Lords Sitting of 18 February 1942

Preamble
The House met, The LORD CHANCELLOR on the Woolsack.

MILK SUBSIDIES.
EARL DE LA WARR: My Lords, I beg to ask the starred question that stands in my name.
[The question was as follows:
To ask His Majesty's Government what subsidies are now being paid from the Exchequer in order to reduce the price of milk to the consumer.]
THE MINISTER OF FOOD (LORD WOOLTON): My Lords, it is estimated that during the current financial year the expenditure incurred by His Majesty's Government in reducing the price of milk to consumers will be approximately £18,500,000 of which £13,000,000 is estimated to be the cost of the National Milk Scheme, and £3,000,000 is the estimated expenditure on the milk in schools schemes, whilst the remaining £2,500,000 represents a sum required to meet deficiencies incurred by the Milk Marketing Boards without raising consumers' prices.

MILK DISTRIBUTION.
EARL DE LA WARR EARL DE LA WARR rose to ask His Majesty's Government what steps they propose to take in order to eliminate unnecessary man-power, transport and expense in the distribution of milk; and to move, That on grounds both of war-time and long-term policy and in view of what is now proposed for other trades the time has come to reorganize the system of milk distribution?
The noble Earl said: My Lords, I make no apology to your Lordships for raising this subject at this juncture of the war. Totalitarian war means a war that is fought from every nook and cranny of our national life; a war in which we have to make the most of every one of our resources. Waste of man-power, material, money or any form of national energy to-day is a betrayal of the war effort. I know, therefore, that the noble Lord, Lord Woolton, would be the very first to
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agree with me when I say that it is not sufficient for him to arrange for the smooth and just distribution of food which our sailors and our merchantmen bring from across the ocean or that our farmers grow: that distribution must be effected—and it is the duty of the noble Lord to do what he can to see that it is effected—with the minimum expenditure of national effort.
That this subject is a large and important one is proved, I think, by certain figures that the Minister of Agriculture gave the other day in another place. He said that before the war, whereas the wholesale value of the food distributed in, and consumed by, this country, was £600,000,000, by the time it reached the consumer it had reached the sum of £1,500,000,000. The difference between those figures is enormous, and enormous not merely in terms of money but also in terms of expenditure of national effort and energy. I think, therefore, that we all welcomed the announcement made by Colonel Llewellin early in January that the Government intended to embark on a scheme for saving man-power, transport, petrol and so on which were utilized in food distribution; but it struck me at the time that it was perhaps strange that, after two and a half years of war, there still remained things of this character which had not yet been done. For all that, however, the step was a good one, and we welcomed it.
After all, men and women have been called up from the most essential occupations, from munitions and from food production, businesses have been compulsorily closed down, or else compelled fundamentally to change their methods and the products which they turn out, and farmers have been compelled also to change their methods, and in many hundreds of cases have actually been dispossessed of their farms for an insufficient contribution to the war effort. It is not unfair, therefore, that we should demand the same sort of effort and sacrifice on the part of everyone. This country is prepared to give all this, and a great deal more, subject to everyone being treated alike. I think, however, that it must have struck all of us as strange—certainly it struck me as strange when I first heard it broadcast—that there should be exceptions made to this rule, that milk and bread were explicitly excepted. Why? I cannot bring myself to believe that there

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is any organized section of our people to-day who would ask for special treatment, nor can I believe that there is any Minister who would be prepared to give it if they did ask for it. The leaders of the milk trade, like the leaders of other trades and industries, and indeed of the trade unions also, have always been well able to look after their own interests. That is quite right; it is what they are appointed for. I cannot believe, however, that there can be any question to-day of their putting those interests before the needs of the country. Surely we must all be convinced that they would actively desire to be allowed to make their contribution to the war effort; if not, then the time has come for them to be given their marching orders.
During the last two or three weeks, we must all of us have read in the newspapers of certain voluntary schemes which are being adopted by dairymen for tackling this problem. We have read of certain dairymen in certain areas who are delivering their milk only every other day, and that is perfectly feasible at this time of the year. There are other groups of dairymen who have come together in order to amalgamate their rounds. There is one great firm which has virtually abolished credit—which was one of the major recommendations of Lord Perry in his Report—by insisting on weekly cash payments. We have also read of the fact, and no doubt welcome it, that the noble Lord, the Minister of Food, is instituting a survey into twelve typical areas or regions of the country. All this is to the good, but I submit that it is really only playing with the problem. Can any of us feel that, at this stage of the war, we should be in the position of leaving it to the whims of this or that group of local traders as to whether they are going to make their maximum war effort? After all the innumerable Committees and Commissions which have investigated this subject during the last twenty years, can we really say that we are justified in holding up further action until we have had the results of further inquiries and further surveys?
What we can say about these schemes is that they prove that the noble Lord, Lord Perry, in the Report of the Committee of which he was Chairman, put forward very sound recommendations, which in the opinion of large sections—
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and the more progressive sections—of the trade are practical; and those sections of the trade are definitely ahead of the Government in considering them practical. But that is merely playing with the problem; it barely touches the fringe of the problem. At all times it is for the Government to lead and to take responsibility, and to-day doubly so. What we want to know to-day is not what small groups of dairymen dotted over the country here and there are doing, but what is the attitude towards all this of the noble Lord, the Minister of Food. Is it really his view that it is right that at the present time there should still be a system in operation which means that four or five men or women, with four or five conveyances, solemnly go down one street delivering milk? We know that we are short of man-power and of woman-power, we know that we are short of transport, we know that we are short of petrol. Are we justified—and we want to hear the view of the noble Lord on this—in continuing to allow this waste?
The noble Lord has told us of the subsidy which is at present paid under different headings in order to keep down the price of milk to different sections of the consumers. We know also the importance of making the most of our financial resources. Is it not a crazy system that the Ministry of Food should go to the Chancellor of the Exchequer for £18,000,000 in order to help keep down the price of an important food to the consumer, when we know from the Report of the noble Lord, Lord Perry, that if we saved only 2d. a gallon in distributing charges we could save something like £10,000,000 a year? I confess that a scheme of finance of that character can only be described as crazy at a moment when every penny is needed for its maximum use in the national interest. Surely the noble Lord will agree with me that there can be no justification whatever on the grounds of the war effort for the perpetuation of this state of affairs.
If there is no reason on the grounds of the war effort, is there some other ground? Is it essential for the permanent needs of the country that this system should be perpetuated? If the noble Lord is of that opinion I think he will have very considerable difficulty in convincing either the country or the House that that is really so. He will have to prove to us that the Reports of these Committees,

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Reorganization Commissions, and Royal Commissions that have sat so frequently during the last twenty years, are all wrong. He will have to prove to us, for instance, that the noble Marquess, Lord Linlithgow, was wrong to draw our attention to the subject in, I think it was, 1924; and that the Reorganization Commission of 1933, presided over by one of his colleagues to-day, Sir Edward Grigg, should not have reported that another factor involving increased costs is the existence of a number of retailers operating the same districts. He will have to prove also that the Committee of Investigation in 1933 should not have reported that there is no justification for fixing permanently the minimum margin on a basis which allows such overlapping and unnecessary services, and that the reorganization of distribution provides the greatest scope for the reduction of the retail price. He will have to prove that a further Commission sitting in 1936 should not have reported in favour of allotting zones of distribution to retailers and of encouraging the amalgamation of rounds.
Further, he will have to prove that the Food Council should not have reported to the President of the Board of Trade in 1937 that the number of distributors in the industry was excessive and that this factor must add to the distributor's costs. Lastly, there is the Committee that the noble Lord himself asked Lord Perry to preside over. That Committee reported last year, making certain very definite and concrete proposals, and stating in their Report that
" We have shown that the system of milk distribution employed in the greater part of the trade is unnecessarily costly and elaborate."
On evidence such as that I am quite sure that the noble Lord will feel that he does not want to try to convince us that this system, as it operates at present, is of the slightest value, or that there is any case whatsoever for saying that the milk trade should be subject to special concessions. It certainly does demand special treatment, but that treatment is of exactly the opposite character to what is suggested by its omission from this scheme of rationalization: it demands special treatment in the sense of drastic and immediate reorganization. I think every reasonable person, looking at this
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subject, must at once admit that this problem that faces the noble Lord is not an easy one. The milk trade is not only very powerful—I am sure that does not bother us; it does not bother the noble Lord in time of war—it certainly should not——
LORD WOOLTON: It does not.
EARL DE LA WARR: —but it is also very complex. It consists of great combines, great consumers' co-operative societies, small traders, and producer-retailers—every one of them with a different and conflicting set of interests, with rights, and many of them of quite definite and permanent use to the country and with a definite function to perform. But nobody is suggesting that we should underrate the difficulties. You do not help to solve a problem by underrating diffculties. What I suggest is that the noble Lord should tackle this problem, and tackle it now as an immediate war issue. I think I can venture to assure him of very wide and sympathetic support from the country, and from all sides in this House, if he does decide to tackle it. But no doubt the noble Lord will still tell us the reason why, so far, he has decided not to do so; why he turned down the Perry Report and why, in the Government announcement of January, he decided to omit milk. I think from the remarks I have made it will be seen that it cannot be on the grounds of the war effort or of the permanent needs of the country. What then is the reason?
The only further reason that I can see is that the noble Lord might feel that these great interests have defied any attempts of Governments to deal with them in the past, and he feels that it would not be wise in the national interest to stir up a hornet's nest at the present moment. But what does that amount to? It amounts to saying that if any powerful group of interests say that they are unable or unwilling to fulfil the conditions of reorganization necessary in order to enable them to put forward their maximum contribution to the war, then they should be allowed to stay as they are. I think that reason only has to be mentioned in order to be thrown aside at once, because not one of us could believe for a moment that that was a reason that would influence the Government at the present moment.

