Lords Sitting of 4 February 1937

Preamble
The House met at a quarter past four of the clock, The LORD CHANCELLOR on the Woolsack.
Several Peers—Took the Oath.

BEEF AND VEAL CUSTOMS DUTIES BILL.
Order of the Day for the Second Reading read.
LORD TEMPLEMORE: My Lords, I beg to move that this Bill be now read a second time. It is a short Bill, containing only two clauses, one of which is the "Short title and construction," and one schedule, which is in two parts. It is certified as a Money Bill under the Parliament Act. Before going into the details, I should like to say that the motives actuating His Majesty's Government in the production of the Bill have been stated on very many occasions during debates on meat, occasionally in your Lordships' House and very often in another place. In all this legislation during past years and up to the present time the Government have had two objectives in view: first, to maintain the agricultural industry, which is still the most important industry in this country; and secondly, to encourage and develop in every way our overseas trade, both with our Dominions and with foreign countries. As an example concerning the first objective I might mention the proposals on the question of the live-stock industry which are now undergoing examination in Committee in another place, and, as regards the second objective, the recent Trade Agreement with the Argentine in place of that which expired in November last. This Bill is to be regarded as complementary to both those measures.
When His Majesty's Government came to propose legislation on this matter they were faced as usual with the claims of divergent interests, and I have no doubt that my noble friend the Parliamentary Secretary of the Ministry of Agriculture has by this time discovered that these interests are sometimes very hard to reconcile. First of all, we have the interests of the live-stock producers;
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secondly, the interests of our overseas trade with the Dominions and foreign countries; and, last but not least, the interests of the consumer at home. Now the Government's proposals as regards the Livestock Bill in another place are going, as your Lordships know, to cost a fairly large sum of money—I think in the region of £5,000,000. The duties imposed in this Bill are to some extent a set-off against that money—which is to to be found, your Lordships must remember, by the general taxpayer—because they will bring in rather over £3,000,000 a year. In deciding the rate of duty the considerations which I have mentioned were constantly before His Majesty's Government.
It may be objected by some noble Lords that the rate of duty is not high enough, but to them I would say that a higher rate of duty than the maximum permitted by the recent Agreement with the Argentine might not only have jeopardised the arrangements—valuable to both countries—embodied in that document, but also might well have imposed undue hardship upon the home consumer. In reply to those who may complain that the rates are too high, or indeed that they should not even have been imposed at all, I would say this. I imagine that the objection on this score would probably have come from my noble friends on the Liberal Benches, had there been any present, but apparently they are not here to-day. But, in the first place, it is far from certain that the whole amount of the duty will, in the event, be passed on to the consumer. Secondly, the temporary advantage which the consumer might obtain if the agricultural industry were left helpless against uncontrolled world price movements and competition is inconsiderable compared with the general hardship resulting from a dislocation of our agricultural industry, such as would almost certainly follow a policy of leaving it to fend entirely for itself. In support of this I would only call your Lordships' memory back to 1932 when agriculture was at the very bottom of the depression, and compare it with the position now, when at all events the farmers in this country have a fair amount of hope.
Some of your Lordships may ask why Dominion imports of these commodities should not be taxed as well as foreign

