Lords Sitting of 30 October 1934

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

MATRIMONIAL CAUSES (AMENDED PROCEDURE) BILL. [H.L.]
LORD MERRIVALE: My Lords, I desire to ask leave to bring in a Bill to amend the law relating to proceedings between husband and wife in respect of domestic differences. I am proposing to do so now because the matter is one which has on more than one previous occasion aroused a great deal of attention, and no doubt there are serious reasons for dissatisfaction with the present state of proceedings. For example, all cases arising out of matrimonial differences which come before the justices are necessarily discussed in public, and the justices have no power of intervention with a view to the conciliation of the parties. Those are two serious defects which have been pointed out on many occasions when the matter has been discussed before your Lordships, and I do not know that anything has been done effectively to remedy them. With regard to hearings in public, no one supposes in these times that the matters
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to which I have referred are matters proper for public discussion, or that there is any advantage in discussing them in public. It is rather in the nature of a public scandal. Then with regard to any organised process far conciliation, the justices cannot clear the court and say: "We must talk to you and find out what are the real differences between you. Why cannot you agree? What is the minimum which can be done, or can there be any temporary measure?" It is not necessary to enlarge upon a topic of that kind, nor would it be proper to do so now, but the Bill which I have prepared, with some experience of matters of that kind, is addressed to remedying those two great grievances. I ask your Lordships' leave to bring in the Bill and to move that it be read a first time.
Moved, That the Bill be now read 1a.—(Lord Merrivale.)
On Question, Bill read 1a, and to be printed.

MILK PRICES.
LORD STRACHIE LORD STRACHIE rose to call attention to the prices paid to producers of milk, and also to the deductions made by the Milk Board from those prices; and to move for Papers. The noble Lord said: My Lords, in calling attention to the proceedings of the Milk Board I do so because there is a good deal of dissatisfaction in the country amongst the agricultural community, and especially

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amongst the dairy farmers, with regard to the action of that Board. I must say that I am one of those who never liked the Milk Board at all. To my mind, it was always a regrettable necessity, and for this reason, that it interfered with individuality. It rather went on the Socialist principle of the control of production and distribution. I may be told that in these days, when the Leader of the Conservative Party says he is a socialist, I ought not to object to anything being done by this Government which has a socialistic tendency. On the other hand, the Milk Board might, if it were worked properly, be of great advantage, but unfortunately it has too many faults. I wish that the Government had not been in such a hurry over the legislation under which the Milk Board is constituted, the Milk Marketing Act. It would have been very much better if they had taken more time and had not ignored the great Commission. I venture to think that if their recommendations had been carried out there would have been very much less difficulty and very much less grumbling in this matter.
I believe the National Farmers' Union drew up the Milk Marketing Scheme for submission to the Ministry of Agriculture, and they no doubt put in certain matters which would have been of some advantage. For instance, they said that there were to be no advantages for the cooperative societies. No doubt the cooperative societies have an advantage because they are able to pay to the people who sell the milk to them a bonus upon their sales of milk. I noticed the other day that Mr. Baxter, the President of the Milk Marketing Board, said that they put that provision into their scheme, but that Mr. Elliot insisted upon striking it out; he said that there would be difficulty in getting it through the House of Commons because the co-operative societies were so powerful. Then there was put into the scheme by the National Farmers' Union—so Mr. Baxter has reported—a provision as regards restrictions of imports, and that also was refused by the Minister of Agriculture, according to Mr. Baxter, the Chairman of the Board.
What has been the result of the refusal to insert the provision respecting the importation of competing dairy produce?
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The result has been very disastrous, not only as regards produce coming from the Dominions under the Ottawa Agreements—which sold agriculture for the benefit of vested interests such as shipping and iron and steel—but disastrous also from the point of view of imports from places like Denmark, which under that unfortunate Act were able to flood this market with their produce. The result of that has been that the Milk Board are obliged to sell the large amount of surplus milk which they have to manufacturers at 3¾d. per gallon, in order that they may compete with the Dominions and with Denmark and other countries from which dairy produce is imported into this country. That has been one of the great difficulties. No doubt manufacturers could not compete unless they were able to buy this very cheap milk. But what has been the result? The result has been to throw a very heavy charge upon the Milk Marketing Board, which has of course to be met by the unfortunate producers in this country.
