Motion made, and Question proposed,
That a Supplementary sum, not exceeding £600,000, be granted to His Majesty, to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1931, for a Subsidy on Sugar and Molasses manufactured from Beet grown in Great Britain.
§ 4.0 p.m.
§ The MINISTER of AGRICULTURE (Dr. Addison)
I have to ask for this Vote in accordance with the existing law, under which a subsidy of 13s. per cwt. is payable for the current year on sugar-beet produced under the provisions of the Act. As everyone who has grown beet knows, it is very difficult to say 12 months beforehand exactly how much beet will be produced. The result is that the Estimate that was submitted to the House early in the year, although fairly near the figure, requires some rectification. For two reasons this Supplementary Estimate is required. Owing very largely to the depression in other branches of arable farming the acreage of beet last year was greater than had been anticipated. As a matter of fact early in the year it was anticipated that the acreage of beet would be 320,000, whereas the acreage actually planted was 28,000 more. That is one of the chief reasons for this Supplementary Estimate. The increased acreage of beet means that the subsidy under the existing law requires to be £450,000 more than it would have been for the lower acreage.
Another element enters into the Estimate, and it is one which is entirely creditable to the grower, namely, that as experience has increased so the expertness of the grower in producing good quality beet has increased. It was estimated last January that the tonnage per acre would be 8.3, whereas as a matter of fact the tonnage per acre has turned out to be 8.7. That fractional increase 2156 of 4 of a ton means an increased amount of beet-sugar on which the subsidy is payable, and the figure is £250,000. Those two items together, increased acreage and increased yield of beet per acre, account for this Estimate. They are in fact together £100,000 more than the Estimate, but we have to set against that the molasses which are still retained in the factories. These molasses are retained by the factories no doubt owing to the low price in the world market, and it will hereafter be necessary to come to the House for an Estimate in respect of those molasses when they are released to the market. But they account for a reduction of £100,000 on the sum that would otherwise be required. So that the net amount of this Estimate is £600,000.
This increased acreage of beet has given rise to a vast volume of employment, both in the factories and elsewhere. I understand that it is not in order for me to discuss beet policy on this Estimate. It is at this moment a very tempting subject. During the past month it has been my duty to spend many weary hours listening to statements on the question of beet, beet sugar, polarisation, prices and such like, and I am very tempted to say what I think about it all. However, as it is not in order on this Estimate I must refrain. I can say that this year marks the end of the second triennial period of the Beet Sugar Act, and that the subsidy hereafter, except for the agreement details of which are known to Members, will be reduced from 13s. per cwt., as it is in this Estimate, to 6s. 6d. The Committee may be interested to know that the acreage of beet five or six years ago was 22,000, and that it has risen to 348,000. There are 40,000 growers employed, and I am glad to say that a large number are smallholders. There are 30,000 seasonal workers. There are 10,000 men engaged during the manufacturing campaign in the factories and 2,000 in the factories all the year round. The amount of sugar on which the subsidy is now required is 424,000 tons, and the transport charges on the sugar, on the 200,000 tons of pulp and the 100,000 tons of molasses, apart from 3,000,000 tons of beet, represent a great contribution to the transport industry. Indeed, it represents £825,000 for beet only.
§ Captain PETER MACDONALD
Can the right hon. Gentleman say how many growers there are in the factory areas and how many outside?
§ Dr. ADDISON
Some of the factories draw beet from greater distances than others. At present the transport arrangements are very uneconomical, because some factories have to draw beet from long distances. There are no defined factory areas arranged between the different factories. The increased acreage, owing to the productiveness of this crop compared with other arable crops, and the increased yield per acre owing to the increased efficiency of our cultural methods, are the two elements accounting for the increased Estimate.
§ Viscount WOLMER
I would like to thank the Minister for the explanation that he has given of this Supplementary Estimate. I think we all recognise that it is impossible for a Minister or his Department to calculate in advance with precise accuracy what the sugar beet subsidy will come to, and therefore we can regard a Supplementary Estimate on sugar beet as one which is bound to occur practically every year, unless the Minister by a sheer stroke of luck happens to hit off the exact sum. The right hon. Gentleman has pointed out that the amount of the subsidy depends not only on the acreage but also on the yield per acre. I am sure that we on this side and hon. Members opposite are equally pleased that there has been an increase in both these items. The Minister will bear me out when I say that there is a third factor on which the amount that Parliament has to pay depends, and on which the right hon. Gentleman did not touch, and that is the sugar content of the beet. I hope that the Minister, in replying to questions later, will be able to tell us something about the sugar content last year.
I was very glad to hear the right hon. Gentleman pay a tribute to the increasing skill of the farmers in growing this new crop. The policy of the late Conservative Government was based on confidence that farmers in the course of a few years would improve in the art of growing sugar beet, and that year by year, subject to weather conditions, they would get increasingly good results. It is very satisfactory to 2158 hear from the Minister that that confidence has been fully justified. Of course sugar content must be largely influenced by the weather. I think I am right in saying that it is not the "hotness" of the Summer or the amount of light that beet gets in the Summer that is responsible for the sugar content so much as the length of time that the beet can be left in the soil during the early autumn when they get increased hours of daylight. I believe that the sugar content obtained in this country compares very favourably indeed with the sugar content of beet grown on the Continent. It would be interesting if we could hear from the Minister whether this gradual increase in the skill of the farmer, as reflected in the weight of the crop per acre, is also reflected in an increase in the sugar content of the beet.
The Minister pointed out what a great deal of employment this industry has given, and I am very glad that he did so. Some hon. Members, particularly those on the Liberal benches, are very much disposed to criticise the money that we require for the establishment of the sugar beet industry; but against that expenditure of money there are to be set two things: First, there is the Excise Duty, which is mentioned on page 15 of the Estimates. It amounts to 2,270,000, which will all come back to the Exchequer. Secondly, there is the indirect saving to the State by the great amount of employment which is given on the farms, in the factories and on the railways. I do not know whether it is possible for the right hon. Gentleman to give us in round figures what that employment amounts to, but I suggest that if it could be summarised in a figure we should be able to realise its extent and the saving that the country was making in unemployment relief. In the present state of trade and industry it is fair to say that every man employed in this industry is one man less drawing unemployment benefit. Whether a man is an insured worker or not, when unemployed he has to be kept by the State. Agriculturists would appreciate the information if the Minister could state what the saving of unemployment benefit has been owing to the development of this sugar beet industry.
The questions put and the answers given 2159 must have a direct bearing upon this Supplementary Estimate. It is better that the Committee should understand at the outset that we cannot have a discussion of policy on this Supplementary Estimate.
§ Viscount WOLMER
I hope my questions are entirely confined within those limits. We are asked to vote an extra sum of £600,000, and all that expenditure has a bearing upon the points I have mentioned. I am most anxious not to carry the discussion beyond the scope of the Vote, although, as the Minister has pointed out, there are wide questions in regard to sugar beet which we should like to discuss but cannot. Another question I should like to ask is whether the Minister can give us any idea of what proportion of this money sticks in the hands of the factories, if I may put it in that way.
§ Viscount WOLMER
We know that some of the factories are doing a great deal better than others. Some factories have not done particularly well. There is a factory at Eynsham which I think I am right in saying has actually gone into liquidation. It is an unfortunate thing, because that factory was sponsoring a new process, and if that new process could have been established it held out hopes of reducing very substantially the cost of manufacturing sugar from sugar beet and it would have made very much easier the problem of increasing the number of factories and extending them from the East of England, where they are very much concentrated at present, into the West and other parts where growers would like to grow beet but have been unable to do so as no factory is near them. I think some of this money was paid to the Eynsham factory, and the Committee would appreciate it if the right hon. Gentleman would say why it had to go into liquidation, whether arrangements were made to take up the crop which that factory had contracted for, which factories are dealing with the crop, and how the problem of railing the crop the extra distance to the other factories was got over.
We all recognise that the establishment of this new industry as taken place in 2160 exceptionally difficult circumstances in that the world price of sugar has been continually dropping and has now got to an unprecedented pitch. Whether the whole subsidy arrangements will have to be reviewed in future in view of the world price of sugar is a question which is outside this Vote, but it would be of assistance if the right hon. Gentleman could give us some idea of what the Ministry thinks the cost of growing beet in this country is to-day and how that compares with the world price of sugar; in other words, what world price would make sugar beet growing in this country remunerative without any subsidy? It was impossible to get those figures until the industry had been running for a number of years, but with the experience of the last six or seven years it may be possible for the Minister to give us some guidance on the subject. I would like to ask, further, whether the Orange Book on the sugar beet industry, which has been in preparation at the Ministry for some months, is to be issued shortly, because if it is up to the standard of the other books it will be of very great assistance to beet growers.
§ Viscount WOLMER
I am glad to hear that. This is still an experimental crop for many farmers; every farmer who is growing it wants to find out what the experience of other farmers has been; and as there is a good deal of development going on in the adaptation of implements, and a great deal of experiment as to the suitability of manures, the Orange Book will, I am certain, be of great help to farmers. Another thing I would like the right hon. Gentleman to tell us is how many of the factories that receive this grant are operating under facilities provided under the Trade Facilities Acts. That is an important point to have in mind at the present juncture, when factory costs are so much to the fore. Although we cannot go into the main sugar beet question this afternoon, we are entitled to gain all the information we can as to how this money has been expended, and in as much as it has all gone to the factories the question of the profits the factories are making is to that extent connected with the amount of assistance they have received under the Trade Facilities Act.
2161 Those are all the questions that I have to ask. We do not desire to oppose this Vote in any way, but we wish to watch the experiment most carefully and gain all the information we can as to its working. I am convinced that if the sugar beet industry were allowed to collapse in the present circumstances of British agriculture it would be a serious disaster to the agricultural community such as no party would be prepared to face.
