ministry is not being pulled upon by this and that aspect of production, to subsidise first one side, then to help another, without considering the industry as a whole; and whether it would not be wise to concentrate only on what can be economically produced in this country and not attempt to subsidise various other sides of agricultural production. The whole of agriculture was helped by the derating policy some years ago under which agricultural land—I speak from memory—pays no rates. Then we have had quite recently in your Lordships' House the beet sugar subsidy, a quite uneconomic subsidy; we have had the wheat subsidy, another uneconomic side of British production, because wheat can be produced far more cheaply and effectively in other countries. Fortunately, we shall hear a little, I hope, about pigs this afternoon, because I look upon pigs as of vital importance to this country and as one side of production in which we ought, with adequate organisation and help, to be able to compete successfully with the whole of the rest of the world. Potatoes, vegetables and so on, and milk above all, are the sides of agricultural production upon which we ought to concentrate.
I am not at all sure whether we are wise to throw millions of pounds away on attempting to extend the radius within which meat production is economic- 1146 ally possible in this country, because we believe that this is, to some extent at least, another method of subsidising an aspect of agricultural production which is really uneconomic, and which I think, though I am not absolutely certain, will need continuous help if it is to be carried through, in face of the competition of the Dominions and the Argentine, both of which produce on a much more economic basis. Secondly, we are against this measure because we believe that that side of the agricultural position has not been adequately examined. Thirdly, we are against it because—and I do wish the Ministry would realise that this is a serious complaint—while once again these subsidies are dished up no share is earmarked for agricultural workers.
The reply of the Minister to that is that the agricultural workers are receiving a weekly wage of 31s. 6d., or something like that; that as a matter of fact, with the fall in prices, they are only entitled to about 25s., and therefore this is going to make it possible for the agricultural wage at 31s. 6d. to be an economic wage. I do not think that is good enough. We are a very rich country, the second richest in the world; we are able from our industrial productivity to give millions of pounds in subsidies to agriculture—I think agriculture has had £20,000,000 handed over within the last few weeks. If those subsidies are given, then I think we are entitled to say that a portion of them shall go to securing a proper standard of life for the agricultural workers. There is no mention of that. The Government entirely ignore the difficulties under which they are living, and I think that they are not being fair to those who, to use the noble Earl's own words, are attempting to scratch a living from the hardships of agricultural life. I think that the Ministry, in producing these various subsidies, should have secured that a portion at least went to the agricultural labourers.
Finally, I think your Lordships will willingly admit—perhaps it is going too far to say "willingly," but I hope you will admit that it is becoming increasingly difficult to run agriculture under the system of private enterprise. Already there is constant interference in every form—import duties, subsidies to aid here and subsidies to aid there—and I 1147 cannot help thinking that the suggestion made a good many years ago by the noble Viscount, Lord Halifax, when I think he was still Mr. Wood, that nationalisation of the agricultural industry might very well come by a side wind, is receiving some justification in view of the constant interference with the industry which private enterprise has rendered necessary in this country.
THE MARQUESS OF LOTHIAN
My Lords, the noble Earl in introducing the measure described it as an emergency measure, a measure designed to give the Government six months time, perhaps a little more, in which to think out their policy. I am prepared to support the measure as an emergency measure, as I admit that in the meat industry at this moment there is an emergency, but I venture to think the emergency is itself the result of the Government's own policy and that the emergency will get progressively worse unless that policy is radically changed. The National Government was formed in 1931, in the face of a grave financial emergency, with a view to straightening out the economic life of the country. The principal cause of the troubles from which this country suffered at that time was the dislocation of international trade as the result of economic nationalism in all its forms. The Party of which I have the honour to be a member supported that Government as long as it was dealing with affairs on an emergency basis, but since Ottawa the policy of the Government, so far from tackling that root cause of the nation's troubles, has progressively and steadily gone further and further in the direction of economic nationalism, and we are reaping, inevitably and inexorably, the consequences of that policy.
Why is that so? Up to 1913 there was a reasonable balance between production and consumption in the world markets. On the whole, people were producing the things for which there was a market, and prices in the market were making those necessary adjustments without which prices begin to fall and production gets in dislocation. The effect of high protection, the effect of the War, has been progressively to dislocate the relations between supply and demand in the world as a whole. The Leader of this House was eloquent the other day about the action 1148 which the Government had taken in protecting producers in this country. He was not nearly so convincing on the point—indeed he never mentioned the fact—that this policy was destroying hour by hour the markets in which producers had to sell their goods. Just consider what is happening in the world. Every single country to-day is trying by artificial means to produce the same things—wheat, sugar, meat, iron and steel, textiles, almost every commodity that exists—with the result that you have got a tremendous glut in the market and tremendous unemployment. You have got everybody trying to produce the same things because of the artificial actions of Governments in forcing them to do so, with the inevitable result that the market in which these goods have to be sold, with the 30,000,000 unemployed, can no longer consume.
That is the root and basic cause of the troubles of the world. This is what we see in the policy of the Government so far as agriculture is concerned: When there is immense over-production of wheat in the world we are aggravating and increasing production in this country which is not particularly suited for the production of wheat; when, owing to scientific invention, the production of sugar in the cheapest possible way is going up by leaps and bounds, we have immense subsidies for assisting the production of sugar in this country, a wholly uneconomic industry; we have an extension of bacon production although the world already can amply supply its needs; and now we are beginning to do the same thing with meat in circumstances which seem to me to promise very little hope of success.
I know the answer will be made: "Look at the figures of unemployment; they have gone down by 600,000 people in the last few years."Why is that? There are certain short-dated results of protection, which are usually far more than balanced by the long-distance disadvantages. Admittedly there are short-dated advantages from protection in this country, and the country at this moment has been gaining those short-dated advantages from employment in small industries established under the protection of the tariff. What is the net result? You have got world trade so reduced, world production and consumption so stuck in immovable barriers, that there 1149 is no prospect of getting the thing right so long as these barriers exist. The only real remedy for this country or any other is to begin once more to allow production and consumption to work out their natural relationship to one another through the operation of price in a free market. There is no other way of doing it.
