Source: https://api.parliament.uk/historic-hansard/commons/1937/may/03/clause-4-subsidy-to-producers-of-fat-1
Timestamp: 2019-04-19 00:22:27+00:00

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HANSARD 1803–2005 → 1930s → 1937 → May 1937 → 3 May 1937 → Commons Sitting → ORDERS OF THE DAY.
I beg to move, in page 4, line 17, at the beginning, to insert: Where the prevailing price for fat cattle is less than the price to be fixed by the Ministers as the standard price and. I regard this Amendment as the most important Amendment that will be moved on the Report stage. Under Clause 36, in Part VII of the Bill, the Treasury have the power to set aside £5,000,000 per annum to subsidise the producers of fat cattle in this country, and the only conditions so far laid down in the Bill are the conditions as to quality, age, weight, and other incidental matters. So far as the cost of production or the market price is concerned, there seems to be no limitation or condition as to when the £5,000,000 shall be reduced, or when the payments shall cease. All that is laid down in the Bill is that the Ministers responsible, with the Treasury, have the power, if the Bill goes through without such an Amendment as this, to pay £5,000,000 per annum whatever the cost of production may be and whatever the market supplies may be. The Amendment, therefore, invites the Minister or Mi Misters to fix a standard price, so that, when the market price reaches a point above the standard price, there will be no further need for payment of subsidy.
The Minister may, and probably will, argue that, in view of the absence of information as to cost of production, it is impossible for the Ministers to fix a standard price. He may argue that, since prices differ in various places, it would be difficult to fix one standard price that would be equitable in all parts of the country. He may also argue that, in fixing the standard price, he would 878 have to have some regard to quality, which would make his task infinitely more difficult. I happen to know that there is a constant variation in the price paid in markets all over the country. During the past month, the price at Salisbury has been 51s. per live cwt. for first quality, and at Llandilo, in Wales, it has been 38s. per live cwt., so that at the same time, in the same week, the producer at Llandilo has received 38s. per live cwt. plus 5s. subsidy, or 43s. in all, and the producer at Salisbury has received yrs. per live cwt. plus 5s. subsidy, or 56s. in all.
For first quality in both cases. Those variations recall to my mind the arguments advanced by hon. Members opposite on the Second Reading. Members from Aberdeen, from Norfolk, and from other county constituencies argued that no one could produce fat cattle at less than 5os. per live cwt. One or two suggested a figure of 52s. 6d., but in each case the spokesman of the agriculturists from the Tory benches referred to costs of production that suited his own particular case. If we were to take those Members at their word, the time was reached three weeks ago when no further subsidy ought to have been paid to the Salisbury producer, because he was actually receiving as much as hon. Members argued was necessary for the production of a live cwt. of beef. The Minister has never stated, either to the House or to the Committee which dealt with the Bill, what in his opinion or in the opinion of his colleagues was the appropriate price for a live cwt. of beef. He has never said whether it ought to be 52s., 55s., 50S., 45s., or 879 whatever it may be, and at least we ought to know from the Government what they think is the appropriate standard price below which they should pay to the producer a subsidy, whatever that subsidy may be. It has been argued that the Minister has the power, after he has accepted one subsidy scheme and that scheme has commenced to operate, to revoke the scheme and make another, but so far we have never been told what would prompt him to make another scheme with regard to the finance of the subsidy. The House and the country are entitled to know just what is in the mind of the Government.
I recall that in 1934, when the price of fat cattle per live cwt. was round about 37s., the Minister argued that that was a non-paying proposition, and the House, therefore, put up £3,000,000 for a period at the rate of 5s. per live cwt., in addition to the 37s., or a total of 42s. per live cwt. That was the average for the country. People in some places would get more, and in others less, according to quality and according to the market. But by January, 1935, the price per live cwt. for first quality had fallen to 32s. 7d., which, with the subsidy of 5s. made a total of 37s. 7d., and it may very well be—I do not profess to be an expert in farm accountancy—that 37s. 7d. was an uneconomic price and that the producers of fat cattle were losing money. But since January, 1935, the average price has increased from 32s. 7d. per live cwt. to, last week, 44s. 6d. If the 5s. was a reasonable subsidy when the average price was only 35s. per cwt. what is a reasonable subsidy when the average price is 44s. 6d.? We are clearly entitled to know that from the Minister. There has been an increase, over the period I have mentioned, of I2S. per live cwt., or 2½ times the amount of the subsidy that has been paid. This increase has been continuous over the last three or four months, and prices are still on the upward grade.
Clause 36 of the Bill sets out to provide £5,000,000 per annum for subsidy, and the payment for first quality is to be 7s. 6d. per live cwt. instead of 5s., as it is to-day, so that, if the Bill remains without Amendment, and we take last week's prices as our guide, we shall have this situation: As compared with the figure of 37s. per live cwt. when the 880 subsidy commenced, plus 5s. subsidy, making 42s., we now have an average price of 44s. 6d., and we contemplate giving a subsidy of 7s. 6d. instead of 5s., so we shall be giving 7s. 6d. plus 44s. 6d., which will make 52s. per live cwt. What I want to ask the right hon. Gentleman, and what this Amendment calls for, is: At what price will he cease paying the subsidy for the production of livestock? The House is clearly entitled to know that.
Then there is another point about which we are entitled to know something. At Doncaster a fortnight ago the price was 41s. per live cwt. At Dorchester it was 46s., at Hull 40s. 6d., at Carlisle 46s. 6d., at Louth 40s. and at Salisbury 48s. 6d. The House is clearly entitled to know why the producer at Salisbury gets 48s. 6d. per live cwt., plus 5s. subsidy, while the producer at Doncaster gets only 41s., plus 5s. subsidy. Does it cost more to produce in the Salisbury area than near Doncaster, or are there other factors intervening, apart from quality, which make this difference of 7s. 6d., because, assuming that all the factors are fairly uniform, clearly if the Doncaster producer can manage on a price of 41s., plus 5s. subsidy, the Salisbury producer, who will get 48s. 6d. without subsidy, does not require any subsidy.