§ Sir GODFREY COLLINS
The Noble Lord has referred to the number of people who are finding employment through the subsidy which has been granted by the Government. No one would deny that a large number of people are finding employment on the land because of the subsidy. The subsidy has already cost the Exchequer a direct sum of £22,000,000 up to the end of this year, and in addition there has been a loss to the Exchequer of some £6,000,000—in rebates—and hon. Members will realise that the disbursement of this £28,000,000 of public money over the country must have brought privileges to a favoured few. The Minister told the Committee of the number of people who are finding employment on the land. Will he tell us how many extra people have found employment on the land through this large expenditure of public money? I will give way to him now if he will supply that figure. Surely he must know. He surely would not ask the House of Commons for another £600,000, making a total this year of £6,000,000, if he were not fully convinced in his own mind that a greatly increased nmber of people are finding work on the land as the result of the subsidy.
I suggest that the real test of this subsidy is not whether it is giving work here or work there, but whether it is finding large numbers of additional people work on the land. The policy of the Noble Lord and his friends favours subsidies, and no one will deny their advantage to the lucky few, but it is the unfortunate taxpayer who is forced to find the money, and the "screw" is being applied to him this afternoon for this £600,000. He is the man who is finding the cash, and there are a certain number of fortunate people who are receiving the "swag."
§ Viscount WOLMER
Would the hon. Member describe the Liberal unemploy- 2162 ment policy as a subsidy for the fortunate few?
I am afraid that the question of the advisability or otherwise of granting subsidies does not arise here. The principle of subsidies in this case has been agreed to by the House of Commons, and all that we have to decide is whether we shall grant this supplementary sum of money to this purpose.
§ Sir HERBERT SAMUEL
Is it not in order when we are asked to vote an additional £600,000 for hon. Members to take stock of the enormous burden on the Exchequer which is mounting by reason of this succession of Votes, and to ask whether it is worth while.
I think the point might be made the subject of grief reference; but any discussion upon the principle of the subsidy would be out of order. The principle has been confirmed by the House and all we can do to-day is to say whether this extra money should be applied to this service.
§ Major ELLIOT
Would it be in order to refer to the increased cost to the Treasury of other schemes which have been put forward in this House?
§ Sir G. COLLINS
I would like to associate myself with the question which the Noble Lord put to the Minister in asking the cost of growing beet in this country and the world cost of beet-sugar production. The answer to that question will enable, the Committee to have a better understanding of the situation when the next Supplementary Estimate is introduced. If I understood the Minister aright, we are shortly to be presented with another Supplementary Estimate. This is just the beginning.
§ Dr. ADDISON
I do not wish that there should be any misunderstanding. I said that the Estimate was less by £100,000 than it otherwise would have been on account of the molasses still retained by the factories, The subsidy is not payable on the molasses till it is 2163 released. When it is it will be necessary to ask for another subsidy.
§ Sir G. COLLINS
Having granted some benefit to the factories, the House of Commons will not be asked until next October to vote another sum of money—
§ Dr. ADDISON
These Estimates relate to beet that was grown last summer, and has been dealt with in the factories between last November and now. The proposal to which the hon. Member was referring relates to the beet that will be sown in spring and grown in the summer and dealt with in the factories next autumn and winter.
§ Sir H. SAMUEL
Will the House be obliged to pay this extra £200,000 or £300,000 without having any opportunity of discussing it?
§ Sir G. COLLINS
Then I will not pursue that matter any further. Agriculturists during the course of the current year will grow certain crops, and, if the House of Commons does what has been suggested in September, there will be created at once great hardship, and you will have the agricultural industry accusing the Government of holding out certain promises which later on they have failed to carry out. When we get the new Estimate we shall be able to judge—
The hon. Member is now discussing a matter of policy; and I have already ruled that policy cannot be raised on this Estimate.
§ Sir G. COLLINS
May I ask if the Minister can tell the Committee the amount of the sums which the Government have lent to the various factories during the last few years? A White Paper was issued last year which gives 2164 some very interesting information. Reference to it will show that these companies, during the last few years, have placed very large sums of money to reserve, and are quite able, without any further assistance either to-day or in the future, to pay the farmers a very good sum for all the sugar-beet grown in their area. I would like to mention the extra-ordinary situation which has arisen. The first company referred to in the White Paper is the English Beet-Sugar Corporation. This company by its profits and through the subsidies received from the Government have reserves equal to 16s. for every £1 of share capital, and they are a very fortunate company. Many other companies to-day are drawing on their reserves at a time when the Government are proposing to pour out another £600,000 to subsidise the beet-sugar industry. I turn next to the Home-Grown Sugar Company, a small company with a general reserve of £95,000 and £125,000 ordinary capital. The reserve in this case is equal to 15s. in the £ of their ordinary capital.
§ Sir G. COLLINS
That does not vitiate my contention, and I make the hon. and gallant Member for Rye (Sir G. Courthope) a present of that argument. Instead of the capital being £125,000, the hon. Member agrees that it was £500,000 and therefore they have a capital reserve to-day of £43,000 and a general reserve of £95,000, that is £138,000 out of a total capital of £500,000. The Ely Beet-Sugar Factory has a capital of £450,000 and a reserve of £241,000, or, in other words, the general reserve is equal to 10s. in the £ of their ordinary capital, and, in addition to that, last year they wrote down their assets by one-third of the total sum which they had spent. Consequently, not only is their reserve equal to 10s. in the £ of their ordinary capital, but the excess sums which have been paid to the company by the Government have enabled them to wipe off at one fell swoop one-third of their total capital.
The Ipswich Beet-Sugar Factory, Limited, has £400,000 ordinary capital and a general reserve of £143,000, and their reserves are equal to 6s. in the £ 2165 of their ordinary capital. In the case of the King's Lynn Beet-Sugar Factory the reserves are not so large as those of the other companies, the ordinary capital being £450,000 and the general reserve being £8,000. On the other side of the balance-sheet this company has written off 10 per cent. of the capital sum expended on their buildings. This fortunate company is able to write off its assets on a much larger scale than the sum allowed by the Income Tax Commissioners in the case of other companies. The next case I would like to mention is the Anglo-Scottish Beet-Sugar Corporation. This is a most fortunate company. The share capital is £442,000, and they have a loan from the Government of £469,000 guaranteed at 5 per cent. Therefore this fortunate company has received from the Government £1 for every £1 advanced by the shareholders who have invested their money in the company.
§ Dr. ADDISON
Does the hon. Gentleman suggest that the present Government have done that? It was done years ago.
§ Sir G. COLLINS
The first time a beet-sugar subsidy was announced under these conditions was in August, 1924, and the announcement was made by a Socialist Chancellor of the Exchequer. It does not, therefore, become the Minister of Agriculture to run away—
§ Dr. ADDISON
I do not run away, but, in presenting this Estimate, I am carrying out the law. The hon. Gentleman is referring to matters which relate to a law which was passed years ago.
§ Mr. HANNON
Surely the action of the Chancellor of the Exchequer in negotiating this scheme was one of the most admirable things that he has ever done.
§ Sir G. COLLINS
I remember the point being raised in connection with the Corn Production Act, and I divided the House on that subject.
The hon. Member is now debating the general principle of the subsidy, and I have already pointed out that that principle has been definitely decided. The only question which can be discussed at this stage is the additional sum which is being asked for in this Vote and the hon. 2166 Member must not discuss the general policy of subsidies.
§ Mr. LOUIS SMITH
Is it not a very surprising thing that there should be such glowing accounts as those which have been given by the hon. Member for Greenock (Sir G. Collins) when it is well known that the Minister of Agriculture has been negotiating for weeks with the factories in order to persuade them to make contracts with the farmers which they could accept?
§ Sir G. COLLINS
It is well known that whenever companies receive a pecuniary advantage from the Government the effect is to whet their appetites, and they try to get more in the future. The last company I will mention is that of the Second Anglo-Scottish Beet-Sugar Corporation. The capital of this Corporation is only £240,000 but they were able to persuade the Government of the day to lend them £740,000 by way of debenture stock guaranteed by the Treasury at 5 per cent. That means that for every £ of money the shareholders of that company found the Government found £3. Having got all this money from the Government so easily, their affairs have not been well managed, and consequently their profits are not large. I suggest that money which is so easily found is generally unwisely spent. I think I have said enough to show the absurdity of the present system. It is a great hardship on the taxpayers that these large sums are being paid out, and have been paid out in the past, to the sugar-refining industry which is in the hands of private individuals. The result of this policy has been to pour out money year after year to the favoured few, and the unfortunate taxpayer has had to find the money to subsidise the sugar-refining industry and its allied industries.
§ Sir ERNEST SHEPPERSON
The position that I take up in regard to this matter is the exact opposite of that of the hon. Member for Greenock (Sir G. Collins). The hon. Member states that the establishment of this industry has done great harm to the sugar refining industry. I am not myself concerned in the sugar refining industry, but I am concerned in British agriculture, and I submit that whatever harm has been done 2167 to the sugar refining industry as more than compensated for by the enormous amount of good that the establishment of this industry has done to British agriculture. The hon. Member for Greenock has asked the Minister to what extent this industry has given employment on the land. I can answer that question. I assure the hon. Member that for every acre under sugar-beet the amount paid in wages averages £10, while in the case of grass land the wages per acre amount to 10s., so that, when grass land or arable land is put under sugar-beet, the amount of labour employed is multiplied something like 10 times. Whether the Minister can or cannot give the additional number of people employed on the land, I can assure him that there would have been a great deal more agricultural unemployment had it not been for the establishment of this industry.