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There is one point that strikes me rather forcibly. I am wondering all the time whether the noble Lord is not a little unfair to the trade that we are discussing. During the four or five years I spent as Under-Secretary at the Ministry of Agriculture I formed some very definite views about the distributors generally. I had a good deal to do with them, as at that time we were introducing some of the marketing legislation of the day, and I came to three very definite conclusions. The first was that the distributors of this country, though perhaps not more, are certainly not less patriotic than any other section in the country. The second was that the retailers are frequently attacked as profiteers when, in fact, they are themselves suffering through having to operate an inefficient system. The third conclusion to which I came was that a great many retailers are fully conscious of that position, and a great many of them would welcome the assistance of an outside body, with the authority which the Government possess, in helping them to put their house in order. They should realize—and I think many of them do realize—there are only two possible methods of handling commodities, such as milk, which are vital to the health and existence of the country. One is that the interests engaged in handling these commodities should get together themselves as a trade and reorganize themselves in the public interest. That is one solution. The second is nationalization. To my mind the choice lies very largely in their own hands, because there would be very few people to-day—even the most dogmatic of Socialists—who would want to nationalize any trade or industry if they saw it had reorganized itself in the public interest.
I should like in conclusion to ask the noble Lord one or two questions Has he discussed all this with the trade? Has he put before them where their duty lies? Has he reminded them of how other trades, industries, and individuals are having their work, effort, and lives con-scribed at the moment? If he has discussed all this with them, I take it he is largely in agreement with me in thinking that something must be done. If he has not discussed this with them, he should tell the House why. If he has, what was their reply? The public have a right to know who, if anyone, is responsible for
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any hold-up. Have the great combines interposed their interests? Have the consumers' co-operative societies? Have the small traders? Have the producer-retailers? Parliament has a right to ask these questions, and I hope the noble Lord is going to answer them. Have any of these sections, in fact, put their interests in front of the interests of the country? Parliament has a right to know, and I can assure the noble Lord that he will be repeatedly asked unless he is good enough to tell us now. And I should like to know from the noble Lord what steps he intends to recommend to his colleagues and to Parliament for dealing with this situation. Alternatively, if he does not intend to recommend any steps to his colleagues or to Parliament, I should like to know why he has chosen to give the milk trade this special privilege—if privilege it can be considered in these days—of not being treated in the same way as other sections of the country.
In conclusion, I may also say that if, despite the Perry Report having been turned down and despite the wording of the announcement in January, the noble Lord is able to tell us that I have been unfair—that, in fact, he does mean to tackle this problem—let me assure him, as I think I can, of wide sympathy with himself in tackling a difficult problem and wide, if not universal, support. Let me urge him in considering this problem not to be troubled about any possible political differences. The country is in no mood to-day for playing about with politics. The country demands practical solutions to practical problems, and Ministers who have the courage and the will to impose them. I beg to move.
Moved to resolve, That on grounds both of war-time and long-term policy and in view of what is now proposed for other trades the time has come to reorganize the system of milk distribution.—(Earl De La Warr.)
LORD WOOLTON: My Lords, the House will realize that the noble Earl who has moved this Motion has spoken from a conviction clearly of many years on the ideal planning of trades. He has provided a solution. He has said that trades, particularly retail trades, must work either towards nationalization or towards something which he did not precisely define, but if I may supply a phrase for it, it would be the establishment of

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public utility companies. He has used the milk trade as a vehicle for the expression of these views. The milk trade most certainly lends itself to such considerations. It is the trade of all trades in this country that has been subjected over a long period of years, and under many Governments, to inquiries by Commissions of one form or another. It was when the noble Earl was at the Ministry of Agriculture that the scheme for the Milk Marketing Boards was set up—a most admirable, beneficent scheme. Then was an opportunity for this bold planning. The Government of that day, however much they may have recognized the necessity for bold planning, stopped when they came to the question of reorganizing the retail milk supplies. They left that problem to be dealt with later.
The noble Earl has brought to our notice, in the midst of this week and this war, a problem that has been one of the issues on which political pamphleteers have written for years. Neither in the days of peace, when men had time, nor in the stress of the last war, when opportunities were such as the noble Earl refers to at the present time, has a solution of this difficulty been found along the lines the noble Earl apparently desires. In point of fact he has not presented the House with any solution to-day. I make no complaint about that. It clearly is the business of His Majesty's Ministers to solve problems, and I most certainly make no complaint that any member of your Lordships' House should direct attention to problems that need to be solved and to ask His Majesty's Government wherein in their opinion the solution lies. The conditions of war may give an opportunity for reforming our industrial and our social order, but when you consider the long trail of controversy that this problem of milk distribution has aroused, it must at any rate be clear to your Lordships' minds that the problem is one that calls for the best brains and the greatest skill that the country can provide if a solution is to be found. The nation is faced with other problems that are making great demands upon such high capacity, and I am going to submit that, so long as the public interest is not involved, those other problems are of a more urgent nature.
What are the facts of the case? The primary duty of the Ministry of Food
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during war-time is to secure that the nation is fed, and that there is no waste of material in the process of feeding it. There has been no failure on the part of the milk trade to keep this nation fed even during difficult times. I approach this problem without political history and without political affiliations. I approach it from the practical and the realistic point of view, and I invite your Lordships to consider the facts. The noble Earl has referred time and again to possible interests. I have no concern with interests, I have no hesitation in dealing with any trade interests, if I come across them, that are acting during this war in a manner inimical to the State. We shall get no further towards the practical solution of this problem by assuming that the men engaged in this trade are not just as good patriots as we are ourselves. The noble Earl asked: "Why did you leave out the milk trade and the bread trade from your plans of rationalization?" I did not; I had never any intention of doing such a thing. One of my colleagues announced, with my consent, that there would be a certain rationalization applied to other things than bread and milk, and the reason for that was a simple one. These two articles of bread and milk are very perishable articles which the public has been accustomed to have delivered to it day by day. They were unsuitable articles to be put in the same category as grocer's dry goods and the like. I thought it wise to have independent plans for dealing with these two articles, both of which differ from the other articles with which I was concerned and each of which differs from the other.
We have already announced what we were going to do with the bread trade, because it was easy to make a public announcement about that trade. We have arranged that the public should no longer have, during the war, the privilege of having fresh bread every day. The distribution has in fact been divided by two, and bread deliveries will take place every other day. The milk problem is a different one, because milk is completely perishable and must be delivered, at any rate during the summer months, every day in the week. That is why I did not place milk in the same category of transport reorganization as I did the grocery trade. It was not because any body of unpatriotic people were objecting to my