That seems to me a very simple and, I hope, a very clear case for a thorough explanation from the Minister as to what the policy of the Government really is. We do not ask them to get the production of each one of 50,000 farms. That would be ridiculous. We have our research stations and agricultural institutions. The right hon. Gentleman said it was not a job for the Commission to potter about with costs. That was obviously the duty of the research stations, and we entirely agree, but the Commission ought to know from the scientific institutions just what the cost of production is. If the Minister of Labour wants to make a statement on the categories of unemployed, young, old or middle aged, or whatever it may be, he does not go to the 1,600,000 who are out of work and take the whole lot. What he does is to take a sample of certain types of cases throughout the country, and he is guided in his future Parliamentary action by the results of those samples.
For costing purposes there is no reason why the Commission should not take 881 samples of ordinary average farms in various parts of the country. They would then know something about variations in price, they would know exactly what they wanted to know about costs of production, and they would know exactly what subsidy, if any, was called for to make the production of beef a paying proposition. The Bill, as it stands, says only that regulations shall be made which shall determine the subsidy to be paid for a certain class of animal. It must come up to a certain standard in weight, must be beyond a certain age, and must fulfil certain conditions, but there are no arrangements laid down whereby, if the market price reaches a certain point, the subsidy automatically starts to decrease. That is a very serious loophole in the Bill and I hope the right hon. Gentleman is going to repair it. We on these benches have been charged with never wanting to do the decent thing for the farmer. That charge is unjustifiable. If it is true that the cost of production has no near relation to the existing market price and the subsidy must be paid for the preservation of agriculture, there would be no objection perhaps to paying the subsidy if we knew that the farmer and not the landowner received it, but when we agree to a subsidy we ought to know the whole facts as to the cost of production and what is the fair price, and then perhaps we should be much more whole-hearted in support of legislation introduced by right hon. Gentlemen opposite than we have been so far.
I move the Amendment with every confidence that at least that handful of Members who are present and who want to be as fair to the taxpayer, the consumer, and the nation as a whole as they want to be to the producer, will support it, because by such an Amendment they would know that at no time in the future would the producer be losing money, we should have the cost of production and the market price before us, and we should know exactly what subsidy, if any, was justified in the circumstances.
The provision of the subsidy without any regulation as to a standard price must, I think, strike most Members as being a most unbusinesslike proceeding. 882 By this Clause the State is providing for handing over probably £5,000,000 per annum in subsidy to the raisers of cattle, irrespective of the price obtained for them. If the price rises, as it has risen, and goes far beyond even the amount which farmers say would be quite satisfactory under the Bill as it stands, they would still be entitled to the subsidy. Assuming that the farmer puts the cost price at 50s. or 55s. and in the course of a year's marketing it rises to 65s., he will still receive the subsidy. On what grounds can it possibly be defended? It is very much on the lines of the derating system, which relieves people making huge profits of 75 per cent. of their rates. It may be said that it is difficult to fix upon a costings basis, or the cost of the beast of, say, 10 or 11 cwt., but there is no difficulty about quality, because the regulations provide that for the ordinary quality of beef there is to be a subsidy of 5s. for home-grown and 2s. 6d. for imported. There is a better quality and for that they are to get 7s. 6d. for home-grown and 5s. for imported. They know what the quality is anyhow, and why cannot they get the costings? Surely it is not impossible to obtain the co-operation of enlightened farmers who would be willing to lay before the Commission the actual facts of their costings, and by such means the average cost might very well be arrived at. In these circumstances, if prices rise in consequence of changes in market and general industrial conditions, the subsidy should come down accordingly. As it stands now, as my hon. Friend has said, it is a case of giving a blank cheque to the agricultural industry, irrespective of the needs of the situation. On these grounds, I second the Amendment.
I rise to support the argument of my hon. Friend, because what has been done for milk and for wheat should also be done for beef. There is now something in the nature of a sliding scale in the subsidy to these two farm commodities. Owing to the general rise in world prices for wheat, the deficiency payment on that commodity has now fallen to a few pence per cwt., and, therefore, the taxpayer, or the consumer in this case, is spared the extra money which has had to be found hitherto for making up the deficiency on the wheat 883 price. There is a similar case in respect of milk at the present time, where, owing to the rise in imported dairy produce, the guarantee which the State is giving to keep the price of manufactured milk at 5d. a gallon is now much less than it was before. Indeed, I think that it has disappeared altogether. What is possible for these commodities should be possible for beef also.
I can see no provision in the Bill which will do anything to provide a sliding scale which would save the taxpayer expense if the price of fat cattle should rise. There is very definite indication that we are not going to experience the same low price for fat stock in the future as we have been experiencing in the past. Until now there is no doubt that the position has been very bad indeed for the farmer. There can be no doubt whatever that over very large areas the feeders have been losing money. At the same time—and here I come to another point to which my hon. Friends referred and which I wish also to stress—the case is very strong for getting more facts about the costs of production.
When we were in Committee on the Bill, I supported Amendments requiring the Commission to take steps to calculate the costs of production figures and general farm costs relating to the feeding of fat stock, because here we have a very clear example of the need for getting this information. There are farmers of whom I am aware, who, all through these very difficult times, have just been able to get through and get their costs of production, even with the existing low prices. They are favourably situated, their cattle do not require very heavy feeding on cake and other feeding stuffs, and their farms are also efficiently managed, and even at the price which then prevailed, of 38s. a live cwt., they were able to get through with it. There are others who, if the price were 45s. or even 50s. a cwt., would not get through with it. They are not feeding farmers at all, but rearing farmers. We ought to know, on the basis of figures produced by the research stations, where those areas are. We should then be able to get some idea as to what rate the subsidy should be, instead of the sort of hit-and-miss arrangement that we have now of just thinking of a figure, which may perhaps 884 be right, and putting it into a Bill which then becomes the law.