I assure the Minister and the House that this industry has been the salvation of British agriculture. The criticism of the hon. Member for Greenock is that the amount of this Supplementary Estimate is large, namely, £600,000, making a total figure of £6,000,000. I admit that a Supplementary Estimate of £600,000 is a large one, but why is it necessary to ask for this supplementary sum? It is because the Chancellor of the Exchequer made an under-estimate last year. He did not realise, and I think the House did not realise, the extent to which this industry would be taken advantage of by the arable farmers of this country. I say without fear of contradiction that last year sugar-beet was the only arable crop that gave an economic return to the farmer, and naturally, therefore, last year, farmers increased their acreage under that crop, on which they could get a satisfactory return. The reason for this Supplementary Estimate is not the fine summer of last year, not an increase in the sugar content of the beet or an increase in the tonnage grown, but the increased advantage which the establishment of this industry have given to arable agriculture. The House may not realise that this industry has become of extreme importance to agriculture. The acreage under sugar-beet is now almost as large as the total acreage under potatoes in 2168 this country, and, when the House realises that fact, it will realise—
§ Sir H. SAMUEL
I am sorry to rise to a point of Order, but may I ask if the hon. Member's observations are in order, and if we shall be permitted to reply them?
The hon. Member is not at the moment out of order, but I am following his speech with care.
§ Sir E. SHEPPERSON
I was endeavouring to show why this Supplementary Estimate is essential, namely, because of the increased acreage under sugar-beet, and I submit that I was in order in making that point. I was saying that the Chancellor of the Exchequer, in making his original Estimate last year, did not realise the advantage which the farmer would obtain at the present time. The farmer has taken great advantage of the establishment of this industry, and that is the reason for the Supplementary Estimate. I would like also to point out that the type of arable farmer who is taking most advantage of this industry is the smallholder. My hon. Friend the Member for the Isle of Ely (Mr. de Rothschild), who is my Member and represents me in this House, will at any rate support me in this statement, that in his constituency the number of smallholders who are taking advantage of sugar-beet growing is in excess of that in any other part of the country—
§ Mr. de ROTHSCHILD indicated assent.
§ Sir E. SHEPPERSON
My hon. Friend will also be aware that many of them have the whole of their land under sugar-beet, and that, therefore, they are benefiting very greatly from this industry; while, as I have already indicated, the agricultural labourer is also benefiting. For these reasons I support the Minister in his request for this supplementary sum. I admit that the criticism is possible that too much of this money is going to the factories, and too little to agriculture. The purpose of the original Estimate was to establish this new industry in this country, with the object of helping British agriculture, and I should like the factories to bear that purpose in mind. The amount of this Supplementary Estimate is a measure of the help to British agriculture. I know 2169 that the Minister realises that the position of British agriculture is worse to-day than it has been within the knowledge of anyone, and that the possibility of making arable agriculture pay is very small. Therefore, it is mare important to-day than it has been at any other time that this industry should continue.
A great proportion of this sum is going to the factories. I realise that it is a large sum, and a large proportion of the amount which goes to the factories goes to that group of factories which is called the Anglo-Dutch group. They were the pioneers of the beet sugar industry in this country, and British agriculture is grateful to them for that. Having been the pioneers of the industry, they were able to take the greatest advantage of the subsidy and to accumulate these reserves. In this House I want to make an appeal to that group that they will consider British agriculture and do what I suggest they ought to do in return for the sum that has been paid to them. I appeal to them publicly in this House of Commons to come up to the other groups and make a reasonable effort so that the industry can be carried on in the future as it has been carried on in the past.
§ Mr. W. B. TAYLOR
I rise to support this Estimate. As the representative of an agricultural constituency in an agricultural county, which, since the inception of this Act, has found from actual experience in the industry itself that the sugar beet industry has proved to be a very godsend so far as the agricultural cultivators are concerned. I do not suppose that any party in the House is very much wrapped up with the idea of subsidising any industry or any section of commerce, on principle, but in this instance the subsidy has proved itself to be so amply justified in regard to the fundamental purposes of the original Act that even the House of Commons is coming to realise that this is one of the exceptions which prove the rule. [Interruption.]
I have previously said that the discussion of policy would not be in order on this Supplementary Estimate.
§ Mr. TAYLOR
Thank you, Mr. Dunnico; I am also kept in order by an hon. Member behind me. I should like to support the point of view expressed 2170 by the hon. Member for Leominster (Sir E. Shepperson) in relation to this Vote. I only differ from him on one point, and that is in regard to the county which should be given the credit of possessing the largest number of smallholders who are benefiting by this provision. I have the honour to be the vice-chairman of the smallholdings committee in the county which I represent, and that committee sent to me this morning a very strong resolution in support of this Vote, which accounts for some 30,000 acres of land in the county of Norfolk, and no fewer than 2,250 smallholders, most of whom are very greatly interested in the issue that we are discussing this afternoon. I shall be interested to hear of any other county that can compare anywhere nearly with Norfolk in that regard.
§ Sir E. SHEPPERSON
If I might interrupt the hon. Member, I said, or at any rate I intended to say, that it was the largest number in proportion to the size of the county.
§ Mr. TAYLOR
I understood the hon. Member for Greenock (Sir G. Collins) to say that this Vote meant the maintenance of a particular privilege for a favoured few. I hope that he was referring more to the factories than to the struggling industry which I have the honour to represent, because, whatever may have been the position in the agricultural industry in years gone by, I do not think that many Members who know much about that industry to-day would regard it as a particular privilege or favour to be engaged in arable agriculture. Anyhow, I hope that the hon. Member, if he has any doubts on that head, will take an early opportunity of experimenting for himself. If he does so, I rather think that next year we shall find him supporting the principle of this Vote as a bare means of keeping tie industry on its feet at all, because, on the arable side, the situation in my county is, indeed, deplorable.
I hope that, in facing up to this position, there will be a growing understand-in; of the accuracy of the statement made by previous speakers that, as I ventured to state last year, and as I repeat this year, if the figures of the factories are ex mined by any impartial man, he cannot avoid forming the opinion that the factories have taken too large a pro- 2171 portion of the subsidy in relation to the producers. I can only say, and here I must tread carefully, that the only remedy seems to me to be more effective control of the size of the profits made by these factories when public money is concerned. I hope that the Anglo-Dutch group will listen to the appeal of the hon. Member for Leominster in regard to their attitude on this issue at the present juncture, because undoubtedly they are the most able, the most capably organised, and the most efficient group of factories, and probably they have made bigger profits than any other group of factories in the country. Now that we have made this protest, the company should be sporting, and meet the growers in the same spirit, rather than offer us profits in the form of a gamble. Let them meet the agricultural industry on terms at least equal to those to which my hon. Friend has been able to persuade the Anglo-Scottish to agree.
I apologise for keeping the House so long on this question, the urgency and importance of which is not understood by my city colleagues and friends. If they only knew the situation in the country, the vital importance of this industry to the maintenance even of a livelihood, and the fact that it increases tenfold the amount of employment on the land where sugar-beet supersedes the ordinary cereal crops, I feel sure they would sink their opposition, while remaining true to the general principle that they are opposed to subsidies. This is an exceptional case, in which the national interests and the interests of agriculture are involved. Money could not be better spent.
§ Mr. L. SMITH
We on this side of the House do not often support a suggestion from the other side, but this is an occasion where I think some of us will do so. I am very pleased that this Supplementary Vote is necessary, because it means so much additional employment on the land. I consider that the beet-sugar subsidy has been well-spent money. Very large numbers of men have been employed, not only in factories, but also on the land. Indirectly, this money has provided employment for a number of other workers in trades that are dependent upon the beet-sugar industry.
2172 I was amazed to hear the hon. Gentleman the Member for Greenock (Sir G. Collins) criticise the amount of money being paid. It seems impossible to understand the type of mind that only a few days ago supported whole-heartedly the proposal to find £20,000,000 for maintaining the unemployed, and yet will oppose a Vote such as we are now considering. Every country in Europe has subsidised this new industry in its early stages. I should like to read from a periodical that has been sent to me. It is issued by the National Council for Industry and Commerce. The Council studies economy, and is somewhat critical of certain expenditures that are being made by Parliament, but with regard to the beet-sugar subsidy, the periodical states, after setting forth the Council's own method of dealing with agriculture:From our standpoint, we see no objection to continuing the beet sugar subsidy at this level for a further period of five years, at the end of which time the scheme that we suggest would, we are assured, be in effective operation, and the growing of sugar-beet would form a crop in the ordinary rotation of arable farming.There is a group of business men who, considering the subsidy on its merits, agree that it is well worth while. I would like to draw the attention of the Committee to an important point that has not been mentioned. During the time that this subsidy has been in operation a very considerable amount of experience has been obtained by farmers and factories. It is extremely difficult to commence a new industry of this sort. I believe we have to thank the factory organisations for providing the brains required to teach agriculturists in all parts of the country how to grow sugar beet in a progressive way. Year by year the sugar content has increased, and so has the tonnage. I am told that two-thirds of the factories have been able to make an offer to the farmers by which they can see a chance of making a livelihood. The majority of those factories, I am pleased to learn, have agreed to a definite offer with regard to tonnages.
I would like to emphasise the appeal that my hon. Friend the Member for Leominster (Sir E. Shepperson) has put before the Committee, that the one group of factories that has not already agreed to make the offer to the farmers that was agreed with the Government should come 2173 into line. The farmer finds in such offers as these a price that will at least cover his costs, and he cannot see as much in the growing of a good many other crops at the present moment. If sugar-beet is not extensively grown during the next year or two, probably a very much larger acreage will be given up to crops like potatoes, and we shall then get a glut on the market and disaster to the farmers. During last season, while this subsidy was in operation, especially in the Eastern counties, sugar-beet was the sheet-anchor of the farmer. Forty thousand farmers have grown about 350,000 acres of sugar-beet and approximately £7,500,000 has been paid out to farmers this year. I say without hesitation that it would be a calamity if we allowed this industry to lapse for the sake of a few hundred thousand pounds, when employment of so many men is at stake. In other countries in Europe a subsidy to an even larger amount than is provided in this country has been thought worth while. Germany is finding 16s. per cwt.; Czechoslovakia 21s.; France 11s. 6d.; Italy 14s. 6d.