Then there is another question, and that is, what sort of receipts does the producer get? No doubt your Lordships will have noticed in The Times a very interesting letter written by a distinguished man who was a member of the Cabinet and also was for many years in the House of Commons. In that letter he gave an account of what happened over the space of ten months upon his home farm in Wiltshire as regards his produce. He made the statement that for ten months the gross value of the produce was £724 4s. 7d., deductions by the purchasers were £72 14s. 3d., and deductions by the Milk Board the enormous sum of £148 1s. 10d., leaving the net amount only £503 out of gross receipts of £724. That is not exactly the way to make farming pay. If you have to pay those very large amounts, how can it pay?
I have ventured to say before here and in other places that one of the great difficulties under the Milk Marketing Scheme approved by the Ministry of Agriculture arises from the fact that while the producers had fixed prices which they might charge, the retailers on the other hand were allowed themselves to fix their price. I never could see why, if retailers could fix the price at which milk was to be sold by them,

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the producers might not have the same right as the retailers had of fixing their price. What has been the result of that? The farmers have been damnified by that and have suffered very much. On the other hand, the distributors have made very great profits. I noticed only the other day that one of the great dairy companies, United Dairies, Limited, said in their report that they had actually made last year on their trading a profit of 18 per cent, on their ordinary shares, though they paid only 12½ per cent., but at the same time they gave a bonus of one share for every £10 of stock. No doubt they were wise to water their shares, because in the future it will not appear that they made so big a profit, and we as agriculturists will perhaps not have the same right to complain, but I hope it will always be remembered that they watered that stock and that they really could have paid a very much higher dividend. Then again, reductions of sales have been heavy, and the reason is that there undoubtedly has been a great glut of milk.
As regards deductions, for publicity they charge 1s. 8d. El suppose that refers to a paper which is called the Home Farmer, and which is issued by the Milk Board. The other day I tried to get a copy of the Home Farmer. I wrote to my newsagents, W. H. Smith & Sons, and they said that they could not supply it because the Home Farmer was not supplied to the trade. That seems a most extraordinary state of affairs. It is difficult to see why there should be this money spent on the Home Farmer when it is supplied, I suppose, only to people who, in their opinion, will not be unkind in quoting what may be said in it. The transport charges are is. 1¾d., and there is also a charge of ½d. for collection. Then also there is a hypothetical conveyance to London. If you have to send your milk only a few miles away, you have to pay as much as if you were sending it to London. That seems a rather curious state of things, and one does not see why the Milk Board should be a privileged body in that respect. I suppose it is privileged just in the same way as that mentioned the other day by Judge Tobin, who denounced the Milk Board having a right, which no other court seems to have, to say that all their prosecutions and all the business on behalf of the Milk Board should be done
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entirely in private, and that the Judge had no power to insist that the public should be admitted to that court.
There is also another matter which is making it difficult to get rid of this surplus milk. No doubt your Lordships are aware that a great difficulty from which the farmers suffer is that they must sell all their milk to the Board, but heavy deductions are made from the proceeds because of the surplus milk which cannot be disposed of except at a very low price indeed. It was suggested that the milk should be supplied at 1s. a gallon for the school children. No doubt there was a double object—namely, to get rid of the surplus milk and also to benefit the children—both very good objects indeed. The Board of Education has issued a circular letter as regards this matter. I do not see my noble friend Lord Halifax in his place, but I gave him notice last week that I was going to raise this question. I notice that in paragraph 3 of the circular of the Board of Education it is said:
"As the authority are no doubt aware, the Board consider that the selection of children for free meals should be made by a system of medical selection by the authority's medical officers, and for this purpose they would regard it as proper that children should be selected who show any symptoms, however slight, of subnormal nutrition."
That paragraph is to apply to the distribution of milk. Apparently it will be necessary for the medical officer of health to examine all the children who are going to have this milk in order to see if they are suffering from lack of nutrition.
Another paragraph in this circular, paragraph 4, provides that the children are not to get this milk if it can be shown that, though they are suffering from want of proper nutrition, the parents are able to pay for it. But there might be cases where the parents are able to pay but refuse to pay. The men might prefer to spend the money on betting or in the public-house; yet the children are to suffer. It seems to me that is an unreasonable thing in this circular of the Board of Education. There is another paragraph, which says:
"The Board desire to urge that in areas where a supply of efficiently pasteurised milk is available such milk should in all cases be provided. In other areas all possible precautions should be taken to ensure as far as practicable the safety of the supply."
