Sitting of 12 February 1962

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  LARGS BURGH ORDER CONFIRMATION BILL
  Considered; to be read the Third time Tomorrow.
ORAL ANSWERS TO QUESTIONS
  PENSIONS AND NATIONAL INSURANCE

    Pensions and National Assistance
    Mr. Hector Hughesasked the Minister of Pensions and National Insurance if he will state the present relation between rates of old-age pensions, National Assistance and the cost of living in terms of cash and percentages, respectively.
    The Minister of Pensions and National Insurance (Mr. John Boyd-Carpenter): On the basis of the Retail Prices Index, the value of the retirement pension in real terms in December, 1961, was 15s. 8d. single and 22s. 9d. married above that current in October, 1951. Expressed as percentages this represents an improvement of 37 and 33 per cent., respectively. The corresponding figures for National Assistance scale rates are 11s. 8d. and 20s. 3d., representing an improvement of 28 and 29 per cent., respectively.
    Mr. Hughes: While thanking the right hon. Gentleman for the detail of his reply, may I ask whether he realises that a very complicated situation has been created by the increased cost of living, by the increased cost of transport, and by the so-called economic pause, and that that has increased the great injustice on a class of people who deserve better treatment? Will he take that into account with a view to rectifying
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    the situation and giving them better treatment?
    Mr. Boyd-Carpenter: It was in order to eliminate any possibility of confusion on those grounds that, as the hon. and learned Gentleman will see when he studies my Answer, the figures were given in real rather than in cash terms.

    Retirement Pensioners
    Mr. Hector Hughesasked the Minister of Pensions and National Insurance why statistics relating to the numbers of retirement pensioners are not available for particular areas; and if he will take steps to obtain them.
    Mr. Boyd-Carpenter: Because records of our 5½ million retirement pensioners are held centrally. Great expense and delay would be involved in breaking up the figures in relation to particular areas in which pensioners reside, and in keeping them up-to-date as pensioners move. The answer to the last part of the Question is, therefore, No, Sir.
    Mr. Hughes: Does the right hon. Gentleman remember that in a recent Answer to me he admitted that there was a very serious gap in his information services with regard to the matter referred to in my Question? Will he look into this again with a view to seeing that the fullest possible information is available to old-age pensioners and to the other people affected by that gap?
    Mr. Boyd-Carpenter: I do not think that that Answer of mine agreed with the hon. and learned Gentleman that there was a serious gap because the figures available about the numbers of pensioners do not coincide with Parliamentary constituencies.
    Mr. Frank Allaunasked the Minister of Pensions and National Insurance if he will study the experience of two clinics in London and Scotland, details of which have been sent to him, regarding the under-nourishment of many old-age pensioners; and if he will institute a national inquiry into the matter.
    Mr. Boyd-Carpenter: I have seen with interest reports on these two clinics at Twickenham and Rutherglen, which deal with the general physical and mental

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    health of the old. There is nothing in them, however, to suggest that existing sources of information on nutrition are inadequate.
    Mr. Allaun: Is it not clear from the experience of these clinics that the pension of £2 17s. 6d. is so low as to cause under-nourishment and ill-health to many elderly people? Should not the basic pension be sufficient at least to provide enough to eat?
    Mr. Boyd-Carpenter: The hon. Member may know that the report made in respect of the Rutherglen clinic specifically stated that malnutrition was not a problem of any magnitude. Taken as a whole, I think that that is the inference to be drawn from both these clinics.
    Mr. Allaun: The right hon. Gentleman has read the script. Is it not clear that half of the 300 people regularly attending the London clinic are suffering from under-nourishment because of lack of money? Is it not clear that when they are provided with a better diet, supplementary foods and so on, their health and whole bearing alter?
    Mr. Boyd-Carpenter: The hon. Member is referring to the script of a certain broadcast to which he was good enough to draw my attention. The value of that broadcast is easily gauged when one recalls that in the course of it there was presented an old lady who was said to be an example of pride preventing an application for National Assistance but who, the National Assistance Board tells me, was much more sensible than the producer of the broadcast and had been drawing it for years.
    Mr. Mendelson: Would not the Minister agree that food represents a much higher percentage of the total outlay of old-age pensioners than of the average member of the community? Does it not follow, therefore, that from time to time and at frequent intervals there should be a new survey to make quite certain that even the slightest change in the cost of living does not produce a serious situation for old-age pensioners? Will he look again at the need for a further inquiry?
    Mr. Boyd-Carpenter: The hon. Member will be aware of the considerable sources of information which we have. There is the fact that in the course of
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    a year the officers of the National Assistance Board pay no fewer than 6 million visits to peoples' homes, and the fact that a very careful survey, with a special category in respect of pensioner households, is produced by my right hon. Friend the Minister of Agriculture, Fisheries and Food.
    Mr. Ross: Have the right hon. Gentleman's sources of information on this question and the general circumstances of pensioners led him to the conclusion that we should be perfectly satisfied with the present rates of pension and National Assistance?
    Mr. Boyd-Carpenter: The Government will never be satisfied. As the hon. Member knows, it is part of our policy to see that pensioners share in the increasing prosperity which the sound economic measures of my right hon. and learned Friend will bring about.
    Mr. Ross: Since he is never to be satisfied, does that mean that at the moment the right hon. Gentleman is dissatisfied? What will he do to remove that dissatisfaction?
    Mr. Boyd-Carpenter: You will allow me, Mr. Speaker, to put it in the form of a quotation and, therefore, I hope, be in order—
    "None of your damned Scottish metaphysics".
    Miss Vickersasked the Minister of Pensions and National Insurance to what extent the policy set out in Command Paper No. 1626, paragraph 7, that the increased cost of living cannot in the present circumstances be regarded as providing a sound basis for an increase of wages and salaries, will affect the basis on which increases are given to retirement pensioners.
    Mr. Boyd-Carpenter: The factors affecting the decision as to what is the appropriate level for contributions and benefits under the National Insurance Scheme were fully set out in a reply which I gave to the hon. Member for Salford East (Mr. Frank Allaun) on 14th November, 1960.
    Miss Vickers: May I ask my right hon. Friend whether consideration will be given to increases in pensions after 1st April? I think my right hon. Friend will agree with me that these pensioners

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    have been very patient. As far as I understand, they have not brought any deputations to try to get increases. They have observed the pay pause. Can my right hon. Friend give them any hope for the future?
    Mr. Boyd-Carpenter: My hon. Friend will be aware that the rate of retirement pension was raised as recently as last April to the highest level in real terms yet reached.
    Dr. King: Is not the Minister aware that the rise in the cost of living and the increases in wages, profits and dividends since the last increase in old-age pensions justify him giving some increase to the old-age pensioners now?
    Mr. Boyd-Carpenter: I am surprised at that suggestion by the hon. Gentleman, in the face of the fact that the level reached as recently as last April was the highest in real terms yet attained and that the level today is higher than at any time previous to that.
    Mr. Houghton: What is more to the point is what are the Government's intentions towards retirement pensioners and other National Insurance beneficiaries in the next phase of the pay pause? Is the pension pause to come to an end when the pay pause comes to an end? What is the intermediate phase for pensioners in relation to the intermediate phase for wage and salary earners?
    Mr. Boyd-Carpenter: The Answer to which I referred my hon. Friend in my main Answer is clear as to the considerations affecting decisions on this matter.
    Mr. Ross: That means, according to the Answer to which the right hon. Gentleman referred, and which I have here, that the cost of living still remains the first factor to be considered.
    Mr. Boyd-Carpenter: The cost of living is certainly one of the factors to be considered with the others enumerated in the Answer with which providentially the hon. Gentleman has armed himself.

    War Disability Pensions
    Mr. Haleasked the Minister of Pensions and National Insurance in how many cases in the 12 months to the
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    latest convenient date applications for war disability pensions have been made and refused under the seven years' rule which places the onus of proof upon the applicants.
    Mr. Boyd-Carpenter: The latest available estimated figures are those for the year ending 30th June, 1961, in which some 1,250 claims made over seven years after death or discharge resulted in awards and some 1,460 were rejected.
    Mr. Hale: Will the right hon. Gentleman reconsider the position in relation to this rule, in view of the fact that the Statute of Limitations was provided to be used normally as a reasonable device to prevent fraudulent claims, or claims made after so long a period that the evidence has been destroyed? In his case, the right hon. Gentleman nearly always has all the evidence, and this rule is being used to prevent applicants from maintaining a claim from chronic diseases the causes of which are unknown.
    Mr. Boyd-Carpenter: A good deal of that supplementary question relates to the next Question to be asked by the hon. Gentleman. However, it does not seem to me that the figures I have just given the hon. Gentleman, when one remembers that they relate to service which in the great majority of cases ended at least 16½ years ago, indicate that there is anything the matter.
    Mr. Haleasked the Minister of Pensions and National Insurance whether, in view of the hardship caused to applicants for war disability pensions caused by the seven-year rule, he will now introduce measures for its abrogation.
    Mr. Boyd-Carpenter: As the hon. Member is, I am sure, aware, even in the case of claims outside the seven year period the claimant is entitled to succeed if on the evidence there is any reasonable doubt whether the conditions are satisfied. I do not think there is any hardship. On the contrary, this procedure compares favourably from the applicant's point of view with procedure in the civil courts or before other tribunals, and is an example of the preference deliberately, and, in my view, properly, accorded to disabled ex-Service men.
    Mr. Hale: Would it not be more simple, practical and prudent for the right hon. Gentleman to obtain the necessary sanction to send a circular to pensions tribunals and appeal tribunals to say that they were under no obligation to apply this rule in cases where they considered that great hardship would result or where the operation of the rule might prevent justice being done?
    Mr. Boyd-Carpenter: I could only consider that if I were satisfied that the present rule was working unfairly and inequitably. As I have said, I do not think that it is.
    Mr. Hale: I will bring a case along to the right hon. Gentleman.

    Gypsies, Darenth Woods
    Mr. Doddsasked the Minister of Pensions and National Insurance what was the total amount of National Assistance paid to gypsies and other travellers in Darenth Woods, near Dartford, for the two weeks ended 20th January prior to eviction; and what was the comparable amount for the two weeks ended 3rd February following eviction to the grass verge of the A.2 trunk road by the Dartford Rural District Council.
    Mr. Boyd-Carpenter: £37 12s. and £288 2s., respectively.
    Mr. Dodds: Does not that information, for which I thank the right hon. Gentleman, show, when only six people out of 300 were on National Assistance, how unjust it was to say that they were lazy layabouts living on public funds? Does not the sharp increase in the number on National Assistance after they were evicted emphasise the callousness of the local council which, in the middle of winter, put them on the side of a trunk road, where it was particularly difficult for them to earn their living?
    Mr. Boyd-Carpenter: I am responsible only for what I say and, as the hon. Member will realise, I never said anything of the sort. It is not for me to comment on the operations of a local authority.
    Mr. Dodds: It is pretty obvious, though.
    Mr. Doddsasked the Minister of Pensions and National Insurance what
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    decision has been reached by the National Assistance Board about the need for assistance for the purchase by the owners of oats, chaff and hay in order to avoid undue suffering for the 25 horses and one mule which, because of the dangerous traffic hazards, have to be tethered for long periods by short lengths of chain on the verge of the A.2 trunk road, near Dartford, as the result of the eviction of the gypsies from Darenth Woods by the Dartford Rural District Council, on 20th January.
    Mr. Boyd-Carpenter: The Board informs me that it has so far made no payments for this purpose. Applications from the gypsies who are receiving assistance for the maintenance of their families, on the grounds that the payments made to them are insufficient to meet all their commitments, have been and will be considered in the light of all the circumstances.
    Mr. Dodds: I thank the right hon. Gentleman for that statement, but will he keep very much in mind that to a gypsy, whose home is on wheels, a horse is very important and must be kept in good condition? After three weeks by the side of the road some of these horses are looking half-starved, and if the position—which is revolting in Britain in 1962—continues very much longer, there will be suffering amongst some of the animals due to the callousness of the local council.
    Mr. Boyd-Carpenter: In general, of course, relief of hardship amongst animals is not one of the responsibilities of the National Assistance Board, and I therefore prefer not to add to the Answer which I gave. As the hon. Gentleman is well aware, a great deal of what he said in that supplementary question, whatever its merits or demerits, is not for me.

    Benefits
    Mr. W. Baxterasked the Minister of Pensions and National Insurance what proposals he has for amending the regulations relating to persons who are off work through illness and who, due to these regulations, lose the first three days of benefit, because they are off for a period of less than 14 days.
    Mr. Boyd-Carpenter: None, Sir.
    Mr. Baxter: Is the right hon. Gentleman aware that pursuance of this policy appears to be "penny wise and pound foolish", inasmuch as many people who have slight illnesses stay away from work for the whole fourteen days merely in order to get the benefit of the three days' waiting time? As that is not in the national interests, would it not be wise if the Minister reconsidered his policy?
    Mr. Boyd-Carpenter: The hon. Member will know that there have been waiting days in respect of sickness benefit since National Insurance began. Indeed, before 1948 they were absolute, whatever the ultimate period of sickness. I am bound to say that nowadays, when more and more good employers make up wages for considerable periods of sickness, the case for doing away with waiting days is weaker than it ever was.

    European Economic Community
    Mr. Jegerasked the Minister of Pensions and National Insurance whether he will publish a comparative table of old age or retirement and other pensions being paid in Great Britain and in the six countries in the European Economic Community, on the basis of information made available to him in the course of the current negotiations for British entry into the Common Market.
    Mr. Boyd-Carpenter: The social security provisions of the members of the European Economic Community are, of course, fully publicised, and no additional information has been or could have been made available in the way suggested. The remaining part of the Question does not therefore arise.
    Mr. Jeger: Do I understand that the Minister will not publish the comparative statement for which I have asked and is merely referring me to other authorities? Is he not aware from recent publications that the rate for Belgian old-age pensioners has been raised to a much higher comparative level than ours? Is he making no preparation to meet the needs of the Six when we join them, when we shall have to harmonise our social security schemes upwards so as to meet the highest prevailing among them?
    Mr. Boyd-Carpenter: The last part of that question goes far beyond that on
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    the Order Paper. The hon. Member asked me to publish information on the basis of that made available to me in the course of negotiations. What I have said is that no such information has been or could have been produced in that way, because it has already been published. If the House wishes, I am quite prepared to place in the Library a statement of the social security arrangements of the Six, although I must warn the House that it will be extremely bulky as these schemes are very elaborate and detailed, and that the comparison which the hon. Member desires is extremely difficult to make because of the differences in relationship to earnings and as to cover.

    National Assistance Board
    Mr. Liptonasked the Minister of Pensions and National Insurance whether he will alter the name of the National Assistance Board to Supplementary Pensions Board.
    Mr. Boyd-Carpenter: No, Sir.
    Mr. Lipton: Is the right hon. Gentleman not aware that many decent people, poor but proud, still believe, however illogically, that there is some stigma about applying for National Assistance? We all come across cases of that kind. Would it not help these deserving citizens if the name were changed as I have suggested, as it is obvious that it is impossible to live on the present basic scale of pension without some form of supplementation?
    Mr. Boyd-Carpenter: There is something in what the hon. Gentleman says, but his suggestion is not practicable when one remembers that the National Assistance Board makes about 700,000 weekly payments to people who are not receiving a pension to which this could be a supplement. I think that we have already largely met the substance of the matter by renaming the order books on which supplements are paid to retirement pensioners.
    Mr. J. Griffiths: Bearing in mind that what we want to do is to induce people to go to the National Assistance Board, where that is necessary, will the right hon. Gentleman consider taking a long-term view of the reorganisation of local offices and absorbing local National

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    Assistance Board offices into offices of the Ministry of Pensions and National Insurance, and so making them one local service?
    Mr. Boyd-Carpenter: I very much doubt whether that idea, which the right hon. Gentleman himself emphatically rejected in 1946, would help towards the end he has in mind. I would prefer to say that the very good reputation which the National Assistance Board and its officers have built up for humanity and discretion in their extremely difficult job is an asset which I should be reluctant to forfeit.

  MINISTRY OF POWER

    Electricity Area Boards (Advertising)
    Mr. Tilneyasked the Minister of Power whether he will give a general direction to the Electricity Council that area boards should not advertise in future until they are sure of being able to meet the demands of their customers.
    The Minister of Power (Mr. Richard Wood): No, Sir. I do not think that the percentage of the Board's gross turnover, spent on promotional advertising is excessive, and the aim of much of it is to make better use of installed plant during off-peak periods.
    Mr. Tilney: May I ask my right hon. Friend to confirm that in the last financial year more than £2 million was spent on advertising? Many people, especially those on Merseyside, consider this to be in the nature of a false prospectus. Will my right hon. Friend consider spending a proportion of that money on sending out questionnaires to householders to find out exactly what they have in the way of electrical appliances in their homes so that bad estimations may remain less bad in future?
    Mr. Wood: The figure of £2 million is the total spent on advertising electricity. The sum spent on promotional advertising, which I think is what my hon. Friend has in mind, is £850,000, or about 0·1 per cent. of the whole turnover. As regards the second part of my hon. Friend's supplementary question, I will ask the Electricity Council to look into this and make a report to me.

    Sub-stations
    Mr. Tilneyasked the Minister of Power whether he will give a general direction to the Electricity Council that area boards should speed up the erection of sub-stations in areas that have recently suffered from electricity power cuts or failures.
    Mr. Wood: I am satisfied that the area boards are building these sub-stations as quickly as they can.
    Mr. Tilney: Will my right hon. Friend confirm that these sub-stations cost only between £6,000 and £9,000, and that much of this money could be provided from savings on advertisements? Is he aware that there is a general feeling in some areas that the area boards are rather complacent in this way?
    Mr. Wood: I do not think that the area board in the area which my hon. Friend represents is complacent, and the chairman of the council recently gave an interview expressing concern about this matter, saying that they were pushing on with the building of sub-stations as quickly as they possibly could.

    Electricity Supply Failures
    Mr. J. Rodgersasked the Minister of Power if he will give a general direction to the Electricity Council to take out overall insurance policies to protect consumers whose machinery and appliances are damaged as a result of power failures.
    Mr. Wood: No, Sir. Legislation recognises that some failures cannot be avoided, and in such cases the boards are protected against prosecutions for the statutory penalty. The Council is aware of this problem and is considering what can be done. It proposes first to approach the manufacturers' and contractors' associations to see if protective devices can be improved and more widely installed.
    Mr. Rodgers: Is my right hon. Friend aware that several of my constituents have had domestic appliances damaged by voltage faults and failures? Is he further aware that the Chairman of the North-Western Area Electricity Board has said that consumers should take out

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    private insurance policies to cover themselves against this? As the electricity boards are a nationalised monopoly, and some of the failures are due to human error, surely it is not out of the question to ask that the boards should at least take out overall policies to cover the failures due to human error by the people working in a nationalised industry?
    Mr. Wood: I do not think that it is right for my hon. Friend to suggest that the responsibility should be placed on the Electricity Council, or indeed on the Generating Board, because they are not in direct contact with consumers. Area boards, which are in direct contact with consumers, have certain responsibilities and obligations which can be legally enforced, but I do not think that it would be possible to do as my hon. Friend suggests and place on area boards the responsibility for any failure for whatever reason it may take place.

    Steel Works, Wales and Monmouthshire (Closures)
    Mr. J. Griffithsasked the Minister of Power if he will make a statement giving particulars of the steel, tinplate and sheet works which have been completely or partially closed in Wales and Monmouthshire in the past twelve months, together with the number of workers displaced in each case.
    Mr. Wood: The Iron and Steel Board has received official notification of the closure of five works in the last twelve months and, with permission, I will circulate details in the OFFICIAL REPORT.
    Mr. Griffiths: Is the Minister aware that men are now being displaced from the old steel works long before they are absorbed into the new ones, and that the situation is becoming critical? Secondly, will he consult the Iron and Steel Board about the rather stupid policy, said to be adopted by some steel owners in the new works, of refusing to employ anyone over 50 years of age, and sometimes even over 40 years of age, thereby losing the valuable work and service of these men, so necessary to meet the economic needs of the country? Will he look into the matter? These two problems are causing deep concern in Wales and elsewhere.
    Mr. Wood: I will certainly put the right hon. Member's second point to the Iron and Steel Board. As for the first, I do not think that any serious unemployment is resulting from these closures. In any case, as he knows, this is a matter for my right hon. Friend the Minister of Labour.
    Mr. Griffiths: The right hon. Member says that no serious unemployment is resulting from these closures. Will he look at the Answer given to me by his right hon. Friend the Minister of Labour last week, in which he said that closures were causing very serious unemployment and short-time working?
    Mr. Wood: I will certainly refer the right hon. Gentleman's question to my right hon. Friend the Minister of Labour, but I was informed that the unemployment that has so far resulted has not been serious.
    Following is the information:
    Closure of steel and tinplate works in Wales and Monmouthshire in the twelve months ended 31st January, 1962.

    (i)

    Company and Works

    Number of Workers displaced

    Richard Thomas and Baldwins Ltd.

    Steelmaking and Billet Plant—Dyffryn

    410

    Tinning Department—Abercarn

    87

    Partridge, Jones and John Paton (R.T.B.) Ltd.

    Hand sheet mill—Pontnewynnyd Steelworks and foundry—Pontymister

    327

    Glynhir Tin Plate Co., Ltd. (Bynea Group)

    Hand mill producing black plate

    about 150

    (i) i.e. the number of workers employed on the date of notification of the closure to the Iron and Steel Board less those still employed, mainly on residual tasks.

  COAL

    Smokeless Fuels
    Mr. Frank Allaunasked the Minister of Power if he will make representations to traders to reduce the price of smokeless fuels, in view of the fact that at present it is hindering the successful implementation of smoke control orders.
    Mr. Wood: No, Sir. If the hon. Gentleman has any evidence that traders' margins are excessive, I will certainly consider it.
    Mr. Allaun: Is the Minister aware that in the cold weather many pensioners and low income families are having a hard time and going without fires because they cannot afford the fantastic prices in a smoke-controlled area, and that this is causing widespread hardship and indignation? Secondly, why should smokeless fuel cost 11s. 9d. or more a bag, and coke 10s., which is more than the price for coal, although valuable chemicals have been extracted? Coke always used to cost far less than coal.
    Mr. Wood: I can only tell the hon. Gentleman that the last time this was examined, which admittedly was three or four years ago, no evidence was adduced that the margins that the merchants were charging on smokeless fuels were excessive. If the hon. Gentleman has any information and evidence that he would like me to consider, I will certainly look at it.

    Prices
    Mr. Rankinasked the Minister of Power whether he proposes to sanction an increase in the price of coal.
    Mr. Wood: Proposals for increases in the prices of certain coals used by industry were put to the Industrial Coal Consumers' Council on 27th November, 1961, and came into effect on 1st January, 1962. The National Coal Board has put proposals for certain increases to the Domestic Coal Consumers' Council and I am now awaiting the Council's observations.
    Mr. Rankin: As an increase in the price of industrial coal at the moment is bound to have a retarding effect on our exports, particularly shipbuilding, will the right hon. Gentleman consider this again? Does he realise that shipbuilders are now facing impending increases in the price of steel in addition to the price of coal, immensely higher valuations, and increases in the price of electricity? Does he think that this gives them a fair chance in the competitive world in which shipbuilding has to live today?
    Mr. Wood: I cannot undertake to reconsider the price increase which came into effect on 1st January. As regards the other proposals for increases, I shall
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    await the observations of the Domestic Coal Consumers' Council and then come to my decision.
    Mr. Rankin: On the domestic side, will the right hon. Gentleman consider particularly the case of the old folk who are paying more for coal at the present time than their meagre allowance warrants? Will he consider a preferential rate for them?
    Mr. Wood: That consideration will be very much in the mind both of the Council and myself when we come to consider these matters.

    Grades and Prices
    Mr. Hannanasked the Minister of Power when he will give effect to the recommendation of the Domestic Coal Consumers' Council that all traders should state the groups of coal they sell, irrespective of size of delivery, so as to bring abuse of grouping and price within the scope of the Merchandise Marks Acts.
    Mr. Wood: I have had discussions with the National Coal Board and the coal trade about ways of achieving the objectives which the Domestic Coal Consumers' Council had in mind. Plans to do this are well advanced and I think an announcement may be made quite soon.
    Mr. Hannan: I appreciate the hopeful note in the Minister's reply, but will he bear in mind that the answer which is often given, namely, that the consumer has the choice of going to another merchant, is insufficient protection and does not deal with the principle of the matter? Is he further aware of the difficulties of those who purchase only small quantities of coal—2 cwt. or 3 cwt.? They have no guarantee that the coal which they purchase at the higher price is the grade of coal which they should get. The reply of the merchants is that the blame attaches to the National Coal Board, but this is quite wrong. Will the right hon. Gentleman do all that he can to defend the Board against such allegations?
    Mr. Wood: I know that the hon. Member has been interested in this matter for a long time. I hope that he will be satisfied if I am able to make an

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    announcement in the near future, and that he will also be satisfied by any scheme that I am then able to announce.

  MINISTRY OF AVIATION

    Abbotsinch
    Mr. Rankinasked the Minister of Aviation what reconsideration he is giving to developing Abbotsinch as the replacement for Renfrew Airport.
    The Parliamentary Secretary to the Ministry of Aviation (Mr. C. M. Woodhouse): None, Sir.
    Mr. Rankin: Is the hon. Member aware that development at Abbotsinch is so slow that it has not even reached the stage of crawling? Does he realise that at Abbotsinch we have 773 acres of ground as compared with 232 acres at Renfrew, and that there, if he so desires, he can develop an airport for the future—something which Britain has never yet had? Is he further aware that every airport in use today was out of date before it was completed?
    Mr. Woodhouse: The hon. Member often draws my attention to things of which I am not always totally aware, and I pay the closest attention to what he says. As to the speed of development at Abbotsinch, we expect to be able to move in there before the end of 1964. Renfrew will continue to be in operation until Abbotsinch is ready.
    Mr. Emrys Hughes: Is the Minister aware that on frequent occasions in recent months passengers have had to be diverted from Renfrew to Prestwick because of weather conditions? Is he further aware that the same weather problem will exist at Abbotsinch? Does not he agree that the practical solution would be to develop Prestwick?
    Mr. Woodhouse: I am sorry that my Department cannot take responsibility for difficulties of weather which are liable to occur at any airport.
    Mr. Speaker: All this shows the danger of giving information in Questions.

    Light Aircraft (Accidents)
    Mr. Burdenasked the Minister of Aviation what steps he intends taking in the interests of safety to check the competence of light aircraft instructors and trainees of aircraft with an all-up weight of less than 5,000 lb., in view of the high accident rate of this category of aircraft disclosed in CAP 176 entitled "A Survey of the Accidents to Aircraft of the United Kingdom" in the year ended 31st December 1960, a copy of which has been sent to him by the hon. Member for Gillingham.
    Mr. Woodhouse: Discussions are proceeding with the Guild of Air Pilots and Air Navigators, which exercises control on my behalf over flying instructors, with the object of ensuring that a high standard of instruction is maintained. My right hon. Friend intends to make an announcement shortly.

    Military Transport Aircraft
    Mr. Goodhewasked the Minister of Aviation whether he has yet selected a close support military transport aircraft for service with the Royal Air Force.
    The Minister of Aviation (Mr. Peter Thorneycroft): No, Sir.
    Mr. Goodhew: What ails my right hon. Friend? Was it not demonstrated as long ago as last May that the Handley Page Dart Herald satisfies the needs of the R.A.F. in this matter? What is he waiting for? Does not he welcome the fact that this aircraft has been developed without the aid of Government subsidies? Have the Government moved so far to the left now that they no longer view even private enterprise with favour?
    Mr. Thorneycroft: This is no doubt an admirable aircraft, but it is not the only one being considered.
    Mr. Cronin: Is there not a very serious gap in the availability of transport aircraft for the Forces at the moment? Is it not a fact that the only short-range transport aircraft available at present either have too small a cargo cross-section or are obsolete? Is not this a matter which calls for urgent consideration?
    Mr. Thorneycroft: There is a requirement for this type of aircraft, and it will undoubtedly be met.
    Mr. Paget: Is it not almost a record that an aeroplane should be available for the Royal Air Force before it is obsolete?
    Mr. Thorneycroft: Three types of aircraft a re available.

  MINISTRY OF HEALTH

    Tuberculosis
    Commander Keransasked the Minister of Health what was the number of persons suffering from tuberculosis under treatment at the end of 1961; and what percentage of these were immigrants.
    The Parliamentary Secretary to the Ministry of Health (Miss Edith Pitt): I will send my hon. and gallant Friend the figure for persons registered with tuberculosis clinics at December, 1961, as soon as it is available. The returns do not distinguish between immigrants and others.
    Commander Kerans: I understand that in recent years there has been an increase in tuberculosis. I appreciate that my hon. Friend cannot at present differentiate between immigrants and others, but will she look into this matter carefully in the future?
    Miss Pitt: No, Sir. This is a health service and we have no reason to ask for the nationalities of the people concerned.

    Welfare Clinics
    Commander Keransasked the Minister of Health how many welfare clinics are operating under his Department in England and Wales; how many persons are employed by these clinics; and what is the total cost to the National Health Service.
    Miss Pitt: None, Sir; this is a local authority service.
    Commander Kerans: Does not my hon. Friend agree that far too many welfare clinics are operating at present? Does not she agree that in many cases these are abused, in that those who
    906
    really need them do not get a look in? Surely this is one major economy the possibility of which can be looked into in the future?
    Miss Pitt: I am absolutely certain from my experience of local authorities, that maternity and child welfare clinics provide an excellent service. Contrary to what my hon. and gallant Friend has stated, attendance at these clinics continues to increase.

    Somerset House (Census Records)
    Mr. Chatawayasked the Minister of Health by what criteria the Registrar-General in Somerset House grants and refuses permission for historians and genealogists to consult the census records subsequent to 1851.
    Miss Pitt: Information from these records up to 1921 is supplied only with the consent of the parties concerned or their descendants.
    Mr. Chataway: Is my hon. Friend aware that my understanding is that up to and including 1851 these records are available to anybody and that many researchers understood that as soon as a hundred years had passed they would be open to them? The 1861 returns have not yet been revealed, which is an annoyance and an embarrassment, apparently, to many researchers.
    Miss Pitt: There was no pledge of confidentiality, I understand, for censuses up to 1851, but for the succeeding decades such a pledge has been given and the records are available only for specific purposes.
    Mr. Chataway: Is that in perpetuity? Does that pledge last for ever?
    Miss Pitt: Not necessarily. I think that perhaps at the end of a hundred years the matter might be considered, but it is a matter for the Public Record Office.
    Sir G. Nicholson: Will my hon. Friend answer a Question about it in a hundred years' time?
    Miss Pitt: I should love to.

    Smallpox
    Mr. Pavittasked the Minister of Health what was the cost of each pack of smallpox vaccine USP prepared by the National Drug Company of Philadelphia, and supplied to the National Health Service, containing ten tubes, ten capillaries of vaccine, ten scarifying needles and one rubber bulb; what was the total number imported from the United States of America during the last twelve months; and what was the total cost to the National Health Service.
    The Minister of Health (Mr. Enoch Powell): 100,000 packs. It is not the practice to disclose prices.
    Mr. Pavitt: Is the Minister satisfied that this rather elaborate practice is the best way of getting this vaccine? Is he able to get supplies from British producers rather than from American?
    Mr. Powell: These were a very useful reinforcement of our reserves. I can say that they were no dearer than our general supplies.
    Mr. Manuel: The Minister has indicated that it is not his practice to state prices. Does he not think that the House is entitled to some information about prices in respect of these huge orders of vaccines and other things necessary for the health of the people which have been ordered from abroad?
    Mr. Powell: Yes, certainly, and I have answered Questions on the cost of supplies generally. But it is obviously undesirable to give the prices for particular consignments where competition between the suppliers is desirable.
    Mr. Callaghanasked the Minister of Health when he proposes to institute a general campaign for vaccination against smallpox in Cardiff and South Wales.
    Mr. Powell: This is not the intention. My policy is to encourage the routine vaccination of all infants and of adults whose work may bring them into contact with infected persons or material.
    Mr. Callaghan: Is the Minister aware that I thoroughly disagree with him? Will he please reconsider this decision and step up the propaganda and publicity so that if there is another outbreak of smallpox we shall not experience
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    once again long queues of worried, anxious people waiting to be vaccinated, when sometimes there are insufficient supplies of vaccine? Why not take time by the forelock in this matter?
    Mr. Powell: The important thing is that, if possible, 100 per cent. of infants should be vaccinated as a routine, as part of the general immunity which children aught to be acquiring. I am glad to say that in Cardiff the acceptance rate for infant vaccination has been increasing in the last few years and is well above the level for England and Wales and for Wales. I hope that Cardiff will go on with this good work, because it is the right approach.
    Mr. K. Robinson: What is the Minister doing to ensure a higher rate of infant vaccination? Even if he is reluctant to go as far as my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) suggests, will he not at any rate see whether he can do something through the schools medical service to get children vaccinated who are amongst the 60 per cent. who were not vaccinated as infants?
    Mr. Powell: Yes. There is a continuous campaign to press immunisation. I believe that each campaign for any kind of immunisation helps with the whole package. In the last few years the increase in immunisation against poliomyelitis has undoubtedly improved the figures for immunity against smallpox. This is something which has to go forward as a whole, and it is being pressed through and on local health authorities.
    Mr. Denis Howellasked the Minister of Health what machinery exists in his Department to receive, distribute and act upon information distributed by the World Health Authority regarding smallpox epidemics.
    Mr. Powell: This information goes to port health authorities direct.
    Mr. Howell: Is the Minister aware that the various medical officers, including the medical officers in Birmingham, are receiving the World Epidemiological Report weekly, which shows that as early as November and December there were about 300 cases a week in Karachi, with 30 deaths a week, but that they received no guidance at all from the Ministry? As late as only a fortnight

    909
    ago, when an aeroplane was diverted unexpectedly to Elmdon, the medical officer of health had no guidance at all as to how he should deal with the matter, and in Birmingham he took the law into his own hands, particularly in respect of a Chinese gentleman who had travelled across the world. Is not this a ridiculous state of affairs?
    Mr. Powell: There is no question of his taking the law into his own hands. The responsibility and the powers are his. This is the duty of the port health authorities, who receive regularly the information which is necessary for them to discharge it. It was only in the third week of December that the figures disseminated by the World Health Organisation showed an abnormal situation in Karachi.
    Mrs. Castleasked the Minister of Health which European countries are now demanding international certificates of vaccination against smallpox from British visitors to their countries; and whether he will insist on reciprocal arrangements being enforced against their nationals.
    Mr. Powell: According to my information, all except Austria, Denmark, the Republic of Ireland, Norway and Switzerland. The answer to the second part of the question is "No, Sir".
    Mrs. Castle: Is it not a fact that there are at present serious outbreaks of smallpox in the Congo and in Liberia, and that Europeans in contact with these countries could carry smallpox when coming to Great Britain? Therefore, will not the right hon. Gentleman protect the British people against the danger of smallpox from Europeans and other travellers, instead of pretending that the only danger comes from Commonwealth immigrants?
    Mr. Powell: As our experience has shown, the requirement of international certificates is in itself not a protection against the importation of smallpox. But there is in Europe hardly any smallpox at all, and, although these countries are fully within their rights under the international agreement in requiring these certificates, I do not believe that our protection would be increased by doing so.
    Mrs. Castle: If the international certificate of vaccination is no protection, why are France, West Germany and other countries demanding the production of such certificates from British travellers? Clearly the right hon. Gentleman is contradicting himself. Have not the British people the same right to protection from European carriers as Europeans have from British carriers?
    Mr. Powell: Yes, we have the right to do this, but there is no question of reprisals in this matter. As there have been cases of smallpox in this country, these countries were entitled under the international agreement to make this requirement.

    Rickets
    Mr. Pavittasked the Minister of Health why the figures of the number of cases of rickets in the years 1938, 1939, 1958, and 1959 are not available.
    Miss Pitt: Because rickets is not a notifiable disease.
    Mr. Pavitt: Is the hon. Lady aware of the very large decrease in the incidence of rickets in the years mentioned in the Question and the fact that one of the reasons for it, apart from the rising standards of living, has been the orange juice and vitamin resources of local welfare clinics? In view of the fact that the use of these has dropped by 70 per cent. throughout the country, will the Minister reconsider the question of the charges on vitamin foods, cod liver oil and orange juice?
    Miss Pitt: I do not think that that arises out of the Question. I agree that gross deforming rickets have been disappearing, and I am very happy to note it, but when we consider the causes of rickets we find that there are a number, of which dietary deficiency is only one. There has been a survey of cases of rickets caused by dietary deficiency, and I understand that figures are being obtained for 1960 and the first half of 1961, so that some information should be available in the future.

    Chemists (Accounts)
    Sir H. Linsteadasked the Minister of Health what delay there has been in the repayment by his Department of chemists' accounts in recent months; and if he will make a statement.
    Mr. Powell: So far as I know, twelve executive councils in the last three months have been unable to pay the full amount due by the normal date. I understand that the delay nowhere exceeded four weeks. In all these cases substantial payments on account were authorised by my Department.
    Sir H. Linstead: My right hon. Friend will recognise that this has come just at a time when the cut in remuneration is taking effect, which is unfortunate from the point of view of public relations? Could my right hon. Friend make it clear that any individual case where a pharmacist is embarrassed can be met by the executive council, in an individual case and not in relation to the whole of the community, making a payment on account?
    Mr. Powell: My Department is always ready to authorise payments on account when executive councils apply for them. My hon. Friend will, I know, recognise that the problem here—and it arises particularly in these months—is the abnormal sickness and staff losses in the pricing offices.

    Whitley Councils (Pay Claims)
    Mr. K. Robinsonasked the Minister of Health on how many occasions during the last six months he has sought deferment of the consideration of pay claims by Whitley Councils, or otherwise intervened in the normal processes of negotiation.
    Mr. Powell: I have on two occasions asked management sides to seek deferment pending further guidance to my representatives. I do not accept that this is intervention in the normal processes.
    Mr. Robinson: How does the Minister reconcile these actions with the assurance that he gave in the communication that he sent last August to Whitley Councils in which he said that normal negotiations should proceed subject only to a reservation about the date of implementation? Does he think this sort of action is going to encourage confidence in the Whitley system?
    Mr. Powell: It is a normal feature of these negotiations that the management side and my representatives on the management side should wish to take
    912
    my guidance, and there may be circumstances in which that necessitates my asking for a deferment.
    Mr. Robinson: It is a different matter if the management side asks for the right hon. Gentleman's guidance, rather than the right hon. Gentleman himself initiating this kind of delay.
    Mr. Powell: It depends on the management side. I can only request them to make a deferment and they have to consider whether it is reasonable to do so.

  HOSPITALS

    Nurses
    Sir Richard Pilkingtonasked the Minister of Health what is the present shortage of nurses in hospitals; and what plans he has to recruit sufficient nurses to meet the requirements of his new hospital plan.
    Mr. Powell: No precise estimate of shortage can be given; but I understand that just under 20,000 vacancies for hospital nurses of all grades were current at Ministry of Labour offices in England and Wales at 31st December, last. The Hospital Plan will not increase the nursing staff required.
    Mr. K. Robinson: Can the Minister say to what extent the educational requirement for entry into the nursing profession is affecting, or will affect, recruitment? Can he also say whether the number of pupil-enrolled nurses coming along is anywhere up to expectations?
    Mr. Powell: As the hon. Member knows, the question of the educational qualification is not a matter for me. Recruitment figures in respect of students of all types show an upward trend.
    Mr. Wilkins: Will the Minister confirm or deny the suggestion made very recently to me in a letter that it is possible for the domestic staff, the unskilled staff if I may put it in that way, in hospitals to earn far more than the professional nursing staff? If this is a fact, would it not be one of the major causes of the lack of recruitment of professional staff in nursing?
    Mr. Powell: It is not possible to institute a comparison merely by looking at weekly pay between one grade and another. As I have said, the strength of the whole nursing force is at its highest ever at the moment and the figures for student intake are on the uptrend.

    Nurses, Physiotherapists and Radiologists
    Mr. Denis Howellasked the Minister of Health if he is aware of the concern of hospital management committees at their failure to attract people of suitable educational attainment as nurses, physiotherapists and radiologists and what steps he will take towards an increase in wages for such staff to avoid a breakdown in the health service.
    Mr. Powell: I have no evidence of any such failure generally. Pay is a matter for the appropriate Whitley Council in the first instance.
    Mr. Howell: Does the Minister honestly believe that we can expect educated men and women of the calibre we require to fulfil the functions outlined in the Question at the rates of pay prescribed by the Council and confirmed by himself? If we can have an intervention in the Wages Council to stop wages from going up, why cannot we have one the other way round, when every hospital in the country is suffering as a result of rates of this kind?
    Mr. Powell: Whatever the hon. Member expects, the fact is that young men and women are entering all these professions as students at an increasing rate—a rate which has been sharply increasing in the last two or three years.
    Mr. K. Robinson: Surely the Minister cannot be as complacent as he sounds about the intake, for example, of physiotherapists and radiologists and a number of other categories? Is he not aware that he has a responsibility to the Service, apart from the fact that the Whitley Council fixes the rates? What is the present position about the nurses' claim which came before the Whitley Council as long ago as August?
    Mr. Powell: The last is a separate question. As for recruitment, obviously we should always like to recruit faster, whatever the rate were, but I have
    914
    placed on record the fact that the increase in the number of students, for example in physiotherapy, in the last two or three years has been extremely sharp.
    Dr. King: Is the Minister aware that the British Medical Association is also concerned about the position of the various groups of medical auxiliaries and supports them in their request for upgrading of status and conditions of service?
    Mr. Powell: Yes, but I think that these matters of pay are best dealt with by this machinery.

    Hospital Plan
    Mr. K. Robinsonasked the Minister of Health if he will state the estimated aggregate cost of the capital development proposals submitted to him last year by regional boards and boards of governors for inclusion in the Hospital Plan.
    Mr. Powell: For the period to 1970–71, about 60 per cent. above that of the proposals included in the Plan.
    Mr. Robinson: Does not this indicate that the proposals included in the Plan represent a very substantial cut in what hospital boards and boards of governors thought was desirable for a ten-year hospital programme? Is this not the reason why may of them are very disappointed with the outcome?
    Mr. Powell: No, Sir. I do not believe that many of them were disappointed with the outcome. All the evidence and indications are the reverse. It was clearly right, in asking hospital authorities to put forward a programme, not to seek to limit them unduly in the financial assumptions they should make. It was much better that they should put forward a programme which might have to be extended over a somewhat longer period. This is what happened here. But it was the right way to go about this operation.