Take the case of the meat industry itself. There were some very interesting figures published in a very interesting pamphlet called Planning, published by "P.E.P." a few weeks ago. This one was published on April 24, 1934. It is numbered 25, and is, I think, available to any noble Lord who may want to get it. It contains an extremely interesting analysis of the consumption of British agricultural products in the British home market. What is the result of these figures, to which I see no answer, and this analysis, which seems to be probably true? That the British home agricultural products are high-priced because they are fresh; that they are bought in proportion to the well-being of the consumer; that the richer section of the community buys a very large proportion of them, the poor less, and the very poor hardly any at all. The poor consumer buys either the cheap foreign product or some substitute product. The conclusion derived from these facts is that however much you protect British agriculture, whatever duties you put on foreign agricultural products or Dominion agricultural products, however high you raise the price of these articles in the home market, it will not benefit British agriculture because the money is not in the pockets of the people to consume these products unless they are themselves employed at adequate wages.
Therefore the real remedy for British agriculture is to secure an adequate market for the products of the industrial population of this country. In proportion as you did that in the past you had a good market for agricultural products; in so far as you do not do that you have a poor market. Protection is no remedy. If that is so, the policy of this Government is directed towards destroying the markets for our industrial products which alone will pay the wages that will enable the people of this country to pay for the home-grown products of British agriculture. I would venture to ask the Gov- 1150 ernment whether they would reconsider a little the long-term policy in which they are now engaged, and see whether they cannot, in a much more resolute and formidable manner than hitherto, tackle that problem with a view to bringing about a. reasonable balance between supply and demand of the world and at home.
Let me give a few more figures as to what I can only call the rake's progress of the National Government—an inevitable consequence of the policy upon which it has embarked ever since the days of Ottawa. I have here a list of the more recent subsidies—a very formidable list—Beet sugar, estimate for 1934–35, £5,250,000; wheat payments, estimate for year ending June, 1934, £7,000,000; milk in various forms, annual estimates between £2,000,000 and £3,000,000—I think that is correct—meat, under this Bill, £3,000,000; oil from coal, £1,000,000; subsidy for the Cunarders, contingent payment, about £9,500,000; tramp shipping, £2,000,0000; a total of somewhere about £30,000,000. This, I would remind your Lordships, is expenditure by a Government dedicated to putting our finances in order. Consider why these subsidies are necessary. The noble Lord, Lord Essendon, one of the great shipping leaders of this country, making a speech only yesterday gave an indication of the consequences of this policy and confirmed that which noble Lords on this Bench have repeatedly pointed out in this House—namely, that if you protect British industry you destroy shipping.
How this is actually operating to-day and why this £2,000,000 is necessary, and will inexorably go on year after year, is made clear by the noble Lord, Lord Essendon, who said: "Unfortunately the Government have introduced a series of restrictive quotas, with the result that our shippers are compelled to restrict their output and our ships are consequently unable to obtain the cargoes which they have hitherto carried. If the policy achieved its purpose of increasing the price of home-grown meat, and it was merely a question of the farmer reaping advantages commensurate to the injury inflicted upon the shipping industry, then I imagine it would resolve itself into a matter of deciding whether the advantages outweigh the disadvantages. But we have the authority of the Lord President of the Council for saying that the Government's policy has failed. Quoting from a speech made only last month, that gentleman stated in reference to beef that ' it was an astonishing 1151 thing that in spite of quotas little or no success, and certainly no permanent success, had attended their attempts to raise prices.'
The facts are that in the early part of 1933 before quotas were introduced the Smithfield average market price of chilled beef imported from Argentina was 419/32d. per lb., and of home-killed beef was 7 3/32d. The respective prices a year later were 4 9/32d. and 6 19/32d., from which it will be seen that the price of the home-produced meat was actually lower than it was previously, and Argentine beef is still considerably cheaper than the home product. Therefore, without doing any good whatever to the farmer, grave injury has been done to other industries, and the measure of the injury suffered by the shipping industry can be estimated from the fact that the restrictions imposed and announced will represent a loss of freight in the first two years of controlled imports of over £500,000 sterling. That is only part of the injury, as the restrictions have also involved loss of employment for officers, engineers and seamen, and our export manufacturers have suffered from the reduced buying power of Argentina.
He went on to say:
" The Government's new beef subsidy policy does nothing to ease the situation so far as shipping is concerned. On the contrary, the position is aggravated by retention and possible extension of the restrictive quotas during the short-term subsidy period. In the long-term policy the Government appear to have accepted the policy of a levy on meat imports to be used as a fund wherewith to subsidise the stock farmer at home, but with this fatal objection, that restriction of imports is still to be maintained."
Such is the effect of this policy on the main arteries of communication with this country.
I have given a list of about £30,000,000 of subsidies. Let us consider for a moment what is happening in another field, the field of defence. Only last week it was announced that between £20,000,000 and £40,000,000 was going to be spent in extending the Royal Air Force. I should like to ask the Leader of the House whether he does not estimate that at least £50,000,000 will have to be spent in reorganising and reequipping the Army. We have fifteen battleships which are now obsolescent and within a few years, unless there is some international agreement, we shall have to replace them at a minimum cost of £75,000,000. There, upon the Air Force, the Navy and the Army, you are faced with an expenditure of something like £200,000,000. In addition, there are the £30,000 already granted in subsidies and further subsidies will be inevitable under the policy which 1152 the Government are now pursuing. I would ask the House to consider where this is going to end. Where is that 6d. off the Income Tax to come from? Where is the balanced Budget? Where are the restored cuts to come from under this policy? I would ask them whether the devotion they have shown to a policy based on restriction, which is based on economic and political nationalism in all its forms, is a sound policy, and whether they should not adopt, with far more resolution than they have adopted hitherto, a policy based on international action by means of which they could bring down these tariffs. I would ask them whether they could not reach an international agreement in order to balance the forces of supply and demand in the world, and abandon a policy the only effect of which must be to produce slump prices and unemployment in every country in the world.
§ LORD BINGLEY
My Lords, my only excuse for venturing to offer a few remarks this afternoon on this subject is that I have had to spend a considerable time enquiring into some of these questions and I have a great sense of the difficulties of the problems which are involved. I will not try to follow the noble Marquess in his very interesting disquisition upon the economic possibilities and theories on which alternative policies might be developed, but I should like to know, if he really carried out to the full the suggestions that he has made, how he could contemplate the continuance of anything like a prosperous agriculture in this country. He has definitely told us that there is overproduction in the world. He seemed to me to suggest that it was not vital to endeavour to subsidise or help the production of meat in this country, but that it would have been far better for us to realise that we were an industrial country and to develop our export trade on industrial lines and allow agriculture, as far as I understood him, to look after itself. If we are to have any hope for British agriculture at all, I think we must realise that without the live-stock industry agriculture practically ceases in this country. The farmer may grow what crops he likes according to the conditions that suit him, but on every farm there must be live stock, and if the live-stock industry goes down the whole 1153 agricultural industry of this country goes down with it.