That seems very reasonable indeed.
But there is another circular—I do not know whether it comes from the Board of Education or not—which is headed "Scheme for the Supply of Milk in Schools in England and Wales at Reduced Rates." It says that milk can only be supplied where the medical officer of health sanctions that milk. The medical officer of health in some counties would only agree to milk being supplied to children if it were pasteurised, therefore it will mean that in a great many cases no milk will be supplied to those children, because it is impossible to pasteurise it. There seems a certain amount of contradiction there. On the other hand I noticed in The Times—I think in the agriculture article—that this statement was made:
"It should be made clear that the Milk Marketing Board lays down no requirements for milk delivered to schools. It rests entirely with the medical officer of health to satisfy himself that any supply offered is safe and desirable. It seems that some medical officers of health are insisting on pasteurised milk, but this is not essential, and there are many schools in rural areas where supplies of pasteurised milk are not readily available. In such cases it should be possible to find a local supply of fresh clean milk which can be approved."
That is quite possible, but on the other hand it would appear, according to the circular of the Board of Education that if the medical officer of health insists on pasteurised milk it would be impossible for milk to be supplied. That seems to go quite contrary to the very reasonable suggestion in The Times.
I notice further that Mr. Baxter, the Chairman of the Milk Marketing Board, is reported to have said this:
"I am quite certain that the Board will not accept the recommendations of the Economic Advisory Council or formulate a scheme on the lines they suggest. The Report advocates compulsory pasteurization, which we would not accept, because it would drive our producer-retailers out of business."
That is a very strong statement indeed. I notice opposite a noble Lord whom we are fortunate to have in this House, Lord Cranworth, a member of the Milk Marketing Board. Perhaps he may be able to give us some explanation of Mr. Baxter's statement. It is said by the Daily Herald that there are 5,000,000 children who are supposed to be supplied with cheap milk, but there are only about 3,000,000 children who would get it, the reason being the difficulties that
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are going to be raised by medical officers of health, and apparently, too, by the President of the Board of Education. There is no doubt that pasteurisation has the effect of playing into the hands of the very big concerns, and that is why they are so entirely in favour of it. Those of us, on the other hand, who have an interest in agriculture know that it is perfectly impossible on a small farm to have pasteurisation, and that would mean that the farmer would not be able to supply milk for school children where pasteurisation was declared to be necessary.
So far as I can make out, the Chairman of the Milk Board is against pasteurisation; the President of the Board of Education seems to be in favour of it, to judge from the circular which is issued, and I do not know what the view of the Minister of Health would be. Perhaps he is too much occupied with the great question of slums, but I should think that the children in those slums, which he so very properly wishes to get rid of, are just the children who ought to receive this milk. As regards the Ministry of Agriculture I think I may claim that it would support me in the view that it is perfectly ridiculous to insist upon pasteurisation. Why do I say that? I say that because I noticed a speech by the Minister of Agriculture, who went to a London County Council school not long ago and told the boys:
"You go on drinking milk. It was milk I drank—and look at the size of me. And what is more, it has made me a Cabinet Minister. If you go on drinking milk you may become Cabinet Ministers—and better Ministers than I am. It is the stuff that puts beef on you and will make you great big healthy fellows."
Well, I suppose that the Minister of Agriculture was brought up on a farm—we have always been told he was. I should not think he would tell us that he ever had pasteurised milk, and I have no doubt that in those days he would have repudiated it as perfectly monstrous to insist that it was necessary to pasteurise milk. He would have said that all that was necessary was to keep the cows clean and healthy, and that is what we are trying to do in the counties now. I hope for that reason that he will be willing to do all in his power to prevent the ridiculous way in which the Board of Education is trying to insist on

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pasteurised milk being given in all schools. I beg to move.
LORD CRANWORTH: My Lords, as a member of the much-criticised Milk Board, perhaps I may be allowed to say a word or two. I hope your Lordships will understand that I am, naturally, speaking for myself alone, and not for the Board. I have listened with great attention to the noble Lord because I am well aware, not only of his great knowledge of agriculture, but also of his great zeal in its behalf, but I think that he is under one or two misapprehensions. In the first place the Milk Marketing Board up to September this year were not responsible for the price paid for the milk. They were unable to agree with the buyers' representatives on a price, and the three independent members—the "appointed persons," as they are called—had to be called in. They gave an arbitration and they are responsible for the price of milk. Though no one could or would dream of saying a single word against the impartiality or the integrity of those three persons, their arbitration was of such a nature that it astonished and dismayed every producer, with the result that the registered producers as a whole—I am not speaking now for the Board—have, for this year at all events, made it impossible for the Milk Marketing Board to approach those three appointed persons again.