The Committee need not hesitate for a moment in agreeing to a subsidy at the present rate. Those who live in the cities and towns of this country do not have to pay more for their sugar than in other countries. They pay less than in any other country in Europe with the exception of Holland. If it were well known in all the cities and towns that the beet-sugar industry was a new and valuable one, I think the voters would be overwhelmingly in favour of helping the farmer to continue beet-sugar growing. The amount of coal that is necessary to supply beet-sugar factories is 300,000 tons each year, and 150,000 tons of limestone is necessary. Consider the amount of transport, a million tons by rail and a couple of millions by road. Railways were last year paid £300,000. All this is providing work in other industries. Then there are the bags for the sugar, the fertilisers, and the seeds.
There is a great future for the further development of the beet-sugar industry. Considerable experiments are being made in dealing with the tops of the beet as food for cattle, and in many other ways we are getting value for our money. Farmers would welcome the continuance of this industry, and so would the large 2174 numbers of men who as a consequence would be employed in the industries that I have enumerated, and, on their behalf, I have the very greatest pleasure in supporting the Vote.
§ Sir DONALD MACLEAN
So far as this subsidy is concerned I agree with what has already been said. Agriculture is not getting a square deal out of it. Thus far we are agreed. It is perfectly evident that vast sums have been poured out, in addition to what is proposed to-day, and a large part has gone, not so much to the industry which stood in need of it, as to capitalists who have had huge subsidies from the State in support of their investments. With the utmost possible force at my command I say that I oppose the granting of this additional sum of £600,000. We have had some comments upon the speech of my hon. Friend the Member for Greenock (Sir G. Collins) and upon the figures which he gave. The concerns to which he referred have undertaken a capital expenditure of £8,000,000 in six years, during which time they have written off £2,000,000 out of profits, and they have accumulated reserves of another £2,000,000. At least £4,000,000 of depreciation have been written off, and thus there are accumulated reserves amounting to half of the total of their expenditure on those two items alone. In addition to that are the enormous dividends which they have declared and are still declaring. I do not wonder that agriculture is so restive under those conditions.
I hear Members say: "Let us have more money." I dissent profoundly. I say that it is quite time this further expenditure was stopped, and a thorough examination was conducted into the whole of this discreditable ramp upon the public funds. If this is hon. Members' idea of how unemployment should be assisted, it is a thoroughly bad lookout for the State. I dissent profoundly from the whole of the proposals that have been made, even from the Treasury Bench. I am quite certain that those who look at this from the point of view of assisting agriculture do not know the facts. I should like to know what the National Farmers' Union would say if they could have the whole of this subsidy to expend on products. They would 2175 not touch this beet-sugar subsidy. They would leave it alone. They would like to have this £22,000,000 to spend on other subjects. The whole of this matter is a discreditable episode in British finance.
§ Mr. PERRY
I think it is essential that some of the points that have been made should be replied to. I hope we shall hear from the Minister that an inquiry is to be made into the whole method of the subsidy and the proportion that is being taken by the factories and by the farmers. Is there a single Member opposite who will defend, as a business proposition, what has actually happened? We are told that the amount of the subsidy, approximately, is about the value of the sugar that has been actually produced. I do not think the farmer is getting a square deal. The negotiations which have recently been conducted have been with a view to securing for the farmer a greater share of the money that is available. There is no business organisation in the country which would attempt to defend the argument that you can increase the prosperity of an industry when you have to assist it from public funds to the full extent of the product itself.
§ Mr. PERRY
That may come in later. I recall that in 1924, when there were only a few of us on these benches, we pointed out the danger of the system that was then being introduced. The figures which have been quoted by the hon. Member for Greenock (Sir G. Collins) have confirmed every word that we said then, and it is due to the taxpayers of the country that, before any more public money is poured out in this direction, the Committee should insist on some measure of public control and on putting some pressure upon the factories in regard to the allocation of the money at issue. I hope we may be told that the whole system of the subsidy and the proportion to be taken by the factories is to be considered by a Committee of the House. It appears to me that the greater part of the subsidy is being taken by an Anglo-Dutch Company, the greater portion of whose capital is not British.
§ Captain RONALD HENDERSON
I should like to traverse the statement of the hon. Member for Greenock (Sir G. Collins) that this is a distribution of largesse in which only the favoured few participate. I should like the Committee to consider what benefit the taxpayer at large, who is not concerned with agriculture, has derived from the subsidy. I should like to ask the Committee to cast its memory back to the condition of the country before we had a beet-sugar industry at all. We were entirely at the mercy of the European sugar cartel.
§ Sir H. SAMUEL
Some of us were most anxious to raise the general question whether the taxpayer is unduly burdened by this subsidy. We have been prevented by the Chair from doing so, no doubt quite properly. Is it in order to raise the general question of the advantage obtained by certain agriculturists and the taxpayers generally?
The CHAIRMAN (Sir Robert Young)
My attention was withdrawn for the moment, and I was not following his remarks. The hon. and gallant Gentleman is not entitled to cover such wide ground.
§ Viscount WOLMER
Surely my hon. and gallant Friend was replying to an argument from the Liberal benches which your predecessor, Sir, allowed to be stated very fully.
§ Captain HENDERSON
I was trying to point out how this Estimate will benefit not only those who are taking part in agriculture but the ordinary taxpayers of the country. Owing to this industry having been started, and to the enormous production of sugar, we have made ourselves completely independent of that controlling factor in the world sugar price. The effect has been that the taxpayer has received cheap sugar for the whole time during which the industry has been flourishing in this 2177 country. One might for the moment put the agricultural industry out of the question and look at it purely from the point of view of the benefit of the food consumers of the nation, and from that point of view alone I am sure the Committee ought in all fairness to sanction the Estimate.
§ Viscount ELMLEY
I do not quite share the apprehensions and the disapproval of this Vote which have been expressed by my right hon. Friends. They have put up a very strong case against it. I do not think I have the ability to put up an equally strong case for it, but I should like to draw attention to one or two things which I have noticed in my Division, in which is situated the first beet-sugar factory that was put up. We are asked to pass this Vote because the industry has done better than was expected. I suppose it is difficult for the right hon. Gentleman to get his Estimates quite right. I can bear out what was said by the hon. Member for South-West Norfolk (Mr. W. B. Taylor) that this industry has been the means of saving a great number of people in Norfolk and, as far as I know, in East Anglia generally from bankruptcy. One simply does not know what many farmers would be doing if they were not growing sugar-beet. I do not know what they could do.
There is another point that one has to bear in mind. I know of a firm of haulage contractors which earns £900 a year by taking the beet to the factories. I should like also to endorse what has been said about this subsidy being intended not for the factories but for the industry of agriculture. We have been ruled out of order in discussing whether subsidies are good things or bad, and I am rather sorry, because there are one or two things that want to be said about it. Anyhow, we have this subsidy for good or for evil—I hope for good—and we have to make the best of it as things are now. The balance-sheets of the factories have been published, and we have heard of the very good position in which the factories are situated. I have recently had an opportunity of examining the balance-sheets of farmers who have been growing sugar-beet and I have seen a very different state of affairs indeed, showing that they are not getting anything like the benefit that they ought 2178 to get from this subsidy. The Government should try to devise some method of seeing that it goes where it really ought to go.
There is a very strong feeling in various parts of the country which grow sugar-beet that the Anglo-Dutch group will see its way to come into line with the rest of the companies. I hope, when this extra subsidy comes along in October, the factories will be able to give far better terms even than have been suggested to the farmers. I should like to ask whether any part of this extra subsidy is to be devoted to research. There is a great deal to be done in that direction. I suppose the right hon. Gentleman is aware of the experiments that have been carried out at one factory with a view to seeing whether it is possible for sugar-beet to be manufactured and grown all the year round. That is a point that is worth while following up. It will do a great deal of good all round if progress is made in that direction.
§ Mr. DUCKWORTH
I am not a talkative Member and I make no apology for rising to support this Estimate. It vitally affects an industry which is of great interest to my constituents and, indeed, to the agricultural community as a whole. In Shropshire during the last five years it has been the sole means of keeping a very large acreage under the plough. Last year the area under the beet crop was no less than 16,000 acres. I have often met farmers who have been quite prepared to admit that they have done exceedingly well out of their beet crop. I believe that in spite of the opinions which have been expressed by the hon. Gentleman below the Gangway, there really is an almost general consensus of opinion in the Committee that the money which is being spent upon these subsidies has been money well spent in establishing this particular industry. The answer to the criticism which has been made, that the factories have taken an unduly large share of the subsidy, is really to be found in the vast increase of the acreage which has constantly taken place year by year.
At the same time, I agree that it is of very great importance that the industry should ultimately be placed upon a self-supporting basis. If the subsidies are not to be continued year by year, it is of the greatest importance that there should be a reduction of costs, because I believe that it is only through a reduc- 2179 tion of costs that these factories can continue to live, and only those which can effect such reductions will continue to live. A great deal has already been achieved. Certainly a great deal has been achieved in the reduction of costs as far as the Shropshire beet-sugar factory is concerned. There is another point which I should like to put to the Minister, and it relates to the question of the yield per acre. He has told us that the yield has risen from 8.1 to 8.7, but I understand that, compared with various Continental countries, it is a very low yield. In Holland, Germany and Czedhoslovakia the yield runs from anything between 10 to 13. I should like to ask the Minister whether research is being carried out with a view to increasing the yield, because it is evident that not less than about 30 per cent. requires to be made up in this country.
It is very rarely, unfortunately, that we on this side of the Committee are able to see eye to eye with the Minister. When he comes to ask for further sums of money we eye him with great suspicion, because we are all well aware that he has all the personality and charm of manner which we associate with those who have established a reputation for financial recklessness. We are glad to find ourselves in agreement with him this afternoon. Finally, I support the Estimate because I hope that when the present difficulties of the industry have passed away, it may be established on a self-supporting basis and be able to look forward to many years of increasing prosperity.