We want to know these facts, because prices are rising at the present time, and we are not going to have a continuation of the low prices we have had for some time past. My hon. Friend the Member for Don Valley (Mr. T. Williams) has. quoted prices for first quality beef, which vary from district to district. All through these figures one can see a much higher level now than was the case two or three months ago. We may even reach 50s. per live cwt. if things go on like this, and if that is the case, why should we, in addition, be paying this extra subsidy? We shall be giving up to 55s., and, in the case of first quality beef, 57s. 6d. a cwt., which would be a gross imposition upon the taxpayer of the country. As one who has all along supported the principle that the State should assist the livestock industry. I consider that the subsidy proposed in the Bill is right, but I want to see it scientifically applied, efficiently administered and given in such a way as will create confidence in the general public that the producers are doing their best, and not just getting a subsidy and getting away with it without giving something in return. Nothing would be more likely to create a feeling that agriculture is not an industry which should be supported than to give subsidies without proper control, and for that reason I am hopeful that the Minister will give us some indication that he is prepared to do something to meet us on this. matter, because the standard price and all that it involves are essential to the proper working of this Measure. Just as we have it in the other branches of agriculture to which I have referred, so. we ought to have it in regard to meat, in order that the maximum inducement can be given to efficient production and the taxpayer will not be asked to contribute when the industry is not really in need. I do not argue that the subsidy is not needed, but I say that if the market conditions go on as they are to-day the argument for a sliding scale will be irresistible.
I hope the Minister wilt not incorporate the Amendment in the Bill. My hon. Friend who has just spoken is a practical man and he will realise that the analogy he drew between 885 milk, wheat and meat is not a good one, because in the case of wheat and milk the article is to a certain extent standardised, whereas meat is not. Meat varies very much in quality and description. An animal which might be very suitable and be looked upon as first grade for one particular market would not suit entirely another market. There are some areas where a large heavy animal is more suitable than in another area, because perhaps there are many more restaurants where they use large joints, whereas in another district the smaller joints would be of greater value and consequently of higher quality.
What I object to in the Amendment principally is that it only acts one way. If the price goes up then the subsidy is to be decreased, but if the price goes down there is no provision that the subsidy should be increased. Consequently, as it is proposed the Amendment would act unfairly and only on one side, and that against the producer. It would be very much better to wait until we come to the next Clause, which is the real answer to the Amendment. Under that Clause the Commission will have to consider the question of the scheme under which the subsidy is given. It will have full power to obtain any information which is available before submitting a scheme to the Minister, and when the Minister has approved it that scheme must lie on the Table of the House for our consideration. That is the time when we could discuss the particular scheme. Although prices may be ascertained as being suitable in one case they might vary considerably in another. Weather conditions have a great deal to do with the progress and growth of an animal and also with the natural food produced from the soil.
Again, there are conditions which are outside our control but which rule the cost of the imported foodstuffs which the producer has to buy for the animals to consume. All these things have to be taken into consideration, and the liability of variations makes it almost impossible to say what would be the cost of production to be put into the Bill. It is, therefore, very much better to leave it to the Commission to make their full inquiries and after deliberation bring forward their scheme, which we shall have the right to criticise when it comes to the House.
We understood that the subsidy of £5,000,000 was to assist the farming interests in the production of cattle. We were told that the prevailing price was insufficient to recoup the farmer, and that was the reason for the subsidy. We will assume that a costing system was brought into operation. That will determine whether or not the selling price for the cattle shows a profit. That should not be difficult to ascertain, and once it is ascertained it would surely not be the intention of the Government to give a subsidy to the farmers if they could produce cattle at a profit. When the production of livestock becomes a paying proposition the Government cannot intend to continue to pay subsidy to the particular farmer or the district where the cattle have reached a high price.
The Commission will see to all that.
I have great sympathy with the idea of a standard price and I should be perfectly happy if we could arrive at a standard price. I can assure hon. Members that the farmers have no desire to fleece the public. All that they want is to get a fair price which will enable them to stock their land properly and to keep their land going. The difficulty about the Amendment is that it operates in only one direction. I would ask hon. Members whether, if it was found that the £5,000,000 was insufficient to bridge the gap between the selling price and the standard price, they would be prepared to recommend that more subsidy should be given than the £5,000,000. I think they would probably think twice before doing that. That is where the trap comes in. The farming community are trying to do their best to keep their land properly and to keep their workers employed under proper conditions, but it costs money. Therefore, I hope the Minister will not accept the Amendment until we have very much more information and until the whole House is prepared to make this thing work both ways, so that if the £5,000,000 is not sufficient they will give more. It is a matter of common knowledge that during the last two years the £5,000,000 would not have bridged the gap between the standard price and the selling price. 887 Until we can get the assurance of very much more exact information, I hope the Amendment will not be accepted.
I have listened very carefully to the hon. Member for Stone (Sir J. Lamb) and the hon. and gallant Member for Petersfield (Major Dorman-Smith), who both appeared to me to put forward some strange reasons why they do not support the Amendment. They put forward the idea that if the price increased there would be a decreasing subsidy and that if the price decreased there should be an increasing subsidy. I should like to know where the farming industry is going to be if we are going to safeguard it like that. If we are going to take all risks out of farming, if we are going to leave the farmer with no need to exercise initiative or enterprise, which is the quality that we are told in this House is possessed by private enterprise, I want to put a straight question, and that is, that if we are to do all that for the farming industry why not boldly face nationalisation? If we are to have a farming industry without risk, are we going to subsidise and bolster up inefficiency?
I was much impressed by the speech of my hon. Friend the Member for the Forest of Dean (Mr. Price). His knowledge of farming is extensive and exact. He is in the industry himself, and there can be no disputing his knowledge of it. He has pointed out that the price of fat cattle is gradually increasing and that there are no safeguards in the Bill which will prevent a subsidy being given to farmers when they are making quite a good thing out of it. The object of the Amendment is to put these safeguards in the Bill, so that we shall not give public money to people who are making really good profits. I take it that the price of farming products depends, like many other things, on the general state of prosperity in the country. If you have miners and engineers and steel producers earning better wages they will be able to buy more meat and a better quality of meat, and prices will go up. There is every prospect that the prices of farm products are going up and that it will be an economic proposition to produce them. Therefore, the industry will not need the subsidy.