The noble Lord, Lord Marley, seemed to suggest that we could carry on agriculture without troubling much about live stock, and said, as I understood him, that meat production was non-economical. I think the answer is that as long as you intend to maintain an agricultural industry in this country you must maintain what is the keystone of agriculture—namely, the live-stock industry. I am sure we all regret that there should be any element of subsidy. Nobody likes to have to remedy any situation merely by the use of a subsidy, but it does seem to be the only practical method of immediate application. I have not heard either from the noble Lord, Lord Marley, or from the noble Marquess anything that seems to me to offer an immediate solution of what is admittedly a very pressing need. This will save those who have cattle coming off the grass this autumn from the severe loss which undoubtedly would fall upon them if no help was given. We hope that the time for negotiation which will be afforded by it will result in a better arrangement by which a more prosperous position can emerge.
I must say that the objections which the noble Lord, Lord Marley, seemed to make were very much milder than those which I happened to hear made in another place. He certainly did suggest that it was a pity that part of a subsidy of this sort was not definitely earmarked for the workers in the industry. In another place the argument was carried a good deal further. It was said that there were objections to any subsidy being paid to private persons, and a pathetic picture was drawn by the chief agricultural expert of the Labour Opposition, who said: "Just fancy the position in which some honourable members of the House may be when possibly at Christmas they find themselves with a cheque for £30 which they feel they are really not entitled to and of which they are in no immediate need." I suggest that if there is this objection and these gentlemen are so well off that they do not need a cheque for that amount, they can always devote it to those charitable purposes to which I suppose the surplus income of members would be naturally devoted. I should have no such conscientious scruple in the matter, nor, I think, would any cattle producer, 1154 because he could fairly set off the severe losses suffered for a number of years against any such payment.
The objection has. also been made—I think the noble Lord, Lord Marley, suggested it—that by this method we are definitely going to tax meat which the poorer classes require in order to provide a better supply of the meat consumed by the wealthy. There is a distinct fallacy involved in that argument. It is by no means the poorer classes who are so determined to eat foreign meat. Some of the keenest demands for British beef come from the East End of London and from the North of England and the mining districts. When your Lordships go into those expensive restaurants in which some people think you spend the whole of your time, you will be going to places which, although you may not know it, are the chief offenders in putting a large supply of foreign meat upon the market. If by a subsidy or levy you make it possible to produce British meat without serious loss at the present low prices, then you are doing a service to the poorer classes because you are making it more possible for them to get the British meat which they want without the price being increased. Therefore, when your Lordships find your bills in expensive restaurants increased as the result of a levy on foreign meat, you can feel gratified that you are helping the poor British workman to get a bit of good British beef which otherwise might have cost him more, and which it might have been impossible to produce at all under the conditions which now prevail.
It has also been suggested that it is not right to grant a subsidy without previous reorganisation of the industry. The noble Earl has dealt partly with that point. I myself would be very much disappointed if I thought there would be no reorganisation, but it must be perfectly obvious to anybody who has taken the trouble to read the Report issued by the Fat Stock Commission that reorganisation in everything connected with agriculture is bound to take a very considerable time. Unless this particular branch of the agricultural industry is assisted quickly there will be no industry left to reorganise.
I am glad that the Government have decided on the plan of supplementing their import regulations, if they can get agreement to that being done, by a levy 1155 which was the course recommended by the Fat Stock Commission. I am very glad that import restrictions are not to be put out of the picture. Although I know that in this matter I am up against the opinion of many people, I think that if you are to have a satisfactory result you must prevent that glut in the market which has been the cause of prices being so low. Unless you can restrict importations and prevent that glut continuing you have no chance, whatever you may propose, of overcoming the difficulties which that glut has produced. There was a particularly good instance of that in the coal subsidy. When the Government of the day gave a subsidy to coal owners none of the subsidy, I believe, went to help the coal owners. The whole of it was returned to the general public who had paid it. The moment the subsidy had been given all the coal owners started working up their coal against each other and the competition was such that prices dropped and the subsidy did them no good. The only people who gained any benefit—except the miners whose wages they were enabled to pay during the period of the subsidy—were the general public. Coal was cheaper owing to the intensive competition between coal owners, who themselves were losers rather than gainers by it. That was because the supply was increased and there was no regulation to keep supply and demand balanced. The same thing would certainly happen if you tried to pay a levy in this case without any regulation to make sure that supply and demand were adequately balanced.
The basis of the distribution of the levy or subsidy is to be live weight or dead weight as the case may be. There is no doubt, I think, that the dead-weight basis is much the more satisfactory. Then you get the actual killing weight, which is more satisfactory to the consumer, because the subsidy is paid on the meat coming to him, and it is more satisfactory to the farmer because it will be paid on the animal that kills best and he will be encouraged to produce animals of that class. Here, however, we come up against the slaughter-house question. It is not possible to distribute the subsidy on the dead-weight basis all through the country because of the large number of small slaughter-houses that exist especially in the country districts. The diffi- 1156 culty of giving certificates through small slaughter-houses is obvious. Until conditions in relation to slaughter-houses are improved, the subsidy must be distributed either on live weight or dead weight as conditions allow. There is no doubt that slaughter-house policy really is the key to the situation. It will involve much time and much expense to bring about any real change in the present position.
There is no doubt that at present municipal abattoirs are very unsatisfactory. Many big towns have spent large sums of money on building abattoirs and the result has not been a very great success. They have been built mainly for sanitary advantage—that has been the principal thing in the minds of those who have constructed them—and it has been necessary to tempt the butchers to use them. Therefore the rates which have been charged have been uneconomic and they have been a distinct loss to the municipalities. You get the system of private slaughtering gangs and you get a great waste of by-products in consequence. The whole system requires to be looked into very carefully. I have no doubt that if we had a dictator in this country we should scrap all these slaughtering arrangements and make a completely clean sweep of the whole thing. No doubt on the bright and blessed day when Sir Stafford Cripps is ruling in this country it may be possible to do that, but as we are, we have got to deal gently with these local authorities, who are of course proud of their abattoirs and who have spent a great deal upon them.