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plans, it was not because of self-interest, and it was certainly not because of fear on my part of trade interests.
May I occupy your Lordships' time—for this problem is one that I know has concerned you—by asking you to look in detail at the make-up of this trade? Allow me to spend a quarter of an hour by going into it in some detail. Throughout the country there are large numbers of co-operative organizations, in the aggregate doing a larger percentage of the milk trade than any other organization. These bodies are called co-operative societies. They are societies that do not represent any single financial unit. They are a number of entirely separate societies, but trading on a common principle, and that common principle involves membership and a distribution of profits to their customers. In the rest of the country milk distribution varies vastly from town to town. In some cases, notably London, there are very large organizations, but large as they are these bodies deal only with a relatively small proportion of the total milk trade of the country. They are called large combines, but they do not figure largely in the aggregate. Then there are numbers of financially comparatively small concerns run by the ordinary milkman who buys his milk wholesale and proceeds to distribute it by retail.
Then, as the noble Earl mentioned, there are a very large number of producer-retailers, men who combine in varying degrees farming and retailing. Sometimes they are fairly large farmers and retailing is a small part of their business. Sometimes they are very small farmers and they buy milk wholesale as well as produce it from their own cows. They have a great hold on the public. The public feel when they are dealing with this section of the trade that they are getting milk straight from the cow, and that is a pleasant thought. As a consequence these traders are found not only in the country areas, but right in the centre of the largest cities, and sometimes it is indeed true that their cows remain right in the centre of the largest cities. You must remember, too, that some of the largest combines are also producer-retailers. Finally, there is that very highly select body of people—I am sure there are many representatives of them in your
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Lordships' House—that peculiarly valuable body who are determined to produce only that milk which under the most severe scientific and hygienic test is of the first quality. They are people who take great pride—and indeed render a great public service—in building up herds of cattle that will produce milk entirely free from disease.
I hope it is reasonable that I should direct your Lordships' attention to the complexities of this problem of rationalization in this somewhat untidy trade. So many Committees have indicated that it should be tidied up; so very few people have indicated methods that will get at any rate any public support by which it should be done. May I invite you to consider the means by which it can be tidied up, because they are quite clear? The first is to admit the principle of unrestricted competition. By this means we could have a milk war, and people who like to run business on such lines would find that war-time gave them a particularly advantageous occasion for doing it. Times when profits are restricted by E.P.T. would enable these people to run a milk war at the expense of the State. The result would be to make it possible for the large organization who could afford to ignore the profit factor for a few years to cut out all the small people. By this means we might certainly obtain a more orderly distribution of milk; but I am bound to say I should regret it. I should find the result scarcely worth the cost. I do not want to see the disappearance of the family milkman who has built up his business by rendering over a long period of years consistent and faithful service to the people who are his customers and people whom he knows. That is a good basis for trading.
There is a second possibility. We have developed through the Ministry of Food national organizations for ensuring the economic distribution of vital commodities such as meat, bacon and margarine. It would be possible to do the same for milk, thereby creating a public utility service. But in those cases that I have mentioned we have stopped at the wholesale level. In the process of doing it we have secured great economies in manpower and in transport. It may indeed be that at the wholesale level some similar organization for milk would serve the national purpose. I believe that it would.

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But when you come to the problem of distributing milk to the retailer I do not believe such a pubic utility company is possible unless the co-operative societies are prepared to come into it. Let us look at these co-operative societies. They have built up their trade on a particular system of membership and a consequent distribution of profits which is different from that of any other trading organization in the country. And they have done it very well. They take a great pride in it, and it is not unreasonable that they should inquire what are the circumstances that make it necessary for them to abandon their peculiar individuality in order to join in a great national scheme. I do not believe that it is very easy to find an answer to that question if the answer is to be rendered in terms of public service.
Thirdly, there is the other and much less dramatic policy that I have pursued, of seeking to obtain by consent results that I think it might be difficult to achieve by compulsion. Fabius was not one of the dramatic or heroic figures of strategy, but he did get there. Here let me answer the questions which the noble Earl asked me. He asked if I had discussed the matter with the trade. Of course, my Lords. He asked did they know where their duty lies. I did not have to talk to the milk trade about where their duty is. They know where it is. He asked did they know what is happening to other trades. Of course they know very well what is happening to other trades. Are these traders putting their interests before those of the country? Most certainly not. Your Lordships are perhaps aware that when I wanted to introduce the National Milk Scheme for mothers these traders said: "We will do this without any profit at all to ourselves as a piece of patriotism and as a piece of national service." These people are not unpatriotic people. Of course I have talked to them.
The line of policy that I have adopted has been to encourage business men who are engaged in this trade, and who have at least as much knowledge of uneconomic factors in the trade, in so far as they exist, as I have, to come together and by mutual consent to eliminate wasteful methods of distribution. The process of amalgamation has been going on all over the country for months past. There have been no public speeches about it.
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Let me give you just a few examples, taken more or less at random. In Birmingham forty firms have been absorbed. In Bournemouth six firms now do 85 per cent. of the trade. In Southampton two firms are doing 90 per cent. of the trade. I quote these merely as examples. But the processes of amalgamation and absorption have many legal and financial difficulties, and sometimes it is easier to arrange for a concentration of selling districts rather than a concentration of capital. I do not mind, so long as the same end is achieved. This is taking place. One of the largest firms in the country has reduced its rounds by 33⅓ per cent.; another by 37 per cent. In two large towns which I know the principal distributors other than the co-operative organization are meeting together and are arranging for a concentration of their rounds.
There is much evidence of increased delivery efficiency as a result, and the noble Earl, I am sure, will say to me: "That is exactly what I have been telling you." There has been increased efficiency as a result of this tidying up of the trade. One of the largest employers tells me that he used to deliver 43·4 gallons per round whereas—until I introduced rationing, which did upset their arrangements a great deal—they had, as a result of amalgamating their rounds one with another, got to the position of going up from 43 to 65 gallons. Let me give your Lordships some more figures. Another distributor has gone up to 43·1 gallons from 26·7 gallons. In the case of two provincial cities deliveries rose in one case from 36 to 57 gallons and from 41 to 55 gallons per round in the other. Perhaps an even better indication of economy in distribution as a result of this co-operation is the average number of calls per round that are being made. I have here the figures of only one firm, but it is a very considerable firm. They have risen from 240 calls per round to 320. That is the process of tidying up that has been going on without the invocation of any new edicts. Of course there has been a reduction in the number of people employed. In some of the larger firms the number of employees for approximately the same gallonage of milk has dropped by one-third.
I would not seek to occupy your Lordships' time by further elaborating

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this issue. I have done so not so much by way of justification for my policy, but because I wanted your Lordships to know that we have been doing something during this period and that we have been achieving results. A minor revolution has taken place in milk distribution in this country during the last year. May I direct your Lordships' attention to this? During this winter the Ministry of Food has cut right through contracts between individual producers and retailers; it has diverted milk from areas to which, under contract, it would have gone, to areas where the national interest required that it should go. Some of your Lordships I know are interested in the nutritional use of milk. Notwithstanding a fall in production in the Northern Counties of England and Wales of over 2,000,000 gallons in the month of December, 1941, as compared with December, 1940, we provided more than 1,250,000 more gallons of milk for consumption in the northern half of England in December, 1941, than in December, 1940.
In the South of England the reverse occurred. Production was up, but we forced consumption down. The Government have effectually determined where milk, after it leaves the farm, shall be sent for consumption, and if we had not done this we should not have been able to be certain that the children and the invalids and the people who most need milk would have had it during these rather difficult winter months. But they got it, my Lords. We have used the power of the Government to direct this vital food so that it should preserve the national health. Those are essential issues, and on those issues there has been neither hesitation nor failure in determined action. May I pay tribute to the forbearance of the adult section of the population for the way in which they have enabled this plan to work? They have had very little milk during these last few months, and I am glad to say they have written me very few letters about it.
Your Lordships may remember that I announced that I would try to deal with the problems of milk and eggs. Well, I have dealt with the problem of milk. Perhaps your Lordships will let me announce that I propose to maintain this system of control over the distribution of milk throughout the year, but, provided that the weather and the cows play their
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parts, from somewhere about the middle of March I propose to increase the allowance for non-priority adults. The increase will be from the present two pints per week to two and a half pints weekly. Your Lordships will be interested to know that this increase of half a pint weekly to the adult population calls for a further 1,700,000 gallons of milk weekly. A further increase will be made as soon as possible after this date, when the increase in production justifies it, but we shall not throughout the war go back to unlimited supplies of milk. During the flush milking period of the summer it will be necessary for us to manufacture quantities of milk powder, condensed milk and cheese in order that, next winter, we may be reasonably well supplied. But, however much we economize, it would be impossible for us to keep up the supplies of milk to the children of this country without the help of the United States of America, and we are indeed greatly indebted to Mr. Wickard, the United States Minister of Agriculture, and to the people and the Government of that country, for the way in which they have enabled the people here to be catered for during this last winter.
We have controlled the milk trade in all its essential factors during this winter, and I hope that both my Department and the trade have learnt so much during the last few months that next year we may operate more equitably, and with loss inconvenience, both to consumers and to traders, than we have had this autumn. I realize that these issues on which I have spoken to your Lordships during the last five minutes are not quite the same as those to which the noble Earl has directed the main portions of his speech. I hope I have convinced your Lordships that something, at any rate, has been done—perhaps more than your Lordships previously realized—along the lines that the noble Earl has indicated. At the present time important negotiations are in progress between the Government, the milk producers and the milk distributors, negotiations directed along the lines of the third alternative that I put before your Lordships. I am very anxious not to say anything to-day that will make those negotiations more difficult, but I must say this. I am not going to encourage your Lordships or the country to expect any grandiose scheme for the rationalization of milk retailing on a national scale. I

