§ Mr. ROYDSasked the Minister for Agriculture what the present financial position of the sugar beet factory at Kelham is; whether the factory is closed or about to be closed for want of funds; and what sum of Government money is involved?
Sir A. BOSCAWENThe present financial position of the sugar beet factory at Kelham gives cause for anxiety. Owing to the high cost of erecting the factory the company had exhausted their capital by the end of last year, and the directors applied to the Government for permission to borrow a further amount up to £200,000 in priority to the second mortgage held by the Government, and for a remission of the Excise Only on home-manufactured sugar. The application of the company was referred to a special Committee appointed by the Ministry in conjunction with the Treasury, under the chairmanship of Sir William McLintock. The Committee recommended that permission should not be given to the company to raise further money to rank before the existing second mortgage, and 1921W in regard to the Excise Duty they pointed out that its remission would amount to a subsidy on beet growing at the rate of £24 an acre.
The Government has decided to act on the Report of the Committee, and the directors of the company are considering the whole position, but owing to the high costs of production in this country at present they have suspended entering into any contracts with farmers for the growing of beet this season. The Government hold £250,000 in shares in the company, which is half the issued capital, and have also advanced a loan of £125,000 to the company on a second mortgage, subject to a prior charge of £40,000 for cash advanced by the company's bankers. The Government have also guaranteed a dividend of 5 per cent. per annum on the 250,000 shares subscribed by the public for the 10 years ending 31st March, 1930, but this guarantee ceases if the company goes into liquidation or ceases to manufacture sugar.