We have also to consider the opinion of farmers, who are very much afraid of any central slaughtering policy, and, especially in the country districts, think that it will mean that they will have to send their stock a great distance and will also be subjected to very serious, troublesome and harassing regulations. The Fat Stock Commission recommended that there should be a Slaughter-house Commission set up which should advise with regard to all future construction. I am sure that if we can gradually get an improvement in central slaughter-houses—slaughter-houses where there is great concentration of population and where large quantities of cattle can be gathered—gradually the farmer will see the advantage which he will get thereby through the diminution of the waste of 1157 by-products, and he will be able also to see the advantage which it is to him to use these central facilities and the good which will come to him by doing so.
I have kept your Lordships too long-already and must not take any more of your time. May I, therefore, put the final point which I should like to make? I was very glad to hear the assurance which the noble Earl gave us on behalf of the Government that there is to be a long-term policy. I do hope that a national policy of better marketing will be developed. You cannot only restrict imports and subsidise home production, though I am afraid that that is as far as many farmers want us to go. I think some of them may be disappointed if they think that anything further in the way of regulation or restriction of their industry is going to be carried out, but if they take the long view, they cannot fail to see that the production of beef in this country does need better organisation. There are unnecessary costs to cut out. There are superfluous small markets. There is great need for a better intelligence system. When you compare this country with the United States or Canada, or other countries where information as to the trend of prices, the question of demand and supply and so on are broadcasted, telephoned, and issued all over the country by regular organisations, you realise how much we fall short in the intelligence system that we have in this country. We want to bring the producer closer to the consumer. There is far too much travelling of stock about the country, through middlemen of all kinds, at all stages, all causing unnecessary cost which eventually reduces the price which the producer can get for his animal.
I do hope that the ideal which will be worked to, though it will be a long time before we can reach it in the country districts, will be a system whereby the great bulk of our cattle will be slaughtered in central abattoirs. By that system the full value of the hides, fat and all other by-products which are at present so largely wasted will be saved for the advantage of the producer of the animal. By that system carcases can be graded dead by an official grader, and the farmer can receive a price which he has agreed by post with the man to whom he is selling the cattle, the farmer agree- 1158 ing to take the graded price and the wholesale butcher merely working on a description of the class of cattle that the farmer has to sell. That system will reduce unnecessary costs of auctions and of dealers and many other things which are at present handicapping the trade. All that is a long way off and it may take a long time for it to happen, but I am sure that it is well worth considering. I hope that the Government will do their best to develop a far better system of scientific production and scientific organisation of this industry as a result to follow from this Bill. Meanwhile I welcome the Bill as being the first step towards definite help being given to this harassed industry, and I only hope that other steps will follow to put it on a firm basis of better prosperity and production.
§ VISCOUNT ASTOR
My Lords, those who had the pleasure of sitting in the House of Commons with Colonel George Lane-Fox were, I am sure, gratified when they read in the newspapers some time ago that he had been promoted to your Lordships' House. I am sure that I am only expressing the views of all here present when I say that the contribution which he has made to to-day's deliberations indicates that in him we shall always have a speaker who speaks after careful thought and preparation and with wisdom and experience.
The other day we were discussing a marketing scheme, but we had before us all the time a White Paper. Listening to all the speakers who have gone before me, it was quite obvious that, although there was before us quite a small Bill, there was before our minds in fact another White Paper recently published by the Government dealing with a long-term policy. I agree entirely with the noble Lord who has just sat down that live stock is really the corner stone of British agriculture. I am afraid that I disagree with the noble Lord, Lord Marley, who apparently classifies live stock with sugar as being an uneconomical branch of agriculture which is not suited to this country.
§ LORD MARLEY
I think I ought to explain that. What I said was that I did not want to extend the radius of meat production in this country in uneconomic directions; that is to say, that there may be areas where meat production is 1159 not suited to this country, by reason of the pasture, by reason of buildings, and by reason of various causes.
§ VISCOUNT ASTOR
I am very glad that the noble Lord has explained what he had in mind, because I should be very sorry if anybody occupying his responsible position were to classify live stock as being one of the more uneconomical branches of British agriculture. I should myself have thought that it was one of the essential branches suited to this country, for reasons into which I need not go.
I read through, I think, the whole of the debate in another place, and it seemed to me that there were two criticisms present in the minds of those who attacked the policy of the Government. One seemed to represent what I call the shadow of the food-tax bogy, and the other arose from a desire to reorganise the industry. It seems to me that in a protectionist England it is useless to say that agriculture alone of all the industries must work on the basis of free trade. It does seem to me that in a protectionist England we have got somehow or other to protect agriculture. It is then a question which particular method we adopt. There are various instruments: subsidies, levies, quotas, tariffs. The object of all of them, it seems to me, is to put more money into the fanner's pocket. In a way, an import board or quota or whatever it may be is just as much a food tax as a tariff duty. It is an additional payment which the public has to make in order to increase the income which goes into the farmer's pocket.
As regards reorganisation, very little—I do not think anything—has been said this afternoon on what I think is one of the essentials of the live-stock industry—namely, the necessity to try to improve our breeding stock. I believe that this year a Bill dealing with what are called scrub bulls comes into operation. I only regret that it did not come into operation years ago. I think the live-stock industry would have been on a far sounder footing if it had come into operation at the same time as such a Bill was introduced into Ireland. I am apprehensive, where agriculture is concerned, when I hear the philosophy of what I call organisation, reorganisation, planning, carried to its extreme. The noble Lord, 1160 Lord Marley, said quite clearly that he looked forward to a time when agriculture would be nationalised. As one who has spent a certain amount of time trying to produce food, or with farmers, it seems to me that agriculture is the last industry that can possibly be nationalised. You are dealing with so many uncontrollable factors, including weather. Having said that I wish to say that I am a little apprehensive when I hear so many of my colleagues, belonging to my Party, repeating the words "organised and reorganised planning." Obviously, some reorganisation is necessary, but anything like the reorganisation which is contemplated by noble Lords belonging to the Labour Party I think, myself, might quite easily be disastrous to British agriculture.
As your Lordships are aware, I have always been a critic of what is called the Ottawa arrangement, speaking from the point of view of British agriculture. In the same way, as your Lordships are aware, I have always been a critic of what is called the "quota policy" which has hitherto been used to protect our live stock, and the more I see of it the less, quite frankly, I like the quota policy. To-day we have been told that the quota has not yet saved beef. I rather think that in another place the Minister claimed that the quota policy had been a success as far as mutton and lamb were concerned—that the good prices which had been obtained for mutton and lamb were due to the quota. My Lords, Australia and New Zealand in 1933 did not supply their quota, but were 7 per cent. below their quota, and the increase in prices was due to a natural shortage and not to an artificial quota, and in so far as mutton and lamb are prospering to-day it is not the result of the quota policy, but is the result of the fact that exporting countries were not able to flood this country as they have been on other occasions.