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am not going to issue edicts which will drive the small traders of this country out of the businesses which they have built up through very hard work and by their own initiative.
I believe that I can obtain the good will of this trade, a track: which has rendered great national service to the country. In the trying times of the heavy air raids they delivered the milk all over the country. That is true not only of the large companies but of the small men, who had to rely entirely upon their own resources, and who could not call up some central office to help them out. They triumphed over all sorts of physical difficulties. I believe that we shall need them again; and, as a practical man engaged in trying to do a very practical job, I am going to do all that I can to retain in the service of the public the traders whose enterprise has built up businesses which proudly bear their own names. I believe that they will, in this spirit, join me in mutual co-operation to ensure that, at the least expense and with the minimum use of labour, they will continue to serve the public for the rest of this war.
LORD TEVIOT: My Lords, I wish to intervene for a few moments only, because I know that other noble Lords desire to speak on this subject. I was a little sorry to hear the noble Lord introduce the word "politics" at the beginning of his speech, because this is not a political question at all. I, and I think most others, are concerned with the enormous cost of distribution, and that is really what I want to speak about particularly to-day. I agree very much with what was said by my noble friend who raised this matter a bout the enormous subsidy which is paid on the top of the cost of distribution. I take it that the cost of distribution must be a great deal more than the 8d. per gallon which Lord Perry's Committee in their Report regarded as sufficient. I take it that this sum of £18,500,000 is on the top of the cost of distribution. Am I right in that?
LORD WOOLTON: No.
LORD TEVIOT: Then the total cost of the distribution of milk is simply the amount which the noble Lord mentioned as a subsidy? Surely it is more than that?
EARL DE LA WARR: It is on top of that.
LORD TEVIOT: Perhaps I am not explaining myself clearly. The noble Lord, Lord Woolton, in answer to a question by the noble Earl who opened this debate, referred to a subsidy which was being given towards the distribution of milk, and which I think he said was £18,500,000. That is not the total cost of distribution?
LORD WOOLTON: No, certainly not.
LORD TEVIOT: That is the point. What I want to know is this: what is now the total cost of milk distribution?
LORD WOOLTON: The cost to whom?
LORD TEVIOT: The cost to the consumer and to the country generally.
LORD WOOLTON: Well, to which?
LORD TEVIOT: The noble Lord has given me one figure. If he will give me the other I will add them together and that will be the cost of the distribution of milk to-day.
LORD WOOLTON: My Lords, perhaps I may intervene for a moment, because I do not want us to go astray. I am not defending the cost of the distribution of milk particularly, but the fact is that the National Milk Scheme does involve giving free milk to a very large number of people, and milk at a very much reduced price to other people. The total cost of that is £13,500,000, but it is only confusing the issue to say that a figure which includes the cost of the milk—it has nothing to do with distribution, but is the cost of giving a commodity free of charge to certain people—has anything to do with the cost of distribution.
EARL DE LA WARR: That is not the point.
LORD WOOLTON: Similarly, milk in schools, as the noble Lord knows, is provided very cheaply, and in some cases free. The total amount involved is £3,000,000, but that has nothing to do with the cost of distribution; it is the cost of the milk.
LORD TEVIOT: My Lords, I quite realize that; it is the cost of the milk plus the cost of distribution. The figure of £13.500,000 to which the noble Lord

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refers is the cost of buying the milk and the cost of its distribution to the various people who drink it. Am I right in that?
LORD WOOLTON: Yes.
LORD TEVIOT: My point is this. Having read very carefully the Perry Report, I find that Lord Perry's Committee came to the conclusion that the cost of distribution, including a profit to those concerned, should be 8d. a gallon. It must be a great deal more than that now. I wonder whether the noble Lord can tell us what it is.
LORD WOOLTON: It is about 11d. It varies in different parts of the country.
LORD TEVIOT: Let us take an average figure.
LORD WOOLTON: We are talking not of the net profit but of the gross profit. A fair average for purposes of discussion would be 11½d.
LORD TEVIOT: Roughly speaking, a shilling.
LORD WOOLTON: Roughly speaking, yes.
LORD TEVIOT: That represents, in gross amount, a very large sum. The noble Lord has told us of innovations and improvements, which I congratulate him on having made, but surely that reconstruction, if I may call it so, instead of keeping the price of distribution up, should have a tendency to lower it. I am wondering whether it has had that tendency.
LORD WOOLTON: Yes, certainly.
LORD TEVIOT: It has? That is extremely satisfactory.
LORD ADDISON: It has not lowered the price which the householder pays.
LORD TEVIOT: If it has lowered anything it is satisfactory. There is one other point, my Lords, to which I should like to refer. I do not understand why, in arriving at a policy on this question, the method of the distribution of profits in the case of any particular undertaking should come into the matter, at all. The noble Lord said that the co-operative societies have their own particular method of distributing their profits; but, with great respect, I fail to see why that should
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have anything to do with a scheme which is intended for the reconstruction of distribution, and, I take it, for the cheapening of milk generally. I am wondering whether there is something which I have not appreciated. I am interested to hear, however, that the noble Lord appears to have taken account of something which does not apply in the case of any other business in the war.
My noble friend who opened this debate said it is appalling to think that while the cost of food generally is about £600,000,000 we have added £850,000,000 to that, so that the cost is increased practically from £600,000,000 to £1,500,000,000. That increase is paid to a great extent by the masses of the people, and we have heard nothing today which suggests that it will be reduced, although what is going into the pockets of the middlemen affords enormous scope for reduction. I earnestly beg the noble Lord, who no doubt has this matter very much in mind, to see whether something cannot be done. It would be of colossal benefit to all the people in the country, and not only to them as individuals but to businesses generally if that figure of £850,000,000 could be materially reduced. I hope that the noble Lord will accept this Motion. As far as I can see there is nothing in it antagonistic to him and his Ministry, and I feel that a long step in the direction of the Motion would materially help a great many of our fellow citizens.
LORD SWAYTHLING: My Lords, there are two aspects of this rationalization to which I would like to draw special attention. The Minister of Food mentioned various districts of the country as examples of places where the voluntary system was working satisfactorily, and one of the districts was one with which I am familiar as it is my neighbourhood of Southampton. He mentioned that two firms there had united. One is the co-operative society. I am given to understand that the only method by which further' rationalization in Southampton could be achieved is by continuing and extending the exchange of customers between these two firms. The co-operative society, I am informed, say that they are willing to "swap customers" provided that they are permitted to give dividends at the end of every three months to those of their customers who should transfer to the other

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firm. Well, that is an aspect of business which your Lordships will immediately agree is entirely impossible, and I have failed to grasp any reason why this payment of dividends by the co-operative societies should be allowed to continue. I feel that if legislation were passed, or orders made, dividends on the co-operative society's milk should cease for the duration of the war. Far more rationalization between the co-operative societies and the other dairy firms could be achieved, with the desired result of economy in man-power and petrol.
The only other point to which I wish to draw attention is the question of saving man-power by permitting milk to be distributed only every second day to customers. Your Lordships will be well aware that milk can be produced, and is produced, up to the official standards of graded milks, not only in winter but also in summer, which will last for two days easily, and that milk which is not of that standard, when pasteurized, will also last two days. It seems to me to be quite practicable to insist that milk should only be delivered in any district every second day. Firms would be able to arrange that their roundsmen should deliver on one day in one district and on the next day in another district, and great economy in manpower would thus be achieved. At the present moment firms are in a difficult position. Their men were, I believe, until a short time ago reserved over the age of thirty, and now that they are no longer reserved at that age they are finding it very difficult to continue their deliveries in a satisfactory manner.
LORD CORNWALLIS: My Lords, I think every one of your Lordships will feel grateful to" the noble Earl who introduced this Motion, because there is no question that this is a subject that is causing very considerable feeling, I would even say a feeling of consternation, though that is a word one hates to use in times like this. I am delighted to hear from the Minister of Food that a beginning has been made with this question of the cost of distributing milk. I only hope that that beginning from its small acorn will grow into a very large oak, because there is no getting away from the fact that those who produce milk have a very strong feeling that the distributors are too strong for the Minister of Food and too strong for the Government. They go even further than that, they have
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a very strong feeling that the milk distributors are too strong for the Government to bring into operation the Perry Report. That is not at all a healthy feeling.
The noble Lord, the Minister of Food, mentioned the small traders and said he did not wish to see them abolished. Nor does any one of us. But I can assure him, and the noble Earl, Lord De La Warr, could also assure him, that he and I have both seen small amalgamations which have been very much to the advantage of the small trader, and perhaps have almost saved their small businesses, especially in the producer-retailer branch of the trade. The Minister of Food said that it was his job to secure that the nation should be fed and that there is no waste in the process. I am perfectly certain that every one of your Lordships would like to pay a tribute to him for the magnificent efforts he has made in feeding the nation, but the point of the Motion that we are discussing to-day is that there should be no waste in the process. We do not want to talk about mistakes of the past and why any particular Committee's Report was not adopted.
It is no good the Minister of Food saying that my noble friend Lord De La Warr produced no solution. After all, the noble Earl could have produced the Perry Report and said, "There is a solution to act on." If one looks back at the inception of the Perry Committee, it was set up to investigate '' the cost of distributing milk in Great Britain," then in brackets—very important brackets—" that is, the difference between the payment received by the producer and the charge to the consumer." In that Report you get that recommendation that the distributive margin, as it is called, should be cut to 8d. It may have to be a little higher now—no one is going to split hairs over that—but what I want to touch upon for one moment is that difference between what the producer receives and what the consumer has to pay, because that is where a great many people in this country believe there is unnecessary expenditure which is causing unnecessary expense to the purchaser of milk.
The cost of production varies very widely over this country. I made inquiries yesterday—I spent some time at it—from milk producers in my own region. These milk producers are all