§ Sir G. COURTHOPE
A number of questions have been asked and criticisms made during this Debate concerning the Anglo-Dutch group of factories. As the Committee know, I am associated with that group, and have been from the beginning—I was as a matter fact, Chairman of the company which built the first factory at Cantley—and I know what it is all about. Perhaps I may be allowed to reply as briefly as possible to the criticisms and questions which deal specifically with that group. I have also one or two words to say about costs of cultivation and matters of that kind of a more general nature. First of all, I want to refer to the criticisms—they were unfair because the information given was incomplete—which were made by the hon. 2180 Member for Greenock (Sir G. Collins). We all know why he makes them, because from the very first time the sugar-beet industry began to be discussed in this House and the question of assistance by the Government came up, we realised, and he realised, that he would hold the seat of Greenock so long as he could continue to complain that the subsidy was being given to an industry which competed with the sugar-refining industry in his constituency. I do not quarrel with him, but I discount the value of his criticism.
§ Sir G. COLLINS
The hon. and gallant Gentleman has made a personal observation about myself, and indicated that I was animated solely by the interests of Greenock, and that I held my seat by opposing the subsidy. May I remind the hon. and gallant Member that for five elections before the subsidy was introduced, I held my seat? To suggest what he has suggested this afternoon is a gross insult, and I ask him to withdraw it.
§ Sir G. COURTHOPE
I very much regret it if the hon. Gentleman feels aggrieved at the chaffing remark which I made. Of course, I know perfectly well that he held his seat for a long time, but I do not think that he would suggest that I am overstating the case when I say that he would be less enthusiastic on this point if it did not appeal to his constituents at Greenock. Otherwise, why on every occasion does he bring in his constituents?
§ Sir G. COLLINS
I am asked why on every occasion I bring them in, because, when the original subsidy was mooted in this House, I opposed it in the interests of Greenock. Unfortunately, the House did not agree with me. They thought that I had over-stated the case. But every inhabitant in Greenock is well aware that the subsidy has caused hardship, quite unwittingly. But that has been the result of the subsidy. To show the accuracy of my remark, the late Chancellor of the Exchequer had to reduce the excise duty on sugar melted in Greenock, because he felt that the present subsidy had indeed done an injury to that industry.
§ Mr. W. B. TAYLOR
Do we understand that the hon. and gallant Gentleman withdraws the suggestion against the hon. Member for Greenock
§ Sir G. COURTHOPE
I said that I regretted that he felt insulted by a facetious remark of mine. I do regret it.
§ Mr. W. B. TAYLOR
With great respect, the hon. and gallant Gentleman ought not to make such a suggestion.
§ The CHAIRMAN
The hon. Member for Greenock (Sir G. Collins) is entitled to stand up for his constituency, and if any motive is implied perhaps the hon. and gallant Member will withdraw it.
§ Sir G. COURTHOPE
Certainly; I wish to make it clear that the chaffing remark I made was not meant seriously, and if the hon. Member takes it seriously, I will withdraw it, and gladly withdraw it.
§ Sir G. COURTHOPE
It was not meant as a serious accusation, and the last thing I would wish to do would be to insult the hon. Gentleman or anyone else in the Committee. With regard to the statement about the reserves of the companies, it is quite true that the group of companies to which he has referred have built up very large reserves, but what he did not state was that with regard to the first two—one in particular, the Cantley factory—which have built up reserves, a very large proportion of the capital invested in building those factories was lost originally and had to be written down in the reconstruction, and that no amount of reserves which the present reconstructed companies may build up will ever repay to the shareholders the capital which they lost through the early failure of those companies.
§ Mr. de ROTHSCHILD
May I ask the hon. and gallant Member to explain how it is that the Cantley factory has a capital of £500,000 and reserves of £460,958 5s.?
§ Sir G. COURTHOPE
Absolutely. The Cantley factory was built by a company called the Anglo-Netherland Beet Sugar Corporation, of which I was chairman, but owing to nobody's fault—
§ The CHAIRMAN
I should like to intervene for a moment. I understand that the hon. and gallant Member is replying to something which was said by the hon. Member for Greenock (Sir G. Collins). If that be so, I trust that the reply will be the last that will go outside the scope of the Estimate.
§ Sir G. COURTHOPE
I will endeavour to reply to the questions without disobeying your Ruling. The capital of the original company was lost. My point is that the £500,000 in reserves of the reconstructed company can never repay to the shareholders the very heavy loss of capital which was sustained in the early days. I do not want to develop that point because I realise that I am walking on very thin ice.
§ Mr. ALPASS
Will the hon. and gallant Gentleman be good enough to inform the Committee what was the average rate of dividends paid by the companies since the Act and the amount of reserves which have been accumulated?
§ The CHAIRMAN
The hon. Member's question raises a very wide point. If an hon. Member gives some facts and I allow a reply, that is no reason for re-stating the arguments.
§ Major GEORGE DAVIES
On a point of Order. The hon. Gentleman the Member for Greenock (Sir G. Collins) devoted 75 per cent. of his speech to going through a Command Paper dealing one by one with the capital and reserves of a series of companies. Many of us here who have spoken since refrained from dealing with the subject because we knew that my hon. and gallant Friend the Member for Rye (Sir G. Courthope) was the one person in the Committee, not only on account of his knowledge, but because of his admitted financial connection with some of these companies, who would be the proper person to reply.
§ The CHAIRMAN
I do not think that the intervention of the hon. and gallant Member concerning the reply of the hon. and gallant Member for Rye (Sir G. Courthope) was necessary. I hope that the discussion will not develop on those lines—[Interruption.]
§ Mr. MacLAREN
These illustrations were given. Does that mean that in the subsequent discussion no comment and no reply can be made to any criticism of the Command Paper as read out by the hon. Member for Greenock (Sir G. Collins)?
§ The CHAIRMAN
That is not what I said. The hon. Gentleman is now in possession of the Committee and has replied to the hon. Gentleman below the Gangway. I understand that he has made a full reply, and therefore I want to get back to the Estimate.
§ Sir G. COURTHOPE
I feel that I should be outside your Ruling in attempting to give the average figures for which the hon. Gentleman asks. They have all been published. I have not got them before me in the form of averages, but it will be found that whilst some companies have been able to pay substantial dividends and build up reserves, the general average profit earned by the subsidised companies has been rather on the small side. I think that that would be the result of any researches; they are all published figures. A question has been raised by several hon. Members but not yet answered about cultivation costs, which have a very material bearing on the Supplementary Estimate. There has been a gradual increase in the sugar produced per acre, and that, in turn, affects the Supplementary Estimate. Therefore, I do not think that I shall be out of order in giving what I think will interest the Committee, namely, the actual costs in the past season of one large concern which cultivated 339 acres. The average yield was approximately 10½ tons—10 tons, 9 cwts, 2 quarters—per acre, the sugar content 17.7 per ton, the tare dirt per cwt. 18.9 lbs., the price per ton of beet 53s. 7d., and the cost per acre £19; the gross return per acre £28 19s. 1d., leaving a cash profit per acre of £9 19s. 1d.
§ Sir G. COURTHOPE
No. This is cash profit. He gets in addition to the £9 19s. 1d. per acre the manurial value of the tops. On my own farm in Sussex—I have not the figures for the past season but for the season before, which was an exceptionally good one—my costs were about £23 per acre, and my receipts £40. I grew a very fine crop.
§ Sir G. COURTHOPE
I was thankful. The subsidy enabled me to get a price for my beet and to get a good return. Several hon. Members have made an appeal to the Anglo-Dutch group of factories, for which I am able to speak, that they should come into line with the other factories in regard to the offer that has been made. I would like to point out that requests of that kind reveal a complete ignorance of the position. All the factories and groups have offered the farmer for the coming season everything that they can make. They will take no profit, they will take nothing for reserves, nothing for depreciation, they will pay no directors' fees, and they will undertake not to increase salaries. The difference of opinion arises in the technical interpretation of what that will mean in the terms of shillings per ton.
Compliments have been paid by several hon. Members to the technical efficiency of the Anglo-Dutch factories. I do not want to overstate the case, but I think the Committee will agree that I am entitled to say that the technical staff of those factories have proved themselves at least as efficient as the technical staffs of any other group. I personally have the highest confidence in their technical efficiency. I am bound to accept their technical advice, because I am not a technical expert myself, and they put an interpretation upon what it is possible for the factories to make in gross returns under the present sugar market conditions of the world, which is very much lower than the interpretation placed upon it by the other groups of factories.
If our technical people are right, the other groups of factories will fail to implement the offer which they have made. My group have made the same offer. We offer to operate the factories without profit, without provision for reserve, without depreciation, without directors' fees, 2185 and without increases of salaries. We offer to pay everything to the farmer; to pay something substantial on account, and to pay the balance on the delivery of the beet when the accounts are made up. We cannot do more, but we put a technical interpretation upon the offer which is much less than that of the others. We are not in a position—no factory is in the position—to offer, say, 10s. a ton more for beet than we can possibly hope to get for the product when we sell the sugar. If our technical people are right, the other will fail to pay, because the money will not be there.
§ Sir G. COURTHOPE
I prefaced my remarks by saying that experience entitled me to express the view that our technical people are, at least, as competent as the other technical people.
§ Sir G. COURTHOPE
Certainly, and by general factory costs. I believe that our technical people can convert sugar beet into sugar rather more cheaply than the technical people of any other group. The Minister of Agriculture does not quarrel with that statement.
§ Sir E. SHEPPERSON
Is it not a gamble Under the offer that has been made by the group of factories in the Anglo-Dutch group, I gather than if the price of sugar goes up the price to the farmer may even be more than the price offered by the factories and—
§ The CHAIRMAN
If I understand the Supplementary Estimate aright, it is an additional sum paid on a subsidy which is fixed for this year. The only question which arises is whether this increased amount of subsidy should be paid. Certain statements were made by an hon. Member below the Gangway, and I have allowed the hon. and gallant Member for Rye (Sir G. Courthope) to reply, but that does not entitle the hon. Member to widen the Debate.