  EMPLOYMENT

    Young Persons
    Mr. Slaterasked the Minister of Labour what consideration he has given to the setting up of emergency training centres for young people out of work.
    The Minister of Labour (Mr. John Hare): In general, the demand for young workers exceeds the supply. My Ministry does, however, regularly provide training courses for disabled unemployed young persons at commercial and technical colleges, at residential training centres, and at Government training centres.
    Mr. Slater: Is the right hon. Gentleman aware that there are very few openings for apprenticeship training in the North-East? Does he not think that if schemes of this kind were introduced, they would be a means of alleviating the position, taking the young people off the streets and enabling them to receive a form of training which would make them ready when such apprenticeship openings arose?
    Mr. Hare: I think the hon. Gentleman is aware that compared with 1960 we had something like 30 per cent. more school leavers last Christmas, and that there are, taking the nation as a whole, something like two vacancies for every young person at present unemployed. My own youth employment officers are doing all they can to see that these people get jobs.

    School Leavers, Billingham and Stockton
    Mr. Slaterasked the Minister of Labour how many boys and girls, respectively, who left school at Christmas in the Billingham and Stockton areas have found employment; and how many are currently registered as unemployed.
    Mr. Hare: Two hundred and thirty-two boys and 255 girls are known to have left school in these areas at Christmas, 1961; 35 boys and 29 girls were still unemployed on 9th February.
    Mr. Slater: Is the right hon. Gentleman aware that the situation is becoming very serious indeed and that parents, along with the education authorities, are very concerned? Does he not think that some more positive action ought to be taken, even if it means consultation between his Department and the Board of Trade, which I have advocated in this House on many occasions? Does the right hon. Gentleman not think that the time has come when he ought to consult with the Board of Trade to see what can be done?
    Mr. Hare: The hon. Gentleman knows that I am in very close touch with the President of the Board of Trade on the matter that he has in mind. I think he will also agree that training opportunities in this area in which he has a particular interest are, if anything, rather better than in the rest of the country because of the preponderance of heavy industry there. I do not want the hon. Gentleman to feel that I am not concerned with what he says, but I think he will find that we shall be able to find employment for these young people whose interests he has so much at heart.

  SOUTH AFRICA (SUPPLY OF TEAR GAS)
  Mrs. Castleasked the Lord Privy Seal whether he will prohibit the export of tear gas from this country to South Africa.
  The Lord Privy Seal (Mr. Edward Heath): No, Sir.
  Mrs. Castle: Is it not a fact that Britain is the major supplier of tear gas for South Africa which does not manufacture any of its own supplies, and that the exports of these supplies are controlled by the British Government? Is it not, therefore, intolerable that we should continue to supply this dictatorship with an instrument for quelling political demonstrations against apartheid when nominally this Government is said to deplore that horrible philosophy?
  Mr. Heath: I have no information as to the other sources of supply which South Africa may have, or what the proportions are. As to the latter part of the hon. Lady's question, I am not aware that this is an illegitimate means of dealing with civil disturbance. In fact, many people would consider that it was better than many other means.
  Mr. H. Wilson: Since the right hon. Gentleman can have no doubt against whom this tear gas is going to be used in South Africa, will he not look at this matter again in relation not only to the export of tear gas but also the proposal which has received much publicity recently that I.C.I. should build a factory in South Africa for making tear gas?
  Mr. Heath: I will consider the point.

  AGRICULTURE, FISHERIES AND FOOD

    Meat
    Sir J. Maitlandasked the Minister of Agriculture, Fisheries and Food whether. in reconsidering Government policy with regard to meat production in this country and in order to reduce its dependence on subsidies, he will urgently review the possibility of establishing machinery which will result in a more rational pattern of modern slaughterhouses and factories which will ensure the application of the most modern methods for the treatment and inspection of meat, as well as its efficient distribution, and the better use of by-products.
    The Minister of Agriculture, Fisheries and Food (Mr. Christopher Soames): This Question covers a wide field and I would ask my hon. Friend to await a statement which I shall be making in the debate on the Supplementary Estimate later today.

DISARMAMENT CONFERENCE (SOVIET NOTE)
Mr. H. Wilson(by Private Notice) asked the Lord Privy Seal whether he will make a statement about the reply received from the Soviet Government to the proposal made last Wednesday for Foreign Ministers to open the disarmament talks.
The Lord Privy Seal (Mr. Edward Heath): A joint reply by Mr. Khrushchev to their letter of 7th February has been given to the President and my right hon. Friend the Prime Minister in identical terms. Mr. Khrushchev suggests a different procedure from the one that we have envisaged and he has also communicated this to the other Governments represented at the Eighteen Nation Disarmament Conference.
Mr. Khrushchev's reply is being considered in consultation with our allies.
Mr. Wilson: The right hon. Gentleman is aware that we on this side of the House, as I am sure does the Minister, welcome the fact that Mr. Khrushchev recognises the need for high-level talks before, perhaps, final and very grave decisions are taken on the question of disarmament. While it is obviously necessary to consider this proposal as against the Foreign Minis-
918
tern' meeting, and while they are connected, the two are not necessarily incompatible. Would the right hon. Gentleman give a clear assurance to the House—as we asked him last week—that there will be no resumption of tests, either by Britain or by the United States of America, until a real effort has been made at Geneva to agree on a multilateral tests ban agreement?
Mr. Heath: I agree with the right hon. Gentleman that it is to be welcomed that Mr. Khrushchev should have responded to the initiative of the President and the Prime Minister, and I accept, as the right hon. Gentleman says, that there should be a beginning at a high level. We are, of course, giving close consideration to the particular proposal that Mr. Khrushchev has made.
The last part of the right hon. Gentleman's supplementary question is a different matter and, in any case, there is a Question down about that to my right lion. Friend the Prime Minister tomorrow.
Mr. P. Williams: Would not Mr. Khrushchev's reply imply that he is not as worried about the tests as is the Opposition, and that, therefore, it is important that Her Majesty's Government should leave their hands free on this matter? Furthermore, does not this show the likelihood of being able to get conversations started at the Eighteen Nation Disarmament Conference, which is a welcome reply to the Prime Minister's initiative last week?
Mr. Heath: Yes, Sir. I have already said that we welcome this reply to that initiative.
Mr. Rankin: Will the right hon. Gentleman say exactly what is meant by the phrase "the West"? Is it now condensed to mean Britain and America? What is the rôle of Britain in relation to America when decisions are taken?
Mr. Heath: I do not see the point of the hon. Gentleman's supplementary question. I am not discussing the West.

DISARMAMENT CONFERENCE (SOVIET NOTE)

  BUSINESS OF THE HOUSE (SUPPLY)
  Ordered,
  That this day Business other than the Business of Supply may be taken before Ten o'clock.—[Mr. Iain Macleod.]

ORDERS OF THE DAY

  SUPPLY
  [6TH ALLOTTED DAY]
  Considered in Committee.
  [Sir WILLIAM ANSTRUTHER-GRAY in the Chair]

  SUPPLY

    CIVIL ESTIMATES, SUPPLEMENTARY ESTIMATE, 1961–62
    Motion made, and Question proposed,
    That a Supplementary sum, not exceeding £78,162,500, be granted to Her Majesty, to complete the sum necessary to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1962, for expenditure in respect of the Services included in the following Civil Estimates, viz.:

    CIVIL ESTIMATES, SUPPLEMENTARY ESTIMATE, 1961–62

    £

    Class VIII, Vote 2 (Agricultural and Food Grants and Subsidies)

    65,209,000

    Class VIII, Vote 11 (Department of Agriculture and Fisheries for Scotland)

    12,953,500

    Total

    £78,162,500

  AGRICULTURE
  3.34 p.m.
  The Minister of Agriculture, Fisheries and Food (Mr. Christopher Soames): We are asking the Committee to vote an extra sum towards the support of our agriculture Vote for this year. For the United Kingdom as a whole this comes to a total of just over £78 million. Hon. Members will have seen the report of the Select Committee on Estimates which examined this Supplementary Estimate and I know that they will be grateful, as I am, to the Committee for the detailed Report and investigation which it made, and for the lucid analysis of the reasons which underlie these Votes.
  I should like to deal with the main point made in the Report of the Committee, which met under the able chairmanship of my hon. Friend the Member for Aylesbury (Sir S. Summers), relating to the nature of our support system, whereby it is the duty of the Government, under an Act of Parliament, to make up the difference in terms of cash—whatever that may be—between the guaranteed prices for the various guaranteed commodities and the market prices
  920
  which have been obtained by farmers, on average, during the year over the whole level of production of those commodities—whatever that may be.
  Inherent in this system there are, of course, many and considerable difficulties in connection with estimating. First, there is the question of timing. All the Votes have to be in and settled by the end of January. This imposes an obligation upon the Minister to do his best to decide what is to be the level of market prices in a free market for a period of up to fifteen months ahead. In other words, the Estimate of which this is a supplementary was settled in January, 1961, for a period extending from April, 1961, until April, 1962. We have to try to estimate the average market price for the different commodities over that period.
  Secondly, as the Estimate has to be in by the end of January, it has to be made before a determination is decided by the Government following the Annual Price Review in February, which ends usually in early March. So we do not know, at the time when we put in the Estimate, what difference there will be in the price determination for different commodities made in the Annual Price Review, and the effect which that will have on the levels of production, or even, perhaps, on the pattern of marketing.
  Last, but by no means least, do not let us forget the very considerable effects which—despite all the technical progress made in post-war years in relation to agriculture—the weather that we may enjoy, or "disenjoy", can have on the level of agricultural output.
  I think that it would be best if I discussed one by one the commodities which have contributed largely to this Supplementary Estimate. Meat is the biggest. Let me take beef first, where we have been proved wrong to the tune of £35·3 million. Of this sum, £13·3 million is accounted for by the extra 10s. a cwt. which was added in the Price Review to the guaranteed price for beef, together with the number of cattle which have in fact come forward. The larger part of this figure of £35 million, that is, £22 million, has been the direct result of lower market prices for beef.
  The Committee might well ask why the Government decided last year to put

  921
  on the extra 10s. per cwt. on beef. Beef production is a long-term enterprise, and the numbers of calves retained on farms to be matured into beef had declined considerably. In view of that fact, and taking with it the level of milk production, which is an alternative to beef production on many farms, and if we note how the figures of milk production had been increasing, we were led to the conclusion that we should give some impetus to the production of beef, because of the declining numbers of calves being retained on the farms. That was the reason for the extra 10s. per cwt.
  What was the measure of the falseness of the Estimate? We had assumed an average market price for beef during the year of 142s. per cwt., which was decided in January last year. There is a nicety to be taken into account here, because this was decided in January, before even the previous financial year was over, because it ends in April. So in January, 1961, we were estimating a market price for 1960–61 of 144s., and our estimate of what the market price would be from April, 1961, to April, 1962, was 142s. per cwt.
  What happened? There was a very considerable drop in the market in the summer months, and the price went down to as low as 98s. 6d. per cwt. In the Supplementary Estimate which we are now debating, we revised our estimate of what the average market price for beef throughout the year would be from 142s. to 122s. 3d. per cwt.
  What caused this very considerable fall in price? There were a number of factors. First, and I think that there is something in this, though not very much, farmers had it firmly fixed in their minds before the last Price Review that there was to be an increase in the price of beef at the Review. I dare say that there was a tendency to hold beef off the market until the extra price to be paid came in at the end of March. In fact, the extra marketings in April and May were not all that much higher than they had been in the previous year. They were up by about 11 per cent. It was in June and July that we got the really heavy marketings of home cattle—up to 50 per cent. more than had been marketed in the same period of the previous year.
  922
  What brought this about? It was, principally, the spring flush of grass coming a full month earlier than is customary in normal weather conditions, with the result that the animals were finished much earlier and came much more in a bunch, as against being spread over the year, than is normal. There was this very considerable flow of extra numbers of animals on to the market in June and July but we still expected then that the beef market would recover in the later summer.
  But the situation on the beef market was then aggravated—and I will come to this in more detail later—by large quantities of lamb coming on to the market, and, even later, by large imports of pig meat from the Continent. It was not until unusually late in the year that the market price for beef began to recover. It is considerably better now, up to 152s.-odd per cwt., compared with the 98s. 6d. to which it fell earlier in the summer, but the improvement came too late, alas, to be able to save this very considerable Supplementary Estimate.
  Now for the lamb figures. We had estimated that the market price of lamb in this year would be 2s. 5d. per lb. In fact, we now reckon it may work out at 2s. per lb. What brought this about? Here, there is no doubt that nature intervened, and, from the point of view of lambs, we have had a year to end all years. There was a record crop, a higher percentage of lambs than ever before. I see that one hon. Member opposite is smiling, but when we are working out the Estimates, and we have the responsibility of trying to get them right, although I know that we sometimes go wrong, what can we take? We have a certain size of ewe flock, and we estimate how many lambs we are likely to get from that ewe flock. But we got a higher percentage of lambs out of the ewe flock, living and marketed, than has ever happened before, following the good weather in February and March. The result has been that 700,000 more lambs grew to maturity on our farms than could have been estimated that there would be, on the basis of normal conditions. These came on to the market at a time when beef prices were low.
  Now for pigs. Here, the Supplementary Estimate is for £17·9 million, of

  923
  which £1·9 million is directly due to the increased awards at the last Price Review. Again, the vast bulk of this Supplementary Estimate is due to the fall in market prices. The numbers of pigs reaching maturity on our farms have worked out at about what we expected them to be—slightly more, but not very much more. We included £1 million in the Supplementary Estimates for the increased numbers of pigs. We wanted to see a gradual and gentle increase in the size of the pig herd in the country, because it had dropped considerably in recent years, and the Price Review decision was designed with this in view.
  What happened about the bacon market was that in the earlier months of the year Denmark found alternative markets in Europe for quite a large proportion of her bacon. This was followed by a strike on the farms in Denmark, and very little bacon was exported while it was on. It lasted some weeks, and the bacon was kept in store. The amount of bacon coming on the market from abroad, particularly from Denmark, during the autumn months was much more than we could possibly have thought likely to be forthcoming when we had made the Estimate in January, and it came on to a meat market which was already weakened, both through the beef and lamb stories.
  If we consider the meat situation as a whole, beef, lamb and pigs, what pattern do we see? There has been an increase in the home production of all meat, and I am including chicken meat in this, of 12 per cent. over last year. There have been fewer imports than last year, and the net result is that the total amount of meat available on the market during the year was 4½ per cent. higher than it was in the previous year. The really worrying feature here is that such a comparatively small increase in the amount of meat coming on the market could bring about such a considerable fall in the market prices.
  I will return later to fatstock, but while I am dealing with the figures of the Estimates I will say a word about other commodities. The Supplementary Estimate for cereals is £7·8 million. There was a fall in the market price of both wheat and oats, though this was counteracted to some extent by a higher
  924
  market price for barley than we had expected. At the last Review we cut the guaranteed price of barley and during the summer months we took measures in regard to the importation of barley and the level of price at which it would be imported. Therefore, the barley price was somewhat better on the market than we had expected. The wheat yields were somewhat up on what we had allowed for and the prices were somewhat lower, but the net difference over the whole range of cereals is an excess of £7·8 million.
  For milk, the figure is £3·4 million. This arises in the main from the increase we gave to the industry at the last Review coupled with the increase in distributive costs the greater proportion of which was caused by an increase in wages within the industry during the year. The 8d. per pint for milk to the consumer throughout the whole year was not sufficient to pay for these extra costs. Once we have settled the retail price of milk for a year ahead we do not like interfering with it, and, accordingly, the £3·4 million has been carried by the Exchequer. We shall, of course, take this increase into consideration when we determine the retail price of milk for the subsequent year.
  For potatoes, the bill is £3·86 million. This was entirely for the 1960 crop, not the 1961 crop. When we made our Estimates in January, 1961, we had had a very bad winter with a lot of rain, and a large proportion of the potato crop was still in the ground. It looked as though a great deal would be ruined. We made an estimate of the quantities which we thought likely to be lifted and capable of sale on the market. In fact, the weather turned much better and larger quantities of potatoes were lifted. There was a surplus of potatoes that year.
  We thought that the Potato Marketing Board would have to buy 400,000 tons of potatoes to keep the market at about the right level, but, in fact, it had to buy a net 550,000 tons. This was a good investment from the point of view of the Exchequer. It was money well spent, for the total subsidy bill would undoubtedly have been very considerable had all those potatoes gone on to the market. The drop in the market price would have been very much greater.

  925
  But even with this considerable support buying programme, the fact remains that the market price was about 6s. lower in the event than we had estimated it would be.
  The Select Committee showed its anxiety and consciousness of the difficulties which any Minister of Agriculture has in trying to hold a balance of interest as between agriculture, the consumer and the Exchequer in this matter of support buying of potatoes. It is a nicely balanced point. Support buying, of course, takes place only in years when the acreage planted for potatoes, which would, in a normal year, produce roughly the amount of potatoes consumed by the public as a whole, gives an exceedingly high yield and one has to deal with very much larger quantities. Support buying takes a proportion of those quantities off the market to hold it at a reasonable level. One has to look at it over the years, and I think that, on the whole, this has been to our national advantage.
  The doubtful element in it, of course, is the consumer, and whether it has been to her advantage.
  Mr. W. A. Wilkins: And the taxpayer?
  Mr. Soames: No. There is no doubt that it is an advantage to the taxpayer. Where the consumer is concerned, the Consumers' Committee which was set up under the Agricultural Marketing Act, and which examined this very problem of support buying of potatoes last year, gave it as its opinion that this was right and that the consumer did not suffer in the long run.
  I return now to the fatstock story and the whole picture of the Supplementary Estimates. There is no doubt that what has happened this year is that several circumstances, all of which can lead to bad estimating, have combined together to bring about a very considerable Supplementary Estimate. This is not unusual. Many of these factors arise not infrequently though they do not, of course, always combine in the way that they have this year. I do not say that the target is never hit. Looking back over the last six years since 1955, there was in 1957 a Supplementary Estimate to cover an excess of 25 per cent. on the Vote as a whole.
  926
  In 1955 and 1958, there was what proved to be quite considerable overestimating. In other years the Estimates, taking them together, turned out about right, but not without considerable over- and under-estimating in certain commodities. In one year, for instance, there was £36 million over-estimated in respect of one commodity, but this was counter-balanced by Estimates being proved wrong the other way, the total Vote in the end coming out about right.
  This system with all its inherent faults has been supported over the years by both sides of the Committee. It is, of course, designed to ensure a fair return to the farmer for his produce and, at the same time, to ensure that the consumer has the advantages of food cheaper than would be the case under a different system of control of imports, either fiscal or quantitative.
  To what extent has it been successful this year? I take, first, the farmers' point of view. The increased figure for support of fatstock—fatstock, of course, is by far the biggest element in it—is £78 million this year over last year. I am not talking about the difference between the original Estimate and the Supplementary Estimate, which just happens to be the same figure, but I am speaking now about the amount of subsidy paid out on all fatstock this year as compared with last year. Every penny of that £78 million has been paid to the farmers, but a large part of it has not led to any increase in the gross takings of the farming community.
  The reason is that, because the market price fell, the sums had to be larger to take account of the difference between the market price and the guaranteed price. But within that figure of £78 million, £31 million has been paid by virtue of increases in the guaranteed prices for beef and for pigs which were made at the last Review and for the extra numbers of cattle, sheep and pigs which have come off our farms this year.
  I now turn to the matter as it concerns the consumer. It has been a popular cry that the consumer has gained nothing from the fall in prices. Let us look at what has happened. I will take, if I may, the last published figures of the cost-of-living index for December. The index shows that the increase in the cost of living as a whole

  927
  was 4½ per cent. over December, 1960, and that the increase in the non-food items during that period was 5½ per cent. The figures show that the increase in the food items was 2 per cent, and that the item of food which contributed most to this small rise was meat, for the meat figure was 6 per cent. less in December, 1961, than it was in December, 1960.
  Perhaps we can consider this from another angle. When we put in this Supplementary Estimate we had knowledge of what the movement in the retail prices of meat would be like on the figures produced by the Ministry of Labour up to December. We had, then, to estimate the price up to the following April. In doing that, we had to arrive at a figure covering April, 1961, to April, 1962. I do not think that the estimate we made will be all that far out. I believe that the cost-of-living index figure for meat over the whole period—from April, 1961, to April, 1962—will be 4 per cent. down compared with the previous year.
  What does that represent? The value of meat at the retail point throughout the country—and this is for all meat produced including that which is imported—is about £1,300 million a year. A 4 per cent. reduction on that total is about £50 million. A reduction of £50 million spread over every family represents about £1 a head a year, or about 6d. per week per head and this might not be thought to reflect very much on individual families. It is, therefore, understandable why individuals may not have felt that there has been this fall in the price of meat. Nevertheless, looking at it from the other side of the coin, £50 million as a reduction in the context of our discussion today—a Supplementary Estimate for fatstock of £67 million—is quite a considerable figure.
  Mr. Frederick Peart: The Minister is now giving average figures concerning retail prices and their effect on consumers. Why, when he put this Supplementary Estimate to the House, did he say that any estimate of what the consumer received could only be speculative? How does the Minister arrive at this figure, since his Department has no accurate figures on this subject? Is not the figure he has given representative of a very small sample and, therefore, only speculative?
  Mr. Soames: It is speculative for two reasons, one of which I have given, namely, that we have had to cast our minds forward to market prices at the end of next April because this Supplementary Estimate is from April, 1961, to April, 1962. That is one inevitable element of speculation. The second is that this is not based on individual purchases in individual shops, but by taking an average—which has been accepted by both sides of the Committee—of the movement of prices as reflected in the cost-of-living index. As I have said, this figure of £50 million in the context of what we are now discussing is a very considerable figure.
  But what of the distributive trades? What sort of a year has it been for them? Let it be said, first, that they have had a good year, for things have gone forward. The quantity has been right, the market price has been low and the demand has been strong. Thus, this has been a good year for them, certainly compared with the previous year, when the situation from their point of view was not so satisfactory. It is very difficult to estimate what the extra figure is for all the distributive trades. There are 40,000 butchers' shops apart from 200,000 other units which handle meat at some point during the distributive chain—importers, slaughterers, grocers, supermarkets, and the rest.
  When I presented this Supply Estimate, in December, I made what I think, in retrospect, was a bad calculation, because I took a bad base point. I took as the base the figure of £78 million which was the increased amount of subsidy we expected to be paid out. I took the figures of £31 million for the farmer and £35 million as the benefit that the consumer had received from home-produced meat on the prices that had had to be paid. I added those together and subtracted the total from £78 million. I arrived at the figure which I said I would call about £10 million.
  As I say, that was all done on a false base and the more I have looked at this the more impossible I think it is to reach a conclusion as to how much, throughout all this complicated chain of the many units at different levels, one can estimate the many links in the chain and the level of increases in profits. Certain figures have been made available

  929
  to us. One well-known retail chain of shops has published its figures. These show that the profit made on meat by that chain in the period which we are discussing was under 1½d. per lb. This firm is in both the retail and wholesale links of the chain. The only comment I would make on this figure is that even were it very considerably reduced it still would not have made any great impact on what the consumer would have paid for meat.
  Undoubtedly, some firms—the multiples particularly—have reflected the movement of wholesale prices in their retail prices very much more closely than have other firms. Indeed, the knowledge that we have of the movement in prices in some businesses over the course of the year, together with what we take to be the average movement of meat prices from the retail prices index shows that there must have been some firms which moved them considerably less than did other firms.
  It is also revealed—and we know this without any doubt—that the movement in prices at the retail point of different cuts of meat has varied enormously. Some figures I have in my mind from a well-known organisation show price cuts varying from a 4 per cent. reduction on steak to, I think. a 20 per cent. or more reduction on the poorer cuts of Iamb. What I think has been shown beyond peradventure, and what has been highlighted this year from the point of view of the consumer, is that there have been opportunities to get very considerable reductions in the cost of meat compared with the previous year, but to obtain full advantage, purchasers have to be very "choosey" both as to the cuts of meat they wish to buy and the shops they wish to patronise.
  Of course, there are some who always go to the same butcher's shop and who are always inclined to ask for the same cut of meat, but there is no doubt that discrimination both as to the type of meat that was bought and the shop in which it was purchased have given the consumer this year the opportunity to get very much above that average of the reduction in cost of meat at retail point.
  Mr. William Baxter: The calculation made by the right hon. Gentleman is, I believe, on a false foundation. The Supplementary
  930
  Estimate seeks to give a bonus or an award to quality produced cattle, but that has a bearing on the other side of the matter, cast cows. That is one of the biggest selling features of beef in any market at present. The price of cast cows fell from approximately £50 or £40 per cow to £30 or £20. The right hon. Gentleman is basing his calculation on the butchers' meat sold in a shop.
  Mr. Soames: This debate is about all the animals which go through the certification centres and are certified as achieving a certain standard so as to be able to qualify for the subsidy. I quite agree that the more low quality meat there is on the market the more it tends to drag down the whole tone of the market. That undoubtedly is so, but deficiency payments are paid only for animals which reach a certain quality when inspected in the certification centres.
  The retail end of the business is only a comparatively small part of the total meat industry. What is most disturbing, and what has brought about this Supplementary Estimate for fatstock more than for anything else, is the change both in the pattern of marketing and the source of marketing and the fact that, following this considerable increase in home supplies, but not a very large increase in total supplies, the market has fallen to such an extent.
  Some of the factors are, I hope, transient, but others, I hope even more strongly, are those which will be with us for some time to come, notably a high level of production of meat from our own farms. If this is to be so, it is most disturbing that the market seemed so incapable this year of adapting itself to these changed conditions. [HON. MEMBERS: "Hear, hear."] I am talking about the whole pattern of meat marketing from the market itself down to the butcher's slab.
  There have been a number of inquiries in the 1900s into meat marketing. There was the Linlithgow inquiry after the First World War, and the Reorganisation Commission for Fatstock in 1934, the recommendations of which had not been put into operation when the last war intervened. Then there was the Lucas Committee, which examined this matter with other matters during the

  931
  post-war period. The proposals of that Committee for fatstock marketing, also, were not implemented.
  The situation we are facing today, however, is entirely different from what it was when any of those Committees examined the problem. I cannot break these figures down for beef, but, taking cattle as a whole, there are 55 per cent. more in this country than there were just before the war. There is 40 per cent. more lamb killed off our farms than just before the war and 85 per cent. more pigs. The situation is fundamentally different. I am convinced that what we need is a thorough re-appraisal of our whole system of meat marketing.
  Mr. Peart: A committee?
  Mr. Soames: Yes, a committee. I can assure the hon. Member that I am not the slightest bit ashamed of setting up a committee. With the agreement of my right hon. Friend the Secretary of State for Scotland and my right hon. Friend the Home Secretary, we propose to set up a committee of inquiry whose terms of reference will be:
  "to investigate the organisation of the marketing and distribution of fat stock and carcase meat in the United Kingdom, and the existing facilities and present methods employed; to consider whether changes are desirable: and to make recommendations."
  From the producer point of view there is a strong feeling among many farmers that a producers' marketing board for meat would have alleviated our problems to some extent this year.
  Mr. Anthony Fell: My right hon. Friend has told us that a committee is to be set up to look into the whole question of marketing meat. Could we have a promise from the Government that nothing will be done to disturb the present support of agriculture before that committee has reported?
  Mr. Soames: I think that my hon. Friend misunderstood the purpose of the committee. Its purpose is not to look into the system of agricultural support, but into the whole structure and system of meat marketing within the industry. I am coming later in my speech to the question of the change in the system.
  A substantial body of producers would like to see a producer marketing board for meat. The leaders of the National
  932
  Farmers' Union have said that they certainly do not dismiss this thought from their mind—indeed, they intend to examine it. Nevertheless, there are weighty arguments on both sides about the setting up of a producer marketing board and I have had discussions on this with the President of the N.F.U. We are in agreement that before taking this point further, it is necessary for us to look into both the pros and the cons in some detail.
  The feature which, obviously, needs looking into most of all is what degree of control a meat marketing board must have to have an effective impression upon the market and the corollary of that, namely, whether the level of control which is necessary to have an effective impact upon the market would be such as to be acceptable within the national interest as a whole. This will fall within the terms of reference of the committee.
  Mr. George Darling: Will slaughterhouses and slaughterhouse policy, and, perhaps, recommendations for factory abattoirs be included in the terms of reference?
  Mr. Soames: I would not go so far as to talk about recommendations, but the whole system of meat marketing, which includes both markets and slaughterhouses, will be included.
  The other point concerning the Estimates is the question of the importation of meat. We are, of course, limited within our international obligations in ways which hon. Members know well. It does not do any good either to the exporting Government or to this country if the levels of importation of any commodity are such as to lower the price to an unacceptable level.
  I have drawn the attention of every major meat exporting country to the situation on our market and have asked them in the ensuing year, because the level of supplies of meat in the coming year will, I expect, be at least as high in total as it was during the past year—although, I hope, the pattern will be spread more evenly—to take the fullest possible account of the situation in our market when they plan their exports to us.
  Mr. F. J. Bellenger: Will the Minister be more explicit? What

  933
  does he mean by that? He says that he has consulted exporters overseas. Does he mean that he wants them to limit their exports to this country?
  Mr. Soames: No. Exporting countries are well aware of this. Many of them depend on these exports for their livelihood. If the volume of any commodity on our markets is such as to break the market, as it did in beef last summer, nothing will be gained by the exporting country any more than by us. That is what I said.
  Mr. A. E. Oram: Will the terms of reference of the proposed committee include the question of imports? The Minister may recall that the Lucas Committee complained that it was not able to produce a more valuable Report because its terms of reference did not include the question of imports. Can the Minister assure us that the same mistake will not occur this time?
  Mr. Soames: I am not at all sure that it is a mistake. We are not looking to the new committee to advise the Government what its trading arrangements should be. It will, however, take into account what trading arrangements exist when it makes its report.
  Several Hon. Members Several Hon. Members rose——
  Mr. Soames: I really must get on.
  The Estimates Committee said, in its Report, that
  "In your Committee's opinion, this Supplementary Estimate is fundamentally due to the policy embodied in the Agriculture Acts rather than to avoidable miscalculations in the original Estimates."
  The present system of support has served the country well and has had the support of both sides of the House of Commons over a long period. Of course, the situation in which we find ourselves today, from the viewpoint of supplies of food throughout the world, is very different from what it was when the system of support was introduced. If we are to maintain, as we on this side are determined to maintain, the possibilities for the agriculture industry to remain buoyant and virile and to make its contribution to the national life, we must be prepared to adapt the systems of support that we use to the circumstances as they present themselves. We
  934
  have our pledge to the agricultural industry that the 1957 Act will remain operative during the lifetime of this Parliament, and this pledge, of course, remains.
  We have also to think of the fact that negotiations have begun with the Common Market to see whether it is possible to make arrangements which are suitable from the viewpoint of preserving the vital interests both of the Commonwealth and of our own nation, to enable the country to join the Common Market. Of course, no changes can, or should, be brought about until the outcome of those negotiations is decided.
  Changes will inevitably be necessary to a considerable extent if we join the Common Market; of that there is no doubt. Quite considerable changes in our system of support to suit the existing circumstances may well be necessary, in any case. Meanwhile, however, we continue with our present system of support, with its advantages and also with the risks of bad estimating or bad out-turn as against the Estimates which are inherent in it. At the same time, the Government will continue to do their best within the scope of what is open to them to ensure that the out-turn is as near as we can manage to bring it to the Estimates.
  4.28 p.m.
  Mr. Frederick Peart: We have had an amazing speech from the Minister, At first, I thought that he would explain in detail the effects of Government policy on the price support position. Throughout my speech, I should like to challenge some of the Minister's main assumptions. I am astonished at his cursory announcement of the new committee on marketing. I will deal with that, because we on this side feel that over a long period of years the Government have failed to respond to our prodding on marketing policy.
  I believe this to be one of the most critical debates for agriculture that we have had in the House of Commons. Hon. Members, on both sides, are disturbed about the results of the Government's policy. The Government cannot escape responsibility for their miscalculations. I see the hon. Member for Kidderminster (Mr. Nabarro) opposite me. I can imagine his reactions if a

  935
  Labour Minister had been making the same speech——
  Mr. Gerald Nabarro: Hear, hear.
  Mr. Peart:—or if the Chairman of the National Coal Board had made so many miscalculations.
  The Government face a critical debate. There is, of course, as the Minister quite rightly said, the shadow of the February Price Review negotiations, and he has mentioned now the Common Market negotiations, and there is also, and above all, the general financial and economic policy of the Government—the Chancellor's policy. We cannot separate increased payments and increased farm incomes from the Government's financial policy as announced recently in the White Paper. So, today, we must inevitably consider the system in relation to that general background.
  Today, the Minister has been slightly more forthcoming than he was when the increased Estimates were announced on 14th December last year. I was astonished that the Minister did not, when he announced the increase, make a statement to the House. That was an example of how the right hon. Gentleman tried to evade his responsibilities for giving the House full information. The reputation of the Secretary of State for Scotland on this has been rather that of a political clam. We are, after all, discussing not only Estimates which affect England and Wales, but also nearly £13 million for Scotland, and, so far, we have had no major statement on these Estimates from the Secretary of State.
  On 14th December we cross-examined the Minister, although I am sure that he arranged for an ordinary Question to be addressed to him so that he could evade making a major statement; but we have had no statement as yet from the Secretary of State. I know that that will be remedied, and I hope that some of my Scottish colleagues will chase the Secretary of State, who has so far failed to make a major statement.
  Fortunately, we had the benefit of the Report of the Estimates Committee, and I, too, would like to congratulate the Chairman of the Commitee, which is comprised of hon. Members from both
  936
  sides of the House. The Committee extracted from the Minister information which he could have given to the House in December. I should also like to congratulate the Minister's Permanent Secretary on the evidence which he gave and on the memorandum which he submitted. Indeed, the speech of the Minister today is only a rehash of his own Permanent Secretary's memorandum to the Estimates Committee.
  The Minister described the total cost of agricultural support as now running at £344·7 million and how he is now seeking to justify the increase of £78 million. The figures now are known. We need not go into them in much detail—£35·3 million for cattle, £13·6 million for sheep, and £17·9 million for pigs. Then there are the Estimates which have been mentioned for cereals and for potatoes.
  The Minister talked about a combination of several factors, how
  "wholesale prices for each of these commodities have fallen greatly below expectation over the course of the year."—[OFFICIAL REPORT, 14th December, 1961; Vol. 651, c. 604.]
  and from the Minister today we have had really what is virtually a hard luck story—a very hard luck story—about how everything has gone wrong, how the weather has not responded, how the Price Review determinations have had the effect of an increase in beef production, how, in pig production, the determinations of the Price Review last year have led to a larger flow on to the market, then the flow of imports from outside, from Denmark—which the Minister today did not mention, but which was mentioned in the memorandum submitted by the Ministry to the Estimates Committee—the extra Irish store cattle, and extra wheat from France, and so on: all this, he said, has led to a depression of the market.
  Our main case today is that though we accept that there may be certain factors in agriculture which cannot be estimated——
  Mr. Fell: May be? Are bound to be.
  Mr. Peart: There are bound to be, but when the Labour Government were in power, in 1947, when our flocks of sheep were affected by the bad weather, we were attacked unmercifully by hon. Members opposite. Here we have a

  937
  combination of factors, and a combination of factors effected by deliberate Government policy.
  Indeed, over the last two years the Government have encouraged increased beef production and the remarkable fact is that farmers have produced more. Because of the circumstances, because of what is termed a free market, because the Government have not sought to create an organised market linked with a deficiency payment system, inevitably such a crisis has occurred. So what we are really debating today is the fact that the system has broken down.
  However much one looks at the figures which were mentioned by the Minister, however one examines the miscalculations which are now admitted—and, my goodness, does not the Minister admit gross miscalculations?—he cannot escape his Department's responsibility in this. Here, we are seeing a breakdown of the system, and the hon. Member for Kidderminster and others who are very vigilant on Estimates know that that is really the issue behind the debate today on these Estimates.
  Mr. Nabarro: Let the hon. Member speak for himself, not me.
  Mr. Peart: The hon. Member can have an opportunity to make his contribution. I thought, judging by where he was sitting, that he was a P.P.S. today.
  I want to know what the Minister will do. We heard him talk about the interim committee on marketing. He made a significant statement on 14th December in reply to a question from one of his hon. Friends, when he said that
  "we will do everything possible, including any action which it may be right to take at the Price Review, and we will also improve marketing arrangements where this can be done."—[OFFICIAL REPORT, 14th December, 1961: Vol. 651, c. 605.]
  I want to know from the Secretary of State whether the Minister really does intend to take action in relation to the Price Review. I want to know what is the Government's policy towards marketing.
  I do not intend to be fobbed off by the announcement of this new committee. As hon. Members on the other side know, this is only window-dressing; it is only a last-minute sop by the Minister.
  938
  He does not even know who the chairman of this committee is to be, or who are to be its members. I want to know, as I shall demonstrate later, from the Minister what really is his policy on marketing.
  As I have said, the Minister must accept responsibility for gross miscalculation. We have had the benefit of the work of the Estimates Committee, and I have paid a tribute to that, but we want to know now where the money has gone. I think that he said that 5 per cent. went to the consumer during the period. Now he has changed his mind. I quote what he said:
  "In round figures, about £31 million…will have gone to the farmers for the increased number of cattle coming forward and because of the higher prices…"
  My hon. Friend the Member for Sheffield, Hillsborough (Mr. Darling) asked where the other £45 million had gone. The Minister, in reply, said that there had been
  "a 5½ per cent. reduction in retail prices…"—[OFFICIAL REPORT, 14th December, 1961; Vol. 651, c. 605–6.]
  The right hon. Gentleman has argued all along that the consumer has benefited by £35 million, and in reply to a question by my hon. Friend said then that the other £10 million went to the distributive trades.
  I assert again, as I did in an intervention in the Minister's speech today, that the Minister's figures are only speculative. Indeed, he said this when he announced these figures. I should like to know how the Minister has arrived at these figures. I hope that we shall have an answer from the Secretary of State. His own Department does not collect retail prices. The Ministry of Labour, of course, does, but even that Ministry takes only a small sample. How can we really have direct comparisons for retail meat? I have here the figures which have been given to me by certain butchers' organisations—no doubt, organisations similar to those which the Minister has mentioned. I have figures given to me by the Meat Trades Federation. I shall not argue who is right, or who has benefited, whether the farmers, the butchers or the distributive trade. Individuals have taken advantage of the system which has been created and that is where, I hope, my hon. Friends will focus their attack.