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imports, and I need only remind your Lordships of the Government's policy, which has been enunciated several times in public, that their care is, first of all, the home producer, secondly, the Dominion producer, and, last of all, the foreign producer. The live-stock industries of the Dominions are of the highest importance to them, and in the negotiations with the Dominion Governments which ensured their participation in the proposed scheme for the orderly regulation of supplies for our meat markets, it was understood throughout that the principle of preference to them should be sympathetically maintained.
With these few remarks I will turn to the provisions of the Bill. Your Lordships will see that in Clause 1 are set out the rates of duty for the various classes. I will go into a few details in a moment, but I may point out here that the rates have been in general adjusted to the measure of the duty of three-farthings a pound on chilled beef and two-thirds of a penny a pound on other kinds. With one exception the ad valorem incidence of all is as near as may be 20 per cent., or such as will increase the incidence of existing duties to 20 per cent., and it will be seen in Clause 1 (1) that Empire products are exempt: from duty. In Clause 1 (1) (b) and (c) it is provided that sweetbreads shall be altogether exempt from duty. Imports of sweetbreads from foreign countries form only a very small part of the import of offals, but of the total imported about half is used for the manufacture of insulin. Generally speaking medicines are subject to the 10 per cent. ad valorem duty chargeable under the Import Duties Act, 1932, but insulin is, exceptionally, entirely exempt. In view of the comparatively small total amount of imports of sweetbreads and the proportion used in the manufacture of medicine there is happily no difficulty in the way of preserving freedom of entry for the raw material of insulin as well as for the manufactured product.
Your Lordships will sec in Clause 1 (2) that no duty shall be chargeable under this clause in respect of any sausages or pastes. The reason for that is that these articles are already subject under the Import Duties Act, 1932, to a duty of 50 per cent, ad valorem. The only other point of detail which I need mention is the duty on tinned and raw tongues. The Bill imposes a duty of 20 per cent.
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on both, but tinned tongues already pay a duty of 10 per cent., and the eventual rates of duty will accordingly be 20 per cent, on raw tongues and 30 per cent, on tinned tongues. The present Trade Agreement with Poland, however, limits the duty which may be chargeable on tinned tongues to a maximum of 10 per cent., and it is accordingly proposed by a Treasury Order under Section 14 of the Finance Act, 1933, which is applied by Part II of the Schedule to this Bill, to be found on page 5, lines 5 to 8, to reduce the duties imposed by the Bill for the time being in order that raw tongues may continue to come in free and tinned tongues to pay no more than 10 per cent. This will preserve the protection afforded at present and continued under the Bill to manufacturers in this country of tinned tongues.
The Bill provides in Clause 1 (6) that these duties shall be deemed to have been in operation as from December 16 last; so that we have now had more than a month's experience of their operation. Our experience has not falsified in any way the expectations entertained when the Bill was framed. It is clear that the collection of the duty will proceed smoothly without dislocation of the trade, and fears which were expressed about the probability of a heavy rise in prices to the consumer have not been substantiated. It is quite true there has been some rise in the wholesale price of canned beef, but in the other classes of goods dutiable under the Bill no definite price movement which can be attributed to the duty is observable. It is not to be expected that the whole of the incidence of the duties will fall on this country, and so far as the charge is made in this country it is by no means clear that it will all be passed on to the consumer. It is too early yet to draw confident conclusions from the course of prices since the duties were imposed, but there is no reason to suppose that they will fall wholly on the consumer or will constitute an undue burden on the people of this country.
In conclusion, I would say that His Majesty's Government, in framing this Bill, have very carefully considered all the points to which they had to give attention and which I mentioned in the early part of my speech, and they have formed the opinion that the duties im-

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posed by this Bill will not cause any rise of prices which will bear hardly on the purchaser of imported beef or veal. At the same time these duties will undoubtedly to some extent offset the very heavy expenditure which, it must be remembered, has to be borne by the general taxpayer of the country and which will be included in the larger Bill which will come before your Lordships at a later date. I beg to move.
Moved, That the Bill be now read 2a.—(Lord Templemore.)
LORD MARLEY: My Lords, this is, of course, a certified Bill and to some extent, therefore, our discussion of it must be academic. I take it that as it was the noble Lord, Lord Templemore, who introduced the Bill and not the newly-appointed Parliamentary Secretary of the Ministry of Agriculture, this is a Board of Trade Bill—
LORD TEMPLEMORE: Treasury.
LORD MARLEY: —and therefore we shall look forward to hearing the noble Earl, Lord Feversham, on a future occasion, probably on the Livestock Industry Bill. I can assure the noble Earl that we are looking forward very much indeed to that occasion. So far as this Bill is concerned, I quite agree with the noble Lord, Lord Templemore, that it is a simple Bill, but at the same time I think it raises rather more important matters than the mere simplicity of its details might appear to indicate. With the permission of the House I propose very briefly to indicate some of these points. As a matter of fact I think it would be far better in this House if we would adopt, whenever we can, a more objective examination of measures which are brought forward and Motions which are discussed rather than a purely Party point of view, because I think that in almost all these things there are good points and bad points. It is not a bad thing to draw attention to the weaknesses in any measure which is produced so that this House may be made more use of in improving measures that come up from another place. I propose personally to try to adopt a realist attitude, and point out what I believe to be good as well as bad points in Government measures. There are many good points, naturally, as well as a certain number of weak points in them. Moreover, I do not
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think one's examination of this sort of measure should be purely theoretical. A mere doctrinaire examination is a mistake. I think a realist examination would probably contribute more value to the discussions in this House.
I quite see, from the point of view of its general object, that this measure is of importance to agriculture. We are heartily in agreement to that extent, and the details we shall discuss when the original measure, the Livestock Industry Bill, comes up. There is not the slightest doubt that agriculture is a very hard profession, and the rewards are inadequate to those who are undertaking a very necessary feature of our productivity, particularly in view of the danger of war and the necessity for a strong and fully developed agricultural industry in this country. When we come to the question of whether a subsidy is a good method or not, personally I have been always in favour of subsidies as a method of encouraging any form of national production which is of national value, but that again will come up for discussion on he Livestock Industry Bill, and I shall reserve anything I have to say on that point until that time. Then we come to the question which is the core of this little Bill this afternoon, and that is the provision of money to pay the subsidy. Here I think the Government are perhaps on rather weaker ground, and I would like to point out why. I admit at once veal, because 90 per cent. of the veal consumed in this country is of British origin and the remaining 10 per cent, does not matter very much; but when we come to beef we come to a much more serious position, because 80 per cent, of all the beef consumed in this country is imported and, of that, 85 per cent, at least comes from the Argentine, which is primarily affected by this Bill. I do not therefore think it can be said that it is not going to affect the cost of living of those who consume beef.
As far as the Argentine is concerned, I am inclined to think there are deeper problems involved in this little Bill than have been touched upon by the noble Lord. The Argentine Government is, I understand, contributing a million pounds towards the Argentine meat industry as a set-off to the cost to the Argentine of payments under this Bill.