888 I want to ask what the Minister is going to do when that time comes. Is he going to pay a subsidy to farmers who do not need it, to producers of fat cattle who do not need it? Is he going to dole out public money into the laps of farmers when they do not need it? We are entitled to an answer to that question. There are no safeguards in the Bill. We are going to pay public money to the farming industry, but there are no safeguards at all for the public purse, and we are entitled to ask that they shall be placed in the Bill.
The hon. Member for Brightside (Mr. Marshall) has said that there are no safeguards whatever in the Bill against paying a subsidy when perhaps the price of fat stock is rather high. While that seems very unlikely to happen after all the bad years, which have so impoverished the livestock producer and the land of this country, let me draw his attention to a Sub-section in Clause 5, which says: The Ministers may withdraw their approval of any subsidy arrangements approved by them, and may approve subsidy arrangements varying or superseding subsidy arrangements previously approved by them. Therefore, the answer to the present Amendment is in the next Clause. After all, the farming industry were prepared to accept a standard price. That is what they have asked for, but the Minister in introducing the Bill on Second Reading said this could not be done and that it would be better to have a fixed subsidy. Are hon. Members going back on that? They cannot have it both ways. Surely, if farmers are denied a fixed price, if they have suffered gravely from low and reduced prices, are they still to suffer? Is it the proposition of hon. Members opposite that as soon as prices get a little better and they have a chance to improve their stock and their land the subsidy is to be cut off? That is a most unreasonable proposition.
In moving this Amendment the hon. Member for Don Valley (Mr. T. Williams) prophesied that I should say that that it was impossible to accept it because of the difficulty of fixing a standard price. I am afraid that is so. It is impossible with our present knowledge to fix a standard price which would be equitable and satisfactory to the indus- 889 try. I need not dwell on the various reasons which make it impossible, but, obviously, there are great differences in local conditions, differences between one county and another and between one farm and another, and difference also in the seasons. But the fact remains that it is not a matter of practical politics to fix a standard price satisfactory to the industry. It would be very convenient indeed if we could. It would get us over a lot of our difficulties if we could fix a standard price, as we can for coal or steel. But the farming industry is so absolutely different that it is not a possible operation and, therefore, on practical grounds alone I shall have to resist the Amendment.
The hon. Member also drew attention to the difference in price between a sale in Salisbury and a sale in a small Welsh village, whose name I did not catch and even if I did I could not pronounce. I think it is difficult to argue from a single case, but in the case of Salisbury and the Welsh village the disparity arose probably because of the different breeds which were being sold, but also partly because of different local conditions and partly because the reporter in reporting first quality meat adopted a fairly wide range of products as coming within the definition of "first quality." At any rate, it is difficult to argue from an isolated case. The hon. Member asked what the Government thought to be the right price and gave figures showing the rise in prices since 1934. In that connection may I remind him of something which was said on the Second Reading when a similar point was put? The point then was that the assistance to the industry should be postponed until the standard price or the actual cost of production could be arrived at. The hon. Member will realise that if the Amendment were accepted it would mean postponing the assistance until we could ascertain the standard price and that might require a long investigation. But that is by the way. What I said then was: I think it was in 1933 that there was a collapse in cattle prices, and the object of the subsidy then was to stop the rot and to give temporary assistance. The cattle industry had suddenly slipped off the ledge and was falling into the abyss, and an endeavour had to be made to pull it back. On the basis at that time of the average realised price of the recent years before the collapse it was assumed that a figure of 5s. per cwt. would be just 890 about enough to put the industry back on to the ledge. No doubt what was in the mind of the Government of that time was the criterion behind the actual figure of 5s. As I said on that occasion: in regard to the present Bill it is desired, and I think the House is fully in accord with the desire, to encourage the production of a better product, and for that purpose there is an increase in the amount of money made available of £1,000,000, making up the total of £5,000,000."—[OFFICIAL REPORT, 21st January, 1937; col. 419, Vol. 319.] The hon. Member should bear this in mind. He is criticising a possible figure which the producer may obtain. Since the years he quoted there has undoubtedly been a rise in the cost of production, and he also quoted figures at a particular time of the year when a peak period is approaching. We do not know what the ultimate figure may be. Past experience has led us to expect a considerable drop. I hope that will not occur, but we cannot say from the experience of one or two months of comparatively high prices that they will necessarily be durable.
We do riot ask that, should the necessity arise as a result of the market price fluctuating downwards as well as upwards, no assistance should be available to the industry. All we say is that the Government must first of all have made up their mind that a certain price is necessary for beef production to continue, and have based the subsidy of 5s. on that price, thereby putting the farmers on the ledge. Since that time there has been an average all-round increase of, say, 9s. a live cwt. All we ask the Government to do is to fix a standard price and then, on the assumption that the subsidy is correct, the Treasury will know exactly what their future obligations are likely to be.
The hon. Member had not come into the Chamber when I was dealing with the standard price. I said what he prophesied I would say, that it was so difficult to fix a standard price that at the present time, in our present state of knowledge, it would not be a matter of practical politics to fix a basis for the standard price. The hon. Member asked at what price the Government would cease to pay the subsidy, and there again, in view of our present knowledge and in view of the impossibility of having a reliable fixed figure as the stan- 891 dard price, we can only watch events and be guided by the course of prices and the costs of production. The hon. Member for the Forest of Dean (Mr. Price) took the Wheat Act and the Milk Act as an analogy, but I think my hon. Friend the Member for Stone (Sir J. Lamb) pointed out correctly that it is not possible to make an analogy between comparatively specialised industries such as the milk and wheat industries, in which it is possible to get figures which are approximately of general application and the beef industry where the conditions vary so remarkably and where the problem of mixed farming makes the obtaining of reliable accounts a task of doubtful realisation. I have no particular malice against obtaining the costs of production and fixing a standard price, but it is not possible to do so.