Let me just take that commodity and see what it means in terms of the quota. One of the reasons why I have always criticised the quota is that it seems to hit the consumer, the general public, most, and to give in compensation the least benefit to the farmer. Let me take imports duing the first five months of this year, and of 1933. In 1933 we imported in the first five months 3,360,000 cwts. of 1161 mutton, valued at £7,400,000. This year, in the corresponding period, we imported 3,070,000 cwts. of mutton, that is to say, 290,000 cwts. less, but paid £8,200,000, or £800,000 more. That is to say that because of our quota policy we paid £800,000, or nearly £1,000,000, more for nearly 300,000 cwts. less.
EARL DE LA WARE
I thought the noble Viscount said that the rise in prices had nothing to do with the quota.
§ VISCOUNT ASTOR
I am comparing the two, and the point I am now making is that because you have a quota, instead of a tariff duty or a levy, the increase in price hits the consumer but does not benefit the consumer as a taxpayer by relieving the Treasury or the Exchequer, and does not benefit the British farmer. Exactly the same thing happened with regard to bacon. The price of bacon and ham increased by 2d. per lb., and owing to the quota something like £10,000,000 has gone out of the country to foreign producers of bacon, while the British housewife is paying more for a smaller quantity of bacon, but the British farmer has not received a compensating advantage, and from the point of view of the Treasury or the Exchequer we are not getting the contribution for the relief of the taxpayer that we should get if we had a tariff duty or a levy. I am trying to make the point that the quota, as a form of protection and as compared with a tariff duty or a levy, gives less benefit to the farmers of the country and does it at the greatest cost to the public. This seems to be our experience of recent years.
I want to say just a word on what has been present in the minds of all previous speakers—namely, a long-term policy. I think it is right that we should be discussing a long-term policy, because this is the last opportunity we shall have for some months of an agricultural debate, and I do not think we have had one in this House for some little time. So far as I understand it, the Government are hoping to be able to introduce a policy of a levy plus a subsidy, and I hope that that will be possible. I call it a levy to distinguish it from an import duty, which goes direct to the Treasury or the Exchequer. A levy differs from a tariff duty in that the proceeds of a tariff duty would go direct to the Exchequer, whereas the Government pro- 1162 pose, I understand, if they can, to transmit the result of the levy direct to the farmer as a subsidy.
Now I want to say a word about the policy referred to by Lord Bingley— namely, the policy of central slaughter-houses or abattoirs. As I understand it the proposal is that we should gradually extinguish all our smaller slaughterhouses, and replace them by a limited number of large centralised slaughter-houses or abattoirs. I have read through the Reports of the Committees presided over by the noble Earl and Lord Bingley. The noble Earl's Committee may have had overwhelming evidence in favour of or justifying this policy, but they have not reproduced that evidence, but merely given it as their opinion that a centralised slaughter-house system would be beneficial, and in several parts of their Report they try to answer the objections made to this policy by people who came to give evidence. The Committee of which Lord Bingley was Chairman also did not reproduce the evidence and arguments in favour of this policy. What are the economic arguments claimed in favour of the policy? It is difficult, I realise, to say definitely the advantage per beast, but I understand that the noble Earl's Committee estimated that something under 15s. per beast might be gained by dealing with by-products; that is to say, something less than ½d. per lb. on a 600 lbs. carcase. I do not quite know on what they base this estimate.
They refer to the experience of the Chicago slaughter-houses or to the frigorificos of South America, but in those slaughter-houses I understand that something like 1,000 up to 3,000 head of cattle pass through every day. Obviously, there are tremendous opportunities for economy if you are dealing with numbers of that magnitude. But what about this country? Where are we to put these central slaughter-houses? Let me, by way of illustrating the difference in the problem, assume that we gave a slaughter-house to a consuming centre of 20,000 people. A consuming centre of 20,000 people, with five days slaughter in the week, would dispose of nine head of cattle a day, and forty-five sheep and eight pigs. It is quite obvious that, with nine head of cattle a day, you cannot effect economies worth talking about. If you double, or treble, or quadruple the 1163 population, you still do not get near the figures on which, it seems to me, the case for economy is based. I have been to Chicago myself, and I have seen the stream of cattle going through, and I know perfectly well that there is no place in England where you can contemplate a flow of cattle of that magnitude. It seems to me that our problem is entirely different from the problem of Chicago.
What, if any, are the dangers associated with the policy of central slaughter-houses? Why is it that people buy English meat? What is the advantage of English meat over imported meat? Surely, its freshness—and only freshness. I think that is practically the only advantage which we have over imported meat. Where is the largest amount of fresh meat eaten? It is not in London or the largest cities, it is in the main in the small towns and in the rural areas. Now if the butchers in the small towns and rural areas have to get their joints from distant large cities, they will lose the incentive which they now have to get fresh joints, and they will get those more uniform, standardised joints which are imported chilled from other countries. It seems to me that there is a real risk to the live-stock industry associated with this policy of central slaughter-houses. People buy English meat because of its freshness, because of its bloom, and that is worth money. The noble Earl referred to cow beef. To-day cow beef of first quality is fetching 1d. more per lb. than imported chilled meat. Cow beef of second quality is fetching as much as imported chilled meat. Why is that? It is because it is fresh. The best fresh meat to-day is fetching something like 4d. per lb. more than imported chilled. There is a real danger lest we lose that advantage of freshness through developing this system of central slaughter-houses.
I gather from the Report of the noble Earl's Committee that some of the witnessess who appeared before them had that fear in mind. The noble Earl's Committee replied to that fear. They said:If … it should be expedient to hold meat in store for longer periods, some fall in price might occur. For the ' bloom ' might be lost, and this ' bloom ' … is apparently highly valued by the housewife." That is a statement of fact. They add:On the other hand, 'hanging' … definitely improves the eating quality of the meat. In the long run, we think that the latter factor is likely to prove of greater importance.1164 Supposing that the noble Earl's Committee were wrong. Supposing the housewife prefers the bloom. Supposing, when she does not get fresh meat, she buys imported chilled. Supposing you develop the taste for chilled imported meat. You may by this policy be giving a serious blow to what we have agreed is the corner-stone of British agriculture. Freshness is worth from £2 to £4 per carcase to the farmer. Are we to risk losing that for a possible gain of 15s., 20s., 30s. per carcase? Those are hypothetical advantages, and we are endangering a very real benefit—namely, that £2, £3 or £4 a carcase, which is now willingly paid by the purchaser for fresh meat. Then we are told that if there were a system of central slaughter-houses we should be able to deal with the inferior cuts by tinning them and preserving them. But we do not want to promote the habit of eating tinned meat, because then people would be buying and eating more imported meat and less fresh meat.