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sound people who try to keep books and look after their businesses. I am not going to vouch for these figures absolutely, but they told me that their average receipts as producers last year came out at about is. 10d. a gallon. From that you have got to take the cost of transit to the buyer, which probably is a penny, and it may be more than a penny now. Thus they receive 1s. 9d. What has been the price to the public? It has been precious near 3s., if it has not been 3s. most of the year. If that is so, there is a difference of 1s. 3d. between the amount paid to the producer and what the consumer has to pay. I should like to put in a rider here that I cannot absolutely vouch for these figures, but there is the idea going about that there is this difference of 1s. 3d.
There will not be any milk distribution if there is no milk produced, and the one thing which is sapping the confidence of people at this moment in this country—and it applies just as much to milk as to any other industry—is that people are perfectly certain that at the end of their effort there is waste going on in the use of the production for which they have been responsible. I am perfectly certain that if the noble Lord, the Minister of Food, will pursue his investigation—I am not accusing the milk distributors of being unpatriotic any more than any one in any other trade—he will find that, human nature being what it is, somebody is trying to make a penny in every industry and not only in milk distributing. It is that waste and that feeling of waste—and, do not forget, producers have read the Perry Report, and read it carefully—that is sapping the incentive of the producers to produce milk. If your Lordships had the job I have got you would know how difficult it is at this moment to keep the producers up to the mark, and to keep them up to a high level of production. I implore the noble Lord, the Minister of Food, to face the facts, and not allow what are known to be really excessive costs of distribution to enhance the price of milk unnecessarily, but to ensure its getting to the people whom it is meant to reach at a proper and reasonable price and one that all can meet.
LORD BALFOUR OF BURLEIGH: My Lords, the noble Earl introduced this subject in a most admirable speech. In
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reply we had, if I may be allowed to say so, a very able debating speech by the Minister, but I thought the most significant thing that the Minister said was an aside which he let drop in reply to my noble friend, Lord Teviot, when he said, "I am not defending the cost of the distribution of milk." Of course he cannot defend it because it is much too big. That is the root of the trouble. The Perry Report, which I hope your Lordships will read if you have not already done so, said that 8d. a gallon was adequate as the cost of processing, bottling, distribution, administrative and selling expenses, interest on capital, and profit. It stated that the total cost of distribution including these items should be, and ought to be, limited to 8d. They also said, and this is a quotation from the Report:
" It follows from the Food Council's figures that an economically operated business which can make a net profit of as much as 4d. per gallon may reap a yield on invested capital amounting to nearly 100 per cent., and this we have actually found to be the case in the course of our own inquiry."
We know that the cost of distribution has gone up, and I do not think it is unfair to say that we can feel pretty confident that the profit in that cost of distribution has not diminished since the date of the Perry Report. That is one of the factors which have got to be taken into account.
The noble Earl made a very strong case on the long-term view and on the short-term view, the latter being the war position, the need for rationalizing labour, petrol, and so on. There is also this point which surely is a strong one. The noble Lord has told us the State is paying £18,500,000 in subsidization to the milk trade. On the other side of the picture we have profits being made in distribution alone of 100 per cent. That cannot be right. I can quite understand the difficulties of a milk war, which the noble Lord told us was one of the alternatives, but from what the noble Lord said I conclude that one of the main obstacles in the way of rationalization, which would include a lessening of the distributive margin, is the system whereby the great co-operative societies distribute their dividends. There are references to that in the Perry Report, and this is what it says on that point:
" We should not feel justified in making recommendations which were designed to maintain the societies in this exceptional position.''

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That is:
" it is inconceivable that the co-operative societies would argue that the price of milk should be kept at an artificially high level in order to give them an indirect means of reducing it to that particular section of the community which they serve."
The Report goes on to say:
" We realize how deeply attached the cooperative movement is to the dividend principle, but we do not think it is too much to ask of a great national institution which has pointed the way to cheaper milk distribution to perform a further public service by accepting a charge which would be for the general benefit."
If I may I will give your Lordships one more quotation from this Report. The Report concludes with this:
" It will rest with the distributors to use the interim period to adjust their trading methods to the new régime. The Report of the Scottish distributors suggests that, given more time, they may produce more effective proposals than those which they have so far put forward. The attitude of the English distributors, however, amounts to a flat denial that anything can be done either voluntarily or under compulsion. We are reluctant to believe that this standpoint can be maintained to its ultimate issue, but if official intervention becomes inevitable the onus will rest on the distributors for forcing action which it would have been preferable to avoid."
That was in June, 1940, and the noble Lord in telling us that the Government were unable to accept the Perry Report, if my recollection is correct certainly did not tell us that the obstacle was the cooperative societies' financial arrangements. That therefore appears to be an obstacle which has emerged in the last eighteen or twenty months.
I would like to make an appeal to all the businessmen engaged in this trade, because it is much more desirable that this co-operation should be secured by agreement and not by compulsion. I quite agree with that. I think if those businessmen were here at the Bar of the House they could not justify a system which today involves not only waste of man-power and waste of petrol, but in some cases 100 per cent. profit on a food which is essential to the poorest of the population. As individuals I do not think anybody could justify that, but the misfortune is that when we individuals get banded into organizations we are not always amenable, quite, to the arguments which as individuals we should regard. A kind of hardening process goes on whether we become limited companies or co-operative societies, or trade unions, or chambers of
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commerce, or any other body. It is a great pity, my Lords. I would appeal to the peple in this great trade, and I hope what I am saying will be of assistance to the noble Lord because we want to help him to get this thing done. It is not justifiable that the present condition should go on. The noble Lord said that Fabius is his model.
LORD WOOLTON: I did not quite say so.
LORD BALFOUR OF BURLEIGH: Well, very nearly. Anyway, Fabius got there, but at the present rate of progress, is the noble Lord going to get there?
LORD WOOLTON: I think so.
LORD BALFOUR OF BURLEIGH: He has been on the road for nearly two years. He gave us some figures about amalgamations that have taken place, but surely what has happened is a drop in the ocean compared to what has to happen. Would the noble Lord lay Papers to show how many amalgamations have taken place and to what extent the cost of distribution and the price to the consumer have been reduced or prevented from going up? That is what we are interested in.
LORD WOOLTON: Certainly, I will lay Papers.
LORD BALFOUR OF BURLEIGH: But will the noble Lord also accept our Motion, as he is so kind? That I think would convince us of his good will and his good intentions even more than the promise to lay Papers, which, however, we do appreciate very much. In this time when our affairs are in a grave condition, every word that is uttered in public on whatever subject has to be weighed, but I would say that there could be no greater contribution to the war effort and to the prospects of post-war prosperity and happiness than that we should see a tendency on the part of great business corporations like these people voluntarily to do that which everybody knows to be in the interests of the country.
LORD ADDISON: My Lords, I have intervened on more than one occasion on this subject, but I deliberately refrained from doing so to-day until the later stage of the debate. I would like to associate myself with what the noble Lord has just said in expressing the hope that the

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Minister of Food, in receiving from some of us criticisms on this subject, will not thereby think that we are not very deeply appreciative of the great services he has rendered to the nation as Minister of Food. But this is an Achilles heel.
A NOBLE LORD: What about eggs?
LORD ADDISON: I did not catch the interruption.
LORD WOOLTON: It is suggested eggs are the Achilles heel.
LORD ADDISON: I believe I said so myself. This is one of the weak places, and is one of the important topics on which, with the greatest possible respect, I must be an unfriendly critic. The noble Lord has not yet made good. I hope he will do so—we all hope he will do so. That is, I presume, what prompted my noble friend across the gangway to put this Motion upon the Paper. May I say that whilst the noble Lord made an interesting and in many ways a very ingenious speech, a large part of it had nothing whatever to do with the Motion? He was exhorting us not to allow ourselves to be led away by what he described as political pamphleteers—I am using his words—but the political pamphleteers referred to appear to have been a Royal Commission; they appear to have been a special inquiry on food prices, Lord Linlithgow's Commission and one other body of pamphleteers of a like character.
LORD WOOLTON: That was not my description of the Commissions. I did not say these particular Commissions were political pamphleteers. That is taking a great licence with my words.
LORD ADDISON: Those were the only pamphleteers that were referred to. There were no other pamphleteers that were being referred to. However, if the noble Lord did not apply the term to these distinguished documents, then I withdraw the remark, but I thought he did. If he did not refer to these documents, which were the ones under discussion, I am wondering what it was he did refer to, because these are the important official documents which really are vital to the issue. If these documents, or anything like them, are to be classed as somewhat impractical and
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unrealistic, I think we are bound to ask the question why the noble Lord appointed the Perry Committee. The noble Lord appointed them to investigate the present cost of distributing milk in Great Britain and to advise what steps should be taken in order to bring about a substantial reduction in costs. Here is their Report. They were asked to report by the noble Lord, and the complaint we are making—and I associate myself with all the previous speakers—is that up to the present time effective steps have not been taken to implement the recommendations of this Commission. This Commission, it always comforts me to reflect, was composed of hard-headed business men, and did not contain any featherbrained Socialists. The members were all hard-headed business men, and they came to these recommendations in a remarkably short space of time. They felt that charges to the consumer were excessive. Here I have the actual receipt paper of a very large and responsible milk producer. He received 1s. 4¼d. with a premium of 2¼d., a total of 1s. 6½d. a gallon, but the villagers across the road were buying their milk at 4½d. a pint. That is the grievance, and with great respect nothing that can be said about imaginary milk wars and all the rest of it will move the people. We do not want a milk war, nobody wants a milk war, and I am surprised that anybody ever thought there was a prospect of one, but the fact is that people are paying 3s. a gallon for the milk they buy at the door. That is the hard fact and the difference between that and the producer's price, when you have allowed the trimmings for transport and all the rest of it, is between 1s. and 1s. 6d. The noble Lord said, as he is entitled to say, that we are distributing to children a vast quantity of milk subsidized by the nation. Everyone, I am sure, admires his efforts and wishes him to succeed more and more in making milk available, but that does not touch the complaint which we respectfully ask him once more to take into account, that the average retail price to the consumer is higher than it ought to be. There is no justification for it and the prophecies that the noble Lord has mentioned are not related to that issue.
Quite frankly, I am afraid that the influence of certain interests has been an obstacle, and I think it is quite likely that the influence of some co-operative organizations has been an obstacle. I