The effect of this Amendment would be to secure an automatic reduction in the subsidy as cattle prices rose. That would be possible if one could fix a standard price, but in view of the impossibility of fixing on a price which one could take as a datum line from which to make a sliding scale, the Government are doing all they can in the Bill to provide safeguards which will protect the public purse from any unjustifiable inroad by the producers. In Clause 4 (2) we begin by laying down that Every subsidy payment in respect of an animal or carcase, shall be computed in such manner as may be prescribed in relation to animals or carcases, as the case may be, by an order made by the Ministers, after consultation with the Commission, and approved by the Treasury; and an order under this Subsection may make different provision in relation to different descriptions of animals or their carcases. There is ample provision here for a revision or a reduction if it is thought to be necessary. In the White Paper which sets out the arrangements, it is stated that: The rates of subsidy that will be prescribed from time to time will take account of the market situation. That is a clear indication of the Government's intention to watch the trend of prices and costs of production, and to see that rates of subsidy are prescribed from time to time in accordance with the market situation. Clause 37 lays upon the Commission the duty of producing estimates of expenses for each accounting 892 period, and clearly the Minister's recommendation to the Treasury as to the amount of the subsidy will be made in the light of those estimates. Finally, the House will have control over the Minister when he asks for the expenditure required. I suggest that, in view of the regrettable impossibility of obtaining a figure which could reasonably be set down as a proper figure on which to work, namely, a standard price, taking into account the costs of production, the market price and so forth, the Government are doing all they can under this Bill to watch the trend of prices and to see that the subsidy is a fair one and is not excessive or unfair to the general public.
I have listened to the Minister with great attention and interest. On previous occasions when we have discussed the question of a subsidy for agriculture, I have heard the argument about the difficulty of arriving at a standard price, but I have not yet heard any good argument in favour of doing what we are doing at the present time—nothing. The Minister referred to the impossibility of arriving at a standard price, but I cannot see that it is impossible. It may be that it would be a matter of some difficulty, but why is not some attempt made to arrive at it? There are agricultural research stations going into this business, and I am told that if arrangements were made for this knowledge to be obtained, it could be obtained. No attempt is being made under this Bill to obtain it. If the Minister had said that he realised the importance of getting information on which he could arrive at a standard price, and that steps were to be taken in the near future, we might have been more satisfied; but he did not do so; he said it would be difficult, and that, therefore nothing was to be done.
If the hon. Member wishes to know the reason we cannot fix a standard price, it is this: one cannot tell what the weather will be like during the next six months. If the hon. Member could guarantee that the weather would be hot, or warm, or cold, or up to a certain temperature, it would be possible to do it, but none of us in the House can foretell what the weather will be during the next six months.
The weather cannot alter this subsidy, the cost prices and so forth.
Obviously, the weather does not control the subsidy, but it controls what cattle will be in the market during the next six months. Anybody who knows anything about farming knows that that is so.
If one accepts the Noble Lord's argument, if the weather is extremely good during the next six months, many farmers will not need the subsidy.
Can the hon. Member guarantee the weather?
No, but I know that the Noble Lord wants the subsidy whether the weather is good, bad or indifferent. Like the other farmers and landlords in the House, for the last year or two he has been using all his power and all his political influence in order to get as much out of the public purse as he could, and he has been fairly successful.
To return to my previous argument, I wish the Minister would at least tackle the problem, and, even if it is difficult, try to overcome it. It is a serious thing, indeed, if we are to be asked to continue this subsidy in perpetuity, but I can see no attempt in the Bill to safeguard us in that respect. Even if the price of beef goes sky high, there is nothing in the Bill about discontinuing the subsidy. I believe there is a White Paper which makes some vague and tentative suggestions as to what may be done in the future, perhaps years ahead, but there is nothing in the Bill. Yet I am told that the price of beef has risen by 9s. per cwt. on the average since this subsidy was granted. When the price was actually 9s. lower than it is to-day, it was calculated that a 5s. subsidy would bring the industry "back on to the ledge of safety." But now they have another 9s. on the price in addition to the subsidy. They must be pretty safe now. I wonder whether the Minister of Pensions would consider the present price, with that addition of 9s., a standard price? Would the Noble Lord consider it a standard price? Would it be good enough for him? I do not suppose it would.
The hon. Member for Stone (Sir J. Lamb) said that if it were proposed to reduce the subsidy as the price went up, we should also agree to increase it, as the 894 price went down. The hon. Member is not asking for much. What has become of the old initiative of the entrepreneur, of the captain of industry about whom we used to hear—the private profit-maker who never wanted Parliament to interfere with him? Years ago we used to hear the declaration, "Keep your hands off industry." Where is the old yeoman spirit of which we used to boast? All that Members on the Government side do now is to come down to this House to beg, threaten, cajole, bully and pray in order to get their hands deeper into the public purse. And then the Noble Lord says, "If you can guarantee the weather we might be able to do something." A sum of £3,000,000 for this purpose is coming out of a levy on the price of imported beef which is mainly paid by the poor, but despite that fact hon. Members opposite want this subsidy to be made permanent, however high the price of beef may rise. They do not want a standard price. They do not want anything which will cause this subsidy to be discontinued. The hon. Member for Horncastle (Mr. Haslam) told us that we had a safeguard in Clause 5. I fail to see it. The Clause says: It shall be the duty of the Commission to submit from time to time to the Ministers particulars of subsidy arrangements and, if the Ministers so direct, to carry into effect any such arrangements approved by the Ministers. The subsidy arrangements shall include arrangements for the issue…of such certificates as are required for the purposes of this Part of this Act, and for determining the places at which, and the persons by whom, animals may be certified for the said purposes. It says nothing about a standard price or about stopping the subsidy. It refers merely to the arrangements for the subsidy and not to the subsidy itself.
The Sub-section which I quoted is Sub-section (3), which provides that Ministers may withdraw their approval of any subsidy arrangements approved by them.
Yes, they may withdraw their approval of arrangements for paying the 5s. subsidy, but they may not withdraw the 5s. subsidy itself. If I am wrong in that, the Minister will correct me. I had hoped, in view of the fact that there has been a rise which is giving the farmers the equivalent of a decent price—and I am pleased to know it—that it would have been found possible 895 to accept this Amendment. I had hoped that while guaranteeing the farmer a reasonable price, the Government would at least have guaranteed to the consumer that when a reasonable price had been reached, he would no longer have to pay this subsidy.