§ Sir G. COURTHOPE
I have tried to keep within your Ruling, as far as possible, and I have little more to say to the Committee. No one desires more than I do that the people with whom I am associated should make an offer of a thoroughly satisfactory nature. We have offered everything we make in the next campaign, and I hope that that will be acceptable to a sufficient number of our own growers. I wish we could honestly interpret it in terms that were wholly satisfactory to them, but for reasons that I have shown we are unable to do it. If our technical staff prove to be wrong, or if there is a very exceptional season next year, the offer of the Anglo-Dutch factories to the farmer may prove to be worth more than the offer made by the other factories. On the basis of existing circumstances and on the basis of the best technical advice that we can get, the best interpretation that we can put upon the situation justifies us in the offer we have made, and nothing more. I thank you, Mr. Chairman, for the latitude you have allowed to me, and I thank the Members of the Committee for the patience with which they have listened to me.
§ Mr. W. B. TAYLOR
Am I to understand from the hon. Baronet that the Anglo-Dutch factories are unable to make us a firm offer?
§ Sir G. COURTHOPE
The Anglo-Dutch factories have made a firm offer which has been circulated to the growers. I have a copy of it in my hand. But they will not make a minimum payment of 38s. for 15½ per cent. beet, because they do not consider that circumstances will allow that to be paid.
§ Mr. de ROTHSCHILD
I rise to support this additional expenditure. I approve of it because it is giving work to 30,000 people a year. The total sum which is being contributed by the Government is £6,000,000, and according to a computation which has been made in this House, by experts and members of the Government, every £1,000,000 makes for the employment of 5,000 people. Therefore, the money cannot be said to have been altogether misspent. I should like to protest, with other hon. Members representing agricultural constituencies and sugar beet growing districts, with respect to the points raised by the hon. 2187 and gallant Member for Rye (Sir G. Courthope).
§ The CHAIRMAN
I hope the hon. Member heard what I said. I understand that before I came to the Chair a speech was made by an hon. Gentleman below the Gangway, which seems to have gone wide of the Supplementary Estimate. In fairness, I allowed the hon. Baronet to reply, but I indicated that the Debate would not have to be extended. The amount of money in the Supplementary Estimate is an additional sum on the fixed subsidy for this year. The question arises whether that sum should be granted and whether the money has been earned in a right or wrong way. Anything that arises on the main Estimate will come up next year.
§ Mr. de ROTHSCHILD
I am discussing the past and not the future. My point was that this money has not altogether been spent in the right way. I submit that the £600,000 that has been spent has mainly gone to the wrong people. Most of it has gone into the pockets of the shareholders of the factories, instead of into the pockets of the growers. When the subsidy was given in 1924 it was opposed by the Liberal party, but the Liberal party have never opposed the continuance of the subsidy, after it had been granted, during the 10 years that it has to run. What they asked for, and what I have asked for in this House is an inquiry into the incidence of the subsidy, but this inquiry has not been forthcoming. About this time last year I asked the Minister whether he would publish figures and all the information that he had in regard to the growing of sugar beet and in regard to the whole industry, to enable the farmers to compete on terms of equality, so far as knowledge went, with the gentlemen in the factories. I am still awaiting the publication of that document, which was promised to us for June of last year, and for which the farmers would have been very grateful.
The difficulties which the farmers have had will be intensified in the future unless something of that kind is done for them and we get a proper inquiry. The people in my constituency looked upon the Dutchmen who came to instal their sugar factories in the Eastern counties in the same way as they have in the past looked upon the great Vermuyden, 2188 who built their dykes in the fens, but the Dutchmen who have come there this time have not rendered them the same service. I am not taking into account the money that may have been lost by previous undertakings before the Act was passed—but since 1925 the money provided by the Government has gone in the main to swell the pockets of the industrialist and not to the fen men. The Cantley factory has been able to pay off the whole of its capital in dividends, £500,000, and besides that has put £460,000 to reserve in six years. That is where the money from the Treasury has gone. It is a large part of the subsidy which this House has voted, and it is the factories and their shareholders that have got it, and not the agriculturists who are the mainstay of the industry. The Dutchman has got the swag—and now he says: "My Motto is Butt on park; I'm off to Holland."
§ 6.0 p.m.
§ Major DAVIES
The closing words of the hon. Member for the Isle of Ely (Mr. de Rothschild) have rather left me gasping. I am not sure whether they are to be taken as a quotation or whether they indicate the hon. Member's intention to go himself to Holland. I propose to occupy the lonely and solitary position of trying to keep in strict order on the Estimate we are discussing and not be led away by previous speeches. The Minister of Agriculture, in response to an interjection from hon. Members below the Gangway, said that he was carrying out the law. That is true, and that really is his defence. In carrying out the law he is bringing forward this Supplementary Estimate for £600,000, which differs fundamentally from other Supplementary Estimates which come before the Committee. All the others are the outcome of misplaced optimism or misplaced pessimism.
§ The CHAIRMAN
The hon. and gallant Member started very well, but he has not continued so well, and at the moment he is criticising something which is not before the Committee.
§ Major DAVIES
I think, Mr. Chairman, that you have been a little unkind to me. I was saying, in passing, that this Supplementary Estimate arises from conditions which neither the Minister of Agriculture nor anyone else could know beforehand because of the factors upon 2189 which they depend. The size of this Supplementary Estimate is the test of the success or failure of a principle which we are not allowed to debate at the moment. At a time like this, when economies are called for in every direction, it would be proper to criticise the amount except for the fact that it is a gauge of the success of the operation and the application of this principle during the past year.
Those who have been interested in this question in previous years have seen a great change in Parliament, a change which, I believe, is reflected in the country as a whole. More and more the country realises what a great benefit this sugar-beet industry has been to the countryside, and if we once admit this and also appreciate the size of this Supplementary Estimate, it means that it has been a much bigger success than it was thought to have been and that we can with cheerful voice go into the Lobby, if necessary, in support of the Estimate and at the same time disassociate ourselves from the somewhat carping criticisms which always emanate from the Liberal benches when anything definite is done or proposed to be done for the assistance of the agricultural industry. You have only to ask the farmers themselves. The only criticism they have to make is that they have not a proper share of this £600,000. As to whether the policy is sound, everyone knows that hon. Members opposite would not support the policy if it were not sound. This money is not going to support a pampered few.
In setting out upon this policy it was hoped that by the application of State assistance we should establish an industry which would ultimately be able to stand upon its own feet. The realisation of that aspiration depends entirely upon whether the farmers can develop, by experience, the necessary skill. The tonnage has increased quite materially this year. It is 8.7, and when we remember what the tonnage was when the industry was in its infancy it is a fairly satisfactory development, but not so satisfactory as we should like to see. "Bogey" is about 10; and we have many difficulties to face. At the same time the glucose content, which is another important factor, is remarkably high in this country, a surprising fact, because the absence of steady sunshine might 2190 prove that this country is not suited for this industry. The real test as to whether we are justified in passing this Supplementary Estimate for £600,000 is to look at the figures of the industry. No less than 356,000 acres are now under arable cultivation, giving a crop which pays the farmer and provides an enormous amount of ancillary occupation in transport and haulage and many other directions. It also gives employment to skilled and unskilled workers in the factories, apart from those engaged on the land itself.
If it was a question of considering the principle of a subsidy, much could be said against it, but the test of this Estimate justifies from every point of view the State coming to the assistance of the industry. Whilst we have some considerable distance to go as regards efficiency and tonnage, I believe that with continuous scientific and practical experiments we may feel satisfied that the 8.7 per cent. is not the summit of our achievement. There is no Member of the Committee but would deplore the thought that by not bringing forward this Supplementary Estimate an industry which has fully justified itself not only from the agricultural point of view, but from many other directions as well, should disappear. The criticism has been made that more than a fair share of this £600,000 is going into the wrong pockets. I do not grow an acre of sugar beet myself, and I have no interest in any factory, but I have been closely connected with the sugar and cane industry in many parts of the world. Hon. Members must realise that the only reason why this is becoming a crop for farmers is because there are factories for turning sugar beet into beet sugar; and that fundamental to the success of the whole scheme. The encouragement given to the industry must not be given entirely to the farmers; you must also encourage the erection of factories to convert what the farmer grows into a marketable commodity. Everyone will appreciate the risks attaching to such an enterprise.
We want, by means of State assistance, to insure that when the time comes and when we are no longer called upon for Supplementary Estimates, we have firmly entrenched in the countryside an industry which, financially and technically, is in a position to work at the lowest possible cost. That is an import- 2191 ant consideration which must be borne in mind when we make the criticism that more should go into the pockets of the farmers and less into the pockets of the factories. There may be some foundation for that criticism, but there is a great deal to be said for continuing the encouragement to factories, because they are the basis which gives the farmer any reason for growing a crop at all. The point is to get factories for British farmers where British crops can be manufactured. Although I hate to see additions to any Estimate of such sums as £600,000, still I feel justified in supporting whole-heartedly this Estimate, for the reasons which I have endeavoured to put before the Committee.
§ Mr. MacLAREN
I have been looking back to the Debate on the Agricultural Land (Utilisation) Bill. For the propositions in that Bill there was not the same applause on the benches opposite which we find to-day for this proposal, and it is a little hard to see why there is this enthusiasm to-day. I am hampered in my remarks because of the restricted nature of the Debate. I am suffering in the same way as the hon. and gallant Member for Yeovil (Major G. Davies) but, apparently, we can discuss whether the money should be spent or not. When this Estimate was before the Committee on a previous occasion I protested against the subsidy, and pointed out that there would never come a time when this industry would be able to stand alone. We have been told that that time is coming. Perhaps we should not protest against this Supplementary Estimate if we saw the time coming when these factories will be able to stand alone financially; but on one in this House or outside can predict the day when the beet sugar industry in this country will be self-supporting, and we are, therefore, becoming apprehensive when we see this Estimate brought in by a side wind as it were, and under the conditions of a restricted Debate, in order to maintain this artificial process of production. That is why I protest against this Estimate.