I speak for myself again, but I have not seen any evidence that has convinced me that the consumer pays for his milk in the right proportion to the producer and the distributor. Roughly he pays to the producer, let us say, 1s. 2d., and to the distributor 10d. Consider the services rendered for that 1s. 2d. and for that 10d. The producer or farmer has to buy and breed his cows. He has to house them, and pretty luxuriously too. He has to feed them, to doctor them, and to milk them. When he has milked them—and that is a laborious and difficult process now—he has to talc?, the milk to the premises of the purchaser or distributor. All that he does for 1s. 2d., and the distributor then, for his 10d. hands it on to the consumer. I for my part shall need much more evidence than I have yet seen that these shares are in the right proportions. What was the price that was actually paid up to September of this year when the new
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contract came into force? The average price for liquid milk delivered to buyers was 13.81d. The price for manufactured milk varied from 3¼d. to 9d. As your Lordships know, under the Milk Scheme these two prices are pooled and the price actually paid is the average price for all milk, and that price was 12.088d. Twenty-seven per cent. of all milk at the present moment is manufactured milk. Of that 27 per cent., 60 per cent. was sold at prices from 3¼d. to 4d. because that price is governed by the price of cheese coming from New Zealand and Canada, and it is because of this low price that the full price of 12.088d. was realised.
The noble Lord talked of deductions which he seemed to imagine came to a very big sum. What, in fact, are the deductions of the Milk Board? The only deduction the Milk Board make is the deduction for expenses, and that deduction comes to rather less than one farthing a gallon. Whether that represents low expenses or not nobody but a chartered accountant can tell us, but we know it covers a vast number of services. The misapprehension with regard to these deductions which the noble Lord is under seems to be this. He is including the deductions that each man pays for the proportion of manufactured milk. Every registered producer gets so much for liquid milk and so much for the proportion of manufactured milk that he is supposed to have taken. If the accounts were done in another way it would merely be stated that he had received the full price, and there would be put down, as I have quoted, 12.088d. There would be put down a deduction of one farthing for expenses, which is the only deduction, as I have said, for which the Milk Marketing Board are responsible. There is, as the noble Lord knows, a thing called the regional compensation levy. In certain regions there is much more manufactured milk and much less liquid milk consumed than in others. If there were no levy at all certain regions would get a much higher sum than others.
The Milk Marketing Board have considered—and it comes under the Scheme—that it is not right and proper that there should be these big differences, which would lead quite naturally to people in one region continually petitioning the Board to come into another region. On the other hand, the Board feel it is not perhaps right to level up

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the whole price entirely because people who live in certain places have certain advantages with regard to milk which are offset by disadvantages in other directions. So the Board have attempted to rectify this by a regional levy and by prices which at the present moment are within three farthings of each other. The only reason why, at the present moment, prices are so low is the low price of manufactured milk. That is governed, not by the Milk Marketing Board, but by political considerations—the question of cheap imports into this country. I have always understood that the noble Lords who sit behind my noble friend have strong views about the cheap importation of foodstuffs, and I am glad to learn that he does not in this way support them. I would suggest to your Lordships that the Milk Marketing Board have done reasonably well. They have been faced with a pretty difficult question. A vast new organisation has been set up, and has lasted a little over a year. The Board have dealt with a product of over forty millions, and it has also been handicapped, as your Lordships may have anticipated, by the size of the Board. It is a very big Board—eighteen members—but that in a way could hardly have been avoided because most of these members act as liaisons with the regions, and it is work which, in my experience, they do extremely well. They bring the grievances of the regions to us and they take back the answer in person to the regions, and from my brief experience they have done their work remarkably well.