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do not think that ought to be so. It is not right that co-operative societies should sell their ribbons cheaper than their neighbours because they can get a big dividend from their milk profits. I can afford to say this as being in closer alliance with these people than perhaps the noble Lord. It is not right to subsidize the sale of other products from a co-operative society by the excessive profits made on the milk account. The noble Lord, if he will face up to it, will get unanimous support from the people. I am not going into that any further, but I feel strongly that some interests, and among them these, have been more potent than they ought to be in putting a brake on His Majesty's Government in taking action in this matter.
At all events, although the noble Lord made an exceedingly interesting speech—and I would like to join in congratulating him on achieving the economies he has made—yet, as my noble friend below the gangway said, the more he achieves economies in distribution the stronger is our case. If he has got all these people to combine in Birmingham and Southampit makes our case stronger still. He has built up our case for us by the economics he himself has promoted. I earnestly ask that the noble Lord even yet will do something to enforce—because that is what is really required—a reduction in the price of milk to the average consumer. In doing so he will enormously assist our war effort, and I believe, as my noble friend Lord Balfour of Burleigh said, he will make the beginning of a very important contribution to an improvement after the war.
LORD PHILLIMORE: My Lords, I speak as one of those hard-working farmers who by skill and initiative have built up small businesses in the milk retailing line. I was glad that the producer-retailers were so handsomely treated by "he noble Lord the Minister of Food in his speech. Farmers have a good deal to say on this point and their position has perhaps not been considered so closely as that of the retailers in this debate. Their interests all point one way. In the first place, it is quite clear that if the distributors' margin can be lowered the demand for milk will be so much increased. Even if more cannot be produced in war-time that will be a point gained for the farmer in the reconstruction period. In the
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second place, the farmer finds it extremely difficult to co-operate with his neighbours. I am not patting him on the back for that, but on the other hand I am not blaming him very greatly because it is more difficult than it appears.
A certain amount of compulsion applied to producer-retailers would be helpful. I think myself there would be very little objection to it if it was fairly and equitably done. I should like to make the point that, on the whole, some regulation of a co-operative nature directed to the producer-retailer would probably do him good. He is an important man, because not only does he supply fresh milk to his customers but in many cases he supplies better milk to his customers. Whilst I am on that point I would urge that ail milk is not milk. There is as much difference between good, clean, uninfected milk, and the sort of muck that comes trundling along mixed with manure in a road truck, as between, one may say, a glass of Guinness and lemonade. But I am tempted away from my subject. Again speaking as a farmer, I am afraid I must challenge my noble friend Lord Balfour of Burleigh on a remark which he made, probably inadvertently. This £18,500,000 which is spent on milk by the Government is in no sense a subsidization of the milk trade. It is a free gift, like any other medicine the Government choose to give, for the good of the children and mothers. It is not in any sense a subsidy to the milk producer or retailer. It is a mistake, if I may say so, to use that word because it would create the impression that we do not know our subject.
I must say that as a result of this debate I came to the conclusion that the Minister did know there was waste. But he did not want to say so, and in particular he did not want to sáy why the Perry Report was not implemented. I think he also knows that the margin is, at any rate in some places, and on some qualities—I emphasize "on some qualities"—altogether excessive, and he did not want quite to say that. But I think that in reality those three things he did not want to say were on his mind, and if that is so he could very well support the Motion put down and so ably introduced by the noble Earl.
VISCOUNT ELIBANK: My Lords, may I be permitted for three or four minutes to intervene in this debate as one who

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took a considerable part in the food control in the last war in the West of Scotland and had a good deal to do with milk distribution at that time? I have listened to the speech made by the noble Lord, the Food Minister, to-day and I do not gather that he has used in any way the machinery which was adopted in the last war in order to meet this very situation which has been discussed by the noble Earl in his opening speech to-day. We were faced with exactly the same problem as is at issue to-day: that is the cost, first of all, of economic distribution in the sense of transport; and secondly, the cost of distribution as distributed between the producers, the retailers and the wholesalers, and we arrived at a system under which the prices were fixed as between those three agents, if I may call them so, without disturbing—as the noble Lord desires, and very rightly desires, not to disturb—the retail-producer or the wholesaler, or the retailer in his particular trade. Wholesale co-operative societies, retail cooperative societies all had their particular form of trading preserved to them, but they were controlled in the prices which they could charge for distribution at the various stages.
I have not gathered from what the noble Lord, the Minister, said that that particular machinery has been adopted at the present time, and I would like to suggest that, perhaps, he will say when he comes to reply whether it has been adopted. I would like to suggest that, if it has not been adopted, it is perfectly feasible to add it to the machinery which he has outlined to us, for certainly in the last war it reduced the cost of distribution very largely indeed. Those are the only words I wish to say. As one who had great experience of this in the last war, I feel very strongly that the noble Lords who have spoken have voiced a point of view which is felt very much in the country, not only by the consumers but by the retailers. You will find that in every side of the trade they will feel that there is a certain inequity because prices are charged which are perhaps a little too high here or a little too low there, all of which was obliterated in the last war by fixing the prices at every stage of distribution.
EARL DE LA WARR: My Lords, I think we would all wish to thank the
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noble Lord, the Minister of Food, for the courteous reply that he made. I wish I could feel that that reply had really taken us very much further. It was an interesting disquisition on the difficulties of the milk trade with a defence of the small man with which, I think, Lord Balfour of Burleigh agreed, and with which many of us would agree entirely, including the point, of course, that there is at least as much room in a well-organized system for the small man as there is in a badly organized system. But it is frequently the small man who is the worst hit in a system of the present character. I think this debate has been useful. It is encouraging because it is perfectly obvious that the Minister agrees with the general contention that I have made that there is a very considerable wastage in this trade, and it is discouraging because, I think, it is quite clear that the Minister has very little intention of trying to tackle this waste.
LORD WOOLTON: Would the noble Earl mind repeating his last point? I am afraid that I did not quite catch it.
EARL DE LA WARR: I say that the noble Lord has shown very little inclination actually to tackle this waste by any drastic means. He has told us of a number of schemes—a limited number of schemes—that have been put into operation. He has, I think, promised to lay Papers giving the House full particulars of all those schemes. I think that, as far as that goes, that may be useful. He has gone further; he has said that these schemes are extremely useful, and he has praised them. Then he has gone yet further still, and he has said that although he praises these schemes he is not prepared to take any drastic action to see that they are put through on a general basis. I ask if that attitude, though it may be perfectly right in peace-time, is sufficient for the present day.
The noble Lord, the Minister, used the phrase that "something, at any rate, has been done." I do ask your Lordships whether that is the spirit in which we hope we are going to win this war. Throughout the debate every speech has shown the waste of effort, looking at this question purely from the point of view of the war, in terms of man-power, transport, money and petrol. And at the end of it, the noble Lord says that something, at any