; The Minister of Pensions sought to defeat this Amendment by saying that while he would like to accept it, such a proposal would be technically impossible. I cannot answer the hon. Gentleman on the technicalities. Probably he is right when he says it is difficult to define a standard price. I am glad the Minister of Agriculture is back in his place, because I wish to ask him whether he accepts the principle underlying the Amendment, namely, that a subsidy must vary inversely with the prosperity of the industry. Does he agree that when the prosperity of the industry goes up, the subsidy should go down and vice versa? Is it his intention to act on that principle? I am aware that he has power so to act and I think the solution of the dispute between the hon. Member for Wentworth (Mr. Paling) and the hon. Member for Horncastle (Mr. Haslam) is to be found in the fact that the hon. Member for Horncastle ought to have referred to Sub-section (1) of Clause 8. It actually contains the powers which he thought were in Sub-section (3) of Clause 5.
The Minister has power, if he chooses, to vary the subsidy. Is it his intention not to concern himself with such precise things as standard price or prevailing price but to feel the pulse of the industry, to make himself acquainted with the general tone of the industry and when that general tone is better to reduce the subsidy and when it is worse, to increase the subsidy. If that is the principle on which he intends to act, will he not accept another principle which is that when a Minister intends to administer subsidies in accordance with certain fundamental principles, those principles ought to appear in the Measure which creates the subsidy? If the right hon. Gentleman accepts that principle, even though he feels that he must reject this Amendment, will he try to find some Amendment which would be apt to describe the fundamental principle that subsidy should vary inversely with prosperity? Will the Minister look at the 896 Amendment standing in the name of my hon. Friend the Member for South-West Bethnal Green (Sir P. Harris) which, I believe, is not to be called, for I think it avoids some of the technical difficulties of the Amendment we are now discussing?
As I listened with great pleasure to the speech of the hon. Gentleman the Member for Wentworth (Mr. Paling) I came to the conclusion that I should like him to come and speak in my constituency. He said that we who represent agriculture were never happy unless we were coming to the Government asking for money, and that we had been very successful in that direction. I only hope that, if he did come into my constituency, he would convince my constituents that I had been successful in obtaining money for them. I would join with the hon. Member in supporting the standard price and a limit of the subsidy if the selling price rose too high, but only under the conditions, with which I am sure he will agree, that when the price fell, so that the subsidy and the price did not reach the standard price, he would consent to an increased subsidy. I am sure from the speech which he has made that he would not ask British agriculture to go on producing beef at a loss. If we could be sure that he would consent to an increase in the subsidy when the prices fall, we should be pleased to support the Amendment. I am confident, however, from what I know of hon. Members on that side, that if we asked for an increased subsidy when prices went down, they would be against us.
I have heard the Minister make many speeches in this House at one time and another, but I have never heard him make a more wobbly speech than the one he has made on this Amendment. We on this side do not believe it is impossible to fix a fair standard price. If it cannot be done there must be something wrong in the Ministry of Agriculture and in the agricultural industry. The farmers of this country are not quite so ignorant as some hon. Members try to make out. We want to get a proper costing system so that we can know whether these continual subsidies are wanted. Recently I had the opportunity of visiting many places in different parts 897 of the Empire, and farmers told me of the cost of production of wool and other things. They had no hesitation in saying what the costs of production were, what price would satisfy them, what price they got, and what profit they made. Do hon. Members opposite really mean to say that we cannot get a proper standard price? We want to find out whether what took place in regard to the coal subsidy is taking place in regard to this £5,000,000 subsidy. I am not surprised the Noble Lord has gone out of the House. If he had been here I should have told him one or two things. It used to be a theory that unemployment was caused by spots on the sun and that if the spots could be removed unemployment would be cured. I am not sure that the Noble Lord has not gone out to consult a barometer.
What took place in the coal industry? There were colliery owners not far from the Noble Lord's constituency who admitted that when they were drawing a subsidy of 1s. 3d. a ton, they were actually making 5s. a ton profit. There were colliery owners who went before the Samuel Commission and admitted that the subsidy was money for nothing. One of them was connected with the Markham group. Why should the State be called upon to give a subsidy to a business that is making profits? If we had a fixed standard. price and the selling price reached it, there ought to be no subsidy. When the subsidy first started, it was stated in the House that the average price was 35s. 9d. per cwt. Within 12 months it had fallen to 32s. 7d., but now the average price is 44s. 6d. We are pleased to know that there has been an improvement of prices. I would like hon. Gentlemen opposite to know that there are Members on these benches who believe that the farmers are entitled to fair and economic prices for their products. Nevertheless, we are suspicious of all this talk about poverty.
Would the hon. Member agree that if the price fell so that the subsidy and the price did not meet the cost of production, the subsidy should be increased?
I will give the answer that any Minister would give—I must have notice of that question. However this Clause is interpreted, the £5,000,000 898 subsidy will be exhausted, no matter how high a level the selling price reaches. We shall not see the Minister coming to-the House and saying, "The selling price is at a certain figure and there is no need for the subsidy." What hon. Members opposite are after is as much subsidy as they can get. The people in the industrial centres are complaining about these subsidies, and I hope the Amendment will be pressed to a Division.
This Amendment is the most important of those under the consideration of the House. If a standard price cannot be provided for in the Bill, it is clear that there is something wrong with the agricultural industry. Standard prices can be fixed for anything now, and the phrase "standard price" has become a commonplace in our language. The agricultural industry, however, is continually pretending that they are a clannish set of ignorant people who must be spoon-fed by the State. It is not true that farming is in a poor state. I arrived late in the House to-day through being detained in Newcastle, where I met a Northumbrian farmer. He stated that they in Northumberland were doing extremely well. I am prepared to give the Minister the name of that farmer. If the price should fall below a profitable basis, the subsidy certainly ought to be raised. We are as anxious as the Minister that agriculture should be maintained on a proper basis. I have never opposed the idea of subsidies. They are becoming an integral part of the normal business of the State. But they must be given under proper safeguards as far as the Treasury is concerned. But here there are to be no safeguards. There is to be a subsidy to the rich whether they require it or not, a repetition of the sugar-beet subsidy under which fancy dividends can be paid to persons.