I believe that the Scheme and the Board have come to stay. I may be wrong, but I think they have, and I think the Board have earned the gratitude of the public if for only one thing and that is it has enabled the school children of this country to get milk at half the price at which they had it before. The noble Lord talked about the purity of the supply and questions of that sort. I regret very much indeed that the accredited scheme brought forward by the Board has not proved acceptable to the County Councils' Association, of which the noble Lord is so distinguished a member. I think it would have been very well if it had accepted that scheme, and I hope—I have reason to hope—that it will not be very long before the county councils and
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the Board come together if it be only so that every child should most certainly have milk of the quality equal to what we propose under our accredited scheme. As far as the Board are concerned I am quite certain they would welcome, and do welcome, the constructive criticism of my noble friend. I am sure it is all to the good that a complicated matter of this sort should receive criticism. Such criticisms will make it better known, and I hope they will tend to make it somewhat less complicated for the average farmer. I hope, too, that they will eventually be the means of providing a reasonable living and reasonable profit—no more—for all those engaged in this great industry.
LORD MARLEY: My Lords, the speech to which we have just listened has been a very authoritative statement, and I for one am very grateful for the figures given. Everyone must have realised the difficulties of the Milk Board and the tremendous importance of the work they are trying to do, and we do want the maximum possible information about the milk supply of this country, especially for our children. When the noble Earl who will be replying for the Government comes to speak he will, I hope, take the opportunity of straying a little beyond the terms of the Motion and give us some sort of review, a little fuller review than we have just had, of the general position of the milk supply under this new Scheme. We all wish it every possible success, and I want to say at once how grateful we are on this side of the House for the fact that children have been able to get milk more cheaply in the schools, as the Minister promised when we had a debate a few months ago. I am very sorry if it is a fact that some medical officers of health have only been prepared to certify pasteurised milk as milk suitable for consumption by school children. I did not know that was the case. Perhaps the Minister will say a word about that.
I do not want to go into the controversy of pasteurisation versus raw milk. The noble Lord, Lord Strachie, quoted the Minister of Agriculture as having pointed out to children that he was a result of pure milk. I do not know whether that is a good example or not. I suppose many members of your Lordships' House were brought up on

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raw milk, some even on human milk, which is probably the best of all, but I do not think we have yet reached a position in which we are fully aware of the effect of pasteurisation of raw milk. Anyhow, there is a big controversy upon this matter and I do not want to start that sort of controversy here, but, personally, I believe pure raw milk to be the best possible milk we could supply to our children. I hope the Minister will say a word about that.
The other point I wanted to ask him to deal with is this. There is a matter which has frequently been confused by the Press. I do not mean that they intend to confuse it, but they lay emphasis upon this or that aspect of price. We know that the producers of milk are not getting an adequate price, but we also read in the Press that in a number of parts of this country distributors of milk have demanded the right to sell their product at a price lower than that laid down locally, and in some cases, I am told, they have actually broken away from the organisation and sold milk illegally.
LORD CRANWORTH: May I be allowed to say that in every case where there has been a concerted demand to sell at a lower price than that laid down it has been granted by the Milk Board?
LORD MARLEY: I am much obliged to the noble Lord. I am not at all sure that in some cases this demand may not be an advertising demand by an organisation trying to gain profits in the rest of its business by selling its milk below the price laid down. I rather think that is possible. I dare say the Minister will be able to tell us something about it. I have also read about cases in which co-operative societies have sold their milk below the normal price, and I feel that the country would welcome a clear statement of what is the actual position, how far the Scheme has developed, how far we have been able to get purer and also lower-priced raw milk as a result of the improvement in the price of manufactured milk. I would like to have seen a publication by the Ministry on this subject. We could then have read it and studied it at leisure. I would also like to see such a publication made regularly every three or six months. Perhaps also there could be included in such a publication the effect of the expenditure of money
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on cleaning up the herds. I do not know if that is possible. It is bound to take some time to have any effect. May I suggest to the Minister that at the next Election he may get a good many votes by this sort of thing? That I do not mind so long as we get pure milk. If we can get pure milk he can have the votes. I believe it would be of value to the country if we could have a regular statement upon the milk supply on which we depend.
THE PARLIAMENTARY SECRETARY OF THE MINISTRY OF AGRICULTURE AND FISHERIES (EARL DE LA WARR): My Lords, I agree with the noble Lord who has just sat down that a periodical statement on the position of all these marketing schemes might well be of very great value. I am afraid at the moment I have not quite sufficient information in my immediate possession to make a long statement on the state of affairs. If anyone could do so I should say it is the noble Lord, Lord Cranworth. He could do it very much better than myself. As the noble Lord is aware, the whole principle of these marketing schemes is that they are instances of self-government within an industry rather than of government from Whitehall. Therefore, I would preface any remarks I venture to make this afternoon with that general statement, and say to the noble Lord, Lord Strachie, that I can carry the matter very little further than the noble Lord, Lord Cranworth, has done in his very interesting remarks.