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rate, has been done, meaning that a few small local schemes have been put through. I really cannot bring myself to express satisfaction with that reply. I do implore the noble Lord to take a more serious view of this serious and immediate problem. The noble Lord ended by telling us that he is having discussions with the dairymen. We do not know what he is putting before them; we do not know what is likely to come out of those discussions. It is quite clear, I think, that this House will want to have another debate in the near future, in order to give the noble Lord an opportunity of reporting the results of those discussions and the conclusions to which he has come.
We now come to the close of the debate, and I should like to ask the noble Lord to accept this Motion. He has made it clear that he admits that there is waste. He has made it clear that he admits that it is desirable to do away with that waste. The only disagreement between us is that he wants to pursue the methods of Fabius, and we want to pursue methods more suited to the running of the war.
A NOBLE LORD: Fabius was running a war.
LORD WOOLTON: Fabius was quite a good warrior.
EARL DE LA WARR: I should have said to the drastic running of the war; I quite agree with the noble Lord on that point. What are we to do now? We have the noble Lord's undertaking as to his discussion with the dairymen. I suggest that you should permit me to withdraw this Motion, and not press it to a Division, but I do implore the noble Lord, Lord Woolton, to realize that we feel most seriously on this matter, and that the question must shortly be brought up again.
LORD WOOLTON: I am very grateful to the noble Earl. He will perhaps permit me to say to your Lordships that I did ask him not to raise this matter at the present time, because I was in the middle of negotiations, and I did not think that a public debate was likely to help. I was wrong in my judgment on that point, because I think that the debate which we have had this afternoon will in point of fact be very helpful to me in the negotiations upon which I have now embarked. Perhaps your Lordships will
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forgive me if I do not reply in detail. Many of the things which have been said will be very useful. I am particularly grateful to the noble Lord, Lord Swaythling, for his references to Southampton. I should like to assure the noble Earl that, if I cannot avoid wastage without drastic action, I will take drastic action; but there is no point in going about brandishing a sword if you do not happen to have anybody who is going to fight you. I have very great hopes, from the conversations that my officers have had with the milk trade, that we shall find the milk trade very willing to cooperate, and I think we shall be greatly fortified by the debate which has taken place in your Lordships' House to-day. I am most grateful to the noble Earl for asking leave to withdraw his Motion.
Motion, by leave, withdrawn.

EXPERIMENT IN POTATO GROWING.
LORD DAVIES: My Lords, I beg to ask the first question standing in my name.
[The question was as follows:
To ask His Majesty's Government, whether they can state, in connexion with the experiment in potato growing carried out at Dolfor in Montgomeryshire, the number of acres sown, the yield per acre, the total cost of the experiment and the estimated value of the crop.]
LORD TEMPLEMORE: My Lords, in the absence of my noble friend the Duke of Norfolk, I have been asked to reply. As a mere statistical answer to the noble Lord's question would give a misleading impression in regard to this land, it is necessary to give a brief explanation of the circumstances. The original intention of the Montgomery War Agricultural Executive Committee early in 1941 was to reclaim this land by ploughing and cultivating during the spring and summer in preparation for cropping in 1942. In May, 1941, however, a surplus of seed potatoes was available in the hands of the Ministry of Food, and, despite the late date of planting—June—it was decided, notwithstanding the possibility of failure, to utilize the seed and to produce at any rate some food from the land in 1941. The possibility of failure was increased by

923
the non-availability of lime but, with the help of machinery provided and operated by the Oxford Institute of Agricultural Engineering Research, the work was undertaken.
It should be emphasized that the reclamation and cultivation carried out in connexion with the potato crop will be of considerable value in regard to the normal cropping of the land in 1942, and the total cost should not, therefore, be regarded as a proper charge against the 1941 crop. Moreover, from the point of view of research the experiment has provided a valuable demonstration that potatoes, normally very tolerant of lime deficiency, will not grow on bracken land without lime. The area involved was 650 acres of land, hitherto completely unproductive, and the yield per acre varied from four tons to practically nothing. The cost, exclusive of tractor fuel not yet brought into account, is estimated at £11,630, and the estimated value of the 1941 crop is £2,100.

MEMORANDA FOR THE FORCES.
LORD DAVIES: My Lords, I beg to ask the second question standing in my name.
[The question was as follows:
To ask His Majesty's Government if they will make available in the Library for the inspection of members of this House specimen copies of all political memoranda and other similar documents not containing military information likely to be of use to the enemy which are issued by Government Departments for the information of the Armed Forces.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR WAR (LORD CROFT): My Lords, the only political memorandum issued by the War Office which does not contain military information likely to be of use to the enemy is the bulletin known as Current Affairs. This is designed to provide regimental officers with material on which to base talks to their men on important issues of the day. I should be glad to arrange for copies to be placed in the Library. In addition, the Foreign Office issues a weekly political intelligence summary, copies of which go to certain Higher Commands of: the Armed Forces. This summary, however,
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is secret, and is not for inspection by members of this House.

ARMY INTELLIGENCE TESTS.
LORD DAVIES: My Lords, I beg to ask the third question standing in my name.
[The question was as follows:
To ask His Majesty's Government whether, with the view of promoting economy in man-power, men serving in the Army are now subjected to an intelligence test designed to ascertain their suitability for employment in specialized branches of the Services; and, if so, whether this test is applied to all ranks including members of the staff engaged in duties at the War Office and other similar military establishments.]
LORD CROFT: My Lords, a selection test is now being given to all men joining the Army at the time of their civil medical examination, as a guide to the posting of men to more specialized Corps. Further selection tests are given to recruits on joining their training units, in order to assist Commanding Officers in selecting men for training as potential tradesmen or specialists. In both cases the tests are followed by an interview before a definite recommendation is made. As regards personnel already serving in the Army, selection tests are given to the personnel of certain units which are being converted to a more specialized arm of the Service, as a guide to Commanding Officers in selecting the men suitable for training in the new role. When applied to the units being converted, the selection tests have been given to ail ranks. They have not been applied to members of the staff engaged in duties at the War Office and other similar military establishments. Experiments are at present being carried out to evolve an improved procedure, which will include selection tests, for the selection of potential officers.

SUNDAY ENTERTAINMENTS ACT, 1932:
RURAL DISTRICT OF DOWNHAM (PARISH OF FELTWELL) ORDER.
RURAL DISTRICT OF HAWARDEN (QUEENSFERRY AND SHOTTON AREAS) ORDER.
VISCOUNT CLIFDEN: My Lords, on behalf of my noble friend the Duke of

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Devonshire, I beg to move that the Orders standing in his name be approved.
Moved, That the Orders made by the Secretary of State for the Home Department, under the Sunday Entertainments Act, 1932, and laid before the House yesterday, be approved.—(Viscount Clifden.)
On Question, Motion agreed to.

WAR ORPHANS BILL.
Order of the Day for the Second Reading read.
VISCOUNT CLIFDEN: My Lords, the object of this Bill is to place on the Minister of Pensions the duty of making provision for the care of any child suffering from neglect or want of proper care, for whom a pension on account of the death of a parent in the present war is being paid by the Minister under the various instruments providing for compensation on disablement or death of members of His Majesty's Forces, the Mercantile Marine, the Civil Defence Services and the civilian population. The Bill covers children in the United Kingdom and the Isle of Man, The Minister cannot extend his statutory responsibility beyond these limits, but this will not prevent him from doing what he can for children living elsewhere.
A similar duty was imposed on the Minister of Pensions by Section 9 of the War Pensions (Administrative Provisions) Act, 1918, in respect of children of members of the Armed Forces of the Crown serving in the Great War. At the outbreak of the present war, Section 2 of the Pensions (Navy, Army, Air Force and Mercantile Marine) Act, 1939, was passed in order to revive this duty with respect to children of the same classes where death occurred as a result of service in the present war, but this duty was not sufficiently comprehensive, as it did not cover orphans of members of the Mercantile Marine or the Civil Defence Services or of the civil population killed as the result of enemy action. The object of this Bill is to cover the children of all classes of persons with whom the Minister of Pensions is concerned.
In common with his predecessors in office, the Minister has never regarded his duty towards an orphan child as being
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completely fulfilled by the mere payment ox pension. It has been accepted as the duty of every Minister to see that a general oversight is exercised over all orphans to ensure that they are receiving proper care and that their pensions are used for their benefit. Any attempt at complete supervision by the Ministry of children residing with a surviving parent would be impracticable and unnecessary. But where it comes to the notice of the Ministry that such a child is suffering from neglect or want of proper care the Minister does not hesitate to intervene. Happily such cases are rare, though the sources from which the information could come are many.
The Ministry's long experience of this problem has shown as a rule that ordinary persuasion, advice and warnings—and perhaps the temporary administration of the pension in kind—have secured the proper treatment of the child. And here I would like to say that the neglect of a child has been frequently found to be due to ignorance, ill-health or indolence rather than to a wanton disregard of the child's interests or to deliberate cruelty. In cases where the neglect has been wilful and more serious or perhaps incurable, and the milder methods have not availed, other measures for securing the care of the unhappy child have to be taken. In these cases the Ministry of Pensions have secured the help of the National Society, and of the Royal Scottish Society for the Prevention of Cruelty to Children. This help has been invaluable and is still available. Sometimes it becomes necessary to apply to the Courts for an order committing the child to the Minister's care. During the present war it has, I am nappy to say, been necessary on one occasion only to take this step. From all this the House will see how necessary it is that the Minister should be given a statutory mandate to secure the care of any pensioned war orphan who may be suffering from neglect.
In order to secure the necessary supervision of war orphans the Minister has appointed specially selected women officers to each of his chief regional offices, whose duty it is to acquaint themselves with the case of every pensioned child in their area who has been bereft of both parents, and to ensure that the child is being satisfactorily treated. It is their duty also to make immediate inquiry