  939
  As yet, we are unable to get exact figures. Even when we considered retail prices, the Minister said, "The consumer could benefit if she would be a bit more choosey. How can ordinary families, old-age pensioners and people on small incomes be choosey in relation to the buying of steak and other high quality cuts? They cannot possibly buy these.
  Mr. Soames: I did not mean that. When I was talking about people being choosey, I meant that the price reduction had not been on the more expensive cuts, but, in fact, on the cheaper cuts.
  Mr. Peart: I think that what the right hon. Gentleman was really saying was that the consumer should have bought cheaper cuts—scrag-end and meat of that kind.
  If we examine retail prices we find that they vary from locality to locality, from the North of England to the South of England, and, indeed, the Scottish position might be quite different from that in the South. I cannot see how the Minister can be so dogmatic. After all, the Minister himself has argued that this is speculative. Again, the Estimates Committee examined the Minister's evidence. [Interruption.] I am glad that hon. Members opposite support my point of view. I would advise all hon. Members to read paragraph 20 of the Second Report from the Estimates Committee, which deals with the relationship betwen wholesale and retail prices. It says:
  "It might have been expected that the payment of the extra £51 million which was made necessary by a fall in market prices of fat-stock would have been reflected in a reduction of retail prices. The witness from the Ministry of Agriculture was asked whether the low wholesale prices for beef had had this effect. He replied that they had not done so to the extent that the Department would have wished, pointing out that it was to the advantage of the Ministry that price reductions should be passed on to the public because this should stimulate demand, strengthen the market price and so lower the deficiency payments. Your Committee are concerned that this process has, in the opinion of the Department, operated so ineffectively."
  In other words, the Estimates Committee merely reinforces the point of view that I have put forward.
  Sir Spencer Summers: I think that in all fairness anyone seeking to pass judgment on a situation should
  940
  recognise that no evidence was taken from the retail meat trade. The last words that were quoted merely reinforced the statement of the Minister. There was no opportunity, because time did not permit, for the retail trade to make its point of view.
  Mr. Peart: The hon. Gentleman, who was responsible for the Report, cannot escape responsibility for it. Nor can the Minister escape responsibility for the evidence which he submitted to that Committee.
  I should have liked to have been set up—I have always argued for this—a permanent Select Committee which could examine an industry like this and where expert witnesses from outside, the National Farmers' Unions, the Meat Trades Federation and other people concerned with the industry, could be examined. The Minister was submitting evidence, and the hon. Member, who was Chairman of that Committee, must also accept responsibility for the findings of his Committee.
  Sir S. Summers: I am not seeking to escape any responsibility. All that I am seeking to do is to draw the attention of readers of the Report to the fact that the retail meat trade did not have an opportunity to put its point of view.
  Mr. William Ross: The hon. Member will appreciate that the Chairman of the Estimates Committee has power to call anyone to give evidence on the matter under discussion.
  Sir Godfrey Nicholson Sir Godfrey Nicholson (Farnham) rose——
  Mr. Peart: I know that the hon. Member for Farnham (Sir G. Nicholson) was also a member of the Committee, so I will gladly give way.
  Sir G. Nicholson: I think that hon. Members should realise that the Estimates Committee in this case could only examine a Supplementary Estimate, Which it examined at the end of December. It had to produce a Report in time for this debate. It could not conduct a full-scale inquiry into all the operations and probably it would not have been in order to have done so.
  Mr. Peart: I think that is a remarkable admission from two members of the Estimates Committee. I do not want

  941
  to chase the two hon. Members, for whom I have the greatest respect, but I think that, on reflection, and in view of all their long experience in the House of Commons, they will find that their interventions were rather unfortunate.
  Sir G. Nicholson Sir G. Nicholson rose——
  Mr. Peart: I must continue with my speech. I have been very courteous and I have given way on two or three occasions. After all, we are discussing evidence which is on the record. I can only assume that this evidence is right. Indeed, it is confirmed by the evidence that has been submitted by the Minister. Other responsible people have commented on this. I have here a report in The Times, from its political correspondent, and I am proposing to quote from other papers which are sympathetic to the Government. The Times of 14th December, 1961, stated:
  "In other words, the taxpayer as consumer has paid twice. Through taxation he has paid out millions to support the meat producers' prices during the months when the market collapsed; through the butchers' shops, it is held, he has not benefited from lower prices."
  The Times, in its editorial, on 15th December, 1961—this is not a Socialist criticism of the Government, but a criticism from a newspaper which is sympathetic to the Government—said, under the heading "The Price of Meat":
  "Next to the gross official miscalculation, the most unwelcome aspect of the supplementary estimate for agriculture is the failure of the retail price of meat to respond fully to the drop in wholesale price. The fall in wholesale price is offset by deficiency payments (hence the size of the supplementary estimate). But it is one of the boasts of the British system of state support for agriculture, about which much has been heard in relation to the Common Market, that while it guarantees a decent living for farmers it also secures cheap food for the people."
  The Daily Telegraph, which is proGovernment—and I shall not read all the evidence from people sympathetic to the Government—on Friday, 15th December, 1961 said:

  AGRICULTURE

    FARM SUBSIDY SHOCK.
    The taxpayer, be it said, has no less cause for concern in that the payment of all this extra subsidy to compensate the farmer for low prices in the cattle market failed to cheapen the price of beef."
    It goes on to state that
    "However intricate the economics of the meat market, it looks, in the event, as if the public, in the role of taxpayer and consumer, is paying twice over for price-support policy."
    The Farmers' Weekly, on 22nd December, 1961, in its editorial, commented:
    "Missing Millions.
    "But the really serious aspect of this business goes beyond what may happen at the Price Review. One thing stands out. The purpose of the farm subsidies is to keep down the price of food to the consumer. Here they have failed to do so."
    It goes on to ask how the Minister can make up his mind and argues:
    "They have not even got the December livestock returns in front of them…to say that the producers have had £31 million of it is easy enough, but it is an over-simplification which does not stand up to close examination…"
    We could go on arguing. We can only say, on the evidence outside, that even in the farming world and in the responsible political world which is sympathetic to the Government it is agreed that there has been a miscalculation and that, even though there may have been an increase in the deficiency payment, in the end the full benefit has not been passed on to the ordinary consumer. The evidence is there and I have carefully looked at the figures from those concerned in the industry.
    Our argument is that here is a breakdown of a system. The Government's policy has failed. A deficiency payment system combined with a free market will inevitably produce the results we have witnessed. The Minister says, "I hope that this will not happen again". It will happen again, and the full responsibility must rest on the Minister and the Government. They created the free market and it was they who sought to undermine the main foundation of the 1947 Act and the organised marketing which we on this side of the Committee sought to introduce.
    I remember the Prime Minister making a clarion call for a change in agricultural policy in November, 1953. He said:
    "The House knows that it is our theme and policy to reduce controls and restrictions as much as possible and to reverse if not to abolish the tendency to State purchase and marketing which is a characteristic of the Socialist philosophy. We hope instead to develop individual enterprise founded in the

    943
    main on the laws of supply and demand and to restore to the interchange of goods and services that variety, flexibility, ingenuity and incentive on which we believe the fertility and liveliness of economic life depend."—[OFFICIAL REPORT, 3rd November, 1953; Vol. 520, c. 26–7.]
    Hon. Members opposite do not believe that now. The astonishing thing is that the hon. Member for Kidderminster and others believed it then.
    Parallel with that major announcement by the Prime Minister, we had in November, 1953, a White Paper on Decontrol and Food Marketing of Agricultural Produce, Cmd. 8989, which was confirmed by the then Minister of Agriculture, who said that the policy which would be introduced returned
    "to the auctioneers, the wholesalers, and the butchers the freedom to buy and sell, and allows the housewives to express their choice through the prices struck in the market. At the same time it gives to the farmers the two things which are essential for the expansion and maintenance of production, namely, an adequate knowledge of the return to be expected from the sale of an animal, and a reasonable assurance that production of good quality animals will be duly rewarded."—[OFFICIAL REPORT, 9th November, 1953: Vol. 520, c. 629.]
    This is surprising, in view of what has happened. The Government say, "Away with controls". Over and over again, we have asked them to do something about marketing and distribution and we have had crisis after crisis. This is nothing new. Hon. Members know very well that in 1958 the then Minister of Agriculture faced what was virtually a crisis over pigs. Too many pigs were produced. In February of that year guarantees were reduced and the rate of subsidy halved, from £40 million to £20 million, and the number of breeding sows was reduced from 700,000 to 600,000. There was a major crisis in the industry.
    As I have said, we have pressed the Government time and again to do something about marketing. Here is an example. The Minister is now forced to accept the view that there must be a new approach to marketing. I have criticised the Estimates Committee. I think that the House of Commons should have been given more details and that the Government should have indicated their views on marketing. The Government should take the initiative. The Minister has been too complacent. At
    944
    the Oxford Farming Conference on 8th January the Minister said that this was a matter solely for the industry. This was the view which the right hon. Gentleman also expressed when he launched the British Farm Produce Council some time ago, when he said:
    "My predecessor, I know, has often preached on the importance of marketing. You will find that I am just as keen. But although the Government can give encouragement, it is, in the long run, only the industry that can achieve the result that we all desire."
    Up to now the Government have always argued that it is for the industry to take the initiative in marketing. We take a contrary view. We believe that the Government should initiate proposals to improve marketing and rationalise the distribution of meat and the processes from the farm gate right up to the retail shop.
    Sir S. Summers: So that we may appreciate the constructive part of the hon. Member's speech, at which he has at last arrived, may I ask what he means by rationalising distribution?
    Mr. Nabarro: The hon. Member for Workington (Mr. Peart) is going back to meat rationing. Eightpence a week.
    Mr. Peart: I will give the hon. Member for Aylesbury a direct answer, and I hope that the hon. Member for Kidderminster will not be a political clown today but will be serious.
    I have been asked a direct question. I give one example. There are today 3,400 slaughterhouses in the country and here there is a case for rationalisation. I know that the hon. Member for Aylesbury will have read the excellent article on meat policy in The Times last week. The Government appointed an Interdepartmental Committee to examine the matter. The Committee argued that there was need for moderate concentration. I do not know why hon. Members opposite complain. That was then part of Government policy.
    We need more concentration of the abattoir system and this may well be one of the biggest items that will have to be considered by the proposed committee. [HON. MEMBERS: "Words."] Hon. Members may say "words", but the Government have issued a White Paper on the subject. In 1957, the then Parliamentary Secretary to the Ministry

    945
    of Agriculture argued that it was not at that time Government policy to aim at moderate concentration. He argued that we should avoid central planning, and said:
    "What I am saying is that the policy of moderate concentration by means of central planning is no longer the way in which we think we should work…We felt we should achieve the same end…by giving freedom to people, if they so wish, to invest in slaughterhouses."—[OFFICIAL REPORT, Standing Committee A, 28th November, 1957; c. 12.1]
    Rationalised distribution is an urgent necessity. The farmers themselves express this view. Hon. Members who represent farming constituencies know that marketing is one of the main preoccupations of most of the local branches of the National Farmers' Union. Farmers in West Cumberland are conducting a major survey on the subject. This is one of the matters which causes the greatest anxiety to the producers. If we are to do anything to give security to the producer and to bring benefits to the consumer, then, inevitably, there must be an organised market and there must be control. [HON. MEMBERS: "Oh."] Of course there must be rationalisation. Why not?
    Mr. Fell: What I cannot understand is how rationalisation always leads to a situation where people are forced to buy cuts of meat which they do not want to eat.
    Mr. Peart: It really is absolute nonsense to argue that if we improve distribution—if the hon. Member for Sunderland, South (Mr. P. Williams) will stand up, I will answer him.
    Mr. Paul Williams: The hon. Gentleman says that we should improve distribution. Who, the State?
    Mr. Peart: Yes, the State—the Government acting for the State. After all, the Government represent the community, and here the Government have a responsibility.
    Sir Peter Agnew: Will the hon. Gentleman make a little more clear what he means by "improving distribution"? Does he mean that at present there is not a full range of choice of meat and that housewives cannot buy the cuts they want, but that by some system he will alter that?
    Mr. Peart: I think that the hon. Gentleman is really missing the whole point. If he were to attend a farmers' meeting and discuss——
    Mr. Nabarro: My hon. Friend attends more meetings in a week than the hon. Gentleman does in a year.
    Mr. Peart: I think that the hon. Member for Kidderminster is really being a silly fool today.
    I have been asked to explain what I mean by rationalisation of distribution. I have given one example of where we have too many slaughterhouses and where there could be a concentration. We are arguing for organised marketing. After all, British agriculture has to compete with New Zealand, the Argentine and Denmark. In all those countries there is organised marketing. New Zealand sends us her lamb, the Argentine sends us her beef and Denmark sends us her bacon. All those countries have gone in for streamlined distribution. That is why we say that the Government have failed to take the initiative—they have failed to take the lead.
    I came now to the Price Review. I ask the Minister what it will do. I have quoted a statement by the Minister in reply to a Question. Perhaps, one of the most serious aspects of the whole problem which we are discussing is its effect on the farm support policy and the harm which it could do to negotiations which are now taking place. Here is the difficulty. If I may, I will break down the figures quoted for 1961–62. If we take a figure of £350 million as the cost of Exchequer support, last year it was £265·6 million. If we assume that farm costs increased last year by £26 million on all products, that year £19 million was on Review commodities. This year it is expected that we shall have £20 million on all produots—£15 million on Review products.
    As hon. Members know, the 1957 Act limits the cut which can take place. It can only be £29 million less than the total increased costs. This will inevitably mean, if we take the inflation figure of £15 million, a cut of only £14 million. This is a dilemma which the right hon. Gentleman faces in relation to the Review. I want to know what really is the Government's policy. What is the Government's attitude, in view of the

    947
    recent White Paper issued by the Chancellor of the Exchequer? Are farm incomes to be considered in relation to general incomes as stated in the Chancellor's White Paper, because farm workers are involved? Will the Government seek to circumvent the provisions of the 1947 Act? The Farmer and Stock-breeder argues that there may be a switching from Exchequer support on individual commodities to production grants. I should like the Secretary of State to tell me what the Government are to do.
    It has been seriously argued that there will be a switch away from Exchequer support on individual commodities to production grants and a measure of structural reform. This is a very serious aspect of the problem which we are discussing. I have always believed in a support policy. I believe that the broad support policy which we have witnessed under the 1947 Act and onwards has benefited the producer and the consumer. But that support policy is now under fire. We have seen how it has been criticised by leading industrialists, including the Chairman of I.C.I. They have criticised it from an industrial point of view. But here is a serious aspect of the problem which concerns many hon. Members.
    The Minister has mentioned negotiations with the Common Market. I think that the hon. Member for Yarmouth (Mr. Fell) will agree with me in this sense, that the danger is that this miscalculation of the Minister, this breakdown of the deficiency payment system, linked with a free market, really weakens the whole support system in this country and that, inevitably, we shall be negotiating with the Brussels Powers from a position of weakness. That I think is the tragic situation which we now face.
    Mr. John Eden: The hon. Gentleman has repeated the statement that this is a breakdown of the system. Given these peculiar circumstances and conditions, how else would he have expected the system to operate?
    Mr. Peart: I have argued all through that the system has broken down and that a deficiency payment system with
    948
    a free market will lead to this. Therefore, I am arguing that if we are to have a deficiency payment system we must have a controlled market and controlled distribution. Indeed, I assert that if we had still had a Labour Government in power at the time their main task from 1950–51 would have been to organise marketing in the interests of the producer and the consumer.
    There is here a conflict of views and a difference of approach. I readily accept that hon. Members opposite believe that their system is right, but I maintain that it inevitably creates the conditions with which we are now faced. One of the tragedies, as I have shown, is that we are now having high-level negotiations with the Brussels Powers and that there is a danger that we shall be negotiating from a position of weakness. Indeed, the Minister admits that we face the prospect of making quite radical changes in our methods by which we support agriculture. That has been accepted by the Minister, and it was confirmed by the Prime Minister when the House discussed the wider issues of the negotiations with the Common Market countries.
    Thus, we are entering a period when there may be major structural alterations. The Government's policy has put them into the position of negotiating from weakness. Events have become, in a sense, too big for the Ministers who are responsible. The right hon. Gentleman is a very worried and bewildered man. He hopes that he will get out of his difficulties through a European solution. I am certain that he believes that the answer to his problems is a European one. I do not argue that today, for we are not debating the Common Market, but I do say that the Government have been waiting for something to turn up in this field.
    I am worried because this Government have undermined the 1947 Act over a long period. I am worried that they will now acquiesce in a European solution, that there will be a structural reform of our support system and that there will be another approach which could harm those policies which a Labour Minister of Agriculture pursued from 1945 to 1951.
    The Deputy-Chairman (Sir Robert Grimston): Order. I am sorry to

    949
    interrupt the hon. Gentleman, but it is not possible now to pursue the question of legislation. The hon. Gentleman can skirt round the subject, but to go into detail would be out of order.
    Mr. Peart: Exactly, Sir Robert. My argument is that the Government have harmed legislation over a long period. The Government have miscalculated. Their policy of deficiency payments in a free market has produced the result we are discussing today. They have failed to give a lead in marketing and in the rationalisation of distribution. They have destroyed confidence in our support system and have weakened the main provisions of the 1947 Act. They have refused to take action when asked to do so. They have always acted too late. In the end, they have harmed the wellbeing of the producers and have not benefited the general taxpayer and the consumer. The Government's agriculture policy has failed, and this Supplementary Estimate is the culmination of that failure.
    5.13 p.m.
    Sir John Gilmour: In making a start at a speech in this Committee today, I crave the indulgence of right hon. and hon. Members for any errors which I may commit. I am sure that most people, when they come here, are sufficiently vain to feel some satisfaction, but, in my case, I definitely have a shadow on my arrival, because it was due to the death of a personal friend. Sir James Henderson-Stewart served the constituency of Fife, East for twenty-eight years and I know how much he is missed in the constituency. I have also come to know, since I have been a Member of the House, how much he was held in esteem by hon. Members on both sides.
    I am lucky to represent a constituency which has both agriculture and a seat of learning—the town of St. Andrew's, with the oldest university in Scotland, and therefore I find it fortunate to be able to take part in this important debate. Because I am a practising farmer in my constituency, and because I, as a partner in a farming enterprise, am a recipient of some of the subsidies, no doubt it would be right for me to declare my interest.
    I believe that we should certainly look at these long-term projects, but I do not think that it would be right for me today
    950
    to enter into such a controversy. But I would like particularly to mention one or two matters in connection with beef and lamb, in which I am interested. First, I think that, in the Price Review negotiations that are taking place now, provision should be made to see that it is not possible for livestock which has been through an auction ring to go back on another occasion.
    This is bound to have a depressing effect on the market and, as the deficiency payment is calculated on an average, I do not believe that it should be allowed to happen. I believe that the farming community would be with my right hon. Friend if he was to propose such a course.
    Then, I think that we should try to make this guarantee system a little more flexible. I suggest that it should be possible for an alteration to be made in grading standards during the course of a fatstock year. After all, the present standard is a minimum of 54 per cent. The recent Smithfield Show was won by an animal graded at 62 per cent. which was judged to be the kind of better beast wanted. The average reached after the first grade was 57 to 58 per cent. During the last year, when too many cattle were coming on to the market, it might have been possible to raise the percentage from 54 to 56 per cent. A brake could have been put on the number of cattle coming forward and savings could have been made.
    I know that it is easy to have hindsight, but I doubt whether it was wise to put on the whole of the 10s. increase in one fell swoop last year. I understand from the Report of the Estimates Committee that it was done to stimulate production in 1962–63, in which case surely the increase could have been put on gradually or put on halfway through the fatstock year.
    There is no doubt that the high rate of subsidy attracts cattle on to the market, and we should face up to the fact that the farmer is just as well off, if not better off, if he receives £5 a cwt. from the auctioneers and £3 from the Government, on Which he pays no commission. Human nature being what it is, this high rate of subsidy encourages too many cattle on to the market.
    In addition, we should face up to the fact that consumption of beef has fallen since pre-war days by about 7 lb. per

    951
    head. If we are to look after the beef livestock farmers, we must stimulate that demand. Another factor to be borne in mind is that about 20 per cent. of all money spent on food is spent on pre-packed and ready-to-eat food which needs the minimum of cooking by the housewives. Therefore, it is in the interest of the beef producers to try to stimulate demand. I think that the extra 10s. which they get has aggravated the Irish immigration problem. In this case, as far as I am concerned, I would favour black immigrants. This has put up the cost of store cattle, adding to the capital which the feeding farmer has invested, and, therefore, I am doubtful whether it has been in the interests of the farming community as a whole.
    Then there is the question of lambs. In a year of plenty, why not reduce the maximum weight on which a subsidy is payable? We know that the average weight of New Zealand lambs is between 29 lb. and 35 lb. A period of high subsidy means that the farmer gets a bigger return from the subsidy than from the auction prices, and he tends to keep his lambs to a greater weight, putting more meat, on to the market, and again aggravating the situation. Some flexibility might be given by a new effort to reduce the maximum weight of about 55 lb. in this country—compared with about 35 lb. in New Zealand—to 40 lb. to 50 lb. That is producing the type of mutton which, in many cases, is not of the best quality, or exactly what is wanted.
    I draw attention to an article in the Pastoral Review, an Australian magazine which, in its "United Kingdom Meat Notes", on 18th August, 1961, drew attention to the importance of packaging and self-service and said:
    "This business of self-service in Great Britain has wider implications…Already, New Zealand meat exporters are examining and even practising pre-packing at source. and it is estimated that this year they will produce about 1 million lambs in this way.
    The system has two main advantages: It provides big economies in freightage and it facilitates the disposal of cuts not in demand in U.K. to other sources. In a recent contract, for example, it was reported that from lamb carcases the legs came to the U.K., the loins went to U.S.A., the shoulders to Canada, the breasts to Ghana and the shanks to Honolulu."
    There may be scope for that kind of outlet for some of the cuts which we do
    952
    not want, if we so organise ourselves. At the same time, we should realise what a great competitor against lamb is the broiler chicken which, I gather, is now being sold in a quantity equivalent to about 8 million lamb carcases per annum. Unless we organise ourselves on these lines, we will not be doing the best far agriculture.
    Having made those few suggestions, which, I hope, may be of some use to the Committee, I return to the main item, which is this very large bill. It is its magnitude which stresses its utmost necessity. Had the system not been available, livestock farmers would have been ruined by last summer's prices. That is why I say that the magnitude of the bill underlines its need.
    My right hon. Friend stressed the weather aspect of this problem. I ask hon. Members to think what it must be like, on a night like this, to be a hill shepherd on the side of a hill with a lambing flock. We have a bounden duty, particularly in a world which is now very much working a five-day week, to safeguard the standard of living and interests and livelihood of those who give unsparing attention to livestock on our farms year in and year out.
    In Scotland, one person in six lives on a farm and the interest of the agricultural community is paramount. The economy of Scotland is bound up with farming, and I therefore welcome the Government's assurance that the guarantee system will continue.
    5.23 p.m.
    Mr. A. Woodburn: I congratulate the hon. Member for Fife, East (Sir J. Gilmour) on his maiden speech. I have personal reasons for doing so, in that at one time he was my opponent in an election. He was then inclined to claim that he was an even better Socialist than I, but, having listened to his speech today, we can all agree that he approaches this problem in a much wiser and more thoughtful way than that shown by many of the hon. Members opposite who were interrupting my hon. Friend the Member for Workington (Mr. Peart) a few minutes ago. I congratulate him on his constructive and critical speech. He did not rise to proclaim himself a "yes-man" of the Government, whatever they did. He introduced much wisdom from

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    his own experience and knowledge and the Government would be wise to take note of many of his suggestions.
    As he said, he has followed a very distinguished Member of Parliament. Sir James Henderson-Stewart was elected about twenty-eight years ago, when I happened to be the election agent of his Labour opponent. Because of that, I had a long and intimate connection with him and his work in the House of Commons, even until the day he passed away. Hon. Members recognised him as a very hard worker. We did not always agree with his politics, but we realised that as a Minister he did his job most effectively. We were a little surprised when he disappeared from the Government Front Bench during a Government reshuffle.
    I have another reason for congratulating the hon. Member which he was too modest to mention himself. He succeeds another distinguished Member of Parliament, his revered father, who was Secretary of State for Scotland and played a very important part in the development of our constitution. He had the reputation and credit of having carried through one of the important reforms of the constitution which took to Scotland the administration of Scottish affairs, which had previously been situate in London. That was a tremendous step forward towards satisfying the Scots, for at least they realised that they were being given some control over their affairs and were not being administered by people who did not understand them. We pay tribute to the hon. Member as succeeding his father and bringing back to the House of Commons a name which carried great distinction and great honour among the Scots for the part he had played in that work.
    I congratulate the Minister on his wonderful feat of memory. He is following General de Gaulle and the former Minister of Health in being able to speak without notes, giving the most complicated sets of figures, in spite of interruptions. That was a remarkable feat which reminded me of the late William Graham, who used to do that with Budget debates and impress every hon. Member.
    My hon. Friend the Member for Workington expressed his disappointment that we had not heard from the
    954
    Secretary of State for Scotland. However, I understand that we are to hear from him later. Perhaps hon. Members do not sufficiently recognise his modesty and timidity about forcing himself on the attention of the Committee. He is like Burns's
    "Wee modest crimson-tipped flow'r."
    He tends to give the impression of shrinking from any activity which arouses interest in him or in what he is doing. Perhaps that is best in some ways because the less there is said, the less there is trouble for him.
    What is worrying me about these support prices and the Supplementary Estimate is not the fact that there is a Supplementary Estimate. I am concerned that there appears to be no control behind it. It seems to me haphazard and the Government appear to have no idea of what is happening. The Minister spent nearly an hour trying to explain what it was all about, a kind of post-mortem examination.
    In principle we have no objection to supporting agriculture in this way. The trouble is that in the form in which it appears before the public it gives the appearance of the Government being a kind of "sugar daddy" to the farmers, handing out millions of £s without any purpose or policy. People think that all the money goes to the farmers. That is wrong and it would clearly be a mistake for anyone to give a suggestion that that is what happens.
    Many years ago, the Labour Party formed an agricultural policy, not because it thought that it could get the votes of the farmers—there was no hope of that because we all know that farmers will always vote for the Tories, no matter what is done to them—but because farmers have to live and we had laid down the principle that the man who produced the wealth of the world was entitled to an adequate reward for so doing. If we were to lay down a national policy, even though the farmers voted Tory, we could hardly leave them out. The purpose of our policy was to carry into effect the principle that we want to maintain our agricultural population. To do so we must enable them to live decently if they are doing their jobs efficiently.
    We also wanted to reduce our dependence on foreign suppliers for meat

    955
    and other products, which had grown up out of two world wars. We cannot look forward in, any future war to farmers playing the wonderful part they did in the last two wars.
    After the First World War agriculture was thrown to the wind, and today there is a kind of wind of change blowing with a frosty nip which the farmers may feel if the weather does not improve fairly soon. We want to reduce our dependence on foreign suppliers as much as possible, and to consume as much of our produce as we can, especially as it is such good produce if we are talking about Scots meat. We also want to ensure regular supplies of feeding stuffs for our animals and food for our people. This is clearly a policy which can be carried out only by the Government.
    Those who this afternoon have been sneering at the Government and Government control do not seem to recognise that the farming industry has been nationalised for many years—though the farmers do not know it. All that has happened is that the Government have farmed out their responsibilities. The agricultural policy of 1947–48 was laid down to establish a partnership between landowners, farmers and the Government for the maintenance of the agricultural industry and the production of as much food as possible at the cheapest possible price to the consumer. We cannot produce all the meat and food that we need. Half of it has to be bought abroad. Sometimes food can be bought more cheaply abroad than in this country, and therefore the free market is an impossibility if we want to maintain a proper agricultural population here. I challenge any hon. Gentleman to show how a free market could make possible the farming community that we have in this country and enable it to live.
    We know what happened between the two wars. People had to live on the land by bleeding it of its fertility, and the land got poorer and poorer. At the beginning of the last war the land was in a state of poverty. The first thing that we had to do after the war was to invest £300 million to revitalise it and stock it with cattle and livestock. Hon. Gentlemen opposite sneer about the groundnuts scheme. They should bear in mind that the sum spent on that
    956
    scheme was a mere bagatelle compared with the money invested to provide people in this country with food.
    The results have amply justified that policy, because the Government are now claiming that wonderful results have been achieved. For instance, 57 per cent. more milk is produced and the yield per cow has risen. Our policy was aimed not only at quantity but at improving productivity by subsidising science and making available to the farmer every kind of knowledge to enable him to produce more milk. As I said, production has risen by 57 per cent. and the yield per cow has risen from 540 to 620 gallons per annum. In addition, there has been an 8 per cent. increase in the production of eggs, and on average hens lay 182 eggs annually compared with 149 before the war. We now produce 57 per cent. more pig meat, and our net output is up by between 70 and 80 per cent.
    All that has been achieved because the Government acted in partnership with the farming community. They invested £300 million to enable stocks to be built up and to enable the land to be refertilised. We supplied fertilisers free and we enabled the hill sheep-farmer to rebuild his property by giving him the price of his farm buildings. In short, we improved the capacity of the farmer to produce more in this country.
    Mr. J. A. Stodart: As a matter of interest, and to enable me to know how I was left out of this, will the right hon. Gentleman tell me what fertilisers were supplied free to which farmers?
    Mr. Woodburn: The hon. Gentleman is entitled to the ploughing subsidy, the lime subsidy, and the fertiliser subsidy. If he does not get them, he must have missed the boat.
    Mr. Stodart: With respect, that is not the same as saying that fertilisers are supplied free.
    Mr. Woodburn: The part which the hon. Gentleman gets for nothing is free.
    The hon. Gentleman has raised an interesting point, because the Government today face a similar problem to that which we faced. We were trying to help the farmers who needed help but the trouble was that we could never

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    help those who needed it without giving fortunes to those who did not. The wealthy farmer like the hon. Member for Edinburgh, West (Mr. Stodart), who ranks among the aristocracy in the farming world, gets the benefit just as does a poorer farmer, and the efficient farmer always gets a bigger rake-off from the subsidy than does the inefficient farmer, or one who is working on poor land. As a matter of fact, most people would regard farmers in East Fife as having something wrong with their heads if they could not make a living off the farms up there because they work on some of the finest soil in this country, if not in the world.
    This brings the Secretary of State far Scotland up against a tremendous problem, because when one talks in terms of an average farm consisting of 70 acres, one has to remember that half the farms in Scotland consist of less than 50 acres. The problem is how to help only the man with 50 acres. Again, these farms vary in quality to such an extent that one cannot say that two farms next door to each other are of comparable quality. The problem of supporting farming is extremely complicated, and I have a certain amount of sympathy with the Government in their efforts to tackle this problem.
    We do not want to subsidise inefficiency. If the money is handed out without any test, it might lead to a dangerous situation. The Government did away with the country agriculture committees and left the farming communities to measure efficiency themselves. The discipline that used to exist has gone by the board. One agricultural committee in an important area wanted power to deal with people who were sitting an some of the best land in Scotland and who, because they did not know how to use the land, were misusing it. The committee wanted power to make such people make proper use of the land they had.
    The greater part of Scotland is in the Highlands and uplands, and this land could be improved tremendously. If we go into the Common Market, are all these farmers to be thrown to the wolves? Is Scotland to go back to the wilds? We have never been told what is to happen about these farmers. We have approved legislation to help the
    958
    crofters, and we are told that the auctioneering system for the sale of their produce is the best. The trouble is that when these people bring their cattle down from the hills they take a gamble, because the price they get depends on whether they arrive at the beginning or at the end of the auction. It may be said that this works out all right on the average, with the ups and downs sorting themselves out eventually, but the problem is that many of these people do not have enough cattle to get an average price. It takes them years to reach the average, and they might have been in the red all the time and never have got an advantageous price.
    If a man produces a high-class carcase he should receive the proper price for it. It should not depend on his chance in the market.
    Mr. Marcus Kimball: He does get the proper price. That is exactly what happens.
    Mr. Woodburn: If he brings his cattle into an auction and happens to get there just at the end of the auction he may not receive very much. I am talking now of store cattle.
    Mr. W. Baxter: The situation is just the same wth fat cattle. A man can bring his fat cattle into the market and receive £8 per cwt., and another man coming in when everybody is away at lunch may get only £5 a cwt. But each man receives the same subsidy from the Government. My right hon. Friend is quite correct. There is no guarantee of price; the only guarantee is the amount of subsidy.
    Mr. Woodburn: I am glad to hear that the Government are going to set up a committee. I hope that it will be a genuine one, and not merely a "pushover" for today's debate, as someone has suggested. If it is a genuine committee I hope that it will go into this question thoroughly. The I.C.I. and other large companies can fix prices for their products, and if a farmer produces something for the stock market he should be able to get the price of his labour and a proper reward for his efforts.
    Even with my experience of this problem I cannot say that I can produce a ready-made solution. I know that there are many complications. We did

    959
    away with the auctioneers, but that increased the costs of administration, and other things. Nevertheless, the problem needs to be solved, so that the men who do the job can at least receive a fair reward.
    This is a vital industry—and not only for the big farmer. If the support system has to be changed in the near future, as is possible, we must consider the problem of the small farmer. I do not want to see the uplands of Wales, the Surrey Downs and the Highlands depopulated. It is important to keep people on the land, and we must make some sacrifices to do that. A support system must therefore be designed to make that policy effective. It need not be inefficient. It has been shown by simple experiment that large areas of the uplands can be brought to a condition in which they will carry three times the amount of stock that they are carrying at present. The Secretary of State has been carrying on experiments in Lewis, and I hope that they will be developed much further.
    It would be a mistake, however, to think that all farmers are full of energy and drive, and want to make their land as profitable as possible. Some of them are prepared to sit down and smoke, or wander about like a "stick-and-a-dog" farmer. It is not necessary to subsidise such persons unless they can show that they can produce results. Under the Secretary of State's housing legislation people must produce justification for a subsidy, and we ought to be able to ask some of these farmers to justify the payment of subsidies to them. They should prove that they are doing their job efficiently for the nation, as its agent on the land.
    I am surprised that the Minister did not produce a better balance sheet for agriculture today. We want to know its effect on our balance of payments. I do not regard the money that we are paying to our farmers as going down the drain; much of it still exists in the form of better stock and a better condition of the land, besides a better heart in the industry. I understand that but for our agricultural industry we should have to import another £400 million worth of food from abroad. My figure may not be correct, but the Minister should provide us with a proper balance sheet.
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    I am sorry that the Government interfered with the 1947 Act by taking away some of its planning provisions without replacing it with something else. We must have a proper pattern for the agricultural industry, which will fit into our economy. If we remove part of the pattern we leave a gap. We must either plan or not plan. This kind of half-planning by the Government has got them, and the country, into no end of trouble. The public have the impression that the Government are giving handouts to the farmers and others, while they must continue to pay the same prices as before. The Government should show that they know what they are doing, and have a grip on the situation.
    When they bring forward a further plan, which I hope will be in the near future, it should be of a comprehensive nature, which will be of benefit to the whole country—the farmers and the public. The public are entitled to know what is being done with their money. They must not think that the money is being thrown about recklessly, as would appear from the Minister's statement.
    5.47 p.m.
    Sir Spencer Summers: I hope that it will not be thought unseemly of me if I address myself to the Supplementary Estimate rather than the wellbeing of farming as a whole. If I understood the right hon. Member for Clackmannan and East Stirlingshire (Mr. Woodburn) correctly, his view was that there should be some kind of test of the performance of a farmer before deficiency payments are made to him. I do not know whether I am interpreting the right hon. Member's point of view correctly, but I am certain that any such scheme would be lamentable. We would have to have a series of committees all over the country, judging whether or not the deficiency payments due to certain farmers, on their figures, should be paid. It would be impracticable, and unacceptable to farmers generally.
    Mr. Woodburn: Is the hon. Member suggesting that we should give money to farmers, or anybody else, without asking any questions?
    Sir S. Summers: I suggest that it is quite impracticable to have the sort of test of efficiency which the right hon. Gentleman

    961
    has put forward. I am sure that the farming community would agree with me.
    The hon. Member for Workington (Mr. Peart) permitted himself a number of remarkable contradictions. He complimented the Estimates Committee—and I was Chairman of the SubCommittee—on what it had to say, but then went on to accuse the Government of a gross miscalculation. The essence of the Report is contained in the last words of paragraph 21, which makes it quite plain that this Supplementary Estimate is in no way due to a gross miscalculation but is, on the other hand, inherent in the Agriculture Acts which have been passed since the war, because there is no limit to the market price in this situation.
    He talked about the system having broken down. The system has not broken down. There is a very grave misunderstanding, which has a bearing on the responsibility of the Estimates Committee, with which I will deal in a moment. There seems to be a view that we are here debating whether the retail price of meat, as affected by the deficiency payment system, should or should not have been lower than it was last year. The retail price of meat has nothing whatever to do with the deficiency payment by which the prosperity of farmers is assured.
    Mr. Charles Loughlin: It has an indirect bearing.
    Sir S. Summers: The comments which I detect from hon. Members opposite simply confirm what I am saying—that there is a grave misunderstanding about this whole matter. Whether the retail price follows the wholesale price down or not, there are certain deficiency payments due to farmers—quite irrespective of what happens to the retail price. It is completely to misunderstand the situation to argue that because retail prices, it is said, have not gone down as much as it is thought they should have gone down, therefore the system is at fault and the farmer ought not to receive all the dues which otherwise would go to him.
    Mr. James H. Hoy: My hon. Friend the Member for Workington (Mr. Peart) said nothing of the kind. My hon. Friend dealt with
    962
    paragraph 20 of the Committee's Report on the relationship between wholesale and retail prices. He pointed out that the Ministerial evidence was to the effect that there has not been the reductions in the price of meat which might have been expected. Indeed, the concluding sentence of that paragraph of the hon. Member's own Committee reads:
    "Your Committee are concerned that this process has, in the opinion of the Department, operated so ineffectively."
    That was the point to which my hon. Friend directed his remarks.
    Sir S. Summers: I am not concerned only with what was said by the hon. Member for Workington. I am also concerned with what other hon. Members opposite have said. All along there has been the implication that there is something wrong with the way in which farmers' remuneration is arrived at if criticism can be levelled at the retail price of food. The two are completely separate and distinct. The retail price has no bearing whatever on the deficiency payments to farmers.
    This brings me to the criticism arising out of that intervention that the Estimates Committee should have gone to more trouble to find out what were the effects on retail prices, implying that, even at the expense of time, the Committee should have taken further evidence from the meat trade and should not have contented itself only with hearing from the Ministry. The reason that these charges are made is that it was hoped that from the Select Committee's investigation that support would come for hon. Members opposite in their criticism of the retail prices situation.
    It is precisely because this has nothing whatever to do with deficiency payments, except to a very limited degree to which I shall refer, that it would have been quite wrong for the Estimates Committee to go out of bounds, so to speak, and to go into the question of retail prices and to find out what has been happening there. There is only one very limited aspect of that part of the subject which is relevant to the Supplementary Estimates—namely, whether a further fall in the retail prices would have corrected the situation, would have brought about greater demand and pushed up the wholesale price and thus have reduced the deficiency payment. It is solely that

    963
    aspect of the question which has any relevance today, and it would be a great mistake to assume that the Select Committee failed in its duty to examine more fully that aspect of the subject.
    I welcome the comments made by my hon. Friend the Member for Fife, East (Sir J. Gilmour) in what, if I may say so without impertinence, was a very remarkable maiden speech. I want to refer to his comments on the need for elasticity in implementing that policy which the Government are pledged to continue throughout the lifetime of this Parliament. I should have expressed it differently, but we reach exactly the same end. It seems to me that under the present system, by which certain prices are assured, the element of quantity is ignored, and that if there are more potatoes, more lambs or more cattle, that is solely for the farmers' benefit and has no mitigating effect, so to speak, on the calculations of the sums which are due under the deficiency payment system. In the assured price for pigs, for example, there is a mitigating calculation related to the price of feeding stuffs so that if the cost of producing pigs is reduced because the price of imported feeding stuffs falls, there is smaller need for public support of that part of the industry. The calculations take account of that.
    May I point out the example of what happens with potatoes? Here I speak with a vested interest as a modest grower of potatoes. The farmer gets it both ways. First of all, if he has a heavy yield he has the advantage of more tons to sell, but by having more tons for sale he also attracts the Ministry's support buying policy, which seeks to make sure that the price does not fall to such a level that farmers attract an inordinate degree of deficiency payment. In other words, the market price is supported at a time when there are plenty of potatoes for sale, which means that the farmer has not only the benefit of the supported price but the benefit of more tons for sale at that supported price. By and large, the same may be said about lambs. There is a fixed price at which the farmer may sell his lambs. If he has a very large number of lambs, as was the case this year, not only does he get the advantage of the assured price but no discount is provided for quan-
    964
    tity, when I should have thought it reasonable to do so.
    I should like my right hon. Friend to clarify one point. The Minister made a very interesting calculation, one of many—and we admired his capacity to make them without a single note. He said that we produced £1,300 million of meat a year. He calculated in terms of millions the benefit to the taxpayer and the consumers of a 4 per cent. reduction in price. Does that grand total include broilers as well as the items of meat in the Supplementary Estimate?
    Mr. Soames: It refers not only to broilers but to all meat from all sources—not just carcase meat but all meat, both from this country and imported.
    Sir S. Summers: If that is the case, I am sorry, because it means that the calculation takes into account types of meat—for example, broilers—with which we are not concerned in the Supplementary Estimate.
    Sir Leslie Plummer: We are.
    Sir S. Summers: There is no deficiency payment for broilers.
    Sir L. Plummer: What the hon. Member overlooks is that 350,000 tons of broilers came on to the market in this period. This was in competition with carcase meat and had a direct effect on the subsidy.
    Sir S. Summers: The hon. Member has not overlooked anything of the kind. That was no surprise; it was known when the prices were fixed in the Price Review last February that a large quantity of broilers would be coming on to the market. It has not been overlooked in the slightest. All I am saying is that in the Supplementary Estimate no deficiency payment is required in respect of broilers.
    I promised to be brief, and I will make only one further observation: I hope that nobody will assume that because it has become necessary, for reasons advanced by the Minister, to ask Parliament for a Supplementary Estimate for £78 million, therefore the system as it affects the farmer—I am not talking about marketing and the Committee to look into marketing—is under fire. Assurances were given in the first place

    965
    that the price would be made up to the producer from the market price. Nothing has happened in the last twelve months to suggest that in present conditions that system is in any need of alteration. It is only the impact of the Common Market, whether we are in it or not, which prompts a change in the system in the future—not what has happened in the last twelve months.
    6.0 p.m.
    Mr. John Mackie: First and foremost, like others who have spoken, I congratulate the Minister on his excellent performance without notes. It is a pity that he did not have a better case to put.
    I should like also to refer to the suggestion made by the hon. Member for Fife, East (Sir J. Gilmour) about cattle coming on to the market a second time. I hope that nobody thinks that this is done to any extent or that a second subsidy is obtained. Farmers are simply taking a commercial gamble, and I am surprised that hon. Members opposite should be opposed to a commercial gamble.
    Mr. Loughlin: While there is no direct evidence, there has been some worthwhile information to the effect that livestock is sold twice and a double subsidy obtained.
    Mr. Mackie: In that case, it is a matter for the Director of Public Prosecutions.
    The hon. Member for Aylesbury (Sir S. Summers) said that the system has not broken down. We have heard continuously that the Agriculture Act, 1947, is designed not only for the farmers but for the benefit of the whole country, and that subsidies are not only to help the farmer but to ensure the provision of cheap food for the consumer. We have heard that meat has not come down in price. If that is so, the system has broken down, and that is the case that we on this side of the Committee are making.
    The hon. Member also referred to the remarks made by my right hon. Friend the Member for Clackmannan and East Stirlingshire (Mr. Woodburn) about tests of efficiency. There is a perfectly good test of efficiency which is run by
    966
    many of the hon. Gentleman's friends in Hampshire and in Wiltshire. There is the Hampshire Growmore Club. I do not know that any of its members supports this side of the Committee, but they have a perfectly good efficiency test which can easily be applied. I was sorry that the Minister did not have a good case, because he fell heir to this problem, and I do not think he will have much help from his party to solve it.
    Let us consider the problem of the extra £67 million for fatstock. We all agree that the purpose of this money was to uphold the guarantee, and we also agree that it was paid direct to the farmers, though there has been a suggestion that some of it was paid to the consumers. I think we all agree on the figure of £31 million which was created by the increase in the amount of stock coming on to the market. The figure in question is the remaining £36 million.
    Here I should like to take to task the former Chairman of the Estimates Sub-Committee, who said that there was not time to consider any further evidence. Between the time that the Supplementary Estimates were produced and now, there has been any amount of time for every conceivable lobby to come to the House, and I am sure they would have been delighted to appear in front of the Estimates Sub-Committee.
    However, we have had discussions with butchers, farmers, housewives and economists, and frankly it has not got us very far. It has been a fascinating exercise, but I am beginning to wonder whether it is not all rather pointless, because the main argument concerns the breakdown of this system.
    A Scots economist working in Glasgow University has produced some interesting figures affecting Scotland. They reveal a rise in butchers' margins of from 28 per cent. to 39 per cent.—a very sharp rise of 11 per cent.—an overall rise of 33⅓ per cent. in distributors' margins. That seems too much. The Minister had suggested that prices had dropped by 5½ per cent., now corrected to about 4 per cent. I consulted a person in a nationalised industry and he told me that over nine months to the end of September his figures showed only a 2 per cent. drop. That was on a fairly large buying job. Another firm said that it had experienced a drop of 17½ per cent.