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That is subject to confirmation, but I believe that to be approximately the case. But this country lives on imported food which is paid for largely by the interest on our investments in other countries, and the Argentine is an important factor in this matter. Anything which diminishes Argentine trade is going to affect quite directly in another way our receipt of food from overseas. I do not think that is unimportant. There is one other fact which I think is worth considering. This country is dependent for its security on the maintenance of what we call the system of collective security, and the Argentine is drawn between membership of the American system and of the European or League of Nations system, and where her trade interests are there will her political heart be also. Already, in the recent discussions in South America undertaken by the President of the United States, there has been a definite conflict of interest as regards; the Argentine between coming into the American group and remaining in the League of Nations, which is so vital to us. I know, of course, that we cannot alter this, but I think it is worth bearing in mind that anything which affects adversely the economic connections between the Argentine and the European nations, and above all the British nation, may have a tendency to drive the Argentine out of the League of Nations group and into the Pan-American group. I think that is an important factor which should not be lost sight of.
I will now deal with the effect of the duties on the people of this country. It is admitted that part of the duty will be paid by the workers. I am not going to put it higher than that. I am not going to say it is all going to be paid by the workers. But the noble Lord would never say that none of it would be paid by the workers. There is a marginal point at which some portion of this duty will be paid by the workers of this country. I am prepared to concede to the noble Lord that the very poorest workers will not be nearly so much affected—the unemployed and such persons will not be so much affected—because they are principally consumers of Empire meat, which is of a cheaper quality and, I believe, is less good. I am not, however, an expert upon the relative values of Australian and Argentine meat. The Australian meat certainly is cheaper, and I am told it does not taste so good.
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Therefore the purchasers of the cheapest food will not be so seriously affected, or at any rate will be affected only to a limited extent.
The productive capacity of the workers of this country, however, is a matter of the greatest importance, and it is essential that the workers of this country should be able to get adequate food of good quality, as otherwise we cannot expect them to be able to participate fully in the growing prosperity of industry. We know as a result of a very serious scientific examination that the workers are not getting adequate food supplies. Noble Lords will remember that some time ago this House discussed extracts from the Report of a Committee, the Report being written by Sir John Boyd Orr. I should like to remind noble Lords of one or two points in this connection because I think they are important. The Report puts in the group who are not getting enough food—the group who are being adversely affected by this Bill—13,500,000 people, and Sir John Boyd Orr expressly points out that so far as meat is concerned if they are to be brought up to an adequate diet from a scientific point of view there must be a 12 per cent, increase in the amount of meat they consume. Now the effect of this Bill must be that there will be a diminution and not an increase in the amount of meat which these people consume, unless, of course, they are prepared to allocate out of slender incomes a larger proportion of their income to meat than they have been accustomed to do in the past.
I need hardly remind the House that there has been heavy increased taxation-on food in recent years, and this has had the effect of raising the cost of living and the cost of food to a considerable extent in recent years. For example, in the Ministry of Labour Gazette for this month I see that since 1934 the cost of living has increased above par value. Between January, 1934, and January, 1937, the cost of living has risen by more than 55 per cent. That increase is a serious one. As compared with the basic cost-of-living figure of 100 in 1914, there has been an increase of 123 to 136 in food only in those few years, and that is an increase of more than 55 per cent, above par. This increase in the cost of living is beginning to have a serious effect. I admit that wages have enormously in-