927
into any case of neglect brought to their notice, even though the child may be in the care of its mother. The Minister I of Health, the President of the Board of Education, and the Secretary of State for Scotland have ensured that the children's officers have the loyal and very effective co-operation of the local education and health authorities. The number of orphans in receipt of pensions from the Ministry of Pensions is, at the moment, comparatively small. There are, in fact, about 1,500, of which about two-thirds are the children of Civil Defence personnel or civilians. Most of them are in the care of relatives or friends, or are evacuated and happily placed in billets secured for them by the local authorities. It is the practice of the Ministry when taking a neglected child under its care to place it in a private home with foster parents who, it is hoped, will help it to forget its past unhappiness, and in this connexion hundreds of kindly people have offered to open their homes to orphans of the war. So far, largely because relatives or friends are acting as guardians, the Minister has only needed to accept one or two of these offers.
I should perhaps say that great care is taken in the selection of foster homes and in the subsequent supervision of the child. The success of the boarding-out system has been shown by the high proportion of cases in which children of the last war who have suffered from early neglect have become healthy and useful citizens, and by the numerous cases in which children have formed lasting ties of affection with their foster parents. I do not think your Lordships will expect me to say very much in support of a Bill, the objects of which must, I feel, spontaneously commend themselves to all. I will merely add that it is, and always will be, the Government's aim to minimize, as far as is practically possible, the adverse effect on these children of their tragic loss, and to secure for them the care which they would have enjoyed had their parents survived. The provisions of this Bill will, I hope, materially assist to this end. I beg to move.
Moved, That the Bill be now read 2a.— (Viscount Clifden.)
On Question, Bill read 2a, and committed to a Committee of the Whole House.

RESTORATION OF PRE-WAR TRADE PRACTICES BILL.
Order of the Day for the Second Reading read.
LORD SNELL: My Lords, the purpose of this Bill is to restore after the war trade practices which have had to be departed from as the result of the pressure of the necessities of the war. It is worth remembering that a similar measure had to be passed after the last war, which was the Restoration of Pre-War Practices Act, 1919. Then, as now, the measure was passed to redeem a pledge which had been made by the Government. The conditions prevailing then and those that prevail now, however, are different. Then specially convened conferences of many trade unions and so on had to be called, and Government pledges had to be embodied in formal written and signed documents. All of that took time and was very complicated. But between the last war and the present war the machinery for the regulation of industrial relations between employers and employed has been enormously increased, and as an illustration one may cite the formation of Joint Industrial Councils. Now there is a National Joint Advisory Council, which was set up in the year 1939 and is an established part of the machinery of government. On this body all the workers and employers are represented, and the intention governing it is, on behalf of all parties concerned, to let no rules and no traditions stand in the way of the fullest co-operation with the State for the complete efficiency of the industry and for the maximum of output. And it is worth noticing in passing that this understanding was active long before the question of a Government pledge was introduced.
Many of the practices to which this Bill relates were safeguards which were the result of generations of trade union effort, and were the barriers erected by them, with the consent of the State, against lower standards of life. The workers, if I may ask your Lordships' permission to say so, had a kind of property right in these regulations, and in suspending them they submitted to a kind of voluntary disarmament. They were suspended for the sole purpose of helping the nation, on the assurance that at the end of the war those practices would be restored. The Government gave such a pledge, and this

929
Bill is an attempt to fulfil that pledge. When the pledge was made it had a composing effect, as was shown by the fact that for the past two years the time lost in trade disputes represents only one-fifteenth part of one day for every worker employed. This Bill is an attempt to redeem the pledge of the Government. It is not concerned with questions of wages, it deals solely with the practices which prevailed before the war began, relating to such matters as dilution of skilled labour and the demarcation of work among different classes of workers.
The Bill does not establish a statutory code of practices. It does nothing more than re-establish practices that previously existed, and it operates for a period of eighteen months, after which the normal methods will be applied. I do not think your Lordships would wish that I should enter into a description of the clauses of the Bill on this occasion. I need not say more to commend the Bill to your Lordships' favourable consideration. It is, on the whole, an agreed measure. It passed through another place without any Division and with very little criticism, and it is important because the reversion of industry to a peace-time footing may prove to be more difficult than its transformation from a peace-time footing to a war-time footing. We believe that this Bill will contribute to the good will which will enable the necessary transition to be made. I commend it to your Lordships' favourable consideration, and move that it be read a second time.
Moved, That the Bill be now read 2a —(Lord Snell.)
THE EARL OF CLANWILLIAM: My Lords, there is only one thing I wish to say in a very few words after the very able exposition which the noble Lord has given, and that is the difference the employee in the Bill is placed vis-à-vis the employer. The employer is under an obligation to do certain things, and if he does not do them he can be had up before the arbitration tribunal. If he does not carry out the award of that tribunal, he can have penalties inflicted upon him. I quite appreciate the object of the Bill. It is an excellent one designed to maintain peace in industry for a certain time after the war is over, but it does seem to me rather unfair that there should be, as it were, this one-sided bargain. The employer has obligations
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placed on him to ensure that he does not break any agreement he has made with the employee, but the employee is not under any obligation, as far as I can see in the Bill, to maintain his agreements with the employer. If the employee breaks an agreement there is no provision in the Bill for any penalties. In these days, when we are all expected to pull our weight, any bargain which is made between employers and employees should be a two-sided one, because what is good for one should be good for the other. I know this is a late stage and that, as the noble Lord has said, the Bill passed through another place without a Division, but I should like to ask His Majesty's Government whether they could possibly consider putting something in the Bill to protect the employer from being unfairly treated by the employee and also place on the employee the natural obligation to keep his word once it has been given.
LORD BARNBY: My Lords, I should like to express a word in support of the view put forward by my noble friend who has just sat down. With regard to the principles of the Bill, I hasten to say I am entirely in accord, but it is right that this caveat should be entered on the lines of what my noble friend has said. It is true that this is an agreed Bill in so far as it has been the subject, before its introduction, of much conference between representatives of both sides. I should not like anything said in this House to give the impression of discord or lack of appreciation of the efforts which the right honourable gentleman the Minister of Labour has made in successfully reaching this point of agreement, and I am conscious of the fact, as my noble friend Lord Snell has said, that the Bill passed through the other House without a Division. But there is a danger in allowing this opportunity to pass without reference being made to the absence of any provision in the Bill imposing on the workers' side a complementary obligation to that which the Industrial Court has the power to impose on the employers' side.
It would be absurd to think that we are going to return to a world after this war which in any way will represent the pre-war conditions. Therefore it might rightly be said that there is no point in arguing whether it matters much that one side should be protected equally with the

931
other. But we have had so many instances in which the absence of such a provision at the moment when the matter was being reviewed has made difficulties later on that in this case it is right that the omission should be mentioned. At this stage of the proceedings I shall confine myself to appealing to the noble Lord to consider, between now and the next stage of the Bill, whether it is not possible to insert something which would achieve the objects for which I ask his sympathy. It is my intention to put on the Order Paper an Amendment which would be in the form of an addition, but between now and the next stage of the Bill I hope the noble Lord will, himself, find it possible to suggest something which will in no way impair the object of the Bill, and in no way suggest the absence of appreciation of the harmony we have in industrial relations in this country, but yet will remove this danger of a measure going on the Statute Book now which would omit a point that might prove important at some future date.
LORD SNELL: My Lords, I thank noble Lords for their favourable reception of this Bill, and I shall in one or two words comment on the suggestions which have been made. The noble Earl spoke of the lack of penalties for the workers in this matter. The Bill deals with the restoration of trade practices in factories and workshops. The only people who can restore pre-war practices are the employers. The workers cannot restore them, and the provision in the Bill is that if an employer refuses to comply with an award of the arbitration tribunal in regard to these practices, then he shall be liable to certain penalties. Employers are, as I say, the only persons who can restore these practices. In regard to the argument that there is no workers' penalty. that is perhaps the case so far
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as the Bill is concerned; but every employer retains the right to dismiss any employee for neglect of duty or for other reasons. That employee has to bear the penalty of dismissal, which is not a light thing. He may also have to appear and justify himself before his own trade union. I cannot at this stage promise that anything can be done. The Minister will note what has been said by the two noble Lords, and if the Government feel that they can satisfy them by making any addition to the Bill they will do so at a later stage.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

MINISTERS OF THE CROWN AND HOUSE OF COMMONS DISQUALIFICATION BILL.
Brought from the Commons; and read 1a
SECURITIES (VALIDATION) BILL.
Brought from the Commons; and read 1a