    967
    in retail prices. That is 3s. 6d. in the £ or 1s. 9d. in 10s.
    We should not be guessing. I am sure there are figures in the Ministry of Labour and in the Minister's own Department, where we could get those particulars.
    Mr. W. Baxter: Is it not conceivable that we could have consulted our wives to ascertain whether there has been a reduction in the price of butcher's meat? I have asked my wife haw much butcher's meat has been reduced in price and she tells me that it has been reduced very little, if at all. There is no need to consult any larger authority than our wives.
    Mr. Mackie: My hon. Friend has anticipated the next part of my speech. Having failed to get official figures, and having got all these differences, I thought the best thing would be to ask some housewives. There is no doubt that housewives are not good buyers. I have consulted any number of housewives and they do not agree that there is any reduction. I have also consulted butchers and they say that it is amazing how few housewives ask the price of a lb. of beef. I thought that I would consult my own butcher. I was told that last year the price of sirloin was 5s. a lb. and that this year it is 2d. dearer. That surprised me, and next time I go to Scotland I propose to look into this matter.
    The suggestion that cheaper cuts are obtainable in Scotland cannot be right. If it were, it would be a reflection on the people of Scotland and would suggest that they are not so well off and cannot buy the good meat and that the dear cuts go to England.
    It looks as if the advantage to the consumer has not been much more than 2 per cent. to 2½ per cent. That produces a figure of £14 million, leaving £21 million to be accounted for somewhere on the distributive side. I do not know whether it is on the wholesale or retail side, but looking at the figures which I have obtained and studied, that seems to be the amount which is unaccounted for.
    I should like to return to the main point, that the system is not working
    968
    and never will. A deficiency payment system with no marketing system and no import control will not work. As has been said, it is nothing but a blank cheque to the Minister of Agriculture, Fisheries and Food. If guarantees were reduced the result could be the same. On the other hand, if they were increased it could mean less. The Minister must speculate all along the line, and I do not think that that is the answer.
    Regarding subsidies paid to farmers, I gathered some figures last weekend concerning one of my farming enterprises and found that on a fairly large acreage over the last year the subsidy averaged out at about £9 an acre. That is not a large figure, because 400 or 500 acres are given over to the production of dried grass which carries no subsidy at all except for the fertiliser. And any farmer will know that lucerne grass needs only potash fertiliser, which, of course, is not subsidised. Thus the picture is not completely true and the figure of £9 is indeed a low one.
    This figure covered the production of potatoes, sugar beet, cereals, fertiliser grants, lime, grassland, ploughing and farm improvement grants. That figure of £9 is interesting, because the farm in question was producing 200,000 gallons of milk but the subsidy figure for milk was only 8s. 6d. an acre. If he had been in beef it would have worked out—on the basis of how many fat cattle would have been produced by the food used in the production of that milk—that he would have produced 400 bullocks, and the average subsidy today stands at over £20 per bullock. That would have increased his subsidy by another £4 an acre at least.
    The Chairman of the Milk Marketing Board has been asking the east of England farmers to give up milk and go in for beef; also the Minister wants to reduce the production of milk. I do not understand it. Why should he wish to curtail the production of milk when we import £6·7 millions of milk produce—dried and tinned—£106 million worth of butter and £31 million worth of cheese?
    As long as the taxpayers only guarantee a standard quantity the milk is handled by the Milk Marketing Board as long as that standard is maintained and the surplus used to level the price,

    969
    and farmers are still willing to produce it, why should the Minister wish to curtail that production? After all, a pint of milk costs 8d. and is a much cheaper food than a bottle of beer, which costs 1s. 6d. To curtail the production of milk seems, on all the facts, to be utter nonsense.
    A Nottingham University agricultural economist recently produced some figures showing that out of some 150 farmers a quarter of them had less than £10 per week of net return. That represents a net income of £10 a week for all management and wages costs and interest on money. The figure of profit for most farms was about £4 per acre.
    I notice that in an interview given by the Minister in Paris the other day he said that the incomes of farmers was "agreeably high." That might be the case in certain circumstances, but that statement would certainly not apply to the farmers covered by the study made by that Nottingham University economist. The Minister should take a lesson from the present system of marketing milk. Of course, there have been little or no imports of liquid milk and, thus, the Milk Marketing Board is able to control all the milk produced. There is a fixed price, a controlled price, and the Board is able to handle everything it has to sell.
    This should apply to all finished products—meat, mutton, pig meat, eggs, sugar beet and potatoes. Consider the Potato Marketing Board, which does not have the same teeth as the Milk Marketing Board and, therefore, is not nearly as successful. The figures quoted by the hon. Gentleman the hon. Member for Aylesbury were not as accurate as he might have thought on the subject of potatoes. I do not think that the support price buying of potatoes affects prices as much as he thought. Certainly the consumer of potatoes did not get much advantage out of the shockingly low price the farmers received in the recent glut, and the consumer got very little advantage when the price of potatoes went up three years ago to £30 and more a ton. The Potato Marketing Board should have control of the price in retail and wholesale sections of the trade. Only in that way would the housewife not be subjected to high and low prices for her potatoes. When there is
    970
    a shortage of supply the price would remain reasonable, and when there is a glut it would still remain reasonable to the housewife and yet the farmer would get a fair price for his potatoes.
    I suggest that the Minister should leave raw materials like coarse grains alone, but couple their production to fertiliser and lime subsidies and continue the production grants for marginal land.
    Mr. J. M. L. Prior: The hon. Gentleman has described the activities of the Milk Marketing Board and has suggested the making of similar arrangements for meat and potatoes. How does he think that meat, for instance, could be organised in the same way as the marketing of milk, which is a single product? Could he explain how this could be done?
    Mr. Mackie: It is amazing the way hon. Gentlemen opposite are so impatient. This is the second time that the words have been taken out of my mouth, for I was coming on to that in my next sentence. I was going to say that the Minister should continue the farm improvement schemes but should think again about special ones for different sizes of farms. All this will require a policy of marketing and of import control. There would be no difficulty making arrangements for meat, and everything to organise a scheme for meat could be done rationally, with the slaughter-houses, with cold storage space and so on to enable the meat to be stored in times of glut so that a reasonable price is maintained the whole time. That is not the case at present. It would not be an easy job, but it is one that must be done.
    Judging from the Minister's speech at Oxford earlier this year, dare we hope that he is thinking along these lines? He mentioned the difficulty of import control and the fact that the Government might have to think about it. One thing is certain, and that is that agriculture in this country cannot expect to go on the way it is at present.
    The deficiency payment system lends itself to careless marketing to such an extent that this past year the housewife was really paying twice—I do not mean double. We are all agreed that agriculture must have support. My right hon.

    971
    Friend the Member for East Stirlingshire has pointed out that agriculture in Britain requires sound support, and he put a strong case for this. Common Market or no Common Market—and I hope that I am not going out of order in mentioning this—the Minister gave an interview in Paris recently and said that the whole system of farm subsidies would have to be changed. This debate, if that is the case, is almost a waste of time, because the Minister also said that the present guarantees would only carry for the length of this Government. In his speech today, the Minister pointed out how far forward the Government had to plan. In any case, this Government have been going for quite some time, but one never knows what will happen next. It looks, however, as if this Government do not have all the time in the world in which to make their plans, and I would appreciate it if we could be given some information about these plans. It seems fairly obvious that time is running out for this Government, so some information on this aspect is certainly needed.
    I must emphasise that the Act of 1947 did a power of good for agriculture in this country, not only for the living standards of the farmer but for the farm worker. It has helped to give the farm worker a living standard which he deserves, and I hope that he will get an even higher standard, for he deserves that, too. But the system must work fairly between producer, distributor and consumer, and the present system is not doing that. We look forward to hearing what the Government intend to do, other than appointing a committee which, in any case, I think was an afterthought on their part in an effort to get out of their present difficulties. If the Minister would like some help, I suggest that he should take a look at our programme and save some of the expense of a committee by adopting the ideas we put forward of a system of fixed prices and import controls, coupled with marketing boards.
    6.20 p.m.
    Sir Richard Nugent: I am glad of the opportunity to join in this interesting debate, but I cannot deal with all of the points raised by the hon. Member for Enfield, East (Mr. Mackie) in his interesting survey. I should like to take
    972
    up what I reckon was the substance of his attack on the Government, which was also the substance of the attack by the hon. Member for Workington (Mr. Peart) and by the right hon. Member for Clackmannan and East Stirlingshire (Mr. Woodburn), and that is that the Government's policy is at fault, in that it has established a deficiency payment system in a free market, and that that is undermining the 1947 Act.
    It surprises me that hon. Members opposite, and especially the hon. Member for Workington, should say this, because their memory should be good enough to bring the recollection that the 1947 Act was introduced with a White Paper which contained these words in regard to price guarantees:
    "The price may be a guaranteed fixed price; a rate of deficiency payment related to a standard price; an acreage payment; a subsidy; or a price calculated in accordance with a formula, of which, for example, the price of feedingstuffs might be the basis."
    The deficiency payment was always contemplated in the 1947 Act, and, indeed,——
    Mr. Harold Davies: In a controlled market.
    Sir R. Nugent: No, not in a controlled market. At standard prices.
    The main subject of criticism today is the scheme made under Section 4 of the 1947 Act, as prolonged by the 1957 Act.
    Mr. R. E. Winterbottom: Does the hon. Gentleman recall the provisions of the 1947 Act with regard to deficiency payments, and will he agree that when introducing the Bill the Minister made it perfectly clear that deficiency payments must go along with something else to make them effective and efficient in British agriculture?
    Sir R. Nugent: He did nothing of the kind. It is very surprising that hon. Members, who to their credit put the 1947 Act on the Statute Book—and Section 4 is the Section which gave birth to the scheme which we are now discussing—should now disown it and chastise the Government for proceeding with it. This is like the attitude of the cuckoo in kicking the eggs of other birds out of the nest; but it is a very inexperienced cuckoo that kicks its own eggs out as well. This is what the hon. Member for Workington has been doing, and I suggest that hon. Members should have

    973
    another look at the legislation which they passed, when they will see that the system which we are now working is the one contemplated by them, but which, in the event, it fell to us to develop.
    I am sorry that my hon. Friend the Member for Aylesbury (Sir S. Summers) is not now in his place, because I should like to thank him and the other members of the Select Committee for their admirable Report, which, I am sure, has been most helpful to hon. Members on both sides of the Committee in trying to understand this very complicated matter. I can remember having some familiarity with the mysteries of the price review and the price guarantee system, and it is most helpful to us to see it set out so clearly.
    It is true that inherent in the system is the fact that we cannot estimate exactly what it will cost from one year to another. My hon. Friend the Member for Aylesbury made that point quite clear. Certainly, I agree with the point made by the hon. Member for Enfield, East that the butchers might indeed have got a bigger slice of the cake last year than in the previous year, but all of us who know anything about the butchering trade know that the profit margins vary a good deal from one year to another. I would not like to say what they did get away with, but one must take into account the fact that they had had a pretty thin year the year before.
    Before I come to the specific points that I want to discuss on this Supplementary Estimate, I should like to record the virtues of the system. Despite everything that hon. and right hon. Members opposite have said, the system does work. First, it works to give protection to farmers and guarantees the price which the Government wish to have guaranteed to them, and, secondly, it gives consumer choice over the counter, and I shall say more about that later on. With regard to the first point—guarantees to farmers to give protection to the farmers. The very big increase in production in the last ten years well illustrates the confidence which they have given to farmers in the past ten years by the increases in production: beef 48 per cent., mutton and lamb 60 per cent., and pigs 35 per cent. So that today in this country we are producing
    974
    about 70 per cent. of our total meat requirements, compared with 50 per cent. ten years ago. This is a very valuable increase, and a very useful saving of imports of from £100 million to £150 million a year. Of course, the system is not perfect. There are defects in every system, but it works broadly to the national advantage, and I think that the Committee should look at the position in a broad sweep, taking one year with another.
    This is an exceptional Supplementary Estimate, as my right hon. Friend explained in his masterly survey, due to a combination of factors which, unfortunately, combined together to push the whole thing in the wrong direction. I should like to comment on two things. First, the working of a price guarantee system, and secondly, the distribution and marketing system. The price guarantee system was designed in 1954 to work with the live fatstock markets with deficiency payments, and, despite what has been said from the other side of the Committee, at that time, and indeed today, this was the only way in which it is possible to get rid of the system of State trading in order to give choice to the housewife over the counter.
    For the housewife to have this freedom of choice over the counter, at some point in the chain of distribution from the supply point on the farm to the shop counter at which the housewife buys the goods, supply and demand must meet, and the price mechanism must work so that the price must equate supply and demand. In that way, the housewife is given freedom of choice over the counter, right back through the distribution from the farm to the wholesalers and dealers in the market. The fact is that there is physically no other way of doing it. I am not denying that in an ideal world we could get better results; for instance, if we could do the whole thing on the hook—on a deadweight basis. But the physical facilities for that do not exist. They are gradually coming into existence, and I should like to see them come into existence more rapidly, because it is the right way of doing it, to give choice for the consumer by equating supply and demand. Therefore, it was introduced to work with deficiency payments which would make up the average

    975
    return of the farmer to the guranteed price level, and it was always intended that the deficiency payments should work without interfering with the market, and so was designed in the first place with a device called the "rolling average".
    Two years later, in 1956, the farmers complained that there was too much variation in their gross return, with the market and deficiency payments, and asked for greater stability. I was at that time in the Ministry of Agriculture, and I must confess that I felt very reluctant to introduce anything into the system which would make for greater rigidity, but we did introduce what is called a "stabilising band", and it was that which, in 1961, was one of the main factors which have added to this bill.
    The stabilising band was introduced on a seasonal curve as the average price estimated, and the device works so that the price paid to the farmer is the finished payment. If the market price falls more than 7s. below the guarantee price on the seasonal curve, or rises more than 7s., the market price above or below that in included, and the finished payment remains the same.
    Let us take the case of a falling market. It means that if the market price falls more than 7s.—that is about 4 per cent. or 5 per cent. for cattle, and there are similar systems for sheep and pigs—or if it falls 30s., 40s., or 50s.—as it did last year—the farmer has no interest in that at all. He still gets exactly the same payment. There are many defects about a live marketing system, as those who are familiar with it well known. But one of the virtues of live cattle marketing is that if the farmer meets a bad market, a market which is glutted and where bidding is weak and prices fall, he can take his animals back home and market them again another day when conditions are more favourable for him.
    With the stabilising band system, however low the market falls, the farmer has no incentive to take his animal back home. That is what happened last year. However low the market falls, the farmer will leave his animals to be sold knowing that the return to him will be the same. He has no incentive to study the interests of the taxpayer.
    Mr. Woodburn: Would not the right hon. Gentleman agree that what he has said may apply to a man farming in a big way who has plenty of transport? Small farmers cannot afford to carry cattle backwards and forwards to market. They have to sell their animals for what they can get.
    Sir R. Nugent: It is surprising what farmers, both large and small, will do, if it pays them to do it, if the incentive is there. The fact is that by introducing this rigidity into the system we have removed the normal incentive for a farmer to study demand.
    I have no doubt that this year—I am speaking of the current year, 1961—the serious defect was because the guarantee price had been raised by 10s.; so that if 7s. were subtracted from the price the farmer was still 3s. to the good over what he expected at the last Price Review. The result was that not only did more cattle come forward than was expected but a number of unfinished cattle came on to the market, which greatly aggravated the situation.
    I urge my right hon. Friend to look at this matter again. Certainly we want to get a reasonable stability into the system, but this arrangement is not to the interest of anybody. It is obviously not in the interest of the taxpayer. It is not in the interest of the consumer because it is glutting the market, and it is not in the long-term interest of the farmer whose job it is to study what the consumer wants. Therefore, the stabilising ban must be substantially modified. There are a number of ways of doing this, but I will not attempt to describe them now.
    The other point I wish to make about the working of the system relates to grading. This was touched on by my hon. Friend the Member for Fyfe, East (Sir J. Gilmour), who made such an admirable maiden speech. The live-weight grading is still much too lax. All who are familiar with grading know that it is not a science but an art, and the eye of the grader is never as precise as is the eye of the butcher when he has the carcase on the slab. As a result, the present system of grading favours live-weight as opposed to dead-weight grading because it is always easier. In last year's market there were many animals which ought not to have been

    977
    graded, and so somehow the system of grading must be made tougher and fairer on treatment by dead-weight grading. Dead-weight marketing must be the marketing of the future.
    I agree with what was said by my right hon. Friend regarding the finish payment system. We have a different situation from that which existed when the system was designed. Now we produce 70 per cent. of our meat at home and imports represent a relatively small part. Undoubtedly the time is coming—whether or not we go into the Common Market—to look again at this system to see whether we should not change the system of price support and turn to another system which might still achieve a comparable level of prices by using different machinery.
    The marketing system for meat is creaking. The traditional pattern depends largely on the family butcher and it no longer meets the present-day demand. Of course, the family butcher has a big part to play, and will continue to play it. Many of the best of them buy their own beasts in the market. They know what their customers want and they do a very good job in supplying that demand. But today there is an ever-increasing demand from self-service and chain stores for large quantities of joints at a standard quality and size, pre-packed and over-ready for the housewife to use. The present-day system must be able to measure up to that situation. The carcases must be moved swiftly from the slaughterhouse by refrigerated vehicles, cut up and made available to the retailers. The process must be quick in order to preserve the quality and flavour of the meat.
    In the present system there is all too little of the necessary efficiency to meet that situation. There are a certain number of private people engaged in it, and my point is that farmers must get into this marketing situation. They must take a greater interest and play a greater part. They must know the requirements of the housewife and breed and manage their animals in a fashion which will meet that demand. There is a trend in the market for fewer buyers buying on a larger scale, and farmers must combine together in co-operative
    978
    arrangements of one sort or another to match the big buyers by becoming big sellers. There is an excellent example provided by the Fatstock Marketing Corporation, which handles nearly 20 per cent. of all the fatstock. That is the right procedure. There are a number of private ventures where farmers are doing something similar, but there is a need for more who will work alongside the many efficient private enterprise organisations which are doing that work.
    I urge my right hon. Friend to try to think out some measures to encourage farmers to play a bigger part in this kind of marketing. He has already done something for the horticulture industry by the 1960 Act with grants for cooperative ventures. The same idea could be applied to this market. It would be more difficult because this commodity would be more difficult to handle. But something could be done, and this is the way in which we should operate. That is the way things are going in any case, and I want to see the farmers playing a prominent part.
    The hon. Member for Enfield, East made some interesting comments about marketing boards. No one in the Committee has had a greater interest or privilege than I have in promoting marketing boards. Every one we have today I was able to play a major part in bringing into being. I am a firm believer in them, but not for this product. I believe that the question my right hon. Friend posed is the key question. Would it be necessary, if we set up a producers' fatstock marketing board, to give it such large powers to have effective control over this immensely complex and varied commodity that it would be unacceptable to the community as a whole and not, therefore, in the national interest? I am bound to say that my instinct is that it would.
    Mr. Harold Davies: I wonder if the right hon. Member's instinct works the same way when it comes to the question of monopolies for fertilisers and feeding stuffs?
    Sir R. Nugent: I am not so much troubled with the principle as with the practice. Milk is a homogeneous commodity and the Milk Marketing Board is doing an admirable job, but to get

    979
    control of a commodity which is so varied—there are thousands of different cuts—I do not believe it would be possible to set up an authority in a way which would be acceptable to the nation as a whole. I am not at all sure that the farmers would vote it in. All too many farmers still believe that it is best to market their animals on the hoof. I am very doubtful whether there would be the necessary two-thirds majority for the proposal.
    Mr. Loughlin: May I remind the right hon. Member that the N.F.U. is now thinking in terms of some organisation such as a marketing board, but not necessarily on the same pattern as the Milk Marketing Board?
    Sir R. Nugent: In fact, the N.F.U. is not doing so. It is studying the question of a marketing board, but its prime idea is the promotion of schemes like the Fatstock Marketing Corporation, which is quite different. Those are not schemes for the control of a whole commodity.
    I believe that the present system can still serve well for the short term, the next two or three years in which we may wish to use it. Taking one year with another, it has served well. I am sure that my right hon. Friend is right not to be panicked into making some changes which might have a dramatic but upsetting effect on the distribution of meat. I am sure he is right to set up an independent inquiry which will yield a most useful report to guide development in the future.
    In the long term, I am sure that the time has come to look for a new system of price guarantees. I earnestly hope that he will find some means of encouraging farmers to take a greater part in the marketing and distribution of meat where such a big development is taking place. I have every confidence in my right hon. Friend steering policy in the national interest and in the interests of farmers and consumers.
    6.42 p.m.
    Mr. Frank Tomney: When the Minister started his speech today he reminded me of an essay on persuasion based on hope and hoplessness. Only when he got to the end of his speech did we get an idea
    980
    of what he, the Cabinet and his Department might be thinking and recommending.
    For the Minister to guarantee the present system in perpetuity, it would be necessary to have at least two things. We should need a severe restriction of imports and perpetually bad summers in Great Britain. Then he might succeed, but neither of those things would be very palatable to the public. I have listened to this debate on an industry about which, frankly, I do not know much. There are no farmers in my constituency, but there are many consumers. It is the consumers with whom I am concerned and with whom the country is becoming increasingly concerned over the matter of the increasing range of farming subsidies. Before very long there must be a limit to the amount of subsidies that the taxpayer can pay to the farming community.
    This Report has high-lighted the position, probably a little viciously. It is a good Report, but, as is usual with an Estimates Committee's Report, we get it after the money has been spent. The conclusions of the Report point the way in which the system has run wild since its inception in 1947 and when it was based on the principle of freedom from responsibility in the industry in 1954. We have farmers taking advantage of every part of this system in order to get the rewards. In fact they did that by flooding the market last year. Doubtless advantage will be taken of deficiency payments.
    The point which the industry must realise was made by the Minister in the last few sentences of his speech when he referred to the possibility of changes. Although there was a promise to keep this system operating for the remainder of this Parliament, the Minister pointed his finger at the conclusions which concern every hon. Member. It is not a question of whether we go into the Common Market or do not go into it. It is a question of changing conditions. It is a question of Britain changing consumer conditions.
    We have been told about a large broiler industry which was so large that the average profit worked out at only 1¼d. a bird. This is remarkable. The butchers seemed to have recognised this in advance of anyone else. There has

    981
    not been a survey into the changing buying habits of the housewife in the last five years. This is the first priority we need before we can fix deficiency payments.
    Mr. Prior: The hon. Member is not correct in saying that there has not been a consumer survey. The National Farmers' Union has discussed this matter in the last few months.
    Mr. Tomney: I am not discussing the National Farmers' Union. When I say that I want a survey I mean that I want it done by a Government authority. I want the facts, not the picture as people wish to present it. How much over-the-counter beef is purchased week by week in this country? Since when have subsidies created a demand for more money? All this has an effect on the money left in the consumer's purse. How many housewives buy beef every week? Very few. This is the reason why there is this glut on the market. It is at that end where things have gone wrong; the other end was always guaranteed.
    This Report is absolutely conclusive. My hon. Friend the Member for Workington (Mr. Peart) said that the system had broken down. It has completely broken down under these conditions and it cannot be put right under these conditions. The right hon. Member for Guildford (Sir R. Nugent) has taken this a step further in the debate. He has explained to me a little more than I formerly knew about this complex industry. Of course, he is on the right track about a marketing board. The price has to be reflected in the shops.
    In the main we are an industrial, exporting nation. We desire to, and ought—as far as possible in our capacity—to retain a healthy farming industry. It would be wrong to discontinue at once the system of subsidies which has been of such great benefit to the farmers. It would be wrong to remove the benefits of the 1947 Act. That was Labour's dream of restoring the countryside to something of the condition in which it ought to be. From now on there has to be a selective examination, subsidy by subsidy, of its value to the country in terms of revenue and balance of payments. In an industrial nation, unless we export we cannot import, and
    982
    some of our imports have to be from agricultural countries.
    It is no good the Government trying to subsidise the growing of wheat on Ben Nevis. Now is the time for financial and political retrenchment on this issue. It is a national situation which cannot be overriden.
    The industry employs a remarkable proportion of people in Scotland. I was surprised to hear from the hon. Member for Fife, East (Sir J. Gilmour) that in Scotland, one person in six gets a direct living from the land. I do not think the figure is anything like that in England, or so concentrated. [HON. MEMBERS: "Nor in Scotland."]
    Sir J. Gilmour: What I meant to say, and, I hope, did say, was that one person in six lives on a farm. It is the population that live on the land.
    Mr. Tomney: I am sorry; I must have misunderstood. Had that figure been true, I should need to do some rethinking.
    The situation as I, an ordinary townsman, representing consumers, see it is that the deficiency payments system has completely broken down, as the Report shows. In determining the future figures at the February Price Review, the Minister seems to use guesswork, because the figures from the previous quarter, on which an assessment could be based, are not available. The Minister it seems, takes the old-fashioned view of accepting a figure. He should then cut it by 50 per cent. and then cut it again by 25 per cent. If he had done that in this case his figures would have broken even.
    That is a rough and ready guide, but certainly the taxpayer cannot for ever subsidise the farming industry to this extent. It may be that within two or three years the whole system must be recast. If so, it is not too early to start recasting it now. I urge upon the Government and the Minister, however, to study a little more the effects of this kind of policy on the domestic policies of the Government in relation to the people. It is no good imposing pay pauses, pushing up rents and doing things like that if, on the other hand, the Government give hand-outs of this character—£78 million—to what is, after all, private industry.
    6.52 p.m.
    Sir James Duncan: I do not in the least object to the hon. Member for Hammersmith, North (Mr. Tomney) speaking from the viewpoint of the consumer. He has complained of the heavy subsidy bill. Today, we are discussing an additional £78 million on top of £266 million, making a total of £344 million. The point at issue between the hon. Member and myself is whether the taxpayer or the housewife should provide that support.
    The hon. Member has spoken from the point of view of the consumer in Hammersmith, an area I used to know well, because at one time I was the Member for North Kensington, next door. Under the present system, the only way to avoid these increased subsidies is to increase the market price. The reason for these increased subsidies is that the market collapsed last summer. The hon. Member has said that the housewife will not support these high subsidy figures in future. Does he want the consumers in his constituency to pay more for British food? That is his choice.
    Mr. Tomney: The hon. Member should read the Report which the Minister presented. It is conclusive when it states that the production of so large an amount of beef should have been reflected in falling prices in the shops. It was not reflected in falling prices, for the reasons I have said. Therefore, the housewife pays twice, as a taxpayer and as a consumer. That is the difficulty.
    Sir J. Duncan: I agree that a certain element arises from the fact that although the market collapsed last summer, the consumer did not get sufficient benefit from the temporary reduction in price. I hope to say a word or two about that.
    A great deal of publicity has been given to this Supplementary Estimate, but practically no publicity has been given to the next Supplementary Estimate, which was published over the weekend and totals £76,749,000 which is almost the same figure. It refers to a large variety of subjects. It is a little unfortunate that agriculture should have been singled out for all this adverse comment, whereas the later Supplemen-
    984
    tary Estimate came out with practically no publicity.
    I should like to express my admiration of the speech of my hon. Friend the Member for Fife, East (Sir J. Gilmour). I am delighted that we have from Scotland yet another practical farmer who lives in his constituency and who, I am sure, will be a great asset to the House of Commons. Like the right hon. Member for Clackmannan and East Stirling-shire (Mr. Woodburn), I served with my hon. Friend's father, not only when he was Secretary of State for Scotland, but also when he was Minister of Agriculture and Home Secretary. In all those offices, he was a distinguished statesman. I am sure that my hon. Friend is a chip off the old block and will be following his father's footsteps with the same honour and success in the years to come.
    The country has been disturbed by the size of this Estimate. I agree with the interpretation of the reasons by my right hon. Friend the Minister. The Estimates Committee has done an extremely good job in explaining how the deficiency arose. First, there is the timing of the Estimates. They are not Estimates, but rather guesses, because the period covered is far ahead, extending over at least fifteen months, and in those conditions it is impossible to guess right.
    Then, there is the question of market prices which have to be guessed. Here, too, there is an enormous margin for error. There is also the question of imports. In December, the Government cannot possibly know what will be the volume of imports in the following December. There is no accurate knowledge of the number of animals or the quantities of produce coming forward. In the case of cattle, the estimate was between 2,200,000 and 2,400,000, but the actual figure will be 2,600,000. Too much has been made of the fact that the extra 10s. per cwt. brought more cattle forward. They would have come forward at some time during the year in any event, but they came forward for weather reasons.
    In the document covering the Price Review it is said that
    "Although the number of animals slaughtered in 1960–61 shows an increase on the previous year, the number of calves retained for beef production has recently been

    985
    falling. With consumption per head still below pre-war, demand for beef is likely to remain strong."
    It then goes on to state that the guarantee had to be increased by 10s. per head.
    While those responsible were anticipating in December, 1960, from the figures which they had, dating back to June—the December returns had not yet come in—they had a completely wrong picture of the number of calves which eventually came into the beef market last summer. This gives an example of the inaccuracy of the knowledge, and that is inevitable under this system, at any rate in estimating the numbers of cattle. As for quantity—and I just mention, for example, potatoes—there again, due to the weather, even if the acreage is known, a variation between one season and another is equivalent to two tons an acre. It is, therefore, quite impossible to make any accurate forecast in the December of a year what will be the production in April—not of the following year but of the year following that.
    Then there is on meat a fairly new and extra imponderable, and that is poultry. It is estimated that this year there will be some 350,000 tons of poultry on the market, a vast increase on, say, five years ago. Of course, there is no guarantee in this, but it is really becoming a factor in the pattern of consumption of the consumer, as the hon. Gentleman the Member for Hammersmith, North said. So I do not think that, on those main grounds, the Government can be blamed for the inaccuracy of this Estimate.
    The total is very big. The total is big because we have been increasing production, and we farmers have increased production because we have been asked to in successive Price Reviews. And for another reason, too: the very fact that increased costs have been forcing on us for years increased efficiency. As the squeeze comes on from the Price Review, increased costs have to be absorbed, or a very large proportion of them. So, during the year, particularly with commodities like milk, a farmer is almost bound to increase production from his land in order to get the same net return. That is wholly applicable to milk, where the tendency
    986
    has been to squeeze in another two or three cows for milk, in order to get the same net return. So we get large bills today because under Government policy—and not the policy of this Government alone but of every Government since the war—the tendency has been to increase efficiency, to squeeze efficiency into the farmers; and in return they have to get increased production in order to get the same net income.
    Therefore, I do not think we should complain about this increase. The only question is, can we pass it on to the consumer, or will the taxpayer continue indefinitely to subsidise at this rate?
    The Agriculture Act, 1947, quite clearly—it is in Section 1, and I do not think it is a bad thing to read it out occasionally because it is forgotten sometimes—lays down, as stated in the Estimates Committee's Second Report, that
    "The Minister and the Secretary of State for Scotland are obliged under the Acts to maintain ' a stable and efficient agricultural industry capable of producing such part of the nation's food and other agricultural produce as in the national interest it is desirable to produce in the United Kingdom, and of producing it at minimum prices consistently with proper remuneration and living conditions for farmers and workers in agriculture and an adequate return on capital invested in the industry'."
    That is the policy laid down by hon. and right hon. Gentlemen opposite, and my experience over the years of operating this policy, with its concomitant Act of 1957, has been that we have been able to increase our efficiency enormously. The right hon. Gentleman the Member for East Stirlingshire three times mentioned the question of efficiency. We have been forced to and are still being forced to increase our efficiency year by year, and the guaranteed prices in the 1961 Price Review were not unreasonable.
    The fact that we never achieved the guaranteed prices, I think, in any week in the year, is not the fault of the farmer, because the 1953 scheme of deficiency payments instead of fixed ones was designed to give the efficient farmer of the high-class beef cattle more than the guaranteed price. But we have not got that this year. We have had it in past years, and the taxpayer has had to pay nothing, but this year even the best cattle have never achieved the guaranteed price. So I do not think that the guaranteed prices as agreed at the last

    987
    Price Review are at all unreasonable, and pressure of increased costs has increased efficiency.
    The problem still remains: what, therefore, do we do? I think that my right hon. Friend was right when he said that this is probably a wholly exceptional and unique year when everything conspired to go against us, when meat production went wrong, for the reasons that he gave, and even the pig meat scheme went wrong because of a strike in Denmark which brought undue quantities of bacon into this country when prices at that time were low.
    I do not think it is likely that in the coming year this will happen again. For instance, there is likely to be no payment on potatoes this year, or only a small one, because payments under this Supplementary Estimate are in respect of last year, and I do not think there is likely to be any payment on potatoes this year. Market prices for meat the last week or two have been very much firmer, and should continue to remain firm at any rate all through the spring.
    I do not think there is very much room for manœuvre within the system, although it may be necessary to review the details of the system, as my right hon. Friend the Member for Guildford (Sir R. Nugent) said; but in the system as a whole, which has worked successfully, the limit of reduction in the next Price Review is about £30 million if the whole 2½ per cent. is taken. That is the limit of manœuvre. The whole 2½ per cent. has never yet been taken, and we have got to set against that, as the right hon. Gentleman said, about £13 million or £14 million increased costs. So the limit of manœuvre is about £15 million altogether. Therefore, I do not think there should be very much or any very revolutionary change in the next Price Review.
    One or two things could be done, I think. One is that there should be much quicker action against dumping. The Committee will remember the troubles we had last year over barley. Action, I suppose, was taken quickly enough, because there is a plus figure in the Estimates for barley, but there was a minus figure last year because of the low price of barley. That is an illustration
    988
    of what can be done and what ought to be done by the Government—I believe that wherever there is dumping the quickest possible action should be taken to stop it, not only in the interests of the producers of the commodity affected, but in the interests of the Treasury and the Chancellor of the Exchequer.
    Secondly, there should be better control of imports. I am not going into the bigger problem of control of buying but there should be better control. There was set up some years ago a voluntary body, which is still in action, called the Bacon Production Council, an unofficial body, but, up to last summer, it worked extremely well. Something went wrong with it last autumn largely because of the strike in Denmark. It broke down and bacon poured in just at the wrong moment. The Bacon Production Council showed us the sort of thing we ought to go in for with other commodities, too—an international body governing imports and organising the imports so that they do not interfere too much with our own prices.
    The next suggestion—and I think the central one in the debate today—is the better organisation of the meat market. The hon. Member for Workington (Mr. Peart) muddled me today. I do not know what he really meant. He talked in a loud voice about rationalisation. He talked about rationalisation of slaughtering. Does he mean the cutting down of slaughterhouses and causing unemployment among slaughtermen? Then he talked about the rationalisation of butchers' shops and the rationalisation of the wholesale trade. Is he going to abolish Smithfield altogether? We should like to know what he meant. The real point is this: if he is going in, as the hon. Member for Enfield, East (Mr. Mackie) suggested, for central meat marketing with price control and import control? I think that those are the three things he mentioned in the last few words of his speech. Is he going to control the retail price of meat and control prices right down to the shop counter? Because that is really the key to the whole matter. I am really having a go at the hon. Member for Workington and the hon. Member for Enfield, East. Let one or the other get up if he wishes.
    Mr. Peart: I said that there were too many slaughterhouses and that meat is inefficiently handled in relation to the slaughterhouses. I agreed that because that was once the Government's declared policy, and they ran away from it. I ask the hon. Member this direct question: is the hon. Member really satisfied with our present abattoir system and marketing?
    Sir J. Duncan: I was engaged on the Slaughterhouses Bill with the hon. Gentleman. I know what a mess the thing was in England. [HON. MEMBERS: Hear, hear."] That was some years ago.
    Mr. Peart: The hon. Member has now admitted that it is a mess in England. The Minister of Agriculture, Fisheries and Food is responsible for England and Wales, and I suggest to the hon. Member that he has given his case away already.
    Sir J. Duncan: I said that it was a mess at the time that the Slaughterhouses Bill went through this House and that was the reason that the Bill was passed—to improve matters. Time has gone on since then and improvements have been made. I have heard of new slaughterhouses going up everywhere.
    As the hon. Member for Enfield, East probably knows, in Forfar we have one of the finest modern slaughterhouses in the world. We are rationalising this in the way it should be rationalised, modernising and expanding, but not necessarily having these enormous abattoirs which there are in Guildford and one or two other places. The hon. Gentleman has not answered my last point. Is he going to control imports and control prices right down to the retailers? This is what I want to know. That is the question I want to have answered. If that is to be the Labour Party's policy every butcher and farmer will be against it.
    Mr. Woodburn: The hon. Member heard his right hon. Friend saying that future marketing would be of pre-packed cuts in the self-service shops. Does he not think that these will be priced very definitely?
    Sir J. Duncan: The point is who is going to pay for the pre-packaging and that sort of thing? This is being done
    990
    in organisations like the Fatstock Marketing Corporation, and a large number of private people are doing it today. This is being done now, and those are the people who are going to organise it. I hope in the future that they will do what my hon. Friend read out was being done in Australia, and that they will gradually, particularly if we go into the Common Market, get their hind-quarters of lamb into Paris and the fore-quarters into Brussels. If some of the people in Brussels like that sort of thing, good luck to them.
    Mr. Peart: Rationalisation.
    Sir J. Duncan: Rationalisation, according to the hon. Member for Enfield, East, is central marketing, State marketing and price control. I am not sure whether it is to be night down to the retail outlet.
    Mr. Mackie: I did not say it was central marketing and I did not say it was price control. I said that we would have marketing boards through which all the produce would go. I happened to say that the Milk Marketing Board and the Egg Marketing Board were working well. We all know that there are fixed margins in the case of milk and eggs. Retail buyers would go to the abattoirs and select their meat at fixed margins. That is a perfectly rational system instead of the ridiculously mixed-up system that we have at present.
    Sir J. Duncan: I was trying to get from hon. Members opposite what is the Labour Party's policy, as the Government have not got one. [Interruption.] As my right hon. Friend the Member for Guildford said, that is all very well for milk, which is what he called a homogeneous commodity. If we are seeking to sell meat, with thousands of different varieties and cuts, throughout the country, and have price control for each cut, it will be quite impossible to operate such a scheme. There will be different qualities, cuts, sizes and weights, and I do not think that we could operate a marketing scheme effectively unless we have a more or less homogeneous commodity.
    Mr. Hoy: Did the hon. Gentleman say that he wanted to know what our policy

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    was because the Government did not have one?
    Sir J. Duncan: I am sorry, the hon. Gentleman must have misheard me. I said that I was trying to find out what was the Labour Party's policy but I had failed. The Government's policy remains what it is today—deficiency payments combined with a free market. I said that it was imperfect but that on the whole it was working extremely well.
    Mr. W. Baxter: If the present position is an indication of the agricultural policy of the Conservative Party the hon. Member will realise that in the years of depression in 1938 overdrafts owed by the farmers to the banks were about £8 million. Today the overdrafts owed by farmers to the bank are over £50 million. If we add that to the amount of accommodation given to the farmers of Scotland by auctioneers, insurance companies, mortgage funds, garages and implement makers and so forth, the debt of the agricultural community at the present time in Scotland is in the region of £150 million. Is that the policy of the Conservative Party and is that the policy that they seek to support?
    Mr. Eden: On a point of order. I apologise for interrupting the speech of my hon. Friend the Member for South Augus (Sir J. Duncan) but for future guidance during the course of the debate may I ask, Commander Donaldson, whether there are any limits to the agricultural subjects which we can discuss? Should we not be examining the reasons why the Government have found it necessary to introduce a Supplementary Estimate? Should we not attempt to confine discussion to the Report of the Estimates Committee?
    The Temporary Chairman (Commander C. E. M. Donaldson): I was about to rise when the hon. Member rose to make his objection. I think that we are getting very wide of the context of the Supplementary Estimate. I have allowed a little freedom. This is normally a time of evening when the Committee is lightly attended and we sometimes have a little more freedom, but I ask hon. Members to refrain from going wide of the Supplementary Estimate and to adhere
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    more closely to the normal rule from now on. I would add that many hon. Members wish to speak and I hope that interjections from both sides of the Committee will not be frequent or long.
    Sir J. Duncan: I will conclude, though sorely tempted to deal with the interruption of the hon. Member for West Stirlingshire (Mr. W. Baxter).
    A mathematically-minded farmer in my constituency has worked out that the cost of this £344½ million which is the total cost of agriculture this year payable by the taxpayer is equal to one penny a meal. I would only ask whether the housewife would get off as cheaply as one penny a meal if Britain joined the Common Market.
    7.22 p.m.
    Mr. R. E. Winterbottom: The hon. Member for South Angus (Sir J. Duncan) represents a constituency which produces very good cattle. I found myself in agreement with most of his speech because he gave largely an academic explanation of what has been happening in the cattle-breeding world. It was only when he dealt with marketing and retail butchering and he put some questions to my hon. Friend the Member for Workington (Mr. Peart) that I began to join issue with him. I shall deal later with the rationalisation of butchering at the slaughtering and auctioneering level, on the retail distributive side and in the control of prices.
    I appreciate the fact which the hon. Member for South Angus mentioned that certain organisations carry out a measure of rationalisation, especially in the control of prices, but this is only partial rationalisation in dealing with cattle and the difficulty to be faced is that of proceeding from partial to full rationalisation. I can agree with the policy of deficiency payments. I thank the Estimates Committee for what it has done, but I differ from it in that its explanation of what has transpired is not sufficient excuse for what the Ministry of Agriculture has done.
    Most of my speeches in the House and in Committee have been on clean air but I have also dealt from time to time with the subject of clean meat. One of the diseases from which meat production is suffering is not foot and mouth disease or bovine tuberculosis but the disease of