I think we must all feel very grateful to the noble Lord for having raised a most important point. I gather from Lord Strachie that he is by no means a hostile critic, that he is perfectly friendly to the Scheme, but that there are certain points about which he is not quite happy. I think we are all agreed now that if there had not been a scheme in existence the position of the milk producer might well be worse to-day than has been that of the beef producer during the last year or two. What is the gravamen of the noble Lord's difficulties in his consideration of the Scheme? The first one, that of the deductions, has, I think, been dealt with very fully by the noble Lord, Lord Cranworth, who pointed out that there is really only one deduction and that is the deduction of a farthing for expenses. The costs of admin-

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istration are covered by one-twelfth of a penny, and the balance of the farthing still stands to the credit of the milk producers in the form of a reserve of just over £500,000. I do not think anybody would suggest for a moment that a Scheme of this character and this size could possibly be administered on a sound basis without some reserve.
LORD MARLEY: Is the amount an average or does it vary in different districts?
EARL DE LA WARR: It is over all. I should have said that the only variation of that is the fact that in May and June they did not actually impose the farthing and the whole payment went to the producers.
LORD MARLEY: That is the same over all districts?
EARL DE LA WARR: Yes. The rest of the so-called deductions are merely readjustments of income as between one set of producers and another, and there is in fact no deduction from the milk price as a whole. Many who, like myself in East Sussex, live in areas where there is a very good market for liquid milk at their doors, feel that they are having to pay apparently very heavily for this Scheme at the present moment; but equally I think every thoughtful man in our district realises that unless he is prepared to compensate producers of manufacturing milk in the western counties, and in other counties, for staying out of the liquid milk market, very soon we should have our markets completely destroyed. That is why, although apparently we have to pay heavily for the Scheme, we in our area support it. I venture to say that if a poll were taken to-day of farmers, not only in the South-Eastern area but all over the country, there would still be a very heavy majority in favour of the Milk Marketing Scheme.
Now I come to what I think was the main point of the noble Lord, that he fears that milk producers as a whole throughout the country are getting less to-day for their milk than they were before the Scheme. It is quite impossible to generalise on that point. Admittedly with the general levy and the interregional compensation levy, some of us are getting less, but on the other hand a great many other producers are getting more. The trouble is that whereas
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we have exact figures for the existing situation, we have no figures at all for judging the situation before the Scheme came into existence. We can, however, I think, take certain figures as a basis of comparison. Thus, if we take what are known as the London Agreement prices for 1932–33—the prices negotiated by the Permanent Milk Joint Committee before the Scheme came into operation, negotiated, that is, between the producers on the one hand and the distributors on the other, mainly for London—we find that the average figures from October, 1932, until September, 1933, worked out for the year at 1s. 2d. per gallon. The negotiated figures for the twelve months 1934–35 came out to just over 1s. 3d. per gallon. That is a penny extra on the figure of 1932, and I think that is a figure which should give some relief to the noble Lord. It must be taken into serious consideration that those prices which were negotiated in 1932 by the Permanent Joint Committee were by no means enforced all over the country. Although there was a negotiated average price of 1s. 2d. per gallon for milk in 1932, there were very large numbers of milk producers in the country who were not, in fact, getting that price, whereas to-day any price that is negotiated as an average price for the country does in fact, under the Scheme, cover every producer in the country.
There is another fact to be taken into account. To-day we are carrying within the Scheme, as the noble Lord, Lord Cranworth, has already said, a very large proportion of the milk supplied at manufacturing prices. The noble Lord complained, I think, of the Government allowing the prices of manufacturing milk to fall to the level to which they have fallen. The problem we have to face is that our milk supply at present has to carry this surplus at a very low price. As I see it there are three ways in which we can face that difficulty. The first one, which I do not think any of us would for a moment contemplate, would be so to decrease our production that there was no surplus over what could be sold as liquid milk. I think we should all agree straight away to wipe that off as a solution. Another solution might he to force up the price of manufactured dairy products by a quota limitation of imports or by very heavy tariffs. We would thus enable our milk

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manufacturers to pay much more for manufacturing milk and in that way relieve the Milk Board of the burden. Other countries have tried that method. They have tried it to such an extent that in December, 1933, when butter was selling on our markets at a wholesale price of 75s. per cwt. it was selling in Berlin at 184s. and in Paris at 238s. per cwt.—238s. per cwt. compared with 75s.!