I prophesied what would happen. In 1926 and in 1927 we were told that the day would come when it would not be necessary to call upon public money, because at the end of 10 years, when the 2192 Chancellor of the Exchequer had paid £20,000,000—with what we have lost in Customs Duty as well the State has paid £26,000,000—as a subsidy to this industry, it would be self-supporting, but I defy any expert in this country to say that it will ever be able to stand on its own finance. It can live only by Estimates of this kind; it can never be maintained as a free, private and independent proposition. One can understand why there is this applause from hon. Members opposite and I suppose that Mr. Van Rossum, Dr. Wijnberg, Dr. Van Loon, Dr. Hirsch, Dr. Aczel and Baron Korfeld, these patriotic gentlemen, will be applauding outside when this Estimate is passed to-day. They foisted these machines and these factories on this country. This has been the greatest financial hoax ever known, imposed upon an unguarded and unthinking people. The more the public get to know about it the more will the criticism react upon this House, and I hope the suggestion that there shall be a public inquiry into the whole matter before any further attempt is made to bring in a Supplementary Estimate will be accepted by the Government.
I feel that I cannot "get going," because of the Ruling from the Chair by which we must all abide, but there is much to be said which would make this case seem almost on an equality with some of the little developments in the City of recent days. Yet we have had Members on the Labour benches supporting this Estimate on the ground that it will give employment in the agricultural areas while Members on the Conservative benches are declaring that the lion's share of this money is going to the factories. The irony of it is that a representative, a director of the factories, stands here himself and says that he cannot accede to the demand, or the request of the farmers, because he does not think he could make it pay. He does not think that the factories can fulfil the requirement put before them by the farmers, because it might not pay. Yet in face of that statement we have Conservative Members supporting this Estimate, while admitting that the factories are running away with the lion's share, and in spite of all that we have heard, there are some hon. Members sanguine enough to believe that the day is coming 2193 when we shall require no more £600,000 Estimates for this purpose. But these Estimates will continue. This subtle attack on the Exchequer of this country will continue to be made in order to feed the maw of this group, who have already pocketed millions of the taxpayers' money. It will continue unless the House of Commons has a bigger and fuller Debate on this matter than is possible to-day.
I hope that there will be such a Debate, after a full inquiry has been held into the subject, and that an end will be put to this fanciful artificial scheme for providing jobs for men. We are told that this artificial industry is going to provide work. If so, why stop at sugar? Why not begin to grow bananas or oranges or grapes? There is plenty of hot air available at little cost. In any case look at the amount of coal which would be required to provide the hot air. Look at the work it would give to the pits. It is all fatuous nonsense about the amount of work which can be given in this way. Men can be given jobs if the Exchequer is induced to pour out public money for the purpose. Perhaps I stand alone in this Committee in protesting against squandering public money on charitable projects which bring you nowhere. When you are finished with them the problem is still with you. But I have done my best to protest against performances of this kind and I am sure that you, Sir Robert, will bless me for having kept within the bounds of your Ruling on this occasion. I think I have done so even better than the hon. Member who announced that he was going to do so, and I conclude by hoping that an end will be put to all this in the very near future.
§ Captain P. MACDONALD
I find great difficulty in understanding the mentality of some hon. Members who have taken part in this Debate. The hon. Member for Burslem (Mr. MacLaren), who so strongly objects to what he calls the pouring out of public funds by spending this sum on work which is to provide employment for 40,000 hands all the year round, and for 30,000 seasonal workers for part of the year, was quite prepared the other day to support a proposal for the expenditure of £20,000,000. The same remark applies to the right hon. Gentleman the Member for North Corn- 2194 wall (Sir D. Maclean) and the hon. Member for Greenock (Sir G. Collins). They take strong exception to this expenditure on the ground that the money is going into the pockets of foreign capitalists instead of to the farmers. But part of their own policy for dealing with unemployment is the expenditure of £200,000,000 of public money on work which would not, as far as I can gather, benefit anybody. I think that this money is very well spent on this industry, but, now that the industry has been going on for some years, it is about time that we had a report on it, so that the farmers and factory-owners may know where they stand.
The situation which has arisen this year is an absolute disgrace. Farmers who have prepared their land, bought their seed and contracted for their labour in connection with the growing of next season's crop have been held up month after month, while the factories, the National Farmers' Union and the Government have been trying to make up their minds as to who was going to concede the most, and how much one was going to get from the other. All the time the farmer who was responsible for the growing of the crop did not know where he stood in the matter. We have heard to-day from the Minister that, as far as this offer is concerned, no group of farmers is ruled out, but I beg to differ from that view. There is an area inside of which the factories will contract and outside of which they will not contract. I have in mind, in my own constituency, a group of farmers who started to grow this crop a few years ago. I encouraged it, because I know that it was a crop particularly adapted to that soil. They have proved it to be so by getting a larger yield per acre than perhaps any other part of the country. They have reached a high sugar content, and there was every prospect of the industry growing in that small island. Now they say that they have no prospect whatever of growing sugar-beet profitably under the new conditions offered by either the Anglo-Dutch group or the other factory groups this year under the terms made by the Minister.
I regard that as a very serious and disgraceful situation. The industry is being confined to a limited area, while the whole country, including the farmers, 2195 outside that area, are obliged to contribute to the taxes from which this subsidy is provided. I am told that the factory representatives have been withdrawn from these outside areas and that the farmers there have been told that there is no prospect of obtaining any contracts this year. I urge on the Minister to take immediate steps to try to put the whole industry on a sound economic basis. I understand that a committee has made a report covering the whole industry. I hope the Minister will make use of that information immediately and will set up some body to advise the Government and to assist the farmers to know exactly where they stand. They should not be allowed to go on from year to year not knowing what is going to happen in connection with this crop and not knowing whether they are to be allowed to obtain contracts or not. There is a great deal of criticism against factory-owners on the ground that they are obtaining what is termed most of the "loot," and a great deal of that criticism is justified. It is true that the farmers up to now have not been complaining about the factories getting the lion's share of the subsidy. The farmers have been quite satisfied while they themselves have been making a fair profit, but, with diminishing subsidies, their profits go down and they are naturally asking why the factories, such as the Anglo-Dutch group, which have built up enormous reserves in the last few years, should not be prepared to take part of the risk at the present difficult time instead of passing it all on to the farmers.
The farmers were quite satisfied that it was necessary for the factories to obtain a return for their capital outlay. What is to be their position now? Will they find that the reserves which have been built up are not to be used for the assistance of the industry at all? Are all these people all over the country to be left high and dry? There is going to be a great deal of criticism in the future about this aspect of the matter and something ought to be done. I do not, as a rule, uphold Government control, but something will have to be done to give the Government further control of this industry, if this is the way in which the factories are going to behave 2196 in the future. The factories would never have got the production which they had to-day if it were not for the growers in outside areas such as mine, where transport charges are exceptionally heavy. It costs the farmer in my area about £1 per ton to transport from the farm to the factory, and it is obvious that, with the present rate of subsidy and the present price of sugar, it is going to be very difficult for them to make a profit. I ask the Minister to bring pressure to bear upon those factories which have been unwise enough to stand out from this agreement in order that those who have made commitments for next year, in preparing to grow the crop may not be "let down" as badly as they have been previously, and in order that they may obtain some benefit from the outlay of this money to which they themselves contribute.
§ Mr. KIRKWOOD
Will the Minister tell us, as trade unionists, seeing that they are going to subsidise this beet industry, if they have made any provision to see that trade union wages will be paid and that fair conditions will be recognised in this industry?
§ Dr. ADDISON
In reply to my hon. Friend the Member for Dumbarton Burghs (Mr. Kirkwood), I am glad to say that the fair wages condition applies to these factories, and although we have had at times complaints so far as, I think, two places were concerned, investigations were made, and what was wrong was put right. It is fair to say that the employment conditions in the factories are very good and that the wages earned are very much higher than they are in the rural areas where the factories are situated. I will now reply as best I can to many of the other points which have been raised during the Debate, and taking first one which has been raised by many speakers, as to how much of the subsidy would go to the factory and how much to the grower, I can only give our calculations as to the average. The Department estimates that of the £22,200.000 paid as subsidy, £11,000,000 has been passed direct to the growers, or about half. To explain this particular figure, I may point out this year the world price per ton of beet was 30s., and the amount paid to the farmer was 50s. The average subsidy per ton of beet was therefore £2, of which the farmers had £1. As far as we can estimate the 2197 figure, it has been divided equally between the factories and the growers in the prices paid.
I should very much like to follow some of the speakers into the attractive region of beet-sugar policy, but this is not the opportunity. In reply to some of the detailed questions asked by the Noble Lord, I may say that the sugar content last year on an average was lower than the year before. The tonnage per acre increased but the sugar content was nearly one per cent. less, and that was owing to the fact, of course, that the weather conditions for the most part were much more unfavourable to the development of a high sugar content in the beet. I recognise too that, as two or three other speakers have said, the tonnage per acre, although showing a satisfactory increase and although that item itself was responsible for £250,000 of this Estimate, even now we are a considerable distance behind the Continental growers in the tonnage.
In reply to the question relating to that, I can say that the factories themselves and various institutions have spent a good deal of money in connection with research in this matter. The results depend upon the particular behaviour and varieties of the seed, which is gradually being acclimatised in this country. The average yield in the Colonies is 10 or 11 tons per acre, and we are two or three tons less.
§ Dr. ADDISON
The differences in soil in different parts of the country are very great indeed. In many cases the soil is very much like some of the Continental soils in which beet is grown, and even when you use the same seed, you have varying tonnage per acre. It depends on all kinds of things. For one thing, the foreign growers have been growing beet for 40 or 50 years, whereas our growers have only been growing it for five or six years, and that is the explanation of the difference, because there is a marked improvement in the quality and in the method of delivery to the factories, 2198 and there is a marked improvement in efficiency, so far as the sugar extraction is concerned, of the factories themselves. I can say this, that there has been a much nearer approach in the last 12 months to economic conditions than was perhaps foreseeable a couple of years ago, and the fact is that we think anyhow that the price now being offered by many of the factories—38s. 6d. per ton of beet with 15½ per cent. of sugar content of beet, rising to 43s. 6d. with 17½ per cent. content—will be a remunerative price. That is 10s. a ton less than the average price paid last year.