If this form of subsidy, without question and in perpetuity, were correct, why did not the Government apply it to the shipping industry? There they pursued a normal businesslike course. They fixed a standard year, 1929, in which they stated that, by examination, shipping was a profitable industry. It was not making fancy profits; there were no extravagant fortunes to be made; the business of the industry was normal. The Government wisely fixed 1929 as the basic 899 year and stated that if and when the freight market should rise to the level of 1929 the subsidy should automatically cease. This year the 1929 level has just been reached. In some markets it has been slightly exceeded and the subsidy will accordingly not be paid. All we want is justice. What is simple and elementary for the shipping industry can be made so for agriculture. It is for that reason that the country is bound to conclude that there are dishonest tactics being applied by the Minister of Agriculture in order to pretend that we have here so ignorant an industry that it is incapable of fixing standard prices as other industries can and so be able to continue in perpetuity to receive large subsidies.
I would not have intervened, but I was hoping that the Minister of Agriculture would have made a statement on this important principle of agricultural policy. I know that the Minister of Pensions did his best to deal with the technicalities, but, after all, he is a mere makeshift, not even a member of the department with which this Bill is concerned. I understood that this was a temporary makeshift to deal with an emergency. I believe that the word used was a "lifebuoy," to stop the industry being destroyed by a world-wide lowering of prices. We have no right as the House of Commons, guardians of the public purse, to brush aside this Amendment unless we have a clear statement from the Government. We want to make it clear that as soon as prices have returned to a reasonable remuneration to the agricultural industry then this subsidy, an undesirable new feature in our political life, shall be swept away. The hon. Member for Leominster (Sir E. Shepperson) was quite blatant about it. He wants us to go down to his constituency and act as relieving officers. But we have a responsibility.
This is a tendency in our public life, but we have a responsibility to the taxpayers as a whole. When the burdens of the public are very heavy, when we have these great commitments on all sides and when the nation is being asked to find money on a scale almost unprecedented, we should be quite 900 sure that the Minister has not committed his Government and the country to a permanent tax. We had a reasonable Amendment on the Order Paper. Apparently it is not to be called because this Amendment is being considered. We are not unreasonable; no Member of this House is unreasonable. We realise that agriculture in the last year or two has been through severe times, and therefore we consider this Bill, not in a critical spirit, but we want the Minister to understand that it is an emergency Bill. If it is to be made a permanent part of agricultural policy, we shall resist the Bill, and the right hon. Gentleman will not have such a smooth passage for the new Clauses as he has had so far.
To avoid any appearance of discourtesy to the House, I will respond to the invitations which have been made to me to make a statement. I think that every farmer throughout the country will agree with me that he will be only too happy to dispense with the subsidy as soon as the prosperity of the industry is such as to enable him to do without it. The farmers have no desire for any subsidy that is not necessary for the maintenance of the livestock industry, but they realise that the livestock industry is necessary to the fertility of our fields, that it is a national asset and deserves national consideration and assistance. I had intended to make a general statement on the subsidy on an Amendment in the name of the hon. Member for the Don Valley (Mr. T. Williams). All I would say now is that hon. Members have mentioned the recent improvement in prices, but let us not shout until we are out of the wood. Let us remember that this increase comes after a long period of depression, which has reduced the fertility of our fields. It is offset by certain facts which are really very important. Stores were dear last autumn. That has to be deducted from the price at present obtainable for fat cattle. Also—it is common knowledge —there has been a great rise in the cost of feeding stuffs, which has gone a great way to offset the increase in price. I am not unhopeful of a return to more normal conditions in prices.
I think that some hon. Members are sometimes apt to view the efficiency of the subsidy from a very depressed 901 trough. I would not like Members on the other side to view its adequacy from what might be a seasonal rise. There is in the Bill adequate power for Treasury consultation and for control by Parliament in the last resort; and no Government would ever consent to an expenditure on this industry which was not necessary—great as its importance is to the national welfare—at the present time. I hope the House will agree with me that that is the wisest course. I must resist the Amendment because, before I could do anything, it would impose upon me the duty of ascertaining a standard price. The Minister of Pensions has described the difficulties which would beset such an undertaking, and they are very considerable, and I hope that hon. Members, though they are entitled to express their point of view, and I have listened to their views, will not think it necessary to impose upon me the duty of ascertaining a theoretical figure of this character which has no relation to the realities and necessities of the situation before this assistance is given to this industry.
§ would not affect the payment of the existing subsidy.
I quite accept that statement. The present arrangement will continue until this new arrangement comes into operation. What I meant to suggest was that it is unreasonable, in view of the difficulties of ascertaining an accurate standard price to hang up the whole of the provisions we have made for rendering this assistance until we have achieved that remarkable arithmetical feat. We have had an excellent discussion on this very important matter, and it would be a great convenience if we could now proceed to an expression of our opinion upon it.
Can the Minister say, yes or no, whether he takes the view that the subsidy must vary with the prosperity of the industry?
I thought that I had already clearly said that as soon as the industry is prosperous enough to do without any subsidy at all—I am sure I shall have the support of every farmer in this country in saying this—we shall desire to see it removed.
§ The House divided: Ayes, 92; Noes, 197.
Division No. 181.] AYES. [9.37 p.m.
Adams, D. (Consett) Hall, J. H. (Whitechapel) Nuff, G.
Adams, D.M. (Poplar, S.) Hardie, G. D. Owen, Major G.
Adamson, W. M. Harris, Sir P. A. Paling, W.
Ammon, C. G. Henderson, A.(Kingswinford) Parker, J.
Anderson, F.(Whitehaven) Henderson, J. (Ardwick) Parkinson, J. A.
Barnes, A. J, Henderson, T.(Tradeston) Potts, J.
Barr, J. Hollins, A. Price, M. P.