That may rather make our mouths water as producers, but let us look for a moment at the result. Actually in the last four years we have increased the consumption of butter in this country by 40 per cent., whereas in France I understand that, except as a luxury product, butter has very nearly gone out of consumption. What earthly use would it be to our producers if we forced up prices to such an extent that they could not sell9 I am glad to hear the noble Lord, Lord Rhayader, applaud that. No doubt it means that he approves what the Government have done to safeguard our producers here to a considerable extent whilst at the same time not forcing up prices. Your Lordships will remember that the Milk Act of last Session guaranteed our milk producers in this country a minimum price for manufacturing milk of 5d. in the summer and 6d. in the winter. The noble Lord mentioned 3¾d. as the lowest price. That is, in fact, the price that is paid by the manufacturer, but the noble Lord will remember that His Majesty's Government have made provision for increasing that sum, as I have already said, to 5d. in the summer and 6d. in the winter.
LORD STRACHIE: Is that for cheese making?
EARL DE LA WARR: It applies mainly to milk for cheese making, because that is the lowest price, but any form of manufacturing milk that fell below the prices I have given would obtain a grant. In addition we made provision—and I was very glad to hear the noble Lord, Lord Cranworth, mention this as possibly the most important thing the Government have done—for increasing the consumption of milk in the country. I think we are all of us beginning to feel, as agriculturists, that if we have got to continue talking of a glut of food at this time, when we know that there are countless thousands of people in the country who are not eating and drinking enough, we
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are running up a very negative path., Therefore we made provision for increasing the consumption of milk in the schools.
The noble Lord, Lord Strachie, raised a certain point there. He referred to two circulars. The first circular, of the Board of Education, referred to free milk in schools. The giving of free milk in schools by local authorities is not really seriously affected by this Government Scheme, excepting to the extent that the local authorities are able to buy their milk in the future at half the price. I have read that circular to which the noble Lord referred, but I speak with some hesitation of it because, as the noble Lord realises, it does not affect my Department, but I certainly read it as being an encouragement to local education authorities to administer the Act of 1921 as freely as possible. Some people might have preferred a drastic amendment of that Act, so that free milk in schools could be administered even more easily than at the moment, but short of legislation the Board of Education, I think, have gone a very long way in loosening up the administration.
The noble Lord mentioned another circular in relation to this particular Scheme, and he is somewhat distressed that there should be a provision within that Scheme insisting upon the approval by the medical officer of health of the supplies of milk to school children. The, noble Lord knows, just as well as, and probably better than I, because he has had longer experience of the problem, that the moment those who are interested in the industry of agriculture attempt to do anything to increase the consumption of milk in the country, we have some learned doctor writing to The Times telling everybody what a hopeless and poisonous beverage it is. Therefore, I think he will agree that it was essential that we should do everything possible within the Scheme to make sure that the medical profession would actively assist us, and so we put in their hands the approval of the supplies of milk to school-children. I think the noble Lord will agree with me that that was really a very wise step.
I am not sure that there were any other points which the noble Lord particularly raised. I hope I have dealt with the main issues which he has put

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before us, but in conclusion might I say this, that this Scheme is, as I think the noble Lord, Lord Marley, has said, a colossal experiment. It is being administered by a body of farmers who, speaking in terms of the normal business world, have had amazingly little experience of what we will call big business. In that administration they are most fortunate in being assisted by two gentlemen, I cannot quite say outside the industry but who have been nominated to the Board for their financial and business capacity. If we could analyse its figures and state exactly its annual turn-over, I think we should find that this Scheme was really representing as large a business as there is in this Kingdom, and for myself, watching the operations of these gentlemen, I am quite amazed by the business ability and business acumen that they are bringing to their great task. I therefore think that it is of tremendous value that we should, as Lord Marley has said, periodically discuss the progress of the Scheme here in this House and amongst ourselves outside, not in order to crab it or make the colossal task which these gentlemen have undertaken more difficult, but in order that we may put before the country and before Parliament our constructive criticisms, and thereby help them in carrying the task to a successful conclusion.