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    Government miscalculation and Government muddle in agriculture. I hope to be able to prove this in the course of my speech. It is clear from the Supplementary Estimate that Government ineptitude has permeated the whole of the cattle-raising industry. I do not propose to deal with subsidies on eggs and cereals. I do not know enough about the subsidies although I have sold eggs and cereals for many years. I know something about cattle, however, and to me Government ineptitude in agriculture is as clear as it is in Government economic policies for our other main industries.
    The Supplementary Estimate disturbs us all, including hon. Members opposite who represent farming communities. It disturbs me both by what it reveals and by what it conceals. The hon. Member for South Angus was the first hon. Member to speak in the debate about the overall subsidy to agriculture. He pointed out that it had increased for 1961–62 by £85 million, from £265 million to about £350 million. I am alarmed at the increase and unless a better explanation is provided than that given in the Estimates Committee's Report I shall continue to feel alarmed.
    Writers in agricultural papers and in meat industry journals, speakers on television yesterday, and every official body associated with the industry, talk about the missing millions. I want to know where the missing millions have gone. The Minister did not reveal the solution to the mystery today. We were given an extension of the explanation given in the Supplementary Estimate, but there has been no genuine explanation. A sum of £85 million represents the difference in the overall subsidy to agriculture and this is the £85 million question which the Minister ought to answer tonight. On 22nd December the Farmers Weekly said:
    "How has this situation arisen? First, there is the absurdity of trying to estimate at all on the evidence which Government Departments have available in December when the estimates are prepared. They have not even got the December livestock returns in front of them. They do not know, for instance, the size of the ewe flock. So how can they possibly guess at lamb marketings? They do not know what the Minister may decide at the Price Review. So how can they tell either the likely size of the market or what is likely to be the discrepancy between market and guaranteed prices?"
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    That is true. It is a statement of fact. The hon. Gentleman the Member for South Angus said virtually the same thing. One cannot argue against facts.
    These are exactly the same conditions which existed last year. They are the same conditions which existed in 1955, 1956, 1957, 1958 and 1959. Yet there has been a difference in the increases in the amount of subsidy. An explanation of that factor must be given. The Supplementary Estimate goes further even than the editor of the article I have referred to. It tells us that 5 per cent. error is the estimated calculation. This represents, in the end, £17 million. In my view, it rightly represents variations in the amounts of home-produced or imported cattle.
    It is unnecessary to go on quoting articles such as the one I have mentioned. One can read these articles year after year. These variant supplies are a factor every December and are always a problem before the Annual Price Review. What the Farmers Weekly and the Government forget is that every excuse they use to protect the Minister and to conceal the missing millions has been used before. They are the same excuses each year. None of them explains where the millions have gone. I hope that tonight we shall have a full and frank explanation from the Government. We do not want the explanation which we have had year after year—that it is due to an increase in the number of cattle on which the subsidy has had to be paid or for which deficiency payments have had to be paid. Such payments are infinitesimal compared with the amount of the missing millions.
    Mr. Prior: The hon. Gentleman says that he cannot account for these missing millions. I believe that he may have something to do with a Co-operative Wholesale Society. Did it reduce the price of meat last year?
    Mr. Winterbottom: I will deal with the problem of price reduction shortly. But before I turn to the problems of the butchers I wish to stress that we should have a full explanation from the Government.
    As the situation is now, the Minister reminds me very much of something told to me by my grandfather. He saw a company promoter going to chapel for

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    prayer meetings six nights a week and attending service three times on Sundays. My grandfather's comment was "He should have his books examined." That is the situation of the Government over these missing millions.
    The Supplementary Estimate for cattle, sheep and pigs is £66 million. This amount of taxpayers' money is supposed to keep down the price of food to the consumer. But there is nothing in the law, as far as I can find out, which compels anyone to fix a minimum price because of subsidies. Yet we are entitled to expect that, when subsidies are given, they should be reflected, in whole or in part, in the prices of meat. We are told that the price index for meat has dropped 4 per cent. Is that enough?
    One correspondent in the Farmers Weekly wrote that he followed the progress of three cattle weighing 9½, 10 and 10½ cwt. from the slaughterhouses to the retail shop. He said that the final cost to the butcher of the animal weighing 10 cwt. was £57 10s., and that the butcher received, through his retail prices, £119—a gross profit of more than 100 per cent. Such a profit is excessive in the circumstances. That was in June of last year.
    I know something about butchering. If the correspondent tried to get his estimate from a few casual inquiries about prices in the shops, he would find it difficult to get a true and final analysis of the amount of money received in retail prices. Nevertheless, in analysing the prices as issued at Smithfield over the past twelve months, I am forced to the conclusion that there has been a reduction in the wholesale price of meat of about 21 per cent. overall. After making inquiries among retail butcher friends, I have also concluded that this fall has not been reflected by a reduction in retail prices. That is a very important matter.
    The Minister has admitted to a mistake in his figures. He said originally that £35 million had gone to the consumer, £31 million to the producer, and £10 million to the butchers. That was his original estimate, from which he has now departed. The time has come when, if we are to have variations because of deficiency payment and variations in the price of cattle as a result of the annual
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    price review, we should have from the Minister, if necessary in association with the Minister of Labour, something in the nature of an official wholesale price index, published, together with the retail price index, as a guide to the consuming public. If we had this system we should have a better idea about where we stand on these matters, and would not be faced as taxpayers and consumers, with such problems as these missing millions, with the farmers, wholesalers, auctioneers and butchers all saying that they have not had them. One thing we do know is that, no matter what the Minister has said about the retail price index, or what I have said in presenting my analysis, the ordinary housewife says that she has not had it either.
    Something has to be done about prices of cattle to give justice to the farmer, justice to the middle man and justice to the butcher, and this is the final problem with which I wish to deal—how to bring order out of chaos. We are facing chaos in agriculture. The National Farmers' Union is gravitating slowly but surely to something like a meat marketing board and just as surely towards something like a greater degree of concentration of slaughterhouses.
    I was a member of the Standing Committee which considered the Slaughterhouses Bill. During the course of about thirty meetings, hon. Members from the Opposition said a great deal about slaughtering in this country and most of what we said has been proved to be true. "There are tricks in every trade bar ours", say the butchers; "There are tricks in every trade bar ours", say the farmers. I could find a wrong-doer in every section of this society, but very few in most of them.
    However, a meat marketing board and a greater degree of concentration of slaughterhouses, plus a development of the present Fatstock Marketing Corporation, with authority to watch over home-produced and imported cattle—the latter being a vexed question—perhaps under the auspices of the Government, could well be a wise rationalisation for wholesale and retail butchering which would introduce a wise control of prices.
    One of many illustrations which I have in mind is taken from the Farmers Weekly of 2nd February and concerns

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    slaughterhouses. This is a most interesting article headed:
    "Export hopes die in the slaughterhouses"
    The story concerns a well-known, highly specialised firm sending cattle to Germany. It has to send them on the hoof. The Germans want the cattle on the hook, but they will not accept them on the hook because the quality of our slaughterhouses does not compare favourably with that of those on the Continent.
    The sort of marketing board which I have suggested would bring order out of chaos, which is what we now have in the marketing of cattle; it would improve meat marketing generally and ensure intensive concentration of slaughterhouses; it would deal with pre-packaging; it would deal with those things which do not now come into our shops, and it would deal with deepfreeze and, possibly, with canning. In this concept the slaughterhouses would be guided by the board and there might be a better understanding of the relationship which ought to exist among farmer, wholesaler, butcher, consumer and, above all, taxpayer. As things are, there is chaos in agriculture and the Minister should ensure that order is restored.
    7.45 p.m.
    Mr. Denys Bullard: When the hon. Member for Sheffield, Brightside (Mr. Winterbottom) said that he knew something about butchering and went on to mention the "missing millions", as he called them, I thought that we were to have some indication from the butchering side about where some of the millions might have gone. However, he carefully skated round that question and went on to a more general theme.
    My right hon. Friend gave us a clear and honest explanation of this Supplementary Estimate. He explained exactly the circumstances which led up to it and he gave as complete a picture as he could of the probable ways in which the money had gone. I was not quite so satisfied when he later mentioned control of dumping and said that he would write to the countries concerned and ask them not to over-burden our market. My reaction was that something firmer and stronger was required.
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    However, I was pleased with his suggestion of even another committee of inquiry to get the up-to-date facts about the marketing of meat.
    I could not understand the contention of the hon. Member for Workington (Mr. Peart), which he repeated several times, that the deficiency payments system had broken down. I do not believe that it has. It is true that this Supplementary Estimate is in a way a serious criticism of it and an indication that it may need amendment, but the system has not broken down. My reaction to the hon. Member's speech—I say this with great personal admiration of the hon. Member—was that he wanted to see the system break down because he happened not to like it and thought that it conflicted with his Socialist philosophy.
    I have been interested to see hon. Members opposite reviving the idea of the commodity commission and fixed prices throughout the whole scale of the trade. They must know that a system of that kind is unworkable with a commodity like meat. In order to control price margins throughout the wholesale and retail selling of meat there would have to be fixed prices for commodities like meat pies and sausages. Hon. Members opposite must know that as soon as we attempt to control prices of that kind, there must be a Government sausage and a Government meat pie, so that a black market would immediately appear and everybody would go off the standard article and would go for something brighter which some private enterprise person would have the energy and enterprise to develop. I do not accept that that is a workable scheme. I know that the Lucas Commission favoured it, but it is as out of date as the Commission itself now is.
    I want to make a few practical suggestions about this Supplementary Estimate. We must accept that there was bound to be one. We have heard the figure of £78 million thrown about, but we all must have known that some of this was due to come, and there should be no surprise about at least a part of it. After the original Estimate was produced we had the February Price Review which, in return for the increased costs of the industry, awarded a certain sum of money, and that was bound to be reflected in the figures which we now

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    have before us unless there were economies elsewhere. We should not, therefore, express surprise at the whole of the figures, although the total is an alarming one, and we have to examine how it might be reduced.
    The second thing which I think is often erroneously said about this Estimate and about the guaranteed payment generally is that they are payments to farmers. I speak as a farmer, but I think that I am capable of looking at the wider aspects of the agricultural industry and seeing all sides of it. Many of these payments are made as a result of the Review, in return for increased expenses which have already been incurred or to which the industry is committed. When 10s. per live cwt. was put on beef, it was not 10s. for the beef producers or the farmers. It was the way in which the Government decided that they could best pay a certain sum into the industry as a whole, and that includes farmworkers, machinery repairers and manufacturers, and so on. The costs which gave rise to the increased payment from the Exchequer had already been incurred.
    My right hon. Friend referred to some exceptional circumstances that had arisen this year, and the hon. Member for Workington referred to this as a hard-luck story. There have been exceptional circumstances. But things change. The world price of cereals is now up, the price of beef is up, and, as my hon. Friend the Member for South Angus (Sir J. Duncan) said, potatoes show every sign of not requiring any payment this year, so that in the long run the situation we are facing tonight may rapidly pass, and I think that it would be wrong of the Minister and the Government to make radical changes, as this may be a passing situation.
    In looking at the figures and in criticising the method of payment, one ought to be very careful in drawing a distinction between criticising the figures for this year and criticising the guarantees themselves. I have often heard hon Gentlemen opposite criticising the guarantees in terms which lead me to the conclusion that very often—though they may not admit this—they are hitting at the guarantees themselves rather than at the detailed method of their administra-
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    tion. We have to remember that any guarantee which is worthy of the name of guarantee costs money to somebody. There can be a tariff, or quotas, or whatever system one likes, but, if the intention is to give any kind of stability to a farming industry, the system adopted costs a certain amount of money to somebody.
    I think that after the war the country rightly decided that the system of guarantees was the right one, not only from a security point of view, but from the point of view of the welfare of the community as a whole, and in particular from the point of view of our balance of payments, and I believe that that argument is as valid today as it ever was. Therefore, I believe that one must be sure that one has a proper system of guarantees, and I think that the system is bound to cost money.
    Mr. Peart: I hope that the hon. Gentleman will not give the impression, as he tried to, that we were against a system of guarantees. We are proud that our Government brought in the first major piece of legislation which gave farmers an assured market and guaranteed prices.
    Mr. Bullard: If I gave that impression, I certainly did not intend to. I am suggesting that the criticisms which are often made against this Estimate, though they are directed against the details, really ignore the fact that any guarantee system, even that devised by hon. Gentlemen opposite, would cost a certain sum of money. I hazard a guess that the method of fixed prices advocated by the Lucas Committee would cost far more in excess than this or any other estimate that we have had.
    I was going to say a word about the good recommendations which the deficiency payment has had from many sources, but as time is short I will not go into that. Suffice it to say that in the White Paper produced in December, 1960, this system was examined very carefully with the farmers' unions, and if anyone cares to read the White Paper he will see some glowing tributes paid to the advantages which the deficiency payment system has to our economy, and in the speech which my right hon. Friend the Lord Privy Seal made on the Common Market—the much publicised

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    and much criticised speech of 10th October—he pointed out to the statesmen of the Common Market countries how greatly to our advantage are many aspects of the deficiency payment system.
    My suggestions, which I will deal with only briefly, as to what can be done to reduce this figure are as follows. First, I think that we must have a speedier method of dealing with dumping. I am sure that our experience with barley this year has taught us a great lesson. The barley figure, which is a minus one in this Estimate, would have been a big plus figure but for the action taken by my right hon. Friend the President of the Board of Trade in getting agreement about barley.
    I do not think that there has been much mention this evening of the effect of the Irish imports of fat cattle on prices, but this was a matter to which the Estimates Committee attached great importance. The flood of Danish bacon into this country after the Danish strike had a disturbing effect on the market at the time, and has certainly added to our troubles now.
    My first point is that we must have better control of dumping. I do not think one can ask for a full-blooded tariff system as well as a guarantee payments system. That is asking too much. One can perhaps have one or the other, but to have the full scale of both would be to demand more than it would be possible to grant.
    My second suggestion is the one mentioned by my right hon. Friend the Member for Guildford (Sir R. Nugent), and that is the method by which the average market price is computed. We do not want the old rolling average which succeeded largely in making sure that the guaranteed price was high when the market price was high, and that the guaranteed price was low when the market price was low, which made it largely unintelligible to the farming community, as to everybody else. The present system does not provide sufficient inducement to producers to hold supplies off the market when it is glutted; nor does it provide a proper inducement to the buyer to take advantage of low prices, because he knows that they may be lower still in the following week, owing to the adjustment in the guarantee
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    payments. We must try to create a better system than that which we now have. I am sure that my right hon. Friend is studying this aspect of the problem.
    My third suggestion has already been referred to by my hon. Friend the Member for Fife, East (Sir J. Gilmour), in his admirable maiden speech, upon which I congratulate him. He referred to the need for not making too drastic changes in the Review. The increase of 10s. a cwt. in the beef price was a very welcome change to beef producers who have never had a very profitable side of the industry, and have always worked on rather narrow margins. Coming as it did, however, it brought in far bigger supplies than were expected, including supplies of immature cattle. The lesson to be learnt for the future is that we must not make too great changes at one time in the Review, because the consequences can be very far reaching.
    Lastly, my hon. Friend the Member for Guildford made a very powerful point when he advocated the creation of organisations to help processing and marketing. The present facilities for storing and processing are not all that they should be, and, excellent though the work of the Fatstock Marketing Corporation is, it has not yet been able to get ahead as it would like with the necessary plant to process meat, especially the cuts that are not popular for immediate fresh consumption. The use of processing and storing has hardly begun to develop in our industry. There is scope for many sorts of organisation to promote this.
    I have mentioned four ways in which our present deficiency payment system could be improved to the advantage of everybody, especially in reducing the size of Estimates and Supplementary Estimates. Big changes may be lying ahead in relation to the guarantee scheme. I hope that if we enter into an arrangement with the Common Market countries we shall not be forced to adopt all their policies. It is to be hoped that some of our policies will be adopted by them. As my right hon. Friend the Lord Privy Seal said:
    "Our purpose in discussions with you"—
    the Common Market countries—
    "will be to gear what has already been achieved for our own farmers into the general aims and framework of the Treaty."

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    I hope that that side of the matter will be carefully watched.
    I hope that we shall do nothing to abandon the principle of the Farm Price Review, which is a vital element in our price structure. We all know that the Supplementary Estimate is too large, but some of the features contained in it are exceptional and will not occur again. I hope that we shall proceed on the basis of amending and improving the system rather than scrapping it and attempting to put something new in its place, for it is a well-tried system which has served the whole community, including the agricultural community, very well.
    8.5 p.m.
    Mr. A. V. Hilton: I am glad to follow the hon. Member for King's Lynn (Mr. Bullard), because the problems arising in his constituency are almost identical to those which arise in mine. I agree with him that there must be some control on imports. Unless we have such a control, the consequences can be disastrous to areas like those of the hon. Member and myself.
    Much has been said about the need to improve slaughterhouses. When my hon. Friend the Member for Workington (Mr. Peart) suggested this he received a rather rough passage from hon. Members opposite. But many slaughterhouses still leave much to be desired. My home town, Swaffham, in Norfolk, has a modern one, which I recommend hon. Members opposite to visit, and take as an example. It is privately owned, and is rendering first-class service. My hon. Friend made a first-class speech, and proved he has a good grasp of the subject.
    Many hon. Members opposite have congratulated the Minister on his speech, but the only thing I can say of it is that it was a long one, and that the right hon. Gentleman did not use notes. He would probably have done a good deal better if he had made his speech much shorter and had used notes. The majority of it amounted to sheer guesswork and conjecture as to where this £78 million had gone. The only positive thing to come out of his long-winded speech was a promise to set up a committee to study the question of meat
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    marketing. That could be very valuable, and I welcome the decision.
    Just before the Christmas Recess, and after the Minister made the announcement of this Supplementary Estimate, many of my hon. Friends and I tabled a Motion criticising him. The criticism was made not of the fact that the £78 million was going to agriculture. My party is in favour of agriculture subsidies.
    Mr. Edward du Cann: The hon. Member says that the whole of his party is in favour of supporting agriculture. When I was younger I fought two difficult seats in the Conservative Party's interest which were held by Labour Members of Parliament, and I can assure the hon. Member that my experience of members of the Labour Party is that many of them are very much against support for agriculture.
    Mr. Hilton: That may have applied when the hon. Member was young. Like me, he is no longer so young. He may take it from me that my hon. Friends are not opposed to agricultural subsidies as long as they go to the sources for which they are intended. It is when they go astray, as a large part of the £78 million has gone astray, that some of my hon. Friends complain. We all ought to complain if this large amount has gone astray.
    We signed this Motion because we contended that the money had gone astray. The Minister admitted this afternoon that it had been a bad bit of underestimation. He was honest enough to admit that. This Supplementary Estimate can be described as the mystery of the £78 million, because nobody will admit having it.
    Mr. Percy Browne: It is a known fact that £31 million of it went to the farmers.
    Mr. Bullard: To the farming industry.
    Mr. Hilton: I am not an authority on farmers, but I can quote one who is—the secretary of the Norfolk branch of the N.F.U., which is not one of the least important branches of that great union. His reaction, about two days after the announcement, was revealed in headlines in the local Press, Which read, "£78 million extra for British agriculture, but the farmers get nothing." I am not saying

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    that he was right. The Minister implied this afternoon, and on other occasions, that £31 million went to the producers. I am saying that this is a guess by the Ministry, and I believe that a figure between the £31 million suggested by the Minister and the nothing suggested by the secretary of the Norfolk N.F.U. is a more accurate figure.
    Mr. Prior: I am sure that on reflection the Norfolk N.F.U. secretary would not wish that story to be put out. I am certain that he will admit straight away that £31 million has gone in increased guarantees to farmers resulting from the last Price Review.
    Mr. Hilton: I have no wish to intervene in a quarrel between members of the N.F.U. I am quoting the headlines in our local paper reporting the Secretary of the Norfolk N.F.U.
    The farmers said that they had not received this money. Certainly the farm workers have not had it. I can vouch for that, because at the identical time that the disappearance of this £78 million was discovered, the representatives of the workers were negotiating an increase in pay for farm workers. After a lot of bartering they came away with a promise of 6s. a week increase in about sixteen weeks' time. They still have not had it, although this was negotiated in November. They will get it later this month.
    Mr. Bullard: I am interested in the hon. Member's analysis and I want to get one point clear. He is not quite fair in saying that the farm workers and others in the industry have had none of this money. In the Review, certain increases in prices, which are reflected in the Estimates, were given to the farming industry on account of increased costs—and among these costs were wages. That has nothing to do with the 6s. a week increase, which I admit is a very small increase, but it has to do with past increases in the year before the last Review. It is not quite fair to say that they have had none of it.
    Mr. Hilton: We are dealing not with two or three years ago but with the year which has just passed. I agree that increased wages are taken into consideration during the Price Review, but the £78 million arose afterwards.
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    Those two sections of the industry, farmers and farm workers, claim that they have had no benefit from this £78 million, and the consumer claims to have had very little, if any benefit, from it. The meat traders and the butchers say that they have been passing this benefit to the housewife but that she has not known of it. The Minister repeated that this afternoon. I can say from experience that housewives are not nearly as dim as the meat traders tried to make out and as the Minister implied. I have spoken to many of them. No doubt they have had better cuts, but they have paid extra for them and there has certainly not been a decrease in the cost of living.
    My complaint is not about giving a subsidy to agriculture. I am in favour of that. My complaint is that the Minister has failed to ensure that the money has gone to the sources for which it was intended—the farmers, the workers and the consumers. This is a very large sum of money. While I have been in the House in the last three years hon. Members opposite have still joked about the groundnut scheme. This is equivalent to three groundnut schemes, but when the Estimate was brought before the House before Christmas, the Conservative Party unanimously supported the Minister when he asked for this £78 million. My complaint is that a large part of this money appears to have gone astray. The Minister obviously does not know where it has gone. He guessed this afternoon, but he does not know. If it has gone astray, an inquiry should be instituted to find out where it has gone. The House and the public are entitled to know.
    I am not alone in that I am desperately anxious that we should have a stable, efficient and prosperous British agriculture both now and in the future, remembering, as I do, British agriculture in the 1920s and the 1930s, when it was sacrificed so blatantly, when hundreds of farmers went bankrupt and when thousands of workers were thrown on the scrap heap and went on relief work. None of us wants to see that occur again. That is the main reason that I am so apprehensive lest the Government take us into the Common Market before we have the assurances which we want for British agriculture.

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    If the Government sell us down the drain and go into the Common Market without getting those assurances, they can expect trouble with a capital "T" from Norfolk. Farmers and farm workers.
    Mr. George Lawson: If the present system brings nothing to the farmers, or very little, what kind of additional assurances is my hon. Friend seeking?
    Mr. Hilton: I am asking that money allocated in subsidies to assist British agriculture should go to the sources for which it is intended.
    Mr. William Hamilton: In bigger wages. At present they are National Assistance scales.
    Mr. Hilton: I hope that it is the Government's intention to implement the pledge given in the Queen's Speech:
    "My Government are resolved to maintain a stable, efficient and prosperous agricultural industry."
    I hope that the Government intend to carry out this pledge, because those of us who have the industry at heart want to see them do so. I wonder if the Minister really wants this for everybody engaged in agriculture, farmers and workers alike.
    I think we can sum up the situation fairly by saying that there are three categories involved. There are the large farmers who are reasonably all right, there are the small farmers who can still do with some extra help, and there are the farm workers who are definitely not getting their share of the cake. If the Government are to keep the pledge they made in the Queen's Speech, more must be done for the small farmer and farm worker. They are both entitled to and must share in the prosperity which is referred to in the Queen's Speech. The farm workers are often referred to as partners in agriculture—and not just sleeping partners, but very active. Look at the record of increased production. There has been a 70 per cent. increase since the war.
    I suggest that in future Estimates the Minister should implement this pledge and provide money for agriculture to bring the wages of the farm workers up to those of industrial workers. Their status is already up to the level of
    1008
    industrial workers, but their wages are not. I know that wages are fixed by the Agricultural Wages Board. I am not suggesting this should be changed, and I do not want to get out of order by going into that, but it is an important matter. Farm workers are partners in this industry. They play an important part in it, and I claim that it is the responsibility of the Government to ensure that sufficient money is in that industry in order that they may be paid a decent wage.
    At the Conservative Party conference a few months ago the Prime Minister said that the aim of the Tory Party and of himself was that wages in this country should be up to £20 a week in ten years' time. Fair enough. Farm workers at present are receiving £8 9s., with a promise of 6s. extra at the end of this month. That is a long way off £20 a week. We want not just dreams for the future but a bit of activity now. I repeat, the farm worker is still not getting the justice to which he is entitled. The position must be rectified, and it is the Government's responsibility to do so.
    8.23 p.m.
    Mr. Percy Browne: I was surprised that such a knowledgeable person in agriculture as the hon. Member for Norfolk, South-West (Mr. Hilton) should come here not knowing his facts and not knowing the exact sum out of this extra Supplementary Estimate which has, in fact, gone to the farming industry. I was also surprised to hear him say that his party was entirely in favour of subsidies for farmers. [Interruption.] It was at a moment when the hon. Member for Fife, West (Mr. W. Hamilton) was not in the Chamber.
    Mr. W. Hamilton: The hon. Gentleman has never yet heard me say that I was against farming subsidies. I am against the principle of indiscriminate distribution of them. The Government continually get on to their feet, both collectively and individually, and say that housing subsidies must be given to the people according to need. That is exactly what I want for farming subsidies.
    The Temporary Chairman (Mr. Malcolm MacPherson): I think I should say that I am against the principle of

    1009
    extending this debate too widely, to the subject of general agricultural policy.
    Mr. Browne: I apologise, Mr. MacPherson. It was an opportunity for which I had been waiting for a long time.
    It is a little awkward at this stage in any debate to say something new. My hon. Friend the Member for King's Lynn (Mr. Bullard) and I did not sit next to one another when we decided what we were going to say in this debate, but when I looked at my notes just now I thought we might well have been doing so.
    The problem that we have got to face is how to maintain the present system. I cannot agree with the hon. Member for Workington (Mr. Peart) that the system has broken down. Undoubtedly it is under pressure. On the one hand, where the price in the market has dropped it has not dropped fully to the consumer; and secondly, the cumbersome anti-dumping legislation has not had the effect it should have had of protecting the producer and the taxpayer. Therefore, the question is what should the Minister and the National Farmers' Union do to make this system work?
    Before suggesting a few solutions, so that we do not have a Supplementary Estimate of this size again, I must make one thing absolutely clear. I believe that as a basis there must be some form of effective control of the food market in this country if our agricultural policy is to succeed. There are, therefore, two essentials—first, that we must have some control over imports—I should like to describe the method in a moment—and secondly, that we must have better marketing of meat in this country.
    I should like to see the Government set up, in co-operation with the N.F.U., a committee composed of members of the N.F.U., of the Board of Trade and the Ministry of Agriculture, Fisheries and Food, whose job would be to coordinate imports and home production, to study carefully trends of home production, to be in a position to stop the import of food with a more up-to-date anti-dumping law, and be able in particular to prevent the import of food from non-traditional suppliers to this country if it became apparent that it
    1010
    was going to upset our home market. As an example of the trend over the past few years, during the last seven years this country has absorbed in its markets 1,000 million gallons of milk equivalent. Of this amount, 67 per cent. has been from imports, and of that 67 per cent. only 38·5 per cent. came from Commonwealth countries.
    I wish to echo what my hon. Friend the Member for South Angus (Sir J. Duncan) said, that to enable the committee which I have suggested to be effective there must be a revision of our anti-dumping legislation. The Estimates Committee in Chapter 16 of its Report mentions this. The essential is swiftness of action. It is not good enough to wait for the applications to be submitted with all the supporting evidence, if in the meanwhile material damage is being done in particular to the taxpayer who has no one to bat on his behalf except those of us in the House.
    With quick and effective anti-dumping legislation, and with this committee of experts who would have power to stop supplies from non-traditional suppliers, I believe that we should be some way towards preventing a Supplementary Estimate of this order in the future. If we do have effective anti-dumping legislation and control of imports, the question arises whether this will be detrimental to the consumer. I believe that the answer is "No", for not only is chaos on the home market to no one's advantage, not only are wildly fluctuating prices not to the consumer's advantage, but a depressed home agriculture is undoubtedly a disadvantage to the country as a whole.
    Complementary to the effective control of imports, there must be better marketing of meat in this country. The alternatives are either a meat marketing board or large commercial organisations set up to provide the retailer with the type of meat he wants at the right price. The object of the exercise, in any case, is always to get the product as cheaply as possible from the producer to the consumer.
    It has been obvious from the speeches today that many hon. Members have been trying to discover what has happened to a large amount of the Supplementary Estimate which has, undoubtedly, been lost along the way.

    1011
    The N.F.U. is urgently considering the problem of setting up a meat marketing board with statutory powers. Any such marketing board must have teeth if it is to work efficiently, and the Devon branch of the N.F.U. has been pressing for the setting up of a board with such powers. While it is considered to be a doubtful political starter, the Milk Marketing Board—a statutory body—is already in being and has not turned out to be a usurper of its powers. It sells its products to the distributor and the manufacturer and provides them with what they want when they want it.
    There is no doubt that a board which could deal with a large variety of meat products and market them efficiently would have an extremely difficult job; but, whether or not meat is sold through a board or through the commercial channels, there are three essentials. Firstly, the organisation must be big enough to provide supermarkets with a graded quality; secondly, if there is a situation where it should be necessary, the organisation must be able to freeze or chill meat and store it when it is not required; and, thirdly, it must be able to process parts of the animal which are not easily saleable.
    There are classic examples of commercial enterprises which are doing this; tailoring a pig from start to finish from the moment it enters to the moment it leaves the factory. While the small butcher often does a fine job, the farming industry has a large part to play in the making of marketing arrangements and there must be greater cooperation. Farmers are fully aware of this, and they are setting out to improve their marketing arrangements and the quality of their produce. They are making energetic efforts to this end. Eventually the only sensible answer will be a dead-weight and grading system, and I hope that there will be greater emphasis on this in the future.
    Meanwhile, I hope that the N.F.U. will draw up a blueprint for a fully-fledged Meat Marketing Board so that if its commercial enterprise does not work—and I hope that it will—it will be able to come to Parliament and ask for these statutory powers.
    There are other ways in which we may be able to prevent this large Supple-
    1012
    mentary Estimate recurring. We must both try to avoid large Exchequer contributions and endeavour to narrow the gap between producer and consumer prices. To this end, it must be right that the December returns of stock on farms should be used for the February Price Review and not the September returns. Anyone who looked at the December returns in 1960 saw that there was bound to be nearly two years' killing of fat-stock instead of an even spread over 1960 and 1961. Many animals did not come forward in the autumn of 1960 and that increased the home killing in 1961.
    This point is discussed by the Estimates Committee which also suggested the possibility of the provisional Estimates coming out after the Price Review. The Committee states that this is impracticable, but it is obvious that any plus award will almost certainly be reflected in a Supplmentary Estimate with a resulting uninformed but damaging criticism of the industry. The Minister could help by altering the guarantee schedules at normal peak killing periods to encourage farmers to hold stock off the market.
    Fat lambs are an example. It is a fair assumption that the market can absorb about 250,000 lambs a week, yet the schedule is so worked out that during the glut period of September and October this is what happened; in the week ending 8th October, 1961, 407,300 fat lambs were on the market at an average price of 37¾d. per lb. with a subsidy element of 1s. 7½d. yet in March, 1961, there were 117,700 lambs brought forward at 44¼d. per lb.—only 6d. up—yet the subsidy element was 8d.—a drop of nearly 1s.
    I am, by these arguments, trying to reinforce what was said by my hon. Friend the Member for King's Lynn who suggested that the schedule in the Price Review should be altered in the same way as that for milk, to encourage farmers to keep lambs and handfeed them until later in the year.
    On the question of narrowing the gap, I suggest that there is every good reason for setting up a meat working party, the object of which would be to give up-to-date information to consumers of the realisation price in the market at any given time, and the sort of price which housewives would be expected to pay in

    1013
    the shops for their meat. The position at the moment is that the average consumer, quite rightly and understandably, has no way of knowing the market price, but, suddenly, the public and the country are presented with a bill for £78 million. Everybody says that it has gone to the butcher, the farmer or somebody else, and we all want to know where it has gone. We want to produce consumer resistance, and we can do that if the housewife is given a realistic guide to the sort of prices she should pay.
    The Committee will note, and I hope that the Minister in particular will, that the suggestions I have made are aimed at protecting the taxpayer, while allowing the farmer to have the reasonable standard of livelihood which he was guaranteed under the 1947 and 1957 Acts, and also making sure that any drop in market prices is reflected to the consumer. The Minister will also notice that none of the suggestions, which I think are practical suggestions, necessitates a cut-back at the next Price Review. I very much hope that my right hon. Friend will not use anything said in this debate, and the Supplementary Estimate which we are discussing, as an excuse for taking the maximum cut, or, indeed. any cut, in the form of the subsidy bill.
    There is a lot more that I wanted to say, but other hon. Members on both sides of the Committee wish to speak. In conclusion, I agree to a great extent with the hon. Member for Norfolk, South-West, who said that we should give more help to small farmers, because I believe that we have many social problems to face in our village life and in the life of the countryside generally. I would say to the hon. Member for Fife, West (Mr. W. Hamilton) that there are practical suggestions which he and I could discuss on how the subsidy could be better weighted towards helping a person on limited acreage, not necessarily those on large farms.
    On that, I agree with him entirely. The report by Professor Zuckerman, "Scale of Farm Enterprises", shows that the income of the small farmer has certainly not gone up in the last few years. That cannot be for the good of an industry which has been contributing a very great deal to this country. To give one figure alone, increased efficiency
    1014
    has meant an annual saving of £300 million in our balance of payments. I should have thought that it was the job, not only of the Minister but of the Committee generally, to ensure that farmers and, therefore, farm workers, get a fair crack of the whip and a decent standard of living. I sincerely hope that this Supplementary Estimate will not be used to take a cut from them at the next Price Review.
    8.38 p.m.
    Mr. Harold Davies: The Committee listened with interest to most of what was said by the hon. Member for Torrington (Mr. P. Browne). He accused my hon. Friend the Member for Norfolk, South-West (Mr. Hilton) of not knowing his facts, when my hon. Friend, like most of us, did not want to reiterate what everybody else had said, or to take up time in saying things that had already been said.
    Nevertheless, we are grateful because one or two bright new ideas have been put before the Committee, one of which, perhaps without pomposity, I can say I had thought of myself. It concerns this business of getting the housewife to build up consumer resistance, and to learn exactly what the price should be and value the right pieces of meat to buy in the butchers' shops.
    Those of us who were brought up in country households were accustomed to seeing our grandmothers or mothers with old-fashioned cookery books. Many people make fun of them, but they did know the best pieces and the best foodstuffs to buy, as well as being able to judge quality. Sometimes, they knew that even the cheapest meat, if properly cooked, could make the most delicious dishes. I think that here is a way in which the housewife, as a consumer, can help the country to keep prices stable.
    I do not wish to repeat what has already been said about the Estimate, but I think that there are a few other things which should be said. I do not wish to appear too politically-minded, but I must point out that the problem of agriculture is indicative of the whole of our economy. We have a social system where value is placed on money. We were told that the party opposite would protect the £. Whether it be in respect

    1015
    of mining, agriculture or any other enterprise, if we are not sure about the stability of our money and Government policy in that regard, there will be a shadow over everything, including agriculture.
    I do not wish to go into the question of the problems relating to the Common Market. We are not discussing the Common Market, but we should be hiding our heads in the sand if we pretended that British agriculture was not concerned about the Common Market, or if we did not consider this Supplementary Estimate and the Common Market in relation to the meeting to be held at Geneva tomorow between those members of the G.A.T.T. and the French Quai d'Orsay which is interested in this matter, together with Canada, Australia, New Zealand, Britain and the Six. There is a meeting tomorrow at Geneva to discuss the French plan——
    The Temporary Chairman: Order. I have difficulty in relating what the hon. Member is saying to this Supplementary Estimate.
    Mr. Davies: I will come right into order in one moment, Mr. MacPherson, because this business of imports and market prices—I had better put myself in order quickly—is something with which we are concerned. The conference tomorrow will deal with that problem. The experts from the Treasury are not sure how to regard the plan. They will be concerned about wheat and about plans for wheat and other commodities in the Commonwealth. I think that I am in order now, Mr. MacPherson.
    The Temporary Chairman: I understood that the hon. Member was trying to get back in order. Perhaps he will try a little harder.
    Mr. Davies: I wish to point out that not only is there the question of the Common Market but also these international discussions about commodity any food prices, about which all hon. Members are concerned, as well as every one interested in the industry.
    We must be fair to the Minister and to the Government. It is difficult to obtain accurate estimates when dealing with imponderables such as the weather. We cannot judge production or what the
    1016
    climate may do. I do not wish to attack the Government unfairly, but I would remind them, very gently, that when the party of which I am a member was in office there was a glorious afternoon when I sat behind the Minister, and somebody thought that I was a Parliamentary Private Secretary. At that time the then Labour Government were being attacked over the groundnut scheme and the uproar over that plan, which was designed to increase food production, was wicked. But today the Opposition have dealt with this matter intelligently because hon. Members on this side of the Committee are concerned about the future of agriculture. I am glad that there has been such an atmosphere in this debate.
    I do not think it right to make a scapegoat of the butcher. It is no good looking for scapegoats in this matter. I agree with my hon. Friend the Member for Workington (Mr. Peart). It is the system which is wrong. When a system is wrong, human nature being what it is, people take advantage of the weaknesses of that system. That can be understood because ordinary people are not saints.
    If it is thought that we can build up an efficient agriculture and an efficient marketing system, I put in one word of warning. There are 155,000 farms in Britain which are worked part-time. They produce a vast amount of food. In my area there are 1,400 farms of 20 acres and less but those working on them find in that their way of life. There is more in life than efficiency. Most of the efficient men I have known have been some of the most miserable devils one could meet. They have a card index mind and can run through a line of figures.
    Mr. Emrys Hughes: And duodenal ulcers.
    Mr. Davies: Yes—and duodenal ulcers, and they never smile. The late Nye Bevan once said that when people start dealing with figures and papers they should realise that they are dealing with human beings. There is much more in life than efficiency; there is human happiness and a way of living.
    Therefore, whatever we take from this Estimate, do not let us make a scapegoat of agriculture and clamour for a system

    1017
    of efficiency by which we say we shall get more and more food production from fewer and fewer farms. If people want this way of life in which they can get out into the fresh air and live a good, clean life, no Government or party of whatever political colour has the right to move them off the land en masse or to make an economic situation in which they have to leave the land. Any Government or party which thinks or advocates that will meet with opposition from the small farming fraternity and also the big farming fraternity and the rural areas.
    As nearly everything that can be said has been said about marketing reform, it would not be wise of me to try to cross the t's and dot the i's, but I think the Committee is knowledgeable enough to accept the need for some kind of marketing reform. Although it is only a palliative and in 1959 the National Farmers' Union suggested an interdepartmental working party to look into this question, we welcome the statement ably made by the Minister when he promised that some kind of committee would be set up to look into it.
    What else can one say that is new? I point out something which I think the Committee has forgotten. In the rural, farming areas people always say, "We don't want to be governed from Whitehall", but it is time they took a greater share in governing themselves in the local authorities. Often farmers on parish councils, rural district councils and county councils are among the most reactionary in opposition to improvement of country roads and approaches to farms.
    I must be careful about this. The Jacks Committee on Rural Transport reported that a third of a million miles of country bus routes were cut out last year. If we want efficient and constructive farming it is absolutely necessary that road and rail services should be efficient. We cannot have a marketing system if road and rail services which should serve it are closed down. There is a fundamental need to look into that question.
    If we want a marketing system, it may mean refrigeration on our farms. Therefore, we want electricity and water supplies as never before. In the modern marketing era, with a refrigeration
    1018
    system on every farm, both meat and vegetables could be kept for marketing.
    On both sides of the House of Commons there is an intelligent appreciation of the need for British agriculture and the fact that it saves the country £300 million a year in our balance of payments. There is an intelligent appreciation of the need for the countryman and the farmer in the British way of life. Tonight, therefore, the Committee should not, because of the Supplementary Estimate, let down the small man, who has been the backbone of British democracy throughout history.
    8.51 p.m.
    Mr. J. M. L. Prior: There has been general agreement in the course of the debate that we must not do anything to let down the home producer. I am glad that the hon. Member for Leek (Mr. Harold Davies) addressed himself to that fact. I hope he will forgive me if I do not follow his remarks, as time is short. He spoke, however, about imports, on which I want to make my first point, which relates also to the contribution made by British agriculture since the war to the balance of payments.
    This year, in the context of meat, our total imports have been down, but we have imported meat from some of the most extraordinary places. The imports from Yugoslavia, for example, are up by £5 million. I regard this as completely necessary. We have an imbalance of trade with Yugoslavia of an exactly similar amount.
    One of the most striking comments on the British economy since the war has been that when we have got into balance of payment troubles we have found it far easier to cut down our imports than to expand our exports. I should have thought that agriculture could make an even bigger contribution in producing more food at home, which would have the effect of decreasing the amount of imports, especially from countries like Yugoslavia, with which we have a trade imbalance.
    I hope that the Government will take much stronger steps that they have done so far to stop not only the indiscriminate dumping of imports, but the indiscriminate purchasing of imports which do terrific harm to our agriculture and are largely responsible for the high deficiency payments