There is another danger. The more we centralise the slaughtering of cattle in a few slaughter-houses the easier it is going to be for the butchers to fix the price. Supposing they offered a price for fresh meat and the farmers refused to take it and asked for more. The butchers would buy imported chilled meat and give it to the public. The farmers would put their beef into cooling chambers, and supposing the butchers the next day or the next week came forward with the same offer and did not improve upon the price, you would gradually get your storage accommodation overcrowded and in time the meat would lose its bloom, its freshness. It seems to me that this policy involves a huge gamble. The possible gains are hypothetical, they are relatively small, and if we endanger the freshness which is associated with British fresh meat to-day we may never regain it. It seems to me that our present methods, although capable of improvement, are not so entirely unsuited to our own conditions as some critics appear to believe, and I do not myself think that either our farmers or our butchers are so incompetent as those seem to believe who advocate an entirely different system.
§ EARL PEEL
My Lords, in this crowded assembly I do not propose to address more than one or two brief observations to your Lordships, and I certainly rise 1165 in support of this short and temporary policy, although I am bound to say that those of your Lordships who have spoken, with that foresight which you invariably display, paid more attention to the far-reaching policy of which we are going to hear so soon rather than, I think, to the details of this particular measure. But, as so many elements in agriculture have received either subsidies or assistance of some kind, I certainly do not think the great stock-raising industry ought to be left out. I should like to protest, as having been connected with the administration of the Wheat Act, that it is not quite right for the noble Marquess, Lord Lothian, in his enumeration of the sums that have been spent on agriculture, to include the amounts that are paid to farmers for growing wheat, for, after all, they are not raised as taxes, they are not paid into the public Exchequer, and they do not come out of it. I think, therefore, you must make a great distinction between those forms of subsidy.
But I assume also in what I am saying that the Government, with that prevision which Governments do not always display, have carefully thought of the question of distribution of agricultural production in this country between the different elements that make up production, and that their levies and grants and subsidies are based upon that scheme. With regard to the question of how far growing more sugar or producing more stock in this country affects our foreign trade and our shipping returns—a very different problem—that is a matter about which I am not going to speak this evening, because no doubt the Government are profoundly weighing these problems.
I am interested in the question of the financing of these operations, because one has often heard of loans which become grants for the reason that the loans are not repaid, but in this case the operation is rather an interesting financial one. It is in the nature of a grant that may become a loan—that is to say, if certain things happen in the future, if the Government continue, and if they are able to carry out a portion of their long-term policy, this money, or some of it, may be repaid. That is a very interesting financial operation, and I think your Lordships will see that grants which are distinct in themselves 1166 very rarely become loans to be repaid. I am not quite clear as to the exact limit of this particular grant. Apparently £3,000,000 is the utmost that can be advanced by the Exchequer to the Cattle Fund, and that money of course has to be repaid by a Parliamentary grant, but I understand that £3,000,000 is not the limit of the Parliamentary grant although it may be the limit of the amount to be advanced by the Exchequer, because in this White Paper I see it is estimated that the total sum Parliament will be asked to provide will not exceed £3,000,000. It is therefore only an estimate, but the amount may exceed £3,000,000.
It is useful that there should be no exact sum to be paid, because otherwise many of the farmers who might be afraid they were going to lose the benefit of this money might be tempted to anticipate the market and lower the price. We are told further that this is a grant pending certain agreements to be made. I do not know whether these agreements will be reached, but I think it is well, in these financial matters, always to take the gloomiest view. It is quite possible therefore, when this £3,000,000 is exhausted, it will not be the last of these subsidies, because before any levy can be placed upon meat there may be some gap to be filled by a further grant, and therefore we have to contemplate at least the possibility of that.
There are one or two questions I should like to ask the noble Earl in charge of the Bill, but before I do so I should like to say I was very much interested to hear a few general observations from the noble Lord, Lord Marley, and from the noble Marquess, Lord Lothian. Lord Marley told us he only wished those agricultural products to be grown or produced in this country which were economical. I suppose he meant those which could be grown more cheaply than they could be imported from other countries. I have often heard these expressions of opinion from what I would call, if I may, hard-bitten Free Traders, but I do not believe anybody in the Government of this country could possibly conduct agriculture, or allow agriculture to be conducted, on that basis. It would be entirely impossible, and if they tried to do so for 1167 a year or two they would find such difficulties that they would have to revert to another policy. It is all very well to talk about the balance of industry and agriculture, but you cannot do it on a world basis unless there is free emigration, which we know there is not, even to our Dominions. Therefore if you are going to have, and you must have, anything like a balance of agriculture and industry you have got to do it by some such methods as have been decided upon by the Government or referred to in the course of this debate.
Although we are accustomed to very liberal deviations from the subject before us in this House, I think the noble Marquess, Lord Lothian, displayed great ingenuity when he managed to discuss the whole question of economic policy on this rather slender basis. I am sorry the noble Marquess is not here at present, or I would have more to say about him, but I think his ingenuity or ingenuousness was extremely pleasant. I cannot understand why he should address this rather scolding discourse purely to the present Government. It is far more a matter to be spoken of in that way in connection with world conferences because, after all, we are only following slowly and reluctantly and in many ways unwillingly the unfortunate examples which have been set us by foreign countries.
It would be well worth watching this grant of £3,000,000, to see how much of it will remain with the producers whom it is intended to benefit and how much is passed on to the consumer. Nothing is more difficult than to estimate that beforehand. It is quite possible that foolish producers may be tempted to lower their prices and pass on some of the benefit to the consumer so that part of the object of this measure may be defeated. I do not want to go into the question of how far chilled meat from abroad competes with British fresh meat and whether, if there is less chilled meat imported under the quota system, more British meat will be consumed. I do not wish to discuss whether there is any very close relationship between the two markets and whether, if you have a quota on chilled meat, it will only mean that the housewife will turn to some other substitute, not to the more expensive British meat. But I should like to ask one or two questions about 1168 the method by which the scheme is to be worked.