LORD STRACHIE: My Lords, I am much obliged to the noble Earl for the careful way in which he has replied to a great deal of my criticism, but I think I am not misrepresenting him when I gather that he is not entirely convinced that the present Milk Scheme is altogether satisfactory and incapable of some amendment. I rather gathered from Lord Cranworth, representing the Milk Board, that he could hold out no hope that something may be done in the future to prevent a majority of distributors in any one area fixing prohibitive prices, like 7d. per quart, and the unfortunate thing is that as regards the majority of people selling—
LORD CRANWORTH: May I point out that I particularly said I was not representing the Milk Board, but myself? I am not authorised to represent the Milk Board in what I said.
LORD STRACHIE: I can only hope that the Milk Board will bear this ques-
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tion in mind, and see the difficulties. I have cases in my own knowledge where in a great town the producer of milk who has a milk walk is bound to sell at 7d. a quart, although he could sell at a profit at 5d. a quart. The consequence is that not only do the consumers complain but the producer sells less milk and there is reduced output. I know of another case in another great town where a man has a walk, and he, just in the same way, is bound to sell at 6d. when he could quite well sell at 5d. or even 4d. per quart, and the consequence is that not only the consumers but the producers are hurt. We are constantly being told that it is very hard on the consumers that they should have to pay a higher price, but it is also hard on the producers who are unable to sell more milk because of the higher price.
I understand, as regards the large reduction which I quoted of £148, that very little was done by the Milk Board with regard to the actual cost of expenditure. I was not criticising that. I was criticising the reductions owing to the surplus of milk. That comes from too big a price in the large towns. Where a smaller price is fixed a great deal more milk is consumed, and there is less surplus milk to be sold at ruinous prices. That is my point and it has not been met. Although the noble Earl said we have a very good market at our doors, the consumers have to buy at an excessive price, which the distributors fix for themselves. As I have already stated, the United Dairies Company earned sufficient to pay 18 per cent., although they in fact declared a dividend of 12½ per cent., with a bonus.
There is no doubt, as the noble Earl has said, that in some districts this Scheme has been a great advantage. No doubt owing to the Milk Marketing Board having to take milk from any area whatever a large amount of milk has been brought into the market from areas from which in the old days it would have been impossible to sell milk owing to the long distances they are from centres, and that has no doubt increased the surplus milk. The people in those places are no doubt doing very well indeed. They are very likely paying only 5s. per acre for their farms while the people who did get a good profit in the old days from the sale of milk are paying perhaps £2 an acre for very good land. There are certain

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people who benefit by it, and I do not complain of those people getting that benefit, but I do complain that the other distributors, who previously were getting good prices, are getting less than they got in the old days.
When the noble Earl spoke of the supply of milk to school children I do not think he denied what I said, that it seemed rather contradictory that in one circular the Board of Education should say that where you could not pasteurise milk it would be desirable that you should have milk treated in another way, or that you should have clean milk—and clean milk could be produced without pasteurisation, or any kind of treatment, there is no doubt about that—while on the other hand, the other circular said that the local authorities, that is to say the education committees, are bound to consult their medical officer of health, whose word shall be law. I myself in my county council not long ago raised this very question of pasteurised milk, and the Chairman of the Education Committee was not at all hostile to my suggestion because he knows very well that we produce in the County of Somerset a very great deal of clean milk, but he said that unfortunately they had to do what they were told by the medical officer of health because under the circular they would get no milk unless they-agreed to pasteurisation, for the medical officer of health for the county insisted
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on having that milk supplied for the school children. That is why I say it seems rather contradictory to say in one place in the circular that there are other means of doing it and that you can get clean, good milk without it being pasteurised, while on the other hand it is said that milk will not be supplied to the education authorities unless the medical officer of health for the particular area approves of that milk.
In a great many cases, as one sees in the newspapers, medical officers of health say that they will have no milk unless it has been pasteurised. It seems to me that that is rather a contradiction of the education committees. If they had not given the ultimate decision to the medical officer of health that would have been all right: if they had retained it in their own hands, that would have been another matter. All I can say at the present moment is that I thank the noble Earl, for I am sure he has tried to assist in this matter, and I hope that in the future he will try to remedy some of the grievances which I have attempted to point out to-day, so that we producers may have a better time than we have at present. I ask leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.
House adjourned at twenty-five minutes past five o'clock.