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creased, that the number of persons employed has increased and unemployment has diminished, and that the workers' share in the national income has increased. Nevertheless I think it is arguable, when the amount of food they can buy is calculated, whether on balance they are very much, if any, better off. I am inclined to think they are worse off. It is impossible, naturally, to get exact calculations in these matters, but it is worth considering whether from now onwards we should not put a stop to any further taxation of the food supplies of this country, because under the law of diminishing returns we may be depriving the workers of that general standard of life which is necessary if they are to participate in building up this country.
I may remind noble Lords that beef is one half of all the meat consumed among the lower purchasing groups in this country. Rather more than half of the meat consumed in the lower-income families in this country is beef. This increase is going to affect most those who have the lowest incomes, because, when you get to the higher incomes, beef is only one-third or one-quarter of the total meat consumption. It is the poorer people, therefore, who are going to be most seriously affected. I realise that we cannot alter this Bill, and I am not going to detain the House any longer, but I think it would be a mistake if we did not realise that there will be some adverse effect upon the poorest people. I do not go further than that, but I do hope that the Government will not suggest any more legislation which will put the burden on the poorer people, on the lower-paid workers generally, but that in future they will spread the burden over the whole of the community.
On Question, Bill read 2a, and committed to a Committee of the Whole House.
UNEMPLOYMENT ASSISTANCE (TEMPORARY PROVISIONS) (AMENDMENT) BILL.
Order of the Day for the Second Reading read.
VISCOUNT GAGE: My Lords, this is a Bill to prolong to the end of March next certain temporary arrangements regarding the financing of unemployment assistance. These arrangements have already been approved by your Lordships on two previous occasions. Your Lordships will remember that when it was decided to postpone the full operation of the Unemployment Act, the local authorities were left unexpectedly with responsibility for the able-bodied unemployed who are not in insurable occupation, and consequently some temporary arrangement had to be made to compensate these authorities until the second appointed day. As your Lordships are aware the second appointed day has now been fixed for April 1 next, on which day this Bill will automatically come to an end. The only difference between this Bill and its predecessors is that the amount of the grants to the authorities will now be readjusted as between certain authorities, and this adjustment has been agreed with the representatives of the local authorities. The Bill has been passed in another place without a Division. In view of that and of what I have already said I have no doubt that your Lordships will excuse the shortness of the Notice with which it has been put down on the Paper, particularly as it is important that it should be passed into law as soon as possible. I beg to move.
Moved, That the Bill be now read 2a.—(Viscount Gage.)
On Question, Bill read 2a, and committed to a Committee of the Whole House.

BUSINESS OF THE HOUSE.
THE LORD PRIVY SEAL (VISCOUNT HALIFAX): My Lords, I understand that in would be convenient if we suspended cur sitting for a time in the expectation of receiving the Regency Bill from another place.
House adjourned during pleasure.
House resumed.
House adjourned at five minutes before seven o'clock.

HOUSE OF LORDS.
[From Minutes of February 4.]

GOVERNMENT OF INDIA (HIGH COURT JUDGES) ORDER, 1937.
INDIA AND BURMA (TRANSITORY PROVISIONS) ORDER, 1937.
GOVERNMENT OF INDIA (ADAPTA TION OF ACTS OF PARLIAMENT) ORDER, 1937.
GOVERNMENT OF INDIA (ADAPTA TION OF INDIAN LAWS) ORDER, 1937
GOVERNMENT OF BURMA (COUNSELLORS) ORDER, 1937.
GOVERNMENT OF BURMA (MISCEL LANEOUS FINANCIAL PROVI SIONS) ORDER, 1937.
GOVERNMENT OF BURMA (HIGH COURT JUDGES) ORDER, 1937.
INDIA AND BURMA (TRADE REGULATION) ORDER, 1937.
GOVERNMENT OF BURMA (IMMIGRATION) ORDER, 1937.
Laid before the House (pursuant to Act) for affirmative Resolution and referred to the India and Burma Orders Committee.