Bellenger, F. J. Johnston, Rt. Hon. T. Quibell, D. J. K.
Bromfield, W. Jones, H. Haydn (Merioneth) Ridley, G.
Brown, Rt. Hon. J. (S. Ayrshire) Jones, Morgan (Caerphilly) Riley, B.
Cape, T. Kennedy, Rt. Hon. T. Rowson, G.
Chater, D. Kirby, B. V. Sexton. T. M.
Cluse, W. S. Lathan, G. Silkin, L.
Dunn, E. (Rother Valley) Leslie, J. R. Sorensen, R. W.
Gallacher, W. Macdonald, G. (Ince) Thurtle, E.
Gardner, B. W. McEntee, V. La T. Tinker, J. J.
George, Major G. Lloyd (Pembroke) McGhee, H. G. Viant, S. P.
Gibbins, J. MacNeill, Weir, L. Walkden, A. G.
Green, W. H.(Deptford) Marshall, F. Watson, W. MoL.
Greenwood, Rt. Hon, A. Messer, F. Westwood, J.
Williams, T. (Don Valley) Young, Sir R. (Newton) Mr. Groves and Mr. Charleton.
Acland-Troyte, Lt.-Col. O. J. Fremantle, Sir F. E. Radford, E. A.
Adams, S. V. T. (Leeds, W.) Furness, S.N. Raikes, H. V. A. M.
Agnew, Lieut.-Comdr. P. G. Ganzoni, Sir J. Ramsbotham, H.
Albery, Sir Irving Gilmour, Lt.-Col. Rt. Hon. Sir J. Ramsden, Sir E.
Aske, Sir R. W. Gower, Sir R. V. Rayner, Major R. H.
Baldwin, Rt. Hon. Stanley Grimston, R. V. Remer, J. R.
Barclay-Harvey, Sir C. M. Hannon, Sir P. J. H. Ropner, Colonel L.
Blindell, Sir J. Haslam, Sir J. (Bolton) Rowlands, G.
Bower, Comdr. R. T. Herbert, Major J. A. (Monmouth) Salmon, Sir I.
Bowyer, Capt. Sir G. E. W. Herbert, Capt. Sir S. (Abbey) Salt, E. W.
Bracken, B. Higgs, W. F. Selley, H. R.
Brass, Sir W. Hills, Major Rt. Hon. J. W. (Ripon) Shakespeare, G. H.
Brown, Brig.-Gen. H. C. (Newbury) Hore-Belisha, Rt. Hon. L. Shepperson, Sir E. W.
Burghley, Lord Horsbrugh, Florence Simmonds, O. E.
Butler, R. A. Hunter, T. Spears, Brigadier-General E. L.
Cary, R. A. Joel, D. J. B. Spens. W. P.
Cazalet, Capt. V. A. (Chippenham) Latham, Sir P. Storey, S.
Colville, Lt.-Col. Rt. Hon. D. J. Lindsay, K. M Sueter, Rear-Admiral Sir M. F.
Cooke, J. D. (Hammersmith, S.) Little, Sir E. Graham- Sutcliffe, H.
Cooper, Rt. Hn. T. M. (E'nburgh, W,) MacAndrew, Colonel Sir C. G. Tasker, Sir R. I.
Courtauld, Major J. S. Macdonald, Capt. P. (Isle of Wight) Tate, Mavis C.
Crooke, J. S. Makins, Brig.-Gen. E. Thomas, J. P. L.
Cruddas, Col. B. Margesson, Capt. Rt. Hon. H. D. R. Touche, G. C.
Davies, C. (Montgomery) Markham, S. F. Tree, A. R. L. F.
Davies, Major Sir G. F. (Yeovil) Mason, Lt.-Col. Hon. G. K. M. Tryon, Major Rt. Hon. G. C.
Dawson, Sir P. Mayhew, Lt.-Col. J. Tufnell, Lieut.-Commander R. L.
Denman, Hon. R. D. Meller, Sir R. J. (Mitcham) Turton, R. H.
Despencer-Robertson, Major J. A. F. Mellor, Sir J. S. P. (Tamworth) Wakefield, W. W.
Drewe, C. Morris-Jones, Sir Henry Warrender, Sir V.
Duncan, J. A. L. Morrison, G. A. (Scottish Univ's.) Waterhouse, Captain C.
Eastwood, J. F. Morrison, Rt. Hon. W. S. (Cirencester) Wedderburn, H. J. S.
Edmondson, Major Sir J. Muirhead, Lt.-Col. A. J. Wells, S. R.
Emery, J. F. Ormsby-Gore, Rt. Hon. W. G. A. Wragg, H.
Entwistle, Sir C. F. Penny, Sir G. Wright, Squadron-Leader J. A. C.
Everard, W. L. Perkins, W. R. D.
Fildes, Sir H. Pickthorn, K. W. M.
Fleming, E. L. Procter, Major H. A. Commander Southby and Captain Hope.
I beg to move, in page 4, line 19, to leave out from "with," to "payments," in line 21, and to insert: a scheme made by the Commission and approved by an order of the Ministers for the time being in force. 904 As the Bill was designed, the subsidy arrangements were not to be laid before Parliament nor made subject to the negative resolution procedure. It was pointed out in the Committee that opportunity was not provided in the Bill for sufficient criticism to be directed against the arrangements, and although I did not accept the 905 suggestion of the Committee that regulations should be made as to animals eligible for subsidy, it was clearly the desire of the whole Committee that these subsidy arrangements should be laid on the Table of the House and could be prayed against. The Amendment which I now move is in order to carry out that wish. "Subsidy arrangements" is considered to be rather an incohate expression for a proposal laid on the Table of the House, and we have therefore substituted for it "subsidy scheme." I think the Amendment will carry out the desire expressed in the Committee.
I wish to express my recognition of the fact that the Minister has given a concession which was asked for in Committee.
§ In page 4, line 29, leave out "arrangements," and insert "scheme."
§ In line 33, leave out "arrangements," and insert "any scheme."
§ In line 34, leave out "are," and insert "is."

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