§ Mr. L. SMITH
There has been a statement in the Debate this evening which might make the farmers hesitate to place contracts, fearing that they might not be able to get what has been promised to them in those contracts. Can the Minister assure the Committee that the arrangements come to with those 12 factories are such as will make sure that the farmer gets what is specified?
§ Dr. ADDISON
I was coming to that matter, which I think ought never to have been introduced into this Debate. I am not going to enter into factory rivalries, but I can say this, that we have investigated the accounts of the factories which came into the agreement and offered 38s. 6d. per ton. All their accounts, of course, are open to our inspection. The experiments carried out at Cambridge and other places led us to believe that beet could be grown successfully at a figure round about 40s. on the average, with 16½ per cent. sugar content. A good many growers grow at substantially less, but we believe that that is a fair price. We investigated the conditions of those factories, and while, of course, some are stronger than others, we believe that on the whole that is a fair offer. It is true that the factories are going without interest, depreciation, or profit, and we are quite satisfied ourselves that they will be able to make good.
I am very sorry, indeed, that a statement should have been made here to-day, which will occasion misgivings among growers. We cannot, of course, guarantee anything, but we were satisfied that the factories were making a businesslike offer in making that offer. It is a bit 2199 of a gamble, in view of the state of world prices, but I think that the appeals which have been made ought not to fall on deaf ears. With regard to the other great group, in which case all the risk is on the shoulders of the unfortunate grower, the position is quite clear. Therefore, I am not going into that. It is outside the scope of this Debate except in so far as it may affect the Estimates next year. As far as payments go, we believe it is about half and half between the factories and the growers.
I have also been asked as to the amount of employment given. So far as we can tell, the figure paid in wages last year in connection with beet production would be over £2,000,000. There was also paid in connection with beet transport a figure which we think was about £850,000. There are various other payments in connection with maintenance staff at the factories, repair work, and so on, which we cannot give with any precision, but it is undeniable that these payments represent an immense addition to the wages paid. I have been asked, I think by the hon. Member for Greenock (Sir G. Collins), how much additional employment this has given.
§ Dr. ADDISON
Quite so. Quite frankly, I cannot answer that question, and neither can anybody else, for the simple reason that you do not know what otherwise would have happened to the land. The fact is that as compared with ordinary arable land, I believe, we employ about three times as many in connection with sugar-beet cultivation and eight to 10 times more than on grass. How much additional employment sugar beet has provided would depend on what otherwise would have been done with that land. I cannot answer that question—nobody can—but I am quite sure that it has enabled farmers in East Anglia to keep labourers on the farms who otherwise would not have been kept there. There is no doubt whatever that that is the case to a very large extent.
The cost of growing in England as compared with the cost abroad was one of the questions I was asked. So far as we can ascertain, the efficiency costs in England are better than they are in the United States, but, of course, we have to set against that the fact that the tonnage per acre in England is less than 2200 on the Continent. Our efficiency cost to the grower per ton of beet is probably a little higher here than in America and as high as it is in most Continental countries. The returns really depend upon the tonnage of beet per acre and upon the sugar content. This effectively disposes, I think, of the accusation that this £600,000 is being handed out to the companies. Half of it, anyhow, it is fair to say, according to the average of our experience, will go to the grower. Some companies, being much more efficient than others, will do better out of this share on the average than others.
The fact is, however, that the Government to-day have no option. The Act of Parliament provides that 13s. per cwt. shall be paid for this season according to the number of cwts. produced, and it is purely an arithmetical calculation as to how much we have to pay. The additional production of sugar in this country, owing to the two changes which I have mentioned in introducing the Estimate, accounts in all for about £700,000 more than was estimated at the beginning of the year, and, of this, £100,000 is held in reserve. I was asked as to the position of some of these companies. The capital debentures which have been guaranteed amount in all to £2,000,000, of which some £1,500,000 is still outstanding.
§ Dr. ADDISON
I do not think that any of it has been lost. Some of the factories have been very unsuccessful, but they were a specialist type of factory. There was a loss in connection with them, and the Ministry cannot offer any assistance to anybody on that matter. It is a purely commercial venture, and not a venture in which I should advise Parliament to advance public money. With regard to the rest, I should say that our meticulous examination of the factory accounts has revealed that the standard of efficiency is improving very rapidly, and that so far as that side of the work is concerned, we have complete confidence in the forthcoming year. I have replied to all the points that were put to me except to the point relating to the principle underlying the Act. There is on that a difference of opinion of a very marked and recognisable kind, but it has nothing to do with this Vote. I can understand anybody object- 2201 ing to the principle of the 1925 Act, but that is not the point before us. There is no difference of opinion as to the case made for this Estimate, and I appeal to the Committee to pass it.
§ Sir D. MACLEAN
I understand that some legislation is necessary. Can the right hon. Gentleman give us any idea when it is likely to be produced?
§ Mr. HASLAM
As an agricultural Member, I desire to make one or two observations before the Vote is passed. The question has been asked as to the value of this subsidy to the farmers. It is not too much to say that in the arable districts many a farmer has been saved from bankruptcy by the sugar-beet crop and by the subsidy. This crop benefits farmers in the very depressed and almost impossible conditions in which they find themselves to-day by the particular way in which they receive payment for the crop, because practically all crops are speculations. When the farmer sows a crop, he does not know the price he will get when he reaps it and takes it to market, but with the sugar-beet crop he knows beforehand, because the factories offer him a certain price. It is because it is a subsidised crop, and because the factories know exactly where they are, that they are able to offer that price. Thus the farmer has a financial anchor, for when he sets this crop he can make his calculations and say that he will have some reward at the end of it. Therefore, I add my testimony to that of other agricultural Members to the great value of the sugar-beet crop to farmers, especially in the arable districts.
Calculations have been given as to the amount of employment that it gives. There is no question that it not only gives employment to the people who work in the factories and to the farmer who grows the crop, but to a large number of other workers and to workers in subsidiary occupations. The Minister said that he was unable to state the amount of employment that was given, because he was unable to say what would happen to the land if this subsidy were withheld. I can answer that question to a large extent. If it were not for this subsidy, a large part of that land would go out of cultivation altogether. The state of the 2202 arable districts is such that wheat, barley, and oats do not pay; there are certain losses on these crops, and sugar-beet is the only thing that the farmer can grow at a profit.
The subsidy helps agriculture in another way. It is impossible to make one crop a paying proposition without assisting many other crops, and even if we could say the number of men who were engaged in growing sugar-beet that would not be the end of the matter, because the sugar-beet crop is of assistance to other crops. I will illustrate that by referring to the great distress into which the potato growers were thrown by over-production in 1929. Sugar-beet is grown by the same kind of men, in many cases, that grow potatoes, and it will be in the nature of a safety-valve to the potato growers, if they can have the subsidy to grow beet, so that the crop is a paying proposition. In that case land will not go from beet to potatoes and the danger of overproduction, which caused so much financial and actual distress in the potato-growing area two years ago, will be reduced. This subsidy, therefore, not only benefits directly the farmers and men who are employed in growing the beet crop, but it benefits indirectly a large number of other farmers and men on the land. There can be no question about that fact. Therefore, in the present conditions in agriculture, I strongly support the continuance of this subsidy. It is one of the few things that enables land still to be cultivated, and I should deplore it if the Committee did not agree to this Vote.
§ Mr. CHRISTIE
I want to remind the Minister of the speech made by the hon. Member for South-West Norfolk (Mr. W. B. Taylor), and to call his attention to the large number of smallholders in Norfolk. The Minister will remember that recently we had the pleasure of seeing him and putting the case of these men before him. He will remember that the facts we were able to put before him showed that these smallholders were growing sugar beet to a greater extent than any other crop, and we were able to prove that it was on the sugar-beet crop that they were basing their ability to keep their end up at all. The Minister knows the unfortunate position in which these smallholders find themselves. I can 2203 understand the Olympian attitude of detachment which he preserves to this subject generally, feeling that it is a matter between the farmers and the factories, but the case of the smallholders is different. They are tenants of the nation, and the Minister is in a different position with regard to their situation than he is with regard to the situation of the ordinary farmer. I know how sympathetic he is with them in their unfortunate position, and I want to ask him whether he advises the tenants of the Norfolk County Council to accept the offer made by the Anglo-Dutch sugar factory, and, if he thinks that it is not a good offer, what he suggests that they should do. If they are not able to grow sugar beet next year, many of them will not know what to grow at all. We have to say something to these men, and, unless something can be done, next year will be the most serious year in the history of smallholdings in Norfolk.
§ Vice-Admiral TAYLOR
I support this Supplementary Estimate because of the protection that attaches to the subsidy, a protection for a. part of the agricultural industry, which has enabled an industry to be created from nothing five years ago until to-day 300,000 acres are under cultivation. It has induced people to go upon the land, and has done something to alter the balance in favour of the agricultural population as opposed to the urban population—
§ Sir H. SAMUEL
I must protest against a speech of this character when we are not allowed to give any reply on the general question.
§ 7.0 p.m.
I was about to rise. The hon. and gallant Member was not in the Committee, I think, when I laid it down quite definitely that we cannot discuss the merits or demerits of the subsidy, as such. The only thing we can discuss is whether this Supplementary Estimate should be granted or not. We must not discuss the principle of the subsidy.
§ Vice-Admiral TAYLOR
I apologise for being out of order, but I was endeavouring to show the necessity for continuing this subsidy, because in the past it has proved to be of such inestimable benefit.
The question is not the continuation of the subsidy; it is the granting of the actual amount of money.
§ Vice-Admiral TAYLOR
The Minister has shown in his reply that, instead of a great proportion of this subsidy going to the factories, about one-half is going to the producers of sugar beet. Although perhaps more than is necessary may be going to the factories, the subsidy has enabled the farmers to produce a crop which is a profitable proposition. I was extremely interested to hear how many of those who produce this crop are smallholders. I am amazed at the attitude