We were told by the noble Earl in charge of the Bill that only about twenty per cent. of the meat would be dealt with on a dead-weight basis in the slaughter-houses, and that gave rise to a very valuable contribution from my noble friend on my left coupled with an equally vigorous attack on centralised slaughter-houses by my noble friend on my right. I do not care to interfere between two authorities. I am dealing with the question on a more slender basis. I have watched very carefully during the last two years or so the question of whether these grants are fairly distributed or whether there is any evasion, and people try to get the same meat or wheat paid for twice over. It is a great advantage, as regards meat in slaughter-houses, that an animal can only die once. It is not possible for a levy to be paid on the same amount of meat twice over, whereas it is very much easier in the case of a beast that is still on its feet. We have been told that we are going to have these regulations and schemes published at a later stage. That will be very interesting, because one of the things that interests me most in the management and administration of this Bill is who are the people who are going to grant these certificates which entitle the fortunate owner to a grant from the Cattle Fund.
The meat has to be certified by certain persons. We are not told exactly who these persons are, but it is quite clear that the whole administration of this Bill will really depend on whether you can get all over the country an adequate number of reliable and fair-minded people who will be able to administer it by signing exact certificates, and who will also be qualified to judge of the different qualities of meat, if different qualities under one section of the Bill are to be established. Under the Wheat Act we have already appointed some 2,200 merchants as approved merchants, whose business it is to certify and approve these certificates. They have in some ways an easier task than, I think, these meat certifiers will have, because, of course, all the wheat-growing farmers are carefully registered. You know the amount of land they have under wheat and you have all the details about them. It is possible, therefore, to check the certificates in that way.
1169 I understand that under the system of registration that is proposed in this case more attention is placed upon the beast, as it were, than upon the owner, and I think it does give some opportunity for evasion if there is no list of that kind.
Further than that, the merchants under the Wheat Act have a comparatively easier task, I think, than these auctioneers or butchers or whoever they may be who make the certificates will have to perform. They have to assure themselves of certain things, such as that the wheat is up to sample or that the man who sees the certificate signed is the real producer of the wheat. They only have one principle to decide, and that is whether the wheat is or is not millable wheat. Even so, it is not very easy to establish an exact parity of judgment on this matter throughout the country, and there is also a temptation to people to be rather freer in their judgments and hence to direct business to themselves by taking a rather lower standard. But we have the tremendous penalty that can be applied to these gentlemen if we are not satisfied with the way in which they are certifying or if their standard gets slack. They are warned or removed from the list, which, of course, is a very severe penalty and very heavy sanction to be applied.
So far as I see, these people, whoever they are, are to have a rather more difficult task than that. They are to be responsible for the weights and they are also to be responsible for the qualities, although I am not sure whether that question is left open under the Bill. It says:Regulations made for the purposes of this subsection may prescribe different standards in relation to different descriptions of cattle.If those regulations are made prescribing different standards it is quite clear that the task of the certifier will be far more difficult than if a simpler standard was maintained. Familiar as I am with the difficulty of setting up an immense organisation of this kind suddenly to cover the whole country and deal with all the wheat and meat that is sold, I do not envy those officials or civil servants who have in the next six weeks to set the whole of this immense organisation going. I wish them every success and every facility, but I know from ex 1170 perience that they will have a tremendous task before them.
I do not wish to say anything about this long-term policy, except that I share, to some extent, the anxiety that has been expressed when we talk so easily about planning, organisation and reorganisation—a fever with which my noble friend Lord Bingley seemed to some extent to be infected, if I may use that expression. I have some anxiety that perhaps a rather long-term policy of complete reorganisation, or as it is generally termed socialisation, may be to some extent intended or at least foreshadowed.
§ LORD ELTISLEY
My Lords, we have had a most interesting, if somewhat lengthy, debate upon this important measure, and I do not propose to ask the kind indulgence of your Lordships for more than a few moments. I do desire, on behalf of the great body of agriculturists, to offer the Minister in charge of this Bill our warm appreciation of it. The solution of the immediate problem is temporary. This problem, I know, has long presented great difficulties to his Department, and I do not wish in any way to belittle the efforts of the Department in the past. They have been confronted with difficulties which are unknown to most of us, otherwise the problem would no doubt have been solved more rapidly. But now the question has become acute, and its settlement is a matter of extreme urgency. I venture with all respect to thank the Government for the fulfilment of the promise which was made by the Minister to help stock raisers and to assist beef producers in this country.
This Bill is a skeleton Bill. It does not, as the noble Earl, Lord Peel, has pointed out, indicate the way in which its provisions will be carried out, and it does not attempt to deal with the bigger outstanding question, the regulation and restriction of imports by quotas or tariffs or in other ways. I would venture to urge that in the six months or so now before us the Department should take every possible opportunity of consulting the various agricultural and other organisations which will be affected by the long-term and final proposals which will be submitted to us in the course of a few months. It will be noted that under Clause 2, subsection (6), the arrangements for carrying out 1171 the provisions of the Bill and the regulations which have to be made there-under have to be submitted in due course to Parliament. They are first of all to be framed by the Cattle Committee set up under Clause 4 of this Bill, who will forward them to the Minister of Agriculture for his consideration and approval, and then they will be laid on the Tables of both Houses of Parliament. I think that this machinery provides ample safeguards for the satisfactory working of the Bill.
The Bill is receiving the good will of many organisations, particularly the agricultural organisations, and many resolutions of approval and satisfaction have been passed, notably by the Central Chamber of Agriculture and the Central Landowners' Association. Reference has been made in the course of the debate to the abattoir question, which will be of very great importance in the long-term policy of the Government. I do not want in any way to argue the case either for or against at this stage, but I do say that the under-hung meat in this country is driving more and more of our people to the consumption of foreign meat, and if abattoirs tend to deal with that problem they will certainly be of assistance to the meat producers of this country. With regard to what was said by the noble Earl, Lord Peel, on the question of certification, undoubtedly that presents great difficulties, but I would like to point out that we have been able to find men of uprightness and probity to administer the even more difficult wheat measure, and I do not myself see any difficulty in finding men of equal uprightness and probity to certify the meat certificate.
§ LORD ELTISLEY
It would take me a long time to enumerate all the just men of this country, but the auctioneers are obviously a body, amongst others, who ought to be, and no doubt will be, asked to certify. It is assumed that this Bill only deals with the welfare of agriculture, but I venture to suggest that it will bring welfare to the nation as a whole. So far as agriculture is concerned this Bill is badly needed, because many of those who were formerly engaged in stock raising and beef production have, 1172 owing to the bottom falling out of the market, turned to the production of milk, and that has tended to produce a surplus of milk which has created great difficulty in dealing with that agricultural commodity.