    1019
    that we are discussing today and, no doubt, will discuss after the Price Review later this month.
    I have tried to look at the problem of meat marketing without fixed political views. I have re-read the Report of the Lucas Committee. I have considered having the Government as a residual buyer which could buy up the surplus which is not easily disposed of through the open market. I have looked at both those points, but I have not come to the same conclusion as certain hon. Members opposite. Having the Government as a residual buyer is an attractive proposition in many respects. It would mean that the situation last summer, when too many cattle came on to the market together, could be overcome. The Government would step in at a fixed price and take off the surplus from the market. They would then have to slaughter the animals and store and freeze them.
    The result would be that the free enterprise system in which the meat market works would not buy those animals until it suited it to do so. It would buy them at extremely low prices and the result would be that the subsidy would cost the Government more money than under the present system.
    Before the hon. Gentleman the Member for Enfield, East (Mr. Mackie) interrupts me, because I know the point he is going to make, I would say that I remember well the Ministry of Food being responsible for barley marketing, and I think it was in the last year before decontrol of barley that what, in modern terms, was a very small quantity of barley, under 1 million tons, cost £40 million to the Ministry of Food. I can well visualise the same sort of process happening with meat.
    Mr. Mackie: Is not a free enterprise system a system where the Government do not interfere? Immediately they do, does it not cease to be a free enterprise system?
    Mr. Prior: Yes, but I was talking then about barley, not cattle.
    It would be a very attractive proposition to save the Government some deficiency payments. I think, indeed,
    1020
    the hon. Gentleman will agree with me about this, that unless we nationalise the whole thing it could not possibly be made to work.
    I think there are some things the Government could do to save themselves some money and to improve marketing pretty quickly. I myself believe that we have got to get away much more from the livestock auction system for marketing, and I believe that it could be done fairly easily and without compulsion of any sort whatsoever. At the moment the average farmer likes to send his cattle through the auction. He can there see them being graded, he can breath down the back of the grader while he is doing it, and he can ask him some awkward questions afterwards if the cattle have not been graded as he wishes; and he, particularly the good farmer who sends his cattle to the auction market, generally gets a better grade, and therefore a better price, than the farmer gets who goes through the Fatstock Marketing Corporation or whose cattle are killed and graded on a deadweight basis.
    I myself begin to doubt the advantages of grading at all. I would think that the time is coming when we should consider grading, as it were, entirely on price. It is not always nowadays, anyhow, the cattle which are graded according to the grader which get the best result. I cannot see why we should not consider a system of grading entirely by price. We should still have our average price as it works at the moment, but then for cattle which obtain less than the average price we could start to deduct subsidy. I think, for example, that if the average price were £7 cwt. and the guaranteed were £8 cwt. there would be a £1 cwt. deficiency payment. If the price of a bullock in the market were only £6, instead of getting £1, as one would now, I would have thought it possible to reduce it to 10s. For cattle making a low price in the market there would be a very low subsidy.
    I think that that would encourage farmers to contract forward and to send their cattle to modern slaughterhouses and abattoirs. It would detract from the present advantages of the auction system and would, I think, give to the industry generally a chance of developing slaughterhouses, which are very much

    1021
    in need of altering from the present setup, and would give a chance for that to be done without altering the economic background of the industry. I hope that my right hon. Friend will consider whether that is possible.
    I do hope that this committee which he is setting up will be successful. I think we have all under-estimated today the very great difficulties in marketing meat. It is no good talking about meat marketing in the same way as one talks of the Milk Marketing Board, because there is all the difference in the world. A group of us on this side of the Committee spent the whole of last winter examining what changes might be made in the set-up for meat marketing. I must be quite frank and say that at the end of those discussions we were very little further forward than we were at the beginning. I rather fear that this committee which is to be set up may come to the same conclusion, because this is an extremely complex marketing system, and I suggest that all we can do is to carry on as we are at present, trying to bring in small changes wherever we can to the existing system, but sticking by that system, and thus, in the long run, giving the consumer meat at the cheapest cost and the farmer the best guaranteed price for his products.
    9.0 p.m.
    Mr. James H. Hoy: We have had a very interesting debate today. The speeches covered a very wide range and some of them contained valuable suggestions for not only the Government but the whole Committee to consider.
    I should like first to single out the maiden speech of the hon. Member for Fife, East (Sir J. Gilmour). It is customary to pay tribute in the House of Commons to maiden speeches. I assure the hon. Member that on this occasion I am not doing so in a customary fashion. I am paying a warm tribute to a speech that was not only well worth while but which contained many valuable suggestions which the Government might well ponder. It certainly contained suggestions which have not met with the Government's approval so far. Indeed, when I heard the criticism and the rational approach made by my hon. Friend the Member for Workington (Mr.
    1022
    Peart) and then listened to the rational approach being made by the hon. Member in his maiden speech, I felt that he had far outdone my hon. Friend. It was a first-class speech and we shall look forward to the hon. Member taking part in our debates on many occasions in the future.
    I turn to the speech made by my hon. Friend the Member for Workington in opening the debate. I thought that it was a first-class speech, but it was interrupted by hon. Members opposite in what appeared to be a concerted fashion and, even worse, having done that, they left the Chamber and have not appeared since. The least they could have done was to extend some courtesy to the Committee. Having made interruptions over a considerable period, they should in fairness have paid some attention to the debate that followed and not just confine their attentions to the opening speech.
    During the speech made by the hon. Member for Aylesbury (Sir S. Summers) and the interruption by the hon. Member for Farnham (Sir G. Nicholson) in the speech of my learned Friend the Member for Workington, apparently, they were seeking to detract from the Report of the Estimates Committee and to criticise my hon. Friend the Member for Workington on what he had said. Let me remind the Committee once more that my hon. Friend was only quoting from paragraph 20 of the Estimates Committee's Report. That Committee stated:
    "Your Committee are concerned that this process has, in the opinion of the Department, operated so ineffectively."
    I should have thought that if anyone went through the Report fairly, he would have come to the same conclusion. Running through the whole of the debate, we have had speeches from both sides of the Committee making suggestions about how the position ought to be met. There was some little criticism, perhaps, of the position of the Labour Party vis-à-vis agriculture. I think that we should put it on record once more that if agriculture is thriving today, and it is certainly much better than it has ever been before, the foundation for its success was laid by a Labour Government in 1947. When hon. Members opposite are inclined to be a little supercilious

    1023
    about those taking part in the debate, let me remind them that it was a British miner, who was then Minister of Agriculture, who made this a possibility.
    If we go back to 1953 we go back to what was the start of this debate when the Government introduced their White Paper on the Decontrol of Food and Marketing of Agricultural Produce. On that occasion my hon. and right hon. Friends expressed their misgivings, to put it no higher, about the Government's proposal to decontrol prices without some adequate control over importations. My hon. Friend the Member for Hamilton (Mr. T. Fraser), speaking in Committee on that occasion, quoted from an article which had appeared in the Observer the previous day. Faced with the bill which we are asking the taxpayers to pay this evening, it is interesting to recall that the Observer said on that occasion that the Government by their action
    "…revives the absurd guessing game of livestock auctions and underwrites them with an unlimited Treasury guarantee, thus throwing the meat market open to the speculators, dealers and price rings which battened on the industry before the war."
    That was comment in the Observer prior to the 1953 debate, and when hon. and right hon. Members opposite accuse some of my hon. Friends of using extravagant language I wish that they would read not only the Press comments of that day but some of the speeches delivered in the country by hon. Members opposite.
    I quote one example of what was thought of this at that time by the hon. Member who then represented East Aberdeenshire but who now adorns another place. He said that he was not prepared to see the livestock producers of Scotland thrown to the wolves of Smithfield in the name of a free market. He went on to say, and this is important in view of this debate:
    "We have to accept the fact that this is a temporary scheme, designed primarily to give us time, but not at the expense of the farmers."—[OFFICIAL REPORT, 9th November, 1953 Vol. 520, c. 661.]
    I am certain that we can all agree about that. Whatever has happened, it has not been done at the expense of the farmers, but what has been worrying some of my hon. Friends is that it has been done at the expense of the consumer and the
    1024
    taxpayer, though it may be that the farmers are one part of that group.
    As a result, we are faced tonight with having to find an extra £78 million to meet this deficit. That is why we want to know what was meant by "temporary". How long is "temporary"? If this proposal was introduced nine years ago and we have had the result with which we are faced tonight surely the temporary period is passed. All we ask is that the Government should take some action to deal with the matter. We have made it perfectly plain that we think it right that agriculture should be supported, but surely we should have some control over where the money is going. This is a question with which I am sure the Public Accounts Committee will want to deal. In addition to what the Report of the Estimates Committee said and what has been said in this Committee today, many questions still remain unanswered.
    I raise this point because in the many years during which I have served on the Public Accounts Committee we have always been able to say where the money has gone. It is true that sometimes we have not all agreed where it has gone, but at least we have known which direction it has taken. On occasion, the Committee has had to question agriculture estimates in this light.
    I was interested in a point raised by the hon. Member for Edinburgh, West (Mr. Stodart) in an interjection. He accused my right hon. Friend the Member for Clackmannan and East Stirlingshire (Mr. Woodburn) of saying that many farmers have had their fertilisers paid for them, getting them free. My right hon. Friend carefully explained that it was that part for which they did not pay that they got free. This is not the first occasion on which we have had a case of this kind before the Public Accounts Committee. Indeed, two or three years ago, as the Secretary of State may remember, there was the case of a very canny old Scots farmer who, in the change-over of prices for fertiliser, managed to get the Secretary of State to pay 110 per cent. of his cost. It caused the Committee some concern that this farmer got 10 per cent. on top of what he had paid.
    Thus, this situation is not new, and I commend to the hon. Member for Edinburgh, West that what we were

    1025
    doing in the Public Accountants Committee then was seeking to safeguard the taxpayer's money. After all, it may seem strange, but this is the taxpayer's money we are paying out. That is important, and that is why we are dealing with this subject tonight. Every penny must come from the taxpayer.
    Last year we also had before the Committee a number of cases where, although ploughing-up grants were paid, no ploughing up took place. We were able to get some of the money back. Indeed, I always thought that it was a little reprehensible that the only man who was ever prosecuted and imprisoned was a civil servant, while the people who got the money were allowed to go scot-free on repayment. But, in any case, we did discover where the money had gone. The difference between this case and those cases is that we have still to find out where the £78 million has gone.
    Mr. W. Hamilton: Groundnuts?
    Mr. Hoy: I may come later to what my hon. Friend says.
    We have had meetings upstairs with representatives of the butchers, consumers and farmers. They are all agreed that they did not get anything out of this. There is no quarrel between them on that. Apparently they all got nothing. The farmer would, I think, admit what was said by one hon. Member opposite—that he got no more than that to which he was entitled, which was the difference between what the market produced and the guaranteed price. Thus, for his labour the farmer, at the end of the day, did not get a penny more than the guaranteed price for his animal.
    The butcher insists that he got no great amount more profit. Today the right hon. Gentleman produced figures which showed us that the price of meat had decreased between 4 per cent. and 20 per cent. and over, but he was careful not to say that the 4 per cent, applied to the best quality meat and that the more substantial reductions applied to scrag ends. In other words, he said that we were quite free to choose: if we could not have bread, we could always take cake. That does not seem a very reasonable argument when one remembers the considerable numbers of people—old-age pensioners and others—whose incomes are so low that they are limited
    1026
    in choice in the butchers shops; indeed, in many cases, they have no choice at all.
    What we have to consider this evening is where this sum of £78 million has gone. Everybody has admitted that it is a very large sum of money. Scotland's share of it is approximately £13 million. It is a matter of regret that the Secretary of State for Scotland has never seen fit to make any statement about that substantial sum. When the right hon. Gentleman the Minister of Agriculture replied to a Private Notice Question about the Supplementary Estimate, I endeavoured to discover why the Secretary of State for Scotland was not present. I do not know why the right hon. Gentleman smiles. He has as much responsibility for this Supplementary Estimate as his right hon. Friend.
    This is a substantial sum when it is remembered that there are about 67,000 full-time farm workers in Scotland, so that this sum which is going to the Scottish farmers would pay every Scottish farm worker an extra £1 a week for the next four years. It is not an insignificant sum. Unfortunately. if we suggested to the Chancellor of the Exchequer that this sum should be found for an increase in farm workers' wages and not for the bolstering up of prices, he would say that that was inflation and that the Government could not tolerate inflation. But this is inflation because the money has to be found by the taxpayer.
    What is made perfectly clear by the Report of the Estimates Committee is that it may be a matter for the Public Accounts Committee. The Estimates Committee has confirmed what my hon. Friend the Member for Workington said this afternoon—that the system has never worked—and one has only to read the Report of the Committee to have that proved. Paragraph 3 of the introduction to the Report says:
    "…in 1956–57 an excess of £18 million on eggs was balanced by a saving of £17 million on milk; in 1960–61 an excess of £10 million on barley was balanced by a saving of £10 million on sheep. Errors of over 100 per cent. on individual subheads occur frequently; examples can be taken at random for most commodities in every year since 1955…A large net sum is required by the present Supplementary Estimate because…almost ever subhead has shown a deficit."
    That proves two things—first, that the present system is far from satisfactory,

    1027
    and secondly, that Parliamentary control over this type of expenditure will have to be carefully studied.
    One of the interesting things about the Report of the Estimates Committee and why I have suggested that the matter should go to the Public Accounts Committee is that we have a system known as virement which is a system wherein Departments can transfer surpluses under one head to meet deficits under another. This is a system upon which the Treasury and the Public Accounts Committee have always frowned. It has been said that if there are deficits there ought to be some appearance before Parliament to ask for the differences, but in this scheme there have been tremendous deficits nearly every year and only by a saving on some other subhead has it been possible to balance the account. I am sure that if in any year an hon. Gentleman opposite who was running a business found that these substantial losses were being made in one section of his business he would not call it a day merely by transferring that loss to another section of his business which had been more profitable. He would want to discover the reason for the loss.
    The Committee this afternoon, and the Estimates Committee, have not been able to discover where this money has gone. We are, therefore suggesting that it might be worth while having this Supplementary Estimate examined by the Public Accounts Committee to discover where the money has gone. It could summon witnesses from every section of the industry—farmers, producers, and butchers—and examine them. It has power to do this, and perhaps the Public Accounts Committee will consider this suggestion and put it into practice.
    The present system is unsatisfactory. I think that a fair comment about it was made by a distinguished Scottish farmer, who I am sure would meet with the approval of hon. Gentlemen opposite. He is Mr. J. G. Jenkins, the immediate past-President of the Scottish National Farmers' Union, who farms near Cambridge. Addressing the Oxford Farming Conference, he said:
    "We need to ensure that we get a fair and reasonable price for our product at the farm gate. This we are palpably not getting and
    1028
    anyone who says it doesn't matter because we have got deficiency payments to make up the difference, is either a fool or a rogue."
    That is pretty strong language, and not from this side of the Committee. He went on to say:
    "What I am convinced of is that we do not want a free market structure which has had appalling results for primary producers. Freedom is a wonderful word for propaganda purposes."
    That seems to sum it up, and we have to consider what to do if this system has failed. It obviously has, otherwise we should not be faced with this Supplementary Estimate. Further, we should not have had the last-minute suggestion of the Minister of Agriculture, Fisheries and Food, backed by the Secretary of State for Scotland, to set up a committee to look into this problem and the whole question of marketing. Had this not been a last-minute thought, the right hon. Gentleman would have been better prepared today than he was, and he might even have been able to tell us the name of the chairman, but of course that is asking too much.
    As long ago as 1953 my hon. Friend the Member for Hamilton told the Government that if we had a system of deficiency payments in a free market sooner or later we should run into trouble. The Estimate proves that we have been running into trouble all along the line, and that the day has been saved only by savings in one Department offsetting losses in another.
    It is not for us on this side of the Committee to formulate plans for dealing with this problem. That is not the point at issue tonight. What we are considering is what the Government intend to do in this matter, and if any hon. Gentleman is frightened of having a real marketing scheme let him consider the proposals made by the National Farmers' Union and by the National Farmers' Union of Scotland. They are not frightened of an examination of this subject. In the concluding paragraph of its statement the National Farmers' Union says that:
    "In putting the present emphasis on producer commercial development, the Union intends also to embark upon a fresh examination of the possibilities of a statutory meat marketing scheme."
    The N.F.U. is facing the problem. According to a Press release, the report of the National Farmers' Union of

    1029
    Scotland also advocates a meat marketing organisation and, perhaps, a marketing scheme. That is all that we are asking for—a scheme which would guarantee a fair price to the farmer, because he has to produce the goods and he is entitled to make a good living out of it.
    At the same time, two other things must be done. First, the position of the workers in the industry must be recognised; just as the farmer has a good income so must the farm worker have a good wage. Secondly, we must remember our responsibilities to the consumers. We must look after the interests of the industry—the farmer and the farm worker—but to the same extent we must look after the consumers, who at the end of the day must pay. The consumers object to this Estimate, because they have already had to pay high prices; now they are expected to bear additional taxation to meet the losses.
    It is because this situation has arisen as a direct result of Government action that we must register our objection in the only way we can tonight. Nevertheless, I hope that many of the suggestions made during the debate by Members on both sides of the Committee will be taken seriously to heart by the Government. No policy of laissez faire will solve the situation in which we find ourselves.
    9.27 p.m.
    The Secretary of State for Scotland (Mr. John Maclay): The first thing I want to do is to add my congratulations to those which have already been offered to my hon. Friend the Member for Fife, East (Sir J. Gilmour). His was an admirable maiden speech. I understood the meaning of his opening remarks. He had two hurdles to get over which not all of us have when we make our maiden speeches, difficult as they are. First, he is the son of a father who was greatly respected by everyone privileged to know him, who played a great part in the work of the House, and who gave great service to the nation, and, in his years as a Secretary of State, to his own native land. Secondly, my hon. Friend followed, as Member of Fife, East, an hon. Member who was a great friend of mine—Sir James Henderson-Stewart—who spoke on many subjects in the House, and very often
    1030
    on agriculture. With those two hurdles overcome, we can say with some certainty that my hon. Friend has made it absolutely clear that he follows in a great tradition wth great skill, and we look forward very much to hearing him on many occasions in the future.
    My hon. Friend did something which I have seldom heard done in a maiden speech; he put forward many constructive suggestions. The hon. Member for Edinburgh, Leith (Mr. Hoy) suggested that they were not entirely in support of the Government. I remember when I spoke in the by-election for Fife, East, which brought my hon. Friend into the House——
    Mr. Ross: He got here in spite of that.
    Mr. Maclay: If I had known that the hon. Member for Kilmarnock (Mr. Ross) was here I would have said that my hon. Friend got here in spite of that. From all my past knowledge of my hon. Friend, I am sure that it was a great mistake for me to encourage him to come into this place, speaking from the point of view of the Secretary of State for Scotland, because I am sure that he will put many more constructive suggestions to me, and he will not by any means always be in agreement with me. I hope that my hon. Friend will forgive me if I do not pick up the suggestions in detail and deal with them.
    This also applies to a number of suggestions made by hon. Members on both sides of the Committee, and in particular by my right hon. Friend the Member for Guildford (Sir R. Nugent), who made an admirably lucid speech, including some constructive suggestions. I am in the difficulty that a number of the points raised touched on the Price Review, which is developing at present, and it will not be possible for me to go into any detail about our views on the various points raised.
    I was criticised by the hon. Members for Workington (Mr. Peart) and Leith for not having spoken on the Estimates before now. The right hon. Member for Clackmannan and East Stirlingshire (Mr. Woodburn) said that I was in the habit of keeping quiet whenever I could. That is not a bad motto for the Secretary of State for Scotland, but it is not one which I

    1031
    normally follow. I took the trouble last year to do a quick check, and I discovered that in three months I had on thirty-nine occasions inflicted myself on the public in some form or another, including speeches in the House. I therefore do not accept the charge that I never say anything about what I am doing. I feel that thirty-nine times in three months is quite enough to get on with.
    The detail of the Scottish figures are on page 16 of the Supplementary Estimates for all to see, and I do not think that I could have added very much to them. The reasons for the Scottish Estimates varying as they have, and the need for the Supplementary Estimates, are substantially the same as those for the English Estimates, and I do not see how I could have added anything of interest to the House by making purely repetitive statements.
    My right hon. Friend the Minister of Agriculture explained how the need for the Supplementary Estimates had arisen. It was mainly because of a series of developments in the fatstock market last year, and particularly the first half of the year, each one of which in turn tended to depress the general level of prices for different kinds of livestock.
    It might be helpful if I recapitulate a little of the debate, even if it involves a certain amount of repetition of points on which hon. Members have touched in one way or another. My right hon. Friend also explained in some detail the features inherent in the guarantee system and in the timing of estimates which make it virtually impossible to forecast with any degree of accuracy the amount of money likely to be needed to meet the guarantees in various products.
    Among the slashing attacks which he was working himself up to as hard as he could, the hon. Member for Workington accused my right hon. Friend of gross inaccuracy and gross miscalculation. He cannot have it both ways. In part of his speech he paid tribute to the work of the Estimates Committee, and he implied that the Committee had done its job very well. He went on to accuse us of gross miscalculation. I have made it clear why imponderables arise which make accurate estimating extremely difficult, and the Estimates Committee
    1032
    made its view on the matter clear. The fact is that in most years, despite great difficulty in forecasting, the variations in the different estimates have reasonably well cancelled out. The hon. Member for Leith fastened on this as a very bad thing, but I suggest that if we are dealing with a whole range of commodities of the kind with which we have to deal in this subject, it would be very surprising if we got them all dead accurate. I believe that it would be virtually impossible. Despite that, in matters of this kind one often has a situation in which one commodity balances against another and in the long run we come out more or less even. I do not think that that is a reason for attack.
    The simple answer has been put by many hon. Members, including the hon. Member for Leek (Mr. Harold Davies), who pointed out very well that hon. Members cannot blame either my right hon. Friend or myself for the fact that sometimes it rains and sometimes it does not. The years are different. They do not follow a direct pattern. It is absurd to say that we should be able to get these Estimates dead right. It does not make sense to talk of gross miscalculations. There may be other attacks which hon. Members can drive home, but gross miscalculation is not one of them. This year events have caused fatstock guarantees to move, as it were, in the same direction, with the result that we were brought here today to examine and discuss this admittedly large bill. Coming at a time when the Government are making special efforts to control public expenditure, this has focused attention very sharply on our whole system of price support for agriculture, and understandably so. This has been evident from the points that have been made in the debate, but despite the differing views which have been expressed on the way that that support should or should not be administered, I am in no doubt, having heard what has been said in the debate, that the great majority of hon. Members are in agreement on the need for providing support. I do not think anybody disagrees with that.
    But that measure of agreement carries with it certain obligations in thinking. Had there been any doubt on the subject

    1033
    of this general unanimity of view on support, I would have been fortified—in fact, I did fortify myself—by reading what the party opposite said in the preface to their booklet which I have with me—" Prosper the Plough. A policy for a sound and efficient British agriculture."
    It is worth reading to the Committee some of the paragraphs in that document. It says:
    "A sound and efficient agriculture, operating at a high level of production, is essential to the long-term economic stability of this country. British agriculture must never again be exposed to all the economic winds that may blow as it was between the wars."
    We are all in agreement with that. The document goes on to say:
    "Because we are the largest food importing country in the world, possessing a relatively high standard of living, the fortunes of our agriculture are inevitably dependent upon Government policy. The Government could ruin our own farmers and farmworkers by allowing artificially (and perhaps temporarily) cheap foodstuffs into the country."
    That is what hon. Members opposite say.
    "On the other hand, it could copy some other countries and protect our agriculture by high tariffs…This method would quickly lead to inefficiency and by resulting in high food prices, would he unfair to consumers."
    I have been searching this document for a profound philosophic statement. The document goes on to say:
    "Another way of assisting agriculture is to have a system of guaranteed prices for home products that, combined with other forms of help, gives agriculture a high measure of assistance without isolating it from world events…As this method involves the expenditure of public money in various ways, in paying for subsidies, grants, administrative machinery and advisory services, etc., agricultural policies inevitably and properly become subjects of political concern."
    a profound truth.
    "The level of the guarantees and the method of implementing them; the quantity of production to which guaranteed prices should apply; the encouragement of efficiency and other matters"—
    and now a profound remark—
    "are all subjects upon which differing views may be held."
    As the preamble to a document which ends up with no constructive statements—[An HON. MEMBER: "Suggest some."] I am tempted to do so. It would make clear the paucity of basic thinking which hon. Members opposite have produced.
    Mr. Peart: What has this got to do with the Estimates, even though it is a very good policy?
    Mr. Maclay: It has a lot to do with the Estimates. The whole point of quoting these remarks is that it is fairly clear that by and large—[Interruption.] If the hon. Member for Workington (Mr. Peart) would stop talking to the Chair, leaving the Chair to its own business, and would allow me to answer him, it would be much better. What it has to do with the Estimates——
    Mr. Peart: Behave yourself.
    Mr. Maclay: If the hon. Gentleman is to sit on the Front Bench, he must not go on muttering. Hon. Gentlemen opposite have been in agreement throughout that a system of support of about this kind has been essential for the good conduct of agriculture in this country, and I shall repeat what the guarantee system is. Its purpose is twofold. It is intended to assure producers of a reasonable return, on average, for their produce, with all that means in terms of livelihood for an important section of our countrymen. This is important not only for the farmers who are directly associated, but also for those in the industries which depend on the farmers' custom for their own prosperity.
    Secondly, the system is intended to ensure that the consumer has a plentiful and varied supply of food available at reasonable prices. Do not let us lose sight of these two points, and the second is particularly important as regards meat, for home production represents a very large percentage of all our carcase meat supplies.
    Over the past five years—not including this year—the guarantees have cost us, on average, almost exactly £60 million, or just under 25s. per head per year. The amounts have varied in the totals and in the amounts paid for cattle, sheep and pigs in the different years. In 1956–57, the first year quoted, we paid out £74·7 million. In 1957–58 it was £82·6 million, and in the next three years we paid out £45·2 million, £50·9 million and £46·1 million, respectivley.
    Taking the two years 1958–59 and 1959–60 together, there were 29 weeks during that period when no guarantee was payable on cattle and in the next year, 1960–61, the guarantee on cattle amounted to £12·3 million, which was actually less than in 1958–59, even though the guarantee was payable for

    1035
    50 weeks of that year instead of only during 43 weeks. This year the position has been different and payments have amounted to just over double the average expenditure incurred during the past five years.
    Hon. Gentlemen opposite should not talk as wildly as they have about the break-down of the system, for they have continually said that the system has broken down. Has it broken down because in one year it has produced a figure which, I agree, is large and about which we must worry? Is 25s. per head per year over five years a very big price to have paid for the supply of a plentiful and varied amount of meat at prices lower than those prevailing in other countries, except one or two of the basic producers?
    I think that hon. Gentlemen opposite are grossly exaggerating the position. It has been stated that the Government have certain things to examine, and of course we have. We intend to examine them, just as my right hon. Friend made clear earlier today. But to talk about a system that has done what this system has done for the farmers and consumers as a complete breakdown is quite absurd.
    I do not want to weary the Committee by going into the figures in too much detail, but I must mention the difference in cost to the Exchequer of implementing the guarantees for fatstock in 1960–61 and 1961–62. While the cost for 1960–61 was £46 million, the expected cost for 1961–62 is £124 million, giving a difference of £78 million. The farmer, of course, received the whole of the money in the first place in the form of subsidy payments, but the net effects are not so easily described with precision. We can see precisely that the farmer received £31 million made up of £13 million increase in guarantee awards for cattle and pigs and £18 million in guarantees on additional animals coming forward in 1961–62.
    My right hon. Friend said earlier that there have been falls in the retail prices of meat amounting to about £50 million from which, in spite of what some hon. Gentlemen have said in an effort to attack that remark of my right hon. Friend, the consumer has undoubtedly benefited.
    1036
    The burning question in the minds of many critics, both inside this Committee and outside, is the extent to which the distributive trades, particularly the butchers, have gained an unconvenanted benefit at the expense of the Exchequer. It is essential to get this in balance and in perspective. The total annual value of retail sales of all meat—I emphasise all meat—which means imported as well as home produced, carcase meat, processed meat and poultry—is over £1,300 million and the trade which handles it is an extremely scattered and complex one. It is simply not possible to attempt to evaluate in sums of money precisely the net effect on particular groups of traders of these additional Exchequer payments. One thing is quite certain, and that is that the customer must have benefited from the lower retail prices this year.
    Mr. Hoy: We must get what is the right hon. Gentleman's reply to the Estimates Committee, which had this to say:
    "Your Committee are concerned that this process"—
    that is, the reduction in price—
    "has, in the opinion of the Department, operated so ineffectively."
    What is the answer to that?
    Mr. Maclay: The answer is that we are not satisfied about certain people having had more in some cases than they should have. In an industry of this sort with a large number of shops and distributors involved, there is an enormous range of possibilities, but, as the hon. Member knows, shops vary in practice according to where they are and how they are run. Some of the smaller ones undoubtedly do maintain a policy of stable prices so far as they can. The year 1960 was not a good year for a lot of butchers, and I think most butchers would agree that 1961 was a very good year for them. It is quite impossible to determine accurately whether some people got much too much or much too little, but if hon. Members will ponder over the proportion of £50 million to £1,300 million they will realise the substance of what I am saying.
    Mr. Peart: It was not only in the Estimates Committee's Report but in the Report of the Minister's own Department

    1037
    that the price reduction had not gone to the consumer.
    Mr. Maclay: It is not the case with all the shops, as I said before, and the hon. Gentleman has got up to ask the same question again. We agree that there are certain things to be examined.
    There is a recognition on every side that the increased expenditure this year arose out of the nature of the guarantees, but none of us would wish to leave that as the last word in the matter. The Government recognise and always have recognised it as their duty to see that the guarantees achieve their two-fold purpose effectively. We have to keep a constant and critical eye on our arrangements, and always be ready to introduce administrative and other reforms such as are necessary to ensure that the money paid out in the shape of guarantees is not wasted in any way.
    As my right hon. Friend said, it is the Government's intention to do all they can to achieve greater stability in the marketing of meat in the coming year. We have also in mind a number of possible ways in which the situation may be improved in this respect. We know that the industry and the trade are as keen as we are on the necessity to avoid, if we can, a repetition of what happened last year. Most of the measures we have in mind impinge in some way, directly or indirectly, on matters which come within the ambit of the Price Review talks with the unions. As the Committee knows, these talks have already begun. They are, and always have been, confidential, and I therefore cannot go into further detail.
    Now I come to the question of marketing and the committee which my right hon. Friend has announced that we shall set up. Today we have heard a lot from hon. Members opposite on the subject of livestock marketing and on the drawbacks of private forms of trading which are going on now and the need to achieve the purposes underlying the guarantee at less expenditure to the taxpayer or to the consumer than at present. Of course we agree that there is a need to look closely into the present marketing system. The experiences of last year have shown that with the level of production now achieved a relatively small disturbance in the flow of animals to the
    1038
    market can have an altogether disproportionate effect on the level of prices and the time they take to recover.
    We have decided to set up a committee of inquiry to which reference was made by my right hon. Friend to look into the highly complex issues involved and to provide some of the answers which we need——
    Mr. Fell Mr. Fell rose——
    Mr. Maclay: I am sorry, I cannot give way.
    Hon. Members: Give way.
    Mr. Maclay: I have said—I cannot give way—that changes——
    Hon. Members: Give way.
    Mr. Maclay: —in the pattern of sources of supply this year have been a dominant feature in marketing——
    Hon. Members: Give way.
    Mr. Maclay: Some of them should have been challenged and others should not. We are producing more meat for home supply in the coming year which will certainly not be less than this year. There is the question of the broiler industry and a change in the pattern of consumer demand. A question which has to be answered is whether the marketing system can adapt itself to this new pattern of supply and demand. Another question is what greater advantage can be taken of technical improvements——
    Mr. Fell Mr. Fell rose——
    Mr. Maclay: I cannot give way.
    Another question is whether our present set-up is the right one to handle the increased level of home production. What advantage should we get from regulating supplies to the markets and how can this be brought about? Another question is whether the maximum size of our markets and our slaughterhouses is correct. What are the implications of modern techniques of pre-packing and the growth of supermarkets and retail chain stores? All these points were raised by various hon. Members——
    Mr. Fell Mr. Fell rose——
    Mr. Maclay: Very well, I will give way.
    Mr. Fell: I am grateful to my right hon. Friend. I do not want to take up more than two seconds of his time. Will he say whether this committee is to be allowed to consider imports from Europe?
    Mr. Maclay: My right hon. Friend made quite clear the terms of reference of the Committee and my hon. Friend the Member for Yarmouth (Mr. Fell) will find then clearly set out in HANSARD.
    The hon. Member for Workington at the end of his speech tried to sum up his attack upon my right hon. Friend and myself and made a number of charges. He said that we had encouraged increased meat production last year. If he will read the speech of my right hon. Friend in the OFFICIAL REPORT, he will see clearly why that was done and last year the reasons were not objected to by hon. Members opposite. The hon. Member accused my right hon. Friend and myself of gross miscalculation. I have dealt with that. Does he also consider that the comments of the Estimate Committee were completely unjustified? It is not gross miscalculation, whatever the charge may be. The hon. Member said that the whole policy is wrong and I wish to explore that statement.
    Mr. Winterbottom Mr. Winterbottom rose——
    Mr. Maclay: No, I cannot give way. I am dealing with the hon. Member for Workington.
    Does the hon. Member for Workington mean that he wishes us to scrap the 1957 Act?
    Mr. Peart: No.
    Mr. Maclay: The hon. Member says he does not want us to scrap the 1957 Act. Throughout his speech and that of other hon. Members a number of right hon. and hon. Members opposite were referring to the purposes of the 1947 Act with great nostalgia, and I wish to know whether they would revert to import controls.
    A number of hon. Members mentioned the need for import controls. Clearly, all these matters have to be considered dispassionately. Is this the moment when hon. Members opposite would impose import controls? What regard would hon. Members opposite have to the long-term commitments to
    1040
    Australia and New Zealand? I hope they would have regard to them. I hope that the hon. Member for Workington will nod his head in agreement. What would they have done with the 1947 Act? Would they go back on their own Act? These are hypothetical questions, I admit, but they all arise out of the kind of speeches hon. Members opposite have been making.
    Another charge made by one hon. Member was that we were acting too late in relation to marketing. Would he have argued a year or two years ago that we should have set up an inquiry into marketing?
    Mr. Hoy: In 1953.
    Mr. Maclay: Certainly in 1953, but this is 1961. [Laughter.] This is 1962. The argument which the hon. Members have been trying to develop is that we should have done it in fairly recent years, but I do not think that argument holds water. I ask hon. Members who have been repeatedly stating that a marketing board is necessarily the right device, to remember that we have to be fairly careful before we dive into a marketing board for a type of commodity such as fatstock. Milk is not the same kind of commodity; it is a single, homogeneous commodity.
    Let hon. Members consider what happens—and must happen—at the moment. A large number of farms have to get beasts to market. There are a large number of small markets and there are the bigger markets. There are people who sell directly to the consumer and some who sell direct to the shop. The auctioneer and dealer has come in for a certain amount of abuse in this debate. Let us remember that this is a highly complex and very tricky trade. Are hon. Members quite certain that if we had a Government body or some other form of marketing board taking the place of the system which exists today it would not have landed itself into even worse difficulties?
    I am not saying that these things do not need examining. That is why we are setting up a committee. I say very definitely that it is wrong to state categorically that it is simple to solve the problem by setting up anything as simple as a marketing board. I hope that hon.

    1041
    Members opposite will at this stage realise that it is quite silly to divide the Commit tee.
    Mr. Peart: I beg to move, That Item Class VIII, Vote 2 (Agricultural and
    Food Grants and Subsidies), be reduced by £1,000.
    Question put:—
    The Committee divided: Ayes 167, Noes 254.

    Division No. 81.]

    AYES

    [9.59 p.m.

    Ainsley, William

    Hart, Mrs. Judith

    Pannell, Charles (Leeds, W.)

    Albu, Austen

    Hayman, F. H.

    Pargiter, G. A.

    Allaun, Frank (Salford E.)

    Healey, Denis

    Pavitt, Laurence

    Allen, Scholefield (Crewe)

    Henderson, Rt. Hn. Arthur(Rwly Regis)

    Pearson, Arthur (Pontypridd)

    Awbery, Stan

    Herbison, Miss Margaret

    Peart, Frederick

    Baxter, William (Stirlingshire, w.)

    Hewitson, Capt. M.

    Pentland, Norman

    Beaney, Alan

    Hill, J. (Midlothian)

    Plummer, Sir Leslie

    Bellenger, Rt. Hon. F. J.

    Hilton, A. V.

    Popplewell, Ernest

    Bence, Cyril

    Holman, Percy

    Prentice, R. E.

    Bennett, J. (Glasgow, Bridgeton)

    Houghton, Douglas

    Proctor, W. T.

    Benson, Sir George

    Howell, Denis (Small Heath)

    Randall, Harry

    Blackburn, F.

    Hoy, James H.

    Rankin, John

    Blyton, William

    Hughes, Emrys (E. Ayrshire)

    Redhead, E. C.

    Bowden, Rt. Hn. H. W. (Leics, S. W.)

    Hughes, Hector (Aberdeen, N.)

    Reid, William

    Bowles, Frank

    Hunter, A. E.

    Rhodes, H.

    Boyden, James

    Hynd, H. (Accrington)

    Roberts, Goronwy (Caernarvon)

    Braddock, Mrs. E. M.

    Irving, Sydney (Dartford)

    Robertson, John (Paisley)

    Brockway, A. Fenner

    Janner, Sir Barnett

    Ross, William

    Brown, Rt. Hon. George (Belper)

    Jay, Rt. Hon. Douglas

    Royle, Charles (Salford, West)

    Butler, Mrs. Joyce (wood Green)

    Jeger, George

    Silverman, Julius (Aston)

    Castle, Mrs. Barbara

    Johnson, Carol (Lewisham, S.)

    Silverman, Sydney (Nelson)

    Cliffe, Michael

    Jones, Dan (Burnley)

    Skeffington, Arthur

    Corbet, Mrs. Freda

    Jones, Elwyn (West Ham, S.)

    Slater, Mrs. Harriet (Stoke, N.)

    Craddock, George (Bradford, S.)

    Kelley, Richard

    Slater, Joseph (Sedgefield)

    Crosland, Anthony

    Kenyon, Clifford

    Small, William

    Darling, George

    Key, Rt. Hon. C. W.

    Snow, Julian

    Davies, Harold (Leek)

    King, Dr. Horace

    Sorensen, R. W.

    Davies Ifor (Gower)

    Lawson, George

    Soskice, Rt. Hon. Sir Frank

    Davies, S. O. (Merthyr)

    Ledger, Ron

    Spriggs, Leslie

    Deer, George

    Lee, Frederick (Newton)

    Steele, Thomas

    Delargy, Hugh

    Lever, L. M. (Ardwick)

    Stewart, Michael (Fulham)

    Diamond, John

    Lewis, Arthur (West Ham, N.)

    Stones, William

    Dodds, Norman

    Lipton, Marcus

    Strachey, Rt. Hon. John

    Donnelly, Desmond

    Loughlin, Charles

    Symonds, J. B.

    Driberg, Tom

    MacColl, James

    Taylor, Bernard (Mansfield)

    Ede, Rt. Hon. C.

    McInnes, James

    Thomson, G. M. (Dundee, E.)

    Edwards, Robert (Bilston)

    McKay, John (Wallsend)

    Tomney, Frank

    Edwards, Walter (Stepney)

    Mackie, John (Enfield, East)

    Ungoed-Thomas, Sir Lynn

    Evans, Albert

    Mahon, Simon

    Wainwright, Edwin

    Foot, Dingle (Ipswich)

    Manuel, A. C.

    Warbey, William

    Foot, Michael (Ebbw Vale)

    Mapp, Charles

    Watkins, Tudor

    Forman, J. C.

    Mason, Roy

    Weitzman, David

    Fraser, Thomas (Hamilton)

    Mellish, R. J.

    Wells, Percy (Faversham)

    Gaitskell, Rt. Hon. Hugh

    Mendelson, J, J.

    White, Mrs. Eirene

    Galpern, Sir Myer

    Millan, Bruce

    Whitlock, William

    Ginsburg, David

    Milne, Edward

    Wilkins, W. A.

    Gooch, E. G.

    Mitchison, G. R.

    Willey, Frederick

    Gordon Walker, Rt. Hon. P. C.

    Monslow, Walter

    Willis, E. G. (Edinburgh, E.)

    Gourlay, Harry

    Morrison, John

    Wilson, Rt. Hon. Harold (Huyton)

    Grey, Charles

    Moyle, Arthur

    Winterbottom, R. E.

    Griffiths, David (Rother Valley)

    Noel-Baker, Francis (Swindon)

    Woodburn, Rt. Hon. A.

    Griffiths, Rt. Hon. James (Llanelly)

    Oliver, G. H.

    Woof, Robert

    Gunter, Ray

    Oram, A. E.

    Wyatt, Woodrow

    Hale, Leslie (Oldham, W.)

    Oswald, Thomas

    Hall, Rt. Hn. Clenvil (Colne Valley)

    Owen, Will

    TELLERS FOR THE AYES:

    Hamilton, William (West Fife)

    Padley, W. E.

    Mr. Charles A. Howell and

    Hannan, William

    Paget, R. T.

    Mr. McCann.

    NOES

    Agnew, Sir Peter

    Bevins, Rt. Hon. Reginald

    Brewis, John

    Aitken, W. T.

    Bidgood, John C.

    Bromley-Davenport, Lt.-Col. Sir Walter

    Allason, James

    Biffen, John

    Brooke, Rt. Hon. Henry

    Arbuthnot, John

    Biggs-Davison, John

    Brooman-White, R.

    Atkins, Humphrey

    Birch, Rt. Hon. Nigel

    Brown, Alan (Tottenham)

    Balniel, Lord

    Bishop, F. P.

    Browne, Percy (Torrington)

    Barber, Anthony

    Black, Sir Cyril

    Bryan, Paul

    Barlow, Sir John

    Bossom, Clive

    Buck, Antony

    Batsford, Brian

    Bourne-Arton, A.

    Bullard, Denys

    Baxter, Sir Beverley (Southgate)

    Bowen, Roderic (Cardigan)

    Bullus, Wing Commander Eric

    Beamish, Col. Sir Tufton

    Box, Donald

    Butcher, sir Herbert

    Bell, Ronald

    Boyd-Carpenter, Rt. Hon. J.

    Butler, Rt. Hn. R. A.(Saffron Walden)

    Bennett, F. M. (Torquay)

    Boyle, Sir Edward

    Campbell, Sir David (Belfast, S.)

    Campbell, Gordon (Moray & Nairn)

    Jackson, John

    Quennell, Miss J. M.

    Carr, Compton (Barons Court)

    Jenkins, Robert (Dulwich)

    Ramsden, James

    Chataway, Christopher

    Jennings, J. C.

    Rawlinson, Peter

    Clark, William (Nottingham, S.)

    Johnson, Eric (Blackley)

    Redmayne, Rt. Hon. Martin

    Clarke, Brig. Terence (Portsmth, W.)

    Johnson Smith, Geoffrey

    Renton, David

    Cole, Norman

    Jones, Rt. Hn. Aubrey (Hall Green)

    Ridley, Hon. Nicholas

    Cooke, Robert

    Kaberry, Sir Donald

    Ridedale, Julian

    Cooper, A. E.

    Kerans, Cdr. J. S.

    Rippon, Geoffrey

    Cordeaux, Lt.-Col. J. K.

    Kerby, Capt. Henry

    Roberts, Sir Peter (Heeley)

    Corfield, F. V.

    Kerr, Sir Hamilton

    Rodgers, John (Sevenoaks)

    Costain, A. P.

    Kimball, Marcus

    Roots, William

    Coulson, Michael

    Kitson, Timothy

    Ropner, Col. Sir Leonard

    Courtney, Cdr. Anthony

    Lancaster, Col. C. G.

    Scott-Hopkins, James

    Craddock, Sir Beresford

    Leburn, Gilmour

    Seymour, Leslie

    Critchley, Julian

    Legge-Bourke, Sir Harry

    Sharples, Richard

    Crosthwaite-Eyre, Col. Sir Oliver

    Lewis, Kenneth (Rutland)

    Shaw, M.

    Curran, Charles

    Lilley, F. J. P.

    Shepherd, William

    Currie, G. B. H.

    Linstead, Sir Hugh

    Smith, Dudley (Br'ntf'd & Chiswick)

    Dance, dames

    Litchfield, Capt. John

    Smithers, Peter

    d'Avigdor-Goldsmid, Sir Henry

    Lloyd, Rt. Hn. Geoffrey (Sut 'nC' dfield)

    Smyth, Brig. Sir John (Norwood)

    de Ferranti, Basil

    Longbottom, Charles

    Soames, Rt. Hon. Christopher

    Digby, Simon Wingfield

    Longden, Gilbert

    Spearman, Sir Alexander

    Doughty, Charles

    Loveys, Walter H.

    Stanley, Hon. Richard

    du Cann, Edward

    Lucas, Sir Jocelyn

    Stevens, Geoffrey

    Duncan, Sir James

    Lucas-Tooth, Sir Hugh

    Stodart, J. A.

    Eden, John

    MacArthur, Ian

    Storey, Sir Samuel

    Elliot, Capt. Walter (Carshalton)

    McLaren, Martin

    Studholme, Sir Henry

    Emmet, Hon. Mrs. Evelyn

    McLaughlin, Mrs. Patricia

    Summers, Sir Spencer (Aylesbury)

    Farey-Jones, F. W.

    Maclay, Rt. Hon. John

    Talbot, John E.

    Fell, Anthony

    Macleod, Rt. Hn. Iain (Enfield, W.)

    Taylor, Sir Charles (Eastbourne)

    Finlay, Graeme

    Macmillan, Maurice (Halifax)

    Taylor, Frank (M'ch'st'r, Moss Side)

    Fisher, Nigel

    Maddan, Martin

    Teeling, Sir William

    Fletcher-Cooke, Charles

    Maginnis, John E.

    Thatcher, Mrs. Margaret

    Forrest, George

    Maitland, Sir John

    Thomas, Leslie (Canterbury)

    Fraser, Ian (Plymouth, Sutton)

    Markham, Major Sir Frank

    Thomas, Peter (Conway)

    Frceth, Denzil

    Marshall, Douglas

    Thompson, Kenneth (Walton)

    Galbraith, Hon. T. G. D.

    Marten, Neil

    Thompson, Richard (Croydon, S.)

    Gammans, Lady

    Mathew, Robert (Honiton)

    Thorneycroft, Rt. Hon. Peter

    Gardner, Edward

    Matthews, Gordon (Meriden)

    Thornton-Kemsley, Sir Colin

    Gibson-Watt, David

    Maudling, Rt. Hon. Reginald

    Thorpe, Jeremy

    Gilmour, Sir John

    Mawby, Ray

    Tiley, Arthur (Bradford, W.)

    Godber, J. B.

    Maxwell-Hyslop, R. J.

    Tilney, John (Wavertree)

    Gough, Frederick

    Maydon, Lt.-Cmdr. S. L. C.

    Touche, Rt. Hon. Sir Gordon

    Grant, Rt. Hon. William

    Mills, Stratton

    Turner, Colin

    Grant-Ferris, Wg. Cdr. R.

    Montgomery, Fergus

    Tweedsmuir, Lady

    Green, Alan

    More, Jasper (Ludlow)

    van Straubenzee, w. R.

    Grimond, Rt. Hon. J.

    Morgan, William

    Vane, W. M. F.

    Gurden, Harold

    Morrison, John

    Vaughan-Morgan, Rt. Hon. Sir John

    Hall, John (Wycombe)

    Nabarro, Gerald

    Vickers, Miss Joan

    Hamilton, Michael (Wellingborough)

    Nicholson, Sir Godfrey

    Wade, Donald

    Harris, Reader (Heston)

    Nugent, Rt. Hon. Sir Richard

    Wakefield, Sir Wavell (St. M'lebone)

    Harrison, Brian (Maldon)

    Oakshott, Sir Hendrie

    Walder, David

    Harrison, Col. Sir Harwood (Eye)

    Orr, Capt. L. P. S.

    Walker, Peter

    Harvey, John (Walthamstow, E.)

    Osborn, John (Hallam)

    Walker-Smith, Rt. Hon. Sir Derek

    Hastings, Stephen

    Osborne, Sir Cyril (Louth)

    Wall, Patrick

    Heald, Rt. Hon. Sir Lionel

    Page, Graham (Crosby)

    Ward, Dame Irene

    Hendry, Forbes

    Page, John (Harrow, West)

    Webster, David

    Hill, Mrs. Eveline (Wythenshawe)

    Pannell, Norman (Kirkdale)

    Wells, John (Maidstone)

    Hobson, Sir John

    Pearson, Frank (Clitheroe)

    Whitelaw, William

    Holland, Philip

    Peel, John

    Williams, Dudley (Exeter)

    Hollingworth, John

    Percival, Ian

    Williams, Paul (Sunderland, S.)

    Holt, Arthur

    Peyton, John

    Wise, A. R.

    Hope, Rt. Hon. Lord John

    Pickthorn, Sir Kenneth

    Wolrige-Gordon, Patrick

    Hopkins, Alan

    Pike, Miss Mervyn

    Wood, Rt. Hon. Richard

    Hornby, R. P.

    Pilkington, Sir Richard

    Woodhouse, C. M.

    Howard, Hon. G. R. (St. Ives)

    Pitman, Sir James

    Woodnutt, Mark

    Howard, John (Southampton, Test)

    Pitt, Miss Edith

    Woollam, John

    Hughes Hallett, Vice-Admiral John

    Pott, Percivall

    Worsley, Marcus

    Hughes-Young, Michael

    Powell, Rt. Hon. J. Enoch

    Yates, William (The Wrekin)

    Hulbert, Sir Norman

    Price, David (Eastleigh)

    Hutchison, Michael Clark

    Prior, J. M. L.

    TELLERS FOR THE NOES:

    Iremonger, T. L.

    Proudfoot, Wilfred

    Mr. Edward Wakefield and

    Irvine, Bryant Godman (Rye)

    Pym, Francis

    Mr. J. E. B. Hill.

    Original Question put and agreed to.
    Resolution to be reported.
    Resolution to be received Tomorrow: Committee to sit again Tomorrow.

    BUSINESS OF THE HOUSE
    Proceedings of the Committee of Ways and Means exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House).—[Mr. Iain Macleod.]

    WAYS AND MEANS
    Considered in Committee.
    [Sir WILLIAM ANSTRUTHER-GRAY in the Chair]
    Resolved,
    That towards making good the Supply granted to Her Majesty for the service of the year ending on the 31st March, 1962, the sum
    1046
    of £96,830,500 be granted out of the Consolidated Fund of the United Kingdom.—[Sir E. Boyle.]
    Resolution to be reported.
    Report to be received Tomorrow: Committee to sit again Tomorrow.

  PURCHASE TAX (FIREWORKS)
  10.12 p.m.
  The Economic Secretary to the Treasury (Mr. Anthony Barber): I beg to move,
  That the Purchase Tax (No. 4) Order, 1961 (S.I. 1961, No. 2500), dated 29th December, 1961, a copy of which was laid before this House on 4th January, be approved.
  The effect of this Order is, as I think the House will appreciate, to add fireworks to the list of goods chargeable with Purchase Tax at the standard rate of tax, that is to say 25 per cent. of the wholesale value, and to include fireworks in the group which comprises toys, games, requisites for amusements and so on. The tax will apply to fireworks of the kinds sold over the retail counter for the celebration of 5th November and also to the kind used in set firework displays.
  In answer to a point raised by my hon. Friend the Member for Kidderminster (Mr. Nabarro) at Question Time the other day, I should like to make it clear that the tax will not apply to fireworks which are made for either military or marine purposes, such as signal rockets or Very lights, nor will it apply to bird scarers as used by fruit farmers or to other commercial articles of that kind.
  Mr. Gerald Nabarro: Before my hon. Friend goes any further, may I say that I am interested in the administrative machinery that the Treasury proposes to install to differentiate between the type of rocket used by a ship in distress at sea, or a lighthouse, or a Very light and those bought for the celebration of Guy Fawkes night on 5th November. What administrative machinery is my hon. Friend devising to prevent the illicit purchase of fireworks for use on Guy Fawkes night which otherwise would be sold for use by ships in distress at sea? This is a very important point.
  Mr. Barber: The ways of Customs and Excise to prevent the avoidance of Purchase Tax are many and various. I doubt whether it would be appropriate or in the general interest were I to go into details on that particular matter. I would only say to my hon. Friend, in answer to his very reasonable question,
  1048
  that the reason why particular types of fireworks, such as signal rockets and Very lights, are excluded from this Purchase Tax Order is a question of construction. The point is, if I can put it very briefly, that the word "fireworks" appears in the new Order in the context of toys, games and so on, as set out in the Order. Therefore, as "fireworks" has to be read in that context I am advised that the exclusion of Very lights and the like is a matter of construction, which is of course a matter of law.
  Mr. R. T. Paget: If we have rockets and Very lights on our boats we are excused Purchase Tax, but if we let them off on Cowes fireworks night we have to pay Purchase Tax. Is that how it works?
  Mr. Barber: I think that the hon. and learned Member is not quite right there. What is important is the character of the firework.
  Mr. Nabarro: I apologise to my hon. Friend for interrupting him, but I must pursue him on this important point. Would he please explain to me—because I am an amateur in this matter of pyrotechnics—whether the sparks or the stars emitted by a firework, such as a rocket, exploded on Guy Fawkes night for pleasurable purposes are different from the sparks or the stars emitted from a firework exploded at sea? Is there some difference in the construction of the pyrotechnic? Otherwise, how does the Treasury propose to differentiate and prevent abuse of the kind referred to by the hon. and learned Member for Northampton (Mr. Paget) whereby he buys a rocket for use on his boat and that is subsequently translated to use by his children on Guy Fawkes night for purely pleasurable and undesirable purposes?
  Mr. Barber: If my hon. Friend the Member for Kidderminster were to purchase a number of Very lights and himself let them off on Guy Fawkes night it seems to me from a preliminary interpretation of the Order that in all probability those lights would not be subject to Purchase Tax, because in general in Purchase Tax matters it is not so much the purposes for which a particular

  1049
  article is used that is the most relevant consideration as the character of the article. The use may of course be relevant in the sense that the way goods are offered for sale is a consideration which must me taken into account, but I do not think that I can go further—unless I am sent a firework for me to give an opinion upon it—than I have gone tonight. In other words, one has to see whether the type of firework is the sort one would expect to be used for amusement or entertainment or for one of the serious purposes which my hon. Friend the Member for Kidderminster has in mind.
  Mr. Donald Wade: If a rocket is fired from a ship for the entertainment of the passengers would Purchase Tax be payable or not?
  Mr. Barber: That is the sort of point which I think will have to be considered when it arises, as no doubt it will. I would only say that in the administration of this new form of taxation that is the sort of point which the Commissioners of Customs and Excise would bear in mind.
  Considered against the background of Purchase Tax as a whole, this Order represents only a minor extention of the scope of taxation. Nevertheless, it is a major change for the industry concerned, which is a small industry. The additional revenue expected as a result of the Order is between £500,000 and £750,000 in a full year. Because the tax is collected quarterly in arrear, the Order will have no effect on the yield of taxation in the current year. I know that some hon. Members on seeing the Order for the first time were surprised to learn that fireworks were not subject to taxation already. It seems a little anomalous that this should have been the case when toys, games and all other kinds of requisites for amusement were already within the scope of the Purchase Tax.
  The reasons for the exclusion were, briefly, that while indoor fireworks such as, for example, magnesium ribbon, have always been subject to tax on the ground that they are a variety of toy, it was felt that the relevant statutory words in Group 20 of the Tax Schedule did not give a sufficiently unambiguous
  1050
  mandate for imposing the tax on all varieties of outdoor fireworks. As a result, outdoor fireworks were allowed to enjoy the benefit of the doubt. Against the background I have mentioned—that Purchase Tax extends to such a wide variety of the consumer's expenditure, including expenditure on toys and "other requisites for amusements," as they are described—it was increasingly difficult to justify the exclusion of fireworks. My right hon. and learned Friend therefore decided that the right course was to seek, by means of this Order, specific Parliamentary approval to bring them into the tax.
  I should perhaps explain why it was decided to make the Order at this particular time of the year. The answer is that we are here dealing with a highly seasonal trade. Almost the whole of its annual production goes up in smoke in a day or two at the beginning of each November. Considered in the context of the Purchase Tax as a whole, this is a minor change and it is obviously sensible to make such minor changes at a time of the year when they are likely to cause least disturbance in the trade concerned. Having decided to impose tax on fireworks, the right time to do it was within a few weeks after the beginning of November, so that the manufacturers would have as much time as possible to make the adjustments in trading which were bound to be necessary as a result of the imposition of tax.
  Mr. Nabarro: Are crackers fireworks or toys? Are they covered by this Order? [An HON. MEMBER: "Cream crackers?"] No, not cream crackers. I am sorry to be guilty of some levity in this matter, Mr. Deputy-Speaker, but I am referring to crackers in boxes, containing a mercurial strip pulled at children's parties—not to biscuits. Are they taxed as fireworks or were they previously taxed as toys?
  Mr. F. M. Bennett: Can my hon. friend say whether the rockets sent up during the rescue of Jayne Mansfield come within this Order?
  Mr. Barber: It is somewhat difficult to answer these detailed points, because the notice by the Commissioners of Customs and Excise runs, as my hon. Friend the Member for Kidderminster knows, for many pages. But Group 20, which

  1051
  is being amended, includes articles which may be sold as carnival goods, toys or requisities—for instance, false beards and moustaches and so on.
  I do not wish to keep the House for long on this sort of point, although there are a number of other relevant points one could make. If I may give a preliminary view to my hon. Friend, I should have thought that crackers as used indoors, if they ever came within the description of a firework, would have been liable to tax, but again I would rather have notice of that question. I have dealt with all the general reasons why it is thought desirable to impose this tax, and also the particular reason as to why it was decided to do at this time of the year and not in the Budget.
  For the reasons I have given, I would ask the House to approve the Order.
  Mr. Glenvil Hall: Before the hon. Gentleman sits down, perhaps he would comment on the representations he has received from the fireworks industry. To my knowledge it put certain arguments to him, but he has not attempted to touch one of them tonight. Will he do so now?
  Mr. Barber: I will do so now if it is convenient to the House. I had thought that one or two hon. Gentlemen would want to speak first and develop points of various kinds, but if hon. Members prefer me to deal with them now, I will certainly do so.
  As I understand it, the two principal points which were raised by the fireworks industry and which we have considered very carefully concerned the getup of the goods, involving containers and labels which were already printed with retail prices. Many of those labels and containers are ordered a year before the date of the sale by the retailer to the consumer and they show the price exclusive of the tax, of course. The prices charged for fireworks in the shops next November may, therefore, be higher than the printed prices shown, and some formula will have to be worked out with the trade in order to indicate to retailers and customers what the difference is.
  Somewhat similar problems do, of course, arise in other cases. In some cases manufacturers have ceased after a
  1052
  period—after the difficult transitional stage—to put a price on the article. But I understand from the representations that have been made by the fireworks manufacturers that that is something which they do not wish to do. This is a problem, but I should not have thought that it was insoluble. It would be possible for manufacturers to continue to print tax-exclusive prices on their fireworks to which the retailers would add an agreed mark-up of the equivalent of 2d. in the Is., or thereabouts, to take account of the tax.
  Mr. Charles Loughlin: What percentage Purchase Tax would go on a "penny banger"?
  Mr. Barber: That is the sort of point which we have been considering, as the hon. Member must have known if he had followed our deliberations last year when the whole range of Customs and Excise duties was increased by 10 per cent. as a result of the announcement by my right hon. and learned Friend on 25th July. He will appreciate that that involved very small adjustments to prices which were so small that in some cases manufacturers and wholesalers in selling goods to retailers had to give some indication about how the tax might be passed on. A bar of soap which cost 6d., including 25 per cent. Purchase Tax, as a result of the 10 per cent. increase in Customs and Excise duties last July had an increase of tax equivalent to one-tenth of a penny. in such cases it is passed on in various ways. I recognise that these are practical difficulties, but they are by no means unique to the firework industry and they have been present over the whole range of Purchase Tax. It is hardly for me to advise a particular industry or a particular company how it should set about things, but as the hon. Member for Gloucestershire, West (Mr. Loughlin) referred to a penny banger, I will give him at any rate one answer to the problem.
  As a result of this change in Purchase Tax, a penny banger could now he sold by the retailer at something more than the increase in Purchase Tax for which the Order provides, at, say, 1½d. or three for 2½. As frequently happens with other industries, other and somewhat more expensive goods would have a reduction in the increase paid on them

  1053
  so that over the whole range of goods the correct amount of Purchase Tax would be levied.
  My hon. Friend the Member for Kidderminster has been saying "Hear hear". He took up this matter of Purchase Tax long before it was raised by the hon. Member for Gloucestershire, West, in connection with fireworks, and he recognises that this is not something new and that it is something with which the fireworks industry will be able to deal when it considers it.
  Mr. G. R. Mitchison: When and how was the trade told about this change?
  Mr. Nabarro: It should not be told five minutes ahead.
  Mr. Barber: I do not know the actual machinery whereby the trade was told. All I can say is that it was not told before the Order was laid before the House of Commons. For reasons which the hon. and learned Gentleman realises, we could not do that.
  Mr. David Weitzman: Were there consultations with the trade before the Order was decided on?
  Mr. Nabarro: Certainly not.
  Mr. Barber: So far as I know there were no consultations.
  The right hon. Member for Colne Valley (Mr. Glenvil Hall) asked me to deal with the representations which had been made by the trade, and perhaps I might deal with a point which I know has concerned one or two hon. Members because they have written to me about it. This concerns the date of payment of the Purchase Tax. As I understand it, manufacturers send out almost all their fireworks between the end of June and the end of October of each year. Tax is payable quarterly within one month of the end of the quarter, so that on goods delivered to unregistered customers in the July-September quarter, tax will be payable on 31st October, but on goods delivered in October it will not be payable until 31st January. The manufacturers have asked that, because of the seasonable nature of their trade, and of the credit terms that they allow to retail customers, some later date for pay
  1054
  ment than 31st October might be considered.
  We considered this request not only carefully, but sympathetically, but I am afraid that it is not possible to meet it. The dates for the payment of Purchase Tax are statutory. They apply to all Purchase Tax trades alike, including many trades which are seasonal, and it is not possible to make individual exceptions.
  I shall be happy to deal with other points which may be raised in the course of this debate, but I have tried briefly to deal with the points put to me by hon. Members and by the trade.
  10.32 p.m.
  Mr. G. R. Mitchison: I want to get one or two things quite clear before we start. We are not dealing with any question of the safety of fireworks. It was not suggested by the hon. Gentleman that that was a reason for the tax. We are not dealing with the activities of Mr. Guy Fawkes, who I think has been rather unfairly condemned because all that he was really trying to do was to blow up another place, and not the Houses of Parliament as a whole.
  This is a silly Order, and a very cheerless one. I can only explain it on the ground that the Government have had so many rockets, particularly from the hon. Member for Kidderminster (Mr. Nabarro) and other back benchers, that they feel that it is about time a tax was imposed on rockets. There is no other explanation for the Order.
  The way in which the Order was introduced was enough to invite criticism. The trade was told only on or after 4th January. It was for the Government to decide what date the Order should come into operation, and the date they fixed was less than three weeks after the earliest date on which, by their own account, the trade was told.
  This is a small trade, and it does nothing else. If someone makes fireworks, he cannot spend the rest of the year on some other activity. The consequence is that he begins making fireworks soon after 5th November in each year, and goes on making them for the occasion of their great consumption on 5th November the following year, and, I might add, for other occasions during practically the whole year.

  1055
  The point, therefore, is not whether the tax ought to be introduced at any given moment, but how much time ought to be allowed to a small trade like this, occupied on only one matter, to make the necessary arrangements.
  My second point is that representatives of the fireworks trade were summoned to the appropriate Government office and told that this tax was to be put on. They protested for the reason I have given and for other reasons to which I shall refer shortly. They seem to have been told, "The tax is being taken off lawn mowers, and we have to put it on something." The hon. Member for Kidderminster asked a Question the other day which seemed to indicate that the same bright idea had struck him. Whether or not that was what was said to these people, the fact remains that the tax came off lawn mowers at about the same time that it went on fireworks. I have never fully understood the workings of the Governmental mind in these matters, but although I am in favour of Purchase Tax as a necessary instrument as a whole, it seems a little strange to take the tax off lawn mowers and put it on fireworks at the same time.
  Perhaps the hon. Member will explain exactly what lucubrations of Government intellect were required to produce this extraordinary combination. Why take the tax off lawn mowers? Why put it on fireworks? How is it that year after year fireworks have gone untaxed. Was it that the Government have never before had so many rockets, and finally though it necessary to tax them? What was the reason for choosing this moment? Is there nothing more than mere coincidence in the removal of the tax from lawn mowers and its imposition on fireworks? Did the lawn mower makers make some contribution to Government funds at the time? I cannot think that that could be the reason. Whatever the reason may be, it seems utterly irrational.
  There is one other very serious grievance. The hon. Member told us that it was quite easy to collect this tax, in some way or other. The fireworks trade has been writing to its customers suggesting various devices for doing so—one of them being what the hon. Member himself suggested. The price
  1056
  tickets have already been issued for many fireworks which will be sold and will attract this tax. It was suggested to one of the larger London stores that it should keep the price tickets and display a notice to the effect that fireworks were subject to a surcharge of so much in the £ and then increase the amount on the customer's bill accordingly. I will read from the firm's reply. It said:
  "I must, however, point out to you that one of the strictest rules of our business, and, indeed, of most reputable retail stores, is that we have one price and one price only marked on goods for sale, and we do in fact sell the goods for the prices there marked."
  The trade has printed all these price labels. The penny label has gone round. and the stores, or whoever they are, are being asked to collect an additional sum.
  When we look to see what the additional sum required is in some cases the idiocy of this tax becomes even more apparent. Apparently, what must be collected on a penny banger is 25 per cent., plus a 10 per cent. surcharge. If I am wrong I hope that the hon. Member will tell me so. Perhaps he will explain how it is that the farthing was abolished as currency a short time ago, and how on earth anybody will be able to collect the ridiculous amount of tax which goes on to fireworks costing ld., 2d., 3d. and the rest, without doing what reputable stores regard as being quite improper, that is to say, marking goods at one price and making an addition afterwards.
  What about the man who buys quite a small amount of fireworks? It is ridiculous to expect this kind of charge to be levied within the existing machinery. We were told that the ways of the Customs and Excise were many and devious. I do not know how it it will manage this one. We were given no intimation, except that which I have mentioned, as to how they should do it. If we are going to deal with a trade like this we must deal with it fairly. We must give it not three weeks' notice, but something very much longer. I should have said that we ought to have given it a year's notice, or the best part of it, before putting the tax on.
  Secondly, we must not tax something which has never been taxed before and

  1057
  which is habitually sold in units of Id., 2d., 3d. and the rest. The Chancellor may think that he is looking for "golden rain" in the middle of all this but he will simply be regarded as "the devil among the tailors" by the fireworks trade.
  It is a thoroughly ridiculous tax. The amount involved is quite small, and the Chancellor would do very much better to think of something else to tax. It is a cheerless sort of tax. What is the point of it? Fireworks represent a very small expenditure in any household—and in same households both parents and children look forward for a long time each year to something which is their bit of fun for the year. This is what the Government have been driven to taxing.
  I say to the Government, "If you are as mean as that, if you wish to tax the kids' one and only beanfeast, the one occasion in many families in which they have a bit of fun without doing anyone any harm—because the vast majority of fireworks are let off in that way—you are a cheerless lot and you had much better think of something else to tax instead."
  Mrs. Patricia McLaughlin: The hon. and learned Gentleman must be aware that the cheaper types of firework, often carried in children's pockets, cause a large number of serious accidents. It would be better still to ban them.
  Mr. Mitchison: The point which I made at the beginning, and which I make now a little more definitely and clearly, is that I entirely agree with the hon. Lady that safety precautions are very necessary for fireworks. These precautions ere possibly inadequate at the moment. But we shall not make fireworks any safer by putting 35 per cent. of a penny on the price of a "banger." It is like cigarettes; we shall not get people to smoke any less by putting a tax on cigarettes. We are doing nothing, but mulct for the benefit of the Treasury the only beanfeast of a lot of children and their parents, for whom I am sure the hon. Lady the Member for Belfast, West (Mrs. McLaughlin) has much sympathy. This is a question not of safety but of fractions of a penny, on one side and
  1058
  on the other, of upsetting a quite small trade, which does no other business and which will be greatly inconvenienced and probably deprived of a large part of its business by this silly Order.
  10.43 p.m.
  Mr. James Allason: In Hemel Hempstead we have the great firm of Brocks, which has been making fireworks for 250 years. If my hon. Friend the Member for Belfast, West (Mrs. McLaughlin) has any complaints about danger from fireworks, I can assure her that the industry will be very happy to look into them. A number of the more dangerous types of firework have already been taken off the market because of complaints.
  I make no complaint about the fact that the trade has not been consulted about this Order. Naturally the Treasury has to produce such an Order as a bolt out of the blue for any trade when Purchase Tax is being imposed; the trade cannot be consulted. But I ask my hon. Friend to consider the great difficulty which arises under the Order and therefore not blindly to say that, having been made, the Order must be approved at all costs. I hope that he will listen to a description of the great difficulties which have arisen for the trade.
  The Treasury may imagine that it has been extremely helpful in putting on the tax soon after 5th November, but if the trade had been consulted members of it would have told my hon. Friend that this is the worst date he could have chosen. As the hon. and learned Member for Kettering (Mr. Mitchison) said, the printing of the labels starts very much earlier in the year. The manufacturing plans are made in June. The printing of the labels starts in August, and soon afterwards the manufacture of the fireworks goes on, because fireworks have mostly been moved out in September and October and the manufacturers then start on the fresh production for the following year's fireworks. A very large number of the fireworks to be let off on 5th November this year have already been made and labelled with the prices.
  The shops have very limited storage facilities and the Explosives Act applies to them, and consequently only

  1059
  a small amount of fireworks can be stored in them. The factory has to store as much as possible and only starts delivering in June. Thereafter, the factory continues to keep the shops stocked up until November when the great sales rush begins.
  Sixty per cent. of the total sales of fireworks are in small items—1d., 1½d., 2d. and 3d.—and these are labelled with the prices, which is a great convenience to the public who know exactly what they are buying. A child can buy a ld. banger and know exactly what he is getting. This is for the protection of the public.
  As to the effect of this 25 per cent. Purchase Tax plus 10 per cent. surcharge, I can do the whole sum for the hon. Member for Gloucestershire, West (Mr. Loughlin). It is quite complicated because one has to deduct varying rates of discount for wholesale prices before working out the Purchase Tax, but in effect, in round terms, it works out that a ld. banger will cost 1 3/16d.
  Mr. Loughlin: I am grateful to the hon. Gentleman for working out this sum, but I did not need to know that. What I wanted to know was how one could put into effect the 25 per cent. plus 10 per cent. surcharge on a 1d. banger over the counter to a customer. It is no good telling the customer that the cost is so many sixteenths of a penny.
  Mr. Allason: I am sorry. I misunderstood the hon. Gentleman. I understand that it is illegal for a shop to mark up the price so that it makes an additional profit, over and above what it ought to make. If the 1d. banger is sold for1½d.—½d. being the lowest item of currency now available—it would appear that the shop is making 5/16d. additional profit, which is very excessive. I should like to hear from my hon. Friend the Economic Secretary to the Treasury whether this is so, and that shops are not entitled to make this additional profit.
  I have with me a letter from a large firm which is well known all over the country. It is from the central buying department, addressed to Brocks and puts the sales difficulty in a nutshell:
  "Dear Sir, Your representative has explained the difficulties in which you find yourself over
  1060
  the recent imposition of Purchase Tax and surcharge on fireworks. May I point out that our difficulties are no less involved, and that unless some satisfactory arrangement can be made, it is possible that some of our stores may be discouraged from handling these goods at all. All your fireworks have the selling price clearly marked on them. Our sales people are now expected to charge more for them in order to cover the Purchase Tax. There are several objections to this. The tax is calculated on a basis of 25 per cent. and 10 per cent. surcharge on our cost price. Our cost price operates on two different levels for boxed and loose fireworks, and there are certain overriding discounts. Although the gross calculations on invoices are complicated, they are at least practicable, but what does become extremely difficult is the tax apportionment at counter level. In theory it is easy enough to work on a rule of thumb scale, such as 2d. or 3d. extra charge per 1s. worth of fireworks sold, but as you know, we have a great many sales to children worth less than Is. How much, for instance, do we charge for a 2d. banger purchased loose, on a basis of 33·3 per cent. discount, how much for the same banger taken from 'broken up' boxed goods bought at a discount of 25 per cent.? It is no use arguing that this kind of thing is a triviality. A large proportion of the firework trade consists of similar trivialities.
  You must also bear in mind that children, who form a large part of our customers, simply do not understand Purchase Tax. When they see a firework marked 6d. they expect to pay 6d. for it. When a sales girl says it is really 7d. or 8d., or whatever the rule of thumb scales make it to be, the juvenile customer is inclined to suspect that the shopkeeper is overcharging him.
  There is another point you must remember. Firework sales in our stores at least are fast sales, compressed into a very short trading period the sales people using cash registers. Your proposed scheme involves all our sales girls embarking on rapid pieces of mental arithmetic, which for many of them are not suitable. If you have any experience of the present standard of shop assistants, you will readily understand my alarm at the prospect of a vast number of over and undercharges—the overcharges mostly coming back to us in the form of dissatisfied, and I might add, suspicious customers. As the time is approaching when we shall need to order for the coming season, I sincerely hope that some more practical scheme can be evolved."
  I have other letters in a similar vein which show that things are extremely difficult. I tried to work out a suitable notice for display on the counter. It might state that Purchase Tax was to be added to the marked price at the rate of 25/144 per penny, or approximately 17·361 per cent. But then, unfortunately, I came across the fact that there is also a 25 per cent. discount and a 33⅓ per cent. discount, giving a fraction of 57/288, or approximately 19·76 per cent. So such a notice on the counter would not be of very great value.

  1061
  It would be practical for the trade to make fresh arrangements this year for the November, 1963 season, and make up fresh sizes of fireworks with the prices marked on them. But that could not be done in time for the 1962 season. That is a point which the Treasury has not appreciated. If the trade is to reorganise and produce new sizes for 1963, the manufacturers would like to know now what the rate of Purchase Tax will be, and there would have to be some arrangement whereby it would remain at the same rate. I think that the trade would be prepared to work on whatever was the rate for 1962. But the manufacturers need to know that far in advance.
  My hon. Friend mentioned the difficulty about the Purchase Tax. The sales in June have to be paid for at the end of July. But, of course, the payments back to the trade from the shops take place at the end of November. This means that the trade will have to carry a very heavy additional burden, an equivalent of about 10 per cent., on the burden which they already carry, remembering that the manufacturers have to finance the whole of their trade for the year before getting the cash in.
  It would not be unreasonable to try to meet the trade on this matter. My hon. Friend said that this would have to run in the same way as other Purchase Tax impositions, but what I have said indicates that this is a very unusual matter, and I ask that some exception be made if this is to come within the limits of the tax. Alternatively, there is a good case for not bringing it within the Purchase Tax range at all. In saying that, I must make it clear that the trade does not want to give the impression that it is trying to get out of its obligation to contribute towards the Exchequer, but perhaps some other form of taxation should be imposed, possibly a turn-over tax.
  Mr. Nabarro: Is my hon. Friend seriously suggesting that the Government should single out pyrotechnics for unilateral treatment in the field of taxation and that they alone should be subject to a turn-over tax while other consumer durables should be subject to Purchase Tax? Is he not aware that Purchase Tax has been applicable to a whole range of products for many years?
  1062
  Might I urge him to study the position of the cosmetics industry?
  Mr. Allason: I am totally unaware that cosmetics are sold in 1d. packets. This industry is quite unique in the way it must make its preparations in June for sales which take place over a few months until November of the following year, all payment being received at the end of that November. This is quite a different trade altogether.
  The Treasury instruction which accompanied this Purchase Tax Order also imposes a tax on displays of fireworks and this may be the answer to the query of my hon. Friend the Member for Kidderminster (Mr. Nabarro) about what would happen if one sent up a rocket which was really a Very light for the pleasure of a ship's company.
  Mr. Nabarro: I raised the case of a rocket used by a ship in distress at sea, or a lighthouse. That is an entirely different matter to that raised by another hon. Member concerning the use of rockets or similar pyrotechnics for display purposes.
  Mr. Allason: I am sorry. It was the hon. and learned Gentleman the Member for Northampton (Mr. Paget) who raised the other matter. I beg the pardon of the hon. Member for Kidderminster.
  Mr. Nabarro: Readily granted.
  Mr. Allason: The Treasury instruction said that these displays are also to be taxed to the extent of the content of the fireworks within the displays, wonder whether that is exactly within the scope of the Order, since it is designed to impose a Purchase Tax on fireworks sold at wholesale rates? I am talking about fireworks that are not sold to the public at all. The manufacturers make up special firework displays and then the whole show goes off with tremendous acclaim. These fireworks are something special and cannot be bought through the shops. It is illegal to do so. I doubt whether this question of the Treasury instruction is completely within the Order.
  I hope that I have said enough to indicate that this is a thoroughly unsatisfactory Order, and I hope that the Minister will take special note of the grave difficulties Which have been raised by

  1063
  the trade and will, therefore, withdraw the Order and do something more practicable.
  10.59 p.m.
  Mr. Donald Wade: On many occasions I have drawn attention to the dislocation caused to industry by the imposition of Purchase Tax and changes in the rate of tax. It is not only the clerical work that is involved for manufacturers, wholesalers and retailers but also the interference that is caused to the normal flow of goods from manufacturer to retailer—sometimes leading almost to chaos.
  From the facts that have already been presented tonight hon. Members are entitled to say that the effect of this Order on the trade will amount almost to chaos. The Economic Secretary said that this was not a major change. I accept that. There is no major issue of Government policy involved and we are not being asked to say that the Government are for the bomb and against the banger. Nor are we discussing safety, although, perhaps for the benefit of the hon. Member for Belfast, West (Mrs. McLaughlin), I should mention in passing that I understand that, in co-operation with the Home Office, the trade 'has stopped making flash bombs and very big rockets and has introduced less noisy bangers.
  The effect of this Purchase Tax imposition is enough to reduce the purchase of fireworks. Even if that were the desire of the Government, I do not imagine that they would set about it in this way. The question is whether this is a suitable article on which to impose Purchase Tax and whether the timing is reasonable having regard to the exceptional circumstances of this trade. The circumstances are 'exceptional, as the hon. Member for Hemel Hempstead (Mr. Allason) pointed out. Manufacture is carried on throughout the year and the sale takes place within the space of a few months prior to November.
  I am grateful for the fact that this tax will not apply to fireworks used other than for entertainment. That is a step in the right direction, but is this change worth while having regard to the very real trouble which is being caused?
  1064
  I have received representations from manufacturers, as have other hon. Members. They are greatly disturbed about the timing and the fact that the Treasury was apparently completely unaware of the practical difficulties.
  I noticed that in the reply which the Financial Secretary gave to the hon. Member for Kidderminster (Mr. Nabarro) on 6th February, the Financial Secretary said, regarding removal of Purchase Tax from lawn mowers and its introduction for fireworks:
  "Both trades are seasonal and this was an opportune time for the changes".—[OFFICIAL REPORT, 6th February, 1962; Vol. 653, c. 216.]
  That is the whole point; it is not opportune. I have already heard of unemployment created in some firms as a result of the announcement. It is a universal custom, I am told, for the price to be printed and fixed for more than a year before the time of sale. There are special reasons for this. The size of the firework is no guide to its value, it is a rushed trade prior to 1st November, and many of the customers are young people between the ages of 13 and 21. It is reasonable that they should be trusted.
  It is true that this is a seasonal trade, but I do not think the Treasury appreciated that these plans have to be made not later than June for sale in the following year. Tubes have to be prepared and printed and boxes have to be made for each individual article. When the Purchase Tax Order was announced on 3rd January this year it was too late.
  I have a letter from Standard Fireworks of Huddersfield, one of the large manufacturers in this trade, which I shall quote from briefly. The letter says:
  "When the Purchase Tax Order was announced on 3rd January, we had very large stocks of goods brought over from the previous season and manufactured since 5th November, priced and, in many instances, packed ready for despatch. It was found to be quite impracticable to alter sizes and prices for this year because of that."
  There is also the difficulty of how this 25 per cent. tax is to be applied to articles priced from 1d. to 6d. Sixty per cent. Of these fireworks are retailed at prices not exceeding 6d. That is where the exception comes in from the cases quoted by the hon. Member for Kidderminster. I understand that an endeavour

  1065
  has been made to overcome this trouble and that traders have been asked to impose a surcharge of 2d. in the shilling. There have already been many objections. I have with me a few letters, but in view of the time——
  Mr. Loughlin: Read them all.
  Mr. Wade: I shall not read them all. I have one from Hull—
  Mr. Nabarro: I quoted cosmetics as just one case, but there is another exact analogy with what the hon. Member is discussing. From a fiscal point of view, there is no difference in principle between a sparkler that sells for a modest price and a pipe cleaner. Pipe cleaners, for example, have always been subject to Purchase Tax, though they sell at 1d. or 2d. a bundle, and manufacturers have had to apply it to the wholesale level. There is no difference in principle.
  Mr. Wade: There is one simple answer to the hon. Member. I know of no firm that manufactures pipe cleaners for a whole year and sells them all prior to 5th November. [An HON. MEMBER: "Or to schoolchildren."] I should like to have read from all these letters, but the hon. Member is taking up valuable time. I will quote, however, from one. It is from the Isle of Wight and is written to the manufacturers. It states:
  "Thank you for your letter regarding Purchase Tax and my deepest sympathy in your predicament. Government interference with trade is on the increase and the results are always disastrous. For my part, I don't think I will be prepared to do what you ask—explain to each child that his bob's worth of bangers will be 1s. 2d. Unlike Her Majesty's Commissioners, children have logical minds and are inclined to be rather outspoken nowadays. If the position remains unchanged, I shall restrict my sales to boxed goods plus the oddments I have left over from last year."
  That is one of about half a dozen letters. It is a problem for the trade and I hope that the Government will appreciate it.
  A suggestion has been put forward, and I think it reasonable, that if Purchase Tax is to be imposed, the charging of it should be deferred. I know quite well that that is exceptional and that it is unusual to announce Purchase Tax in advance, but this is an exceptional trade. I should like to give three reasons which are worth consideration.
  1066
  It is an important point to the trade that Purchase Tax should not be imposed without notice, without any opportunity of preparing for it.
  The three reasons for deferment—this is from Standard Fireworks, from which I have already quoted—are these:

  "(a) Traders would not on the whole buy more than they required for any one season because that would involve their carrying large dead stocks of fireworks on their premises for twelve months, until November, 1963, sale.

  (b) We ourselves could not possibly increase our 1962 output to cope with an extra demand of this nature, and the same would apply to other manufacturers.