In the course of the debate we were told that agriculture should be left to the free play of the world's markets, that nothing agricultural should be subsidised, and that we should concentrate only on the things which we can produce economically in this country. If that policy be adopted, as is advocated by the opponents of this Bill, I venture respectfully to ask what is likely to be the wage position in this country. Already since 1921, in some thirteen years, there has been a drop of about 20 per cent. in the number of those employed in the agricultural industry. We, on this side of the House, take a deep interest in the maintenance of the wage level and many of us feel that the price level of commodities is very closely bound up with the wage level. Perhaps the wage level of the agricultural worker is the most important of all wage levels to be maintained because from it date all other wage levels in our national life.
Undoubtedly farmers will benefit under this Bill, labourers will also benefit because their interests are protected by the wage boards, and the whole country will, I think, receive a measure of advantage. The colossal fall in the price of meat was not due to any change in intrinsic value but was due to the world outside unloading surplus production into this country. Although we may deplore that and although this may not be the best possible scheme, I suggest that no alternative scheme of any merit has been put forward. I venture once again to thank the Government for their action which, taken into account with other measures, will, I think, undoubtedly have a beneficial result. Therefore, I hope this Bill will speedily reach a place on the Statute Book.
§ EARL DE LA WARR
My Lords, the hour is getting on but a number of important points have been raised to which I think I should reply. I do not think a great deal has been said about the Bill itself, but I can make no complaint of that because I began by saying that it was impossible to consider the Bill without considering the policy which lay be- 1173 hind it. The noble Lord, Lord Marley, led off with a very familiar complaint that no mention of wages is made in this Bill. I have explained repeatedly that it would be quite irrelevant to introduce anything concerning wages into such a Bill. At the same time I would like to point out to the noble Lord that since the general policy of the Government on agriculture has been in operation, no fewer that thirteen counties have increased wages and nine counties have reduced the hours of work. I think, therefore, he will agree that at least some of the benefit given to farmers has been passed on to the labourers.
Then he mentioned another point which is very important because a great deal was made of it in another place. He said that by the policy of a levy on imported meat to be handed over to home producers we were proposing to tax the food of the poor and to hand over the proceeds to the producers of the food of the rich. That point has already been dealt with by the noble Lord, Lord Bingley, but I would like to emphasise the point that English meat is by no means consumed only by the rich. In fact, in the case of such meat as we have information about—National Mark beef sold in London—we know that the great bulk of it goes to the East End. A man doing a hard day's work needs the best quality food. Quite apart from that the principle of levy is the principle of the pooled price. The noble Lord, Lord Marley, and I have had the pleasure in the past of co-operating in advocating import boards for meat.
What significance import boards can have for the meat industry but that of the pooled price I fail utterly and completely to see. The noble Marquess, Lord Lothian, and I think the noble Lord, Lord Marley, also put another point. They asked why cannot we just limit ourselves to encouraging economic production in this country and scrap all other commodities. I would like to see a picture of the countryside if we did away with all assistance to all crops that need assistance. They would have to let go assistance to beef and to wheat. I gather that the noble Lord, Lord Marley, approves of assistance to pigs and the noble Marquess, Lord Lothian, does not, but he would let moat go, and milk go, and finally there would be complete ruin. But the noble Lord, Lord Marley, does not apply that doctrine throughout industry.
1174 The Labour Party, as your Lordships will remember, were responsible for an Act of Parliament assisting coal on a very restrictive basis. I think there is very little justification for taking up such an attitude.
The noble Marquess, Lord Lothian, quoted a speech of the noble Lord, Lord Essendon, pointing out the difficulties which our policy of reducing imports of beef had in the past created for the shipping industry. But, in fact, imports into this country did not decrease. Therefore, there was not the slightest basis for the observations of the noble Lord, Lord Essendon. What happened was that there was a transfer of imports from the Argentine to the Dominions. What complaint can the noble Marquess have of that? It was the result of Ottawa. It is true that the noble Marquess, Lord Lothian, did not approve of the conclusions arrived at at Ottawa, but he was responsible, because he was in the Government, for sending a deputation to Ottawa with the express intention of transferring trade to the Dominions.
I think those are the most important points raised except that the noble Viscount, Lord Astor, brought up the old argument about the quota. We have had this argument very often before and I hope the noble Viscount will forgive me if I do not follow him very far into that argument now. Suffice it to say that I do not think it quite fair for him to give to the quota for mutton no credit whatsoever for the improvement in price and then in the very next breath to blame the quota for the increase in price.
§ VISCOUNT ASTOR
I pointed out that the quota had not been filled. Therefore, the quota could not be responsible. The rise was due to natural not to artificial shortage.
§ EARL DE LA WARR
It does not matter whether it was due to the quota or to the weather. It is a question of whether supplies are limited or not. The point is that in regard to mutton and lamb the Government limited supplies coming on to the market from the Argentine, and the good Lord by controlled weather limited the supplies of mutton and lamb coming from Australia and New Zealand. The effect was exactly the same. Then the noble Viscount went on to make a great attack on new methods of dealing with and slaughter- 1175 ing for meat. I take it from the speech of the noble Viscount that he is completely satisfied with the existing system of handling and distributing meat?
§ EARL DE LA WARR
I am very glad to hear that he is not. The noble Lord in his speeches always implies that he is in favour of some abstract reorganisation. We have never heard what it is. I would like one day to be in the position of being pressed to do something by the noble Viscount, Lord Astor. Whenever this Government brings forward proposals in your Lordships' House for dealing with agriculture the noble Viscount always has most convincing criticisms to utter of what is being done, but he has never yet told us what he really would like to have done.
§ VISCOUNT ASTOR
I do not want to keep on interrupting the noble Earl, but when I speak I try to be as brief as possible. I have written two books, and he will find in those books a constructive alternative. The other day on the question of milk I did suggest an alternative. I really did not think that there was time to-day or I could have indicated an alternative had I wished to occupy more of your Lordships' time.
§ EARL DE LA WARR
I have spent two delightful and happy week-ends reading the noble Viscount's publications, but still I am not quite sure yet what he really wants to do about agriculture except to get in a criticism of anything that His Majesty's Government puts forward. I think I may say that this Bill has been received with almost unanimous favour in your Lordships' House. Even the noble Lord, Lord Marley, while criticising a good deal of the long-term policy, I think really admitted that some such measure as this had to be taken. Therefore I ask your Lordships to give the Bill a Second Reading.
§ On Question, Bill read 2a and committed to a Committee of the Whole House.