  Furthermore, to do a big trade this year and then have no trade to do next year would be disastrous to any firework manufacturer.
  (c) Even if traders did overstock with a view to beating the tax, they could get no monetary advantage from it because they would still have to sell the goods the following year at the prices printed on them."
  I think that in the circumstances there is a reasonable case for withdrawing this Order.
  11.10 p.m.
  Mr. John Arbuthnot: I have a constituency interest in this Order in that there is a firm which makes fireworks in my constituency. It employs some 500 people in all, 200 indoors and 300 out of doors. It has already had to dismiss thirty people as a result of this Order, and expects to have to dispense with the services of a good many more.
  It will not have escaped the notice of my hon. Friend that so far there has been no friendly remark made about this Order. I want to make it perfectly clear that the reason for which I personally, and, I think, probably most other people who have spoken, dislike it so intensely is not that we object in any way to fireworks being subject to Purchase Tax that would seem a perfectly reasonable thing. The reason I object to this Order is the timing and the handling of it. The timing of it seems to indicate that the Treasury has no clue as to how the trade works.
  As my hon. Friend the Member for Hemel Hempstead (Mr. Allason) pointed out, the plans for the production of fireworks to be sold this November started last June, and the labels have already been printed for all the fireworks made by the firm in my constituency to be

  1067
  sold in the shops in the three months leading up to this coming November, and the three months' of filling had already been done, when this Order was made. It may be suggested that the labels could be taken back and fresh labels put on those fireworks. This is just not a practical proposition, since if one starts to put a new label on a small firework, either a penny banger, or a twopenny or threepenny one, one must use some form of adhesive, which will result in the possibility of the adhesive going through the firework case and the firework becoming a damp squib. It therefore is not possible to relabel the three months' supply of fireworks already made for next November.
  It seems to me that the right course for my hon. Friend is to withdraw this Order. I know the rules of the House prevent us from amending it. The thing to do, I suggest to him, is to withdraw it, and to give proper notice of his intention to introduce Purchase Tax as from 6th November next. My hon. Friend may suggest that that is an unusual practice. I agree, but this is an unusual trade. The reason the Treasury does not announce changes in Purchase Tax in advance is the fear that people will build up a stock of tax-free goods. That is not possible with the fireworks trade, because shopkeepers do not have magazines or storage capacity in which to store the fireworks. Since the trade is based on a steady production throughout the year, and the sales taking place in the three months immediately before November, it would not be a practical possibility for the fireworks trade to build up a stock of tax-free fireworks. This makes it possible for my hon. Friend to take the step, being urged on him from both sides of the House, and to show some sense of timing in this matter. I do not suggest that he should drop fireworks from the scope of Purchase Tax, but he should withdraw this Order and re-introduce it to operate from 6th November next, giving fair warning to the trade.
  11.15 p.m.
  Mr. Charles Loughlin: We can all congratulate the Government on their breadth of imagination in presenting us with the Order. We have spent the greater part
  1068
  of the day discussing a Supplementary Estimate and we are now to spend the rest of the night—I hope until about six in the morning—talking about putting 25 per cent. Purchase Tax, plus 10 pet cent. on penny bangers. How crackers can one get?
  Within three minutes of starting to introduce the Order, the Economic Secretary was conceding that rockets and Very lights would not be covered by the Order. He said that it depended on the character of the rocket and the Very light. A Very light or rocket used in a shipwreck would be outside the Order, but he could not explain what would be the position if such rockets or Very lights were used by his hon. Friends when they were entertaining themselves at Cowes. He has admitted that the Order cannot be applied universally and that when his hon. Friends are at Cowes enjoying themselves with rockets and Very lights, those rockets and Very lights, being a pleasurable occupation, will be outside the Order.
  Mr. Nabarro: It is not a pleasurable occupation listening to a damp squib.
  Mr. Loughlin: The hon. Member for Kidderminster is making sedentary interruptions. I do not object to his rising to his feet if he wants to.
  Mr. Nabarro: What I said was that it was not a pleasurable occupation listening to a damp squib.
  Mr. Arthur Lewis: The hon. Member far Kidderminster (Mr. Nabarro) was snoring.
  Mr. Loughlin: Within three minutes of the Economic Secretary's opening I had used the gag about a damp squib. Perhaps the hon. Member for Kidderminster was asleep. While his hon. Friends play about at Cowes, Purchase Tax will have to be paid by little lads like mine who, before 5th November, save part of their pocket money to buy fireworks. My lad is prepared to do jobs and to save pocket money to buy fireworks, but he has to pay tax. The Government impose Purchase Tax on the pocket money of little lads and give additional subsidies in Supplementary Estimates to farmers. What a wonderful Government they are!—They cannot impose the Order in one direction, but

  1069
  they talk about imposing a 25 per cent. Purchase Tax, plus 10 per cent., on a penny banger.
  Hon. Members opposite and one of my hon. Friends have been speaking for the trade. I do not think for a minute that that trade would object if 25 per cent. plus 10 per cent. were worked out on the basis of fractions, because the penny banger would be a 1½d. banger and the 1½d. one would cost 2d. Profit would be made.
  Mr. Nabarro: What about the Coops? What about the "divi"?
  Mr. Loughlin: Profit will be made on the basis of the increased Purchase Tax. I hope that my hon. Friends will pursue this issue. We ought not to be prepared to be parties to Orders of this kind even though the Economic Secretary has used his imagination in presenting it to us. We ought to say quite clearly that it is a load of nonsense. I know that the trade would have liked longer notice, but why should it have any notice at all? This trade is no different from any other.
  Mr. Nabarro: Hear, hear.
  Mr. Loughlin: This trade is not entitled to it, and here, unfortunately, I am being supported by the hon. Member for Kidderminster (Mr. Nabarro). Once we start giving advance notice to the firework makers—[Interruption.] The hon. Member for Kidderminster again mutters from a sedentary position. [Interruption.] Some of us, unlike the hon. Member for Kidderminster, did not have the advantage of a university education——
  Mr. William Ross: The hon. Member for Kidderminster (Mr. Nabarro) has not had the advantage of any education.
  Mr. Loughlin: That is why the hon. Member for Kidderminster is such an extrovert. It is possibly the greatest pity that he did not have a university education. If he had we should not be pestered in the way we are being pestered at the moment.
  Mr. Nabarro: I should have been over there, on that side of the House, with the hon. Member if I had.
  Mr. Deputy-Speaker (Sir William Anstruther-Gray): Order. The House
  1070
  will know that it is not in order to make remarks seated during the speeches of other hon. Members.
  Mr. Nabarro: I apologise at once and withdraw that statement. It was intended to be sotto voce but the exuberance of the occasion caused me to speak a little louder than I had intended.
  Mr. Loughlin: We are getting a little away from the subject of the debate. I was about to say that I saw no reason why this trade should have any preferential treatment over others to which Purchase Tax may be applied, but this is such a miserable Order that the Economic Secretary should take it away and bury it.
  11.25 p.m.
  Mr. Ian Percival: My intervention is in the spirit of a squib rather than a rocket; a squib which I hope will move my hon. Friend at least to shift his ground on the dates on which payment is to be made, rather than on a rocket to try to blast him entirely from his intentions.
  I, too, have a fireworks factory in my constituency, and as I also have a child-like delight in fireworks, it is perhaps natural that I have some knowledge of the industry. I think that it is most important to have some understanding of the special considerations which apply to this industry, certainly if one is to appreciate the point that I am going to make, and certainly if I am to persuade my hon. Friend that he should accede to my request.
  There have been many references to some of the considerations which should be borne in mind, but there are some that have not been mentioned, and some of those that have been mentioned bear repeating after one or two of the speeches that have perhaps strayed from the point at issue.
  The safety angle has been referred to, but one aspect of it has not, namely, that there is close co-operation between the Home Office and the industry. There is an annual meeting between representatives of the two to discuss what are and what are not desirable fireworks, and immediately that discussion has taken place the whale industry starts getting busy with its production for the following year.

  1071
  Another special consideration is that price labels are used for this commodity. I think that these are the only items bearing Purchase Tax which have a price label on them. Also not specifically referred to is the fact that this industry, in which certainly the bulk of the home trade is built up to one day, must try to spread its efforts and its expense over the whole year.
  Finally, one has these two special considerations. First, the majority of fireworks are distributed in July, August and September, and, secondly, I understand that the Home Office tries to discourage sales by retail except in the last fortnight before 5th November.
  Those factors give rise to three consequences which I think bear summarising. First, this is an industry in which the manufacturers lay out money all the year round, up to a peak about the end of October. Secondly, because of the discouragement of retail sales until the last fortnight before 5th November—a very wise and proper precaution—and because many retailers are small concerns and cannot afford a large capital outlay, they have to be given extended credit. The result of those two factors is that 31st October in each year is the time at which the manufacturers are extended financially to the furthest point.
  In those circumstances, the impact of this Order will be two-fold. First, it will create many technical difficulties for the industry. These have been so fully and lucidly put before the House by my hon. Friend the Member far Hemel Hempstead (Mr. Allason) that it would be odious for me to repeat them. Secondly, and I am more concerned about this, the tax payable in respect of goads distributed in July, August and September—which, as I have said, is the time when most of the fireworks are delivered—will fall to be paid on 31st October, the time when the Whole industry is fully extended financially.
  If my hon. Friend the Economic Secretary decides that despite the very persuasive arguments put to him by my hon. Friend he must still go ahead with the tax, I submit that he should not allow the maximum burden to fall on the manufacturers at the very time when they are bound to be most fully ex-
  1072
  tended financially. That seems to be piling Pelion on Ossa. The firms have a justifiable moan. It is not that they cannot pay the tax; I submit that they should not be called upon to pay it at that time, in addition to coping with the problems and the expenses which will come with those problems, to which my hon. Friend the Member for Hemel Hempstead has referred.
  In recent correspondence my hon. Friend has indicated to me—and he has made it clear to the House—that, although he is aware of these problems, matters must take their course. I ask him to reconsider that view. My request could easily be met administratively. The regulations which require payment on 31st October also require a general provision giving discretion. I can see no reason why, under this Order or some other provision, an administrative decision extending the period over which the tax is to be paid should not be made. This is a special case, and there are good grounds for making this exception, perhaps not regularly but at least for a start, until we see how it works out in the industry in this first year.
  Even some indication that my hon. Friend will give further consideration to this request would give a grain of comfort to the industry—some confidence that individual problems like this receive individual consideration, and that we do not simply say, "There is the tax. We know it raises problems, but get an with them." I ask for little. I hope that my hon. Friend will now feel able to turn round gracefully and give some indication that he will reconsider acceding to this modest request. He may gain by doing so. If I were a manufacturer of fireworks I should say, He has done this much to help us; now we must get on with the rest." He could do it now without breaching any principle, establishing any precedent, or causing any difficulties. I hope that he will.
  I started by saying that my intervention was in the spirit of a squib. I close by expressing the hope that my hon. Friend will not regard it as a damp squib, upon which he may sit utterly unmoved.
  11.33 p.m.
  Mr. David Weitzman: I have no desire to delay the House by repeating

  1073
  the arguments adduced by hon. Members on both sides. The Economic Secretary will recognise that not one voice has been raised in favour of the Order.
  Mr. Nabarro: I am all in favour of it.
  Mr. Weitzman: It may be that the Economic Secretary still awaits the eloquence of the hon. Member for Kidderminster (Mr. Nabarro). I interrupted the Minister to ask whether the trade had been consulted. I did not suggest for a moment that information with regard to the imposition of this tax ought to have been given to the trade, but having regard to what has been said, it looks as though the Treasury might have acted with a little common sense by making some inquiries from the trade and ascertaining some of the difficulties that would have arisen from the imposition of this tax.
  I have had a letter from a company manufacturing fireworks stating that already, as a result of this provision, it has had to discharge thirty employees. The firm says that it will have to discharge many more as a result of the Order. In view of all that has been said, I hope that the Economic Secretary will at least withdraw the Order and reconsider the matter.
  11.35 p.m.
  Mr. Gerald Nabarro: I rise to support the Order. The hon. and learned Member for Stoke Newington and Hackney, North (Mr. Weitzman) expected to hear at least one voice from the Government benches in support of the Order, and I support it as a matter of principle—and a very important principle, too. It is only a historical accident that fireworks were excluded from Purchase Tax in the first case. The manufacture of fireworks was stopped in the early days of the war, before Purchase Tax was introduced; that is why, historically, they escaped. Successive Governments omitted to put Purchase Tax on fireworks.
  I see no reason at all why every form of manufactured consumer goods, including notably consumer durables, should attract Purchase Tax rates up to 55 per cent.—including a large number of articles which are essential to the daily life of the people of this nation
  1074
  —whereas fireworks, which are essentially a luxury article, whether used by children or by grown-ups, should escape Purchase Tax.
  I must say at once that I have no sympathy at all with the arguments advanced by my hon. Friends the Members for Hemel Hempstead (Mr. Allason), Southport (Mr. Percival) and Dover (Mr. Arbuthnot) about the timing of this Order, about packaging and about pyrotechnics. There is not one of those arguments which cannot be multiplied a hundred times over in the context of thousands of manufactured articles which are already within the Purchase Tax schedule. Hard cases make very, very bad law in the context of this debate.
  I believe that fireworks should always have been subject to Purchase Tax, save only for the important exception made by my hon. Friend the Economic Secretary. I asked a Parliamentary Question on the subject a fortnight ago. Rockets which are of a special construction for the use of ships in distress at sea or for use by lighthouses, and Very lights, as used for military and naval purposes, again distinguished by special construction, should be excluded from the Purchase Tax schedule. If there is any doubt, I suggest to my hon. Friend the Economic Secretary that a certificate of exemption may be submitted by the purchaser of rockets for distress purposes, or Very lights, which would easily be capable of identification by the Customs and Excise for purposes of exclusion.
  As to the marking of all these thousands of packages of fireworks which have already been distributed, let me say to my hon. Friends who have raised the point so eloquently on briefs supplied to them by the fireworks manufacturers that, of course, we all——
  Mr. Denis Howell: Where is the hon. Member's brief?
  Mr. Nabarro: They all wrote to me first expecting me to support them, but I have no fireworks manufacturers in my constituency.
  Mr. Howell: A carpet bagger?
  Mr. Nabarro: A man cannot be a carpet bagger after being elected four times. My possessions run to much more than that which is contained within a carpet bag.
  I have no sympathy with this argument about the marking of the packages. Every firework has a price marked on it, but these are all in the channels of distribution at the moment, and from the date that this Order becomes operable it is necessary only for the external packing containing the fireworks to be marked with a label defining the amount of the emoluments to the price represented by the imposition of Purchase Tax.
  It has been done a hundred times over in the last few years when Purchase Tax rates have been changed and when enormous quantities of goods have been within the channels of distribution. It is no good my hon. Friend the Member for Dover nodding his head. He is generally occupying a sedentary position in the Chair during these Purchase Tax debates.
  Mr. Arbuthnot: I am not nodding my head. I am shaking it because the hon. Member talks so much nonsense.
  Mr. Nabarro: There is no nonsense about the marking of packages. My hon. Friend does not normally take part in Purchase Tax debates on the Finance Bill. Had he done so in the last few years, he would have found that it is commonplace when Purchase Tax rates change for the exterior of the packages to be marked with the change in the Purchase Tax rates. My hon. Friend the Economic Secretary will readily confirm that. Purchase Tax rates have changed many times during the last few years, and notably with the imposition of the regulator on 25th July last. Is that nonsense? The fact is that my hon. Friend the Member for Dover knows little of Purchase Tax matters.
  I support this Order. If a wide range of manufactured goods is to be heavily taxed within the Purchase Tax schedules, it is inequitable and anomalous that fireworks, which are a luxury article, should be excluded, and I support their inclusion in the Order notwithstanding the pleas of my hon. Friends who represent fireworks manufacturers in their respective constituencies.
  11.41 p.m.
  Mr. Glenvil Hall: It would be a pity if this debate ended on the note which has been introduced by the hon. Member for Kidderminster (Mr. Nabarro). To many of us on both sides of the House this is a very important matter. The livelihood of our constituents depends on what we do tonight, and I think it has been demonstrated beyond any possibility of doubt by speakers on both sides of the House that this industry is in a particular and peculiar position. Our criticism of the Government is that they did not take that fact into account when they produced this Statutory Instrument.
  I think it was the hon. Member for Kidderminster who said that when a change of this kind is to be made and Purchase Tax imposed, the industry concerned is not told. That is true. But, so far as my knowledge and experience go, industries which have in the past been subjected to Purchase Tax have at some time had discussions with Customs and Excise or the Inland Revenue in order that they may make themselves familiar with the practices within the industry concerned.
  It seems to me from all that I have heard in this debate and all that has been said to me by constituents and others that the Treasury or Customs and Excise have not informed themselves of the situation. Therefore, I hope that the Economic Secretary will realise that there is on both sides of the House a good deal of feeling in this matter and will be willing to take this Order back and look at the situation anew.
  It is not that the industry feels that in no circumstances should it pay Purchase Tax on fireworks—nothing of the kind. What it objects to is the way in which this is sought to be done and the time at which the tax is being levied. I do not want to go over the arguments which have been put forward tonight, but I think—and surely the Economic Secretary should have informed himself of this—that there is everything to be said for those arguments for taking back this Order. In particular, I hope that the Economic Secretary will realise that to ride off, as he did, on the fact that it is general for Purchase Tax to be paid at quarterly intervals is not good

  1077
  enough for this industry. The millions that the industry will be collecting at the end of November from retailers and others represents its main income for the year. But, glibly and almost casually, the Economic Secretary indicated that the manufacturers would have to refund the tax due earlier than that, I think on 31st October. Surely in that respect at least the Treasury could meet the industry.
  I hope that the Order will be withdrawn, but if it is not I hope that the Treasury will not expect the industry to produce many hundreds of thousands of pounds at a time when the manufacturers have not received the income from the sale of their fireworks.
  11.47 p.m.
  Mr. Barber: I am grateful to the right hon. Gentleman the Member for Colne Valley (Mr. Glenvil Hall) for having said that there is nothing objectionable in principle in the imposition of Purchase Tax on fireworks. After listening to speeches from both sides of the House, I think it fair to say that hon. Members have been concerned with the problems of financing, administration and timing and so on. When moving the Motion I went a little further than I had intended, as was the wish of hon. Members, and I anticipated some of the points which were likely to be raised. But in view of the way in which the debate has developed, I think that it would be most convenient if I dealt now with various points which have been raised.
  The hon. and learned member for Kettering (Mr. Mitchison) thought it rather miserable of us to give three weeks notice before the Order comes into effect. The hon. and learned Gentleman would be the first to realise that normally, when Purchase Tax is imposed, or an alteration made in the rate of a tax, there is no notice given at all. I think it fair to say that, bearing in mind that the sales of fireworks at this time of the year are very small, what we should be concerned with regarding timing is not the period between the laying of the Order and its coming into operation, but the period between its coming into operation and the busy period of the year for the industry.
  1078
  The hon. and learned Gentleman also referred to the Purchase Tax Order No. 3 concerning inter alia the removal of Purchase Tax from lawn mowers. It would be wrong for me to go now into the matter in detail, but since the hon. and learned Gentleman has asked me I will say that the reason for that change was developments in the design and the use of grass cutting machines which made it increasingly difficult to administer the tax equitably.
  My hon. Friend the Member for Kidderminster (Mr. Nabarro) gave the answer to the question why fireworks were not originally included when Purchase Tax was imposed. In 1940, when the tax was first levied, no fireworks were being sold. The hon. and learned Member for Kettering went on to deal with the question of prices—
  Mr. Mitchison: It has taken the hon. Gentleman some time to realise that the war is over.
  Mr. Nabarro: But there was a Labour Government for seven years. Good gracious me!
  Mr. Barber: If there is any blame to be attached to anyone for delaying the imposition of Purchase Tax on fireworks, I think that it can fairly be shared between us all. Having reached the conclusion that tax should be imposed I think it was right that we should take action.
  On the question of prices, I dealt with this at some length in my opening remarks and, while some hon. Members have mentioned the difficulty of placing a 25 per cent. Purchase Tax on goods of a low price, it is relevant—and this is a fair point—to remember that this is not a problem which is new or unique to this industry. Consider a host of items which cost a very small amount; buttons, clothes pegs, curtain rings and, as has been mentioned, pipe cleaners. It is not fair to present this problem as though it is something unique to this particular industry.
  Mr. Loughlin: One does not buy ld. worth of buttons. This whole question arises because each item costs 1d. That should be kept clearly in mind.
  Mr. Barber:If the hon. Member for Gloucestershire, West (Mr. Loughlin) loses a button from his jacket and wants a new one sewn on he would normally have to buy one of the same colour or pattern.
  Mr. Loughlin: It would cost more than 1d.
  Mr. Barber: In any case——
  Mr. Arbuthnot: It seems to be, firstly, that the item has the price label attached to it and, secondly, that one cannot change the price label once a firework has been filled because it would jeopardise the effectiveness of the firework. To change the label one would have to use some adhesive which might prevent it from going off.
  Mr. Barber: I appreciate the point made by my hon. Friend the Member for Dover (Mr. Arbuthnot) about not being able to use an adhesive on a firework once it is filled. But surely it is relevant to point out, certainly when Purchase Tax was first imposed and also when changes have been made in the tax, that a number of manufacturers of articles which had prices marked on them decided, simply because of this difficulty, that in future they would not have the prices marked on the individual products.
  Mr. Nabarro: Exactly.
  Mr. Barber: Not only the hon. Member for Dover but also my hon. Friend the Member for Hemel Hempstead (Mr. Allason) and the hon. Gentleman the Member for Huddersfield, West (Mr. Wade) raised the question of labels. I tried to cover this point in my opening remarks to which I do not think I can add anything beyond saying that I cannot consider it to be reasonable—just because of a difficulty which is not unique to this industry, although it may be more onerous to it—to defer the imposition of the tax for an additional year.
  I say that bearing in mind to the full the concern of the hon. Member for Dover who has spoken to me about this matter on a couple of occasions. The burden of financing Purchase Tax has also been mentioned by several hon. Members, particularly my hon. Friend
  1080
  the Member for Southport (Mr. Percival). It may well be that the fireworks manufacturers will have to modify the arrangements hitherto prevailing whereby generous credit is given. This is something which had to be faced by other manufacturers in the past and the difficulty is nothing unusual.
  Consider Christmas cards sold in bulk shortly before Christmas. The tax on them becomes due at the end of January. In answer to the specific point made by my hon. Friend the Member for Southport concerning the dates for payment of the tax; these dates are statutory and it would not be possible, as he suggested, to make mere administrative changes.
  Mr. Wade: Surely Christmas cards are not quite the same as fireworks. The suppliers are not called upon to pay the Purchase Tax at the end of November but in January—a very different matter.
  Mr. Barber: I am trying to point out that other products are subject to seasonal factors as well as fireworks. In other words, there is nothing new in this.
  I am grateful to my hon. Friend the Member for Kidderminster for making the fundamental point that there is nothing unique about the difficulties of this industry. Signal rockets and Very lights may be distinguished because they are differently constructed and the sale of fireworks is subject to Home Office control and, as a result, the Service and marine stores pass through different channels of trade from those channels for goods for 5th November. My hon. Friend the Member for Kidderminster also asked about Christmas crackers, and I find that these are already taxed as toys or requisites for amusement. I hope that my hon. Friend will appreciate that I am being purely factual when I point out that they come under the same heading as cardboard trumpets and hobby horses.
  Mr. Allason: My hon. Friend has not dealt with the point I made. How on earth can one calculate the most fantastic fraction at a time when selling a great number of penny packets?
  Mr. Barber: I can only tell my hon. Friend that this applies to other articles

  1081
  and the problem has been solved in other trades. I am sure that the fireworks industry will do the same.
  Resolved,
  That the Purchase Tax (No. 4) Order, 1961 (S.I. 1961. No. 2500), dated 29th December,
  Question put:—
  The House divided: Ayes 107, Noes 56

  Division No. 82.]

  AYES

  11.56 p.m.

  Agnew, Sir Peter

  Hamilton, Michael (Wellingborough)

  Pym, Francis

  Atkins, Humphrey

  Harrison, Col. Sir Harwood (Eye)

  Ramsden, James

  Barber, Anthony

  Harvey, John (Walthamstow, E.)

  Rawlinson, Peter

  Batsford, Brian

  Hastings, Stephen

  Redmayne, Rt. Hon. Martin

  Biffen, John

  Hendry, Forbes

  Risdale, Julian

  Biggs-Davison, John

  Hill, J. E. B. (S. Norfolk)

  Roberts, Sir Peter (Heeley)

  Bishop, F. P.

  Holland, Philip

  Roots, William

  Black, Sir Cyril

  Hughes-Young, Michael

  Scott-Hopkins, James

  Bourne-Arton, A.

  Johnson, Eric (Blackley)

  Seymour, Leslie

  Box, Donald

  Legge-Bourke, Sir Harry

  Shaw, M.

  Boyle, Sir Edward

  Lewis, Kenneth (Rutland)

  Smith, Dudley (Br'ntf'rd & Chiswick)

  Brewis, John

  Linstead, Sir Hugh

  Smithers, Peter

  Brown, Alan (Tottenham)

  Litchfield, Capt. John

  Stodart, J. A.

  Campbell, Gordon (Moray & Nairn)

  Longbottom, Charles

  Storey, Sir Samuel

  Chataway, Christopher

  McLaren, Martin

  Summers, Sir Spencer (Aylesbury)

  Clark, William (Nottingham, S.)

  McLaughlin, Mrs. Patricia

  Talbot, John E.

  Clarke, Brig. Terence (Portsmth, W.)

  Macleod, Rt. Hn. Iain (Enfield, W.)

  Taylor, Sir Charles (Eastbourne)

  Cordeaux, Lt.-Col. J. K.

  Macmillan, Maurice (Halifax)

  Taylor, Frank (M'ch'st'r, Moss Side)

  Corfield, F. V.

  Maddan, Martin

  Thomas, Peter (Conway)

  Coulson, Michael

  Markham, Major Sir Frank

  Tiley, Arthur (Bradford, W.)

  Courtney, Cdr. Anthony

  Mathew, Robert (Honiton)

  Touche, Rt. Hon. Sir Gordon

  Curran, Charles

  Matthews, Gordon (Meriden)

  Vickers, Miss Joan

  Dance, James

  Mawby, Ray

  Walder, David

  d'Avigdor-Goldsmid, Sir Henry

  Maydon, Lt.-Cmdr. S. L. C

  Walker, Peter

  Doughty, Charles

  Mills, Stratton

  Wall, Patrick

  du Cann, Edward

  Morrison, John

  Ward, Dame Irene

  Elliot, Capt. Walter (Carshalton)

  Nabarro, Gerald

  Webster, David

  Farey-Jones, F. W.

  Osborn, John (Hallam)

  Wells, John (Maidstone)

  Fell, Anthony

  Page, Graham (Crosby)

  Williams, Dudley (Exeter)

  Finlay, Graeme

  Pannell, Norman (Kirkdale)

  Wise, A. R.

  Fisher, Nigel

  Pearson, Frank (Clitheroe)

  Wolrige-Cordon, Patrick

  Fraser, Ian (Plymouth, Sutton)

  Peel, John

  Woollam, John

  Gibson-Watt, David

  Pitman, Sir James

  Worsley, Marcus

  Gilmour, Sir John

  Pitt, Miss Edith

  Grant, Rt. Hon. William

  Pott, Percivall

  TELLERS FOR THE AYES:

  Green, Alan

  Powell, Rt. Hon. J. Enoch

  Mr. Edward Wakefield and

  Gurden, Harold

  Prior, J. M. L.

  Mr. William Whitelaw.

  NOES

  Arbuthnot, John

  Hayman, F. H.

  Paget, R. T.

  Beaney, Alan

  Howell, Charles A. (Perry Barr)

  Pavitt, Laurence

  Blackburn, F.

  Howell, Denis (Small Heath)

  Redhead, E. C.

  Bowden, Rt. Hn. H. W. (Leics, S. W.)

  Jones, Elwyn (West Ham, S.)

  Roberts, Goronwy (Caernarvon)

  Brockway, A. Fenner

  Kelley, Richard

  Ross, William

  Brown, Rt. Hon. George (Belper)

  King, Dr. Horace

  Small, William

  Cliffe, Michael

  Lawson, George

  Spriggs, Leslie

  Craddock, George (Bradford, S.)

  Lever, L. M. (Ardwick)

  Stones, William

  Davies, Harold (Leek)

  Lewis, Arthur (West Ham, N.)

  Taylor, Bernard (Mansfield)

  Delargy, Hugh

  Loughlin, Charles

  Wade, Donald

  Diamond, John

  Mabon, Dr. J. Dickson

  Wainwright, Edwin

  Driberg, Tom

  MacColl, James

  Watkins, Tudor

  Forman, J. C.

  McInnes, James

  Weitzman, David

  Fraser, Thomas (Hamilton)

  Manuel, A. C.

  Whitlock, William

  Gaitskell, Rt. Hon. Hugh

  Mason, Roy

  Wilkins W. A.

  Galpern, Sir Myer

  Mendelson, J. J.

  Willis, E. G. (Edinburgh, E.)

  Gordon Walker, Rt. Hon. P. C.

  Millan, Bruce

  Gunter, Ray

  Mitchison, G. R.

  TELLERS FOR THE NOES:

  Hall, Rt. Hn. Glenvil (Colne Valley)

  Noel-Baker, Francis (Swindon)

  Mr. Ifor Davies and

  Hannan, William

  Oram, A. E,

  Mr. Sydney Irving.

  1961, a copy of which was laid before this House on 4th January, be approved.

  BRITISH ARMY (FUSILIER MARSH)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. G. Campbell.]
  12.5 a.m.
  Mr. Leslie Spriggs: I wish to endeavour to persuade the Secretary of State for War to authorise the payment of compensation for the wrongful arrest of Fusilier Kenneth Marsh of the 1st Battalion of the Lancashire Fusiliers now stationed in Germany—or, if the Minister wishes to dispute the use of the word "arrest," perhaps we can agree on some other phraseology which will cover the taking away of a man's liberty. I would submit that even the Secretary of State for War might agree that it is not normal practice to get people out of bed after midnight in peace time, and especially a man who has been on sick leave.
  Upon close examination it would appear that the Minister based his decision upon information which I must challenge. Even the Under-Secretary of State [has contracted it by the Answer given me on 13th December, 1961. Perhaps the House will bear with me while I refer the Under-Secretary of State to his correspondence and his right hon. Friend's Answer to me in the House some little while ago. If the hon. Gentleman wishes me to give way, I will.
  The Under-Secretary of State for War (Mr. James Ramsden): I have the extracts which the hon. Gentleman refers to, but I am not sure I have the complete HANSARD report. Perhaps the hon. Gentleman would remind me of the words.
  Mr. Spriggs: Yes, I will. The hon. Gentleman replied to my letter on 10th November, 1961, and said:
  "I find that Fusilier Marsh was granted leave from 30th July to 18th August. As his wife has told you, he fell sick while on leave and sent in doctors' certificates, the final one of which declared him fit to travel on 22nd August. His unit was notified of this and rejoining instructions should have been sent to Fusilier Marsh by the Record Office on 24th August. Due, however, to a most unfortunate oversight by a clerk, who, I am told, is no longer serving, these instructions were not in fact sent to him until he asked for them on 8th September. His unit, however, were unaware of this and had meanwhile
  1084
  posted him as being absent without leave from 22nd August, which entailed notifying the civil police. In accordance with the normal procedure, action was also taken to withdraw Mrs. Marsh's allowance book. However, as soon as Fusilier Marsh returned to his unit, steps were were taken to restore Mrs. Marsh's allowance book and as my private secretary told you on 5th October it was returned to her on 18th September. I am very sorry that this mistake occurred in the Record Office and I realise how distressing it must have been for Mrs. Marsh when her husband was arrested and then, to make it worse, her allowances were stopped."
  I now refer to the OFFICIAL REPORT for 13th December. I shall not weary the House by reading all the replies which the right hon. Gentleman gave me, but I will read the relevant parts, and if the Under-Secretary wishes to have the full account, I will give it him.
  Mr. Ramsden: It is all right. I have it.
  Mr. Spriggs: The right hon. Gentleman said:
  "My hon. Friend has already written to the hon. Member, giving him a full account of the circumstances, but I am glad to take this opportunity of stating that no blame whatever attaches to Fusilier Marsh, and to express my own regret at this unhappy error. I must however, make it quite clear that Fusilier Marsh was not arrested, and I do not consider that there are grounds in this case for financial compensation."
  The right hon. Gentleman replied to a supplementary question:
  "The hon. Member has had a full letter from my hon. Friend on this matter. I feel that to make an apology was the right action to take in this case. This was a complete mistake by a member of the clerical staff. When the fusilier was thought to be a deserter, the clerk informed the police. The police did not arrest Fusilier Marsh or detain him but they asked him to go to the police station to establish the facts. I very much regret this error. It was a simple human error for which I felt I should apologise, and I have done so."—[OFFICIAL REPORT, 13th December, 1961; Vol. 651, c. 446.]
  I cannot agree that that reply was satisfactory.
  I have taken the trouble to examine the facts in this case. The Secretary of State feels that this is not a case in which compensation should be paid, but I assure the House that the distress caused to this soldier's wife, and to him when he had to leave her in such a distressed condition, were anything but a matter which could be light-heartedly passed off, as the right hon. Gentleman wished.

  1085
  I will read a paragraph from this young wife's letter. She said:
  "Please Sir, try to help us, as all this worry is making me ill, and for my sons' sakes. I must not let that happen, because I love them so very dearly."
  Without doubt, this young woman was upset and terribly distressed when I met her, travelling home from Nairobi to do so.
  Last week I gave up a free weekend, something I seldom have, to go to find out the facts for myself. I found that the facts as stated in the correspondence and on the Floor of the House were correct, but I will supply details. I had better give them this way because I am afraid that the hon. Gentleman will read his right hon. Friend's brief and I want the hon. Gentleman to discard the official brief in this human story and struggle for justice.
  The police arrived after midnight and knocked up the family, which was asleep. When the fusilier reached the door, the police asked him if he was Fusilier Marsh. Upon being told that he was, the sergeant said, "I have a warrant for your arrest. I wish you to accompany me to the police station to give the inspector certain details." He did so. He gave the details to the inspector on arrival and even the police inspector could see the genuineness of the man's case. The inspector told him that he would check his story later that morning and that it had better be true. He asked the fusilier to see the officer in charge of the Territorial Army centre and to ask that centre to check with the police. After giving him a further warning that his story had better be true and saying that he believed him, the inspector told him that he could leave. In the early hours of the morning, this young soldier returned to his wife.
  I have ascertained these facts, and if that is not arrest, I do not know what is. If that is how the Secretary of State bases his case of "no arrest" I submit to the House that here is a clear case where a man's liberty was taken from him. And it was a case which caused distress. Other people were concerned. This young couple and their children love the house but other families live there and when the police arrive with the intention of getting someone out of bed and to the front door they do the
  1086
  job very well, as most people will appreciate. Everybody in the house was awake and they all realised that a man was being arrested, a man with a clean record and a good character.
  I am worried about how this sort of thing can happen and whether, even with this warning, it will happen again to other young men in the Services. If it does, will they be treated in the same way? There are cases to which I could refer where proceedings have been taken for wrongful arrest. I fear to tread on this holiest of 'holy ground and I shall not try to interpret the law. I know full well that there are hon. and right hon. Members here and elsewhere who are better qualified than I am to give a fair interpretation of the law, but I have tried to find out whether there is a right to sue the Crown.
  I have read certain Sections of the Crown Proceedings Act, 1947. I have not attempted to interpret their meaning, but I am assured by some of my lion. and learned Friends that there is a possibility and that there is a right. I appeal to the Under-Secretary not to put me in a position in which I should be bound to advise my constituent to take that action. I should prefer that the Secretary of State or the Under-Secretary should agree to discuss this matter with the object of paying out a small sum. This young man and his wife do not want to make a fortune out of a complaint of distress caused by this error.
  If compensation were conceded now in this place it would establish among National Service men, in the Regular Army, and among all who are serving in Her Majesty's Forces a real feeling that justice has been done and that Parliament is just as much concerned about their welfare as it is about the welfare of the rest of the British people. I appeal to the House and particularly to the Under-Secretary that it be seen beyond reasonable doubt that justice has been done. I am prepared to meet the Under-Secretary to discuss this matter if he is willing to meet me on the case as I have put it to him.
  12.20 a.m.
  The Under-Secretary of State for War (Mr. James Ramsden): The hon. Member for St. Helens (Mr. Spriggs) has put

  1087
  his case with great care and sincerity, and I shall do my best to answer all the points that he put to the House.
  It might help if I begin by trying to set out the facts as they concern the part played in this affair by the soldier himself, by the police, by the soldier's unit and the Record Office involved. in sequence, so far as I can, and as clearly as I can.
  Fusilier Marsh was granted leave in the United Kingdom from 31st July to 18th August last year. During his leave he fell sick and quite rightly and properly on 17th August forwarded a certificate of sickness to the Officer-in-Charge of Infantry Records at Exeter. Records received the certificate on 21st August and signalled the unit in Germany to the effect that the soldier was sick on leave.
  That was quite right, but in addition to signalling the unit Records ought to have acknowledged the receipt of the certificate of sickness from the soldier, and instruct him what he ought then to do, but they omitted to do this.
  Fusilier Marsh, when he heard nothing from the Record Office, wrote to it again, and this time, because he was better, said that he was fit to travel from 22nd August and asked for instructions how to get back to his unit. This letter was also pigeon-holed by the Record Office, quite wrongly. Appropriate action has been taken to remove the clerk responsible for these two oversights from the job in which his failure to discharge his responsibilities attributed to the sequence of events that followed.
  To complete the story with regard to the Record Office, it was not until Fusilier Marsh had been to his local Territorial Army centre on 8th September, and it had rung the Record Office, that the case came to light and instructions were sent by registered post. Then, in accordance with these instructions, Fusilier Marsh rejoined his unit on 13th September. This is what ought to have happened at the start, and it was certainly not Fusilier Marsh's fault that it did not happen.
  I go back now to what was happening in the unit. The unit acted perfectly correctly throughout. It knew from Records that the soldier was sick on
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  leave. On 29th August the unit signalled Records to ask for the latest report on Fusilier Marsh's fitness. Records replied saying that he had reported fit to travel as from 22nd August, and asked the unit to confirm the date he arrived.
  As he had not arrived, the unit took absentee action, which is normal practice. It involves publishing a Part II Order, and notifying the Paymaster, and the civil police nearest the home of the absentee. The Paymaster withdrew Mrs. Marsh's allowance book, as the hon. Gentleman said. It was restored on 18th September, as soon as the true position became known.
  Mr. R. T. Paget: Was this authorised by an officer in the unit?
  Mr. Ramsden: The Paymaster is notified by the unit, and according to the normal practice withdraws the allowance book.
  Mr. Charles A. Howell: Is the order signed by an officer or by a clerk?
  Mr. Ramsden: The Paymaster is notified by the unit orderly room staff, but the officer takes responsibility.
  When Mrs. Marsh's allowance book was sent back she was able to draw what she had been prevented from drawing earlier, and she quite rightly suffered no loss because the withdrawal was due to a mistake.
  The civil police also took what is for them the normal action to investigate the report of a soldier being absent without leave. They went to see him to make inquiries. They called late on Saturday night; actually at a quarter past twelve on the morning of Sunday, 10th September. They asked Fusilier Marsh to go with them to the police station to sort the position out and verify the facts, and he did so. His explanation was accepted, and he was told to keep in touch with the police and with the Teritorial Army Centre.
  The hon. Member said that when the police got there they said that Fusilier Marsh was under arrest, or words to that effect. I can only tell the House that that is not my information. The police, according to their normal practice, following their duties under sections 186 and 187 of the Army Act, went

  1089
  to satisfy themselves what the position was and to ask this soldier for his explanation. He gave it to the sergeant who called, and the sergeant then asked him if he would accompany him to the police station, so that the explanation might be further checked. This was done by the superintendent, the explanation was accepted, and Fusilier Marsh was given certain advice as to what he should do on the following day.
  As my right hon. Friend said in reply to the hon. Member's Question, Fusilier Marsh was at no time arrested. I am sorry that in my letter I referred to the distress of his wife at his being arrested. I used the word in a loose sense. and there is no question of an arrest having been made by the police. The fusilier was asked to go along with them to substantiate his reason for absence, and he did so to their satisfaction.
  Mr. Paget: What would have happened if he had said that he would not go? When the police pull a man out of bed after midnight and tell him that he is wanted at the police station, is the hon. Member seriously telling us that that is not an arrest?
  Mr. Ramsden: It is the duty of the police to make inquiries. I know that a quarter past midnight is a late hour to go to a house, but this was Saturday night, and there is quite a little activity going on in most cities even as late as a quarter past midnight on Saturday. The police had to go as soon as they conveniently could when they got this information, and at a time when they could be reasonably sure of finding the man at home. He was quite willing to volunteer an explanation, which was a genuine one. Had he not been prepared to co-operate the police might have had reason to suppose that he was a deserter. But that is a hypothetical point. As it was, he gave a ready explanation and justified himself, and was in the clear.
  Mr. Paget: Did the police tell him that if he did not want to go to the police station he did not have to?
  Mr. Ramsden: I have no information that they told him so. I do not see that that point necessarily arose. The soldier went along, and we have
  1090
  no reason to suppose that he was unwilling to give the explanation which eventually cleared the matter up, from his point of view.
  Mr. Spriggs: When the hon. Member wrote to me and said he was sorry that the fusilier had been arrested, if he did not mean "arrested" what did he mean?
  Mr. Ramsden: My right hon. Friend, and I, too, this evening, have made it quite clear that the fusilier was asked to go along to the police station to assist the police in their inquiries. This is quite a common thing to happen and, in the event. I suggest that the police acted correctly, and that the result was to clear up the situation.
  Mr. Paget: But did not the hon. Member also act correctly in interpreting this as an arrest?
  Mr. Ramsden: No, Sir; it was certainly not an arrest, and if the hon. and learned Member will allow me to complete my case I may be able to satisfy him further.
  The hon. Member for St. Helens has said that he would like Fusilier Marsh to be able to prosecute my Department, or, if that is not possible, for me to agree to pay him some compensation, but I must repeat what my right hon. Friend said, namely, that we have no power to pay Fusilier Marsh any compensation. He did not lose any sum of money. There was no identifiable loss, as I told the hon. Member in reply to his Parliamentary Question.
  The hon. Member asked me whether Fusilier Marsh had any right to sue the Crown and cited the advice of his hon. and learned Friend the Member for Northampton (Mr. Paget). The hon. and learned Member's advice is quite right. It coincides with such legal advice as I have been able to obtain. It is that Fusilier Marsh would be in a position to sue the Crown. But I must further tell him that my advice is that in this case the action would be most unlikely to succeed. It may well be that the House, not being a court of law, is not the place to argue the rights and wrongs of that proposition, but what is certain is that the hon. Member's constituent has a right to sue, should he wish. Having said that according to my advice he would be most unlikely to succeed in

  1091
  that enterprise, I can only repeat that the right is open to him and that if he wishes to take it, no doubt he could apply for legal aid were that necessary. But short of that being done, I am afraid that my right hon. Friend is in no position to offer to make any compensation along the lines that the hon. Member suggests, because there was no question of Fusilier Marsh having been arrested at any time.
  I quite see that the hon. Member may maintain that the Fusilier and his wife underwent a certain amount of personal indignity in being visited by the police at a late hour, got out of bed—if they were in bed—and asked to accompany the police to the station. One can make a little too much of this. It is not uncommon for the police to have to make genuine inquiries. My right hon. Friend has apologised, not in the least lightheartedly, as the hon. Member sug-
  1092
  gested, but with great sincerity, and I repeat that apology tonight. It is no light thing, I hope the hon. Member will accept, for a Minister to acknowledge a mistake on the part of his Department such as led to this chain of events. My right hon. Friend and I have acknowledged the mistake which happened and we have offered our apologies to the hon. Member and his constituent, and I hope that they feel that this carries the genuine weight that it should carry.
  I hope that as a result of the debate, and of the hon. Member having aired the case, it will be even more clearly realised that Fusilier Marsh is in no way to blame and that the hon. Member feels a little more satisfied on his account.
  Question put and agreed to.
  Adjourned accordingly at twenty-seven minutes to One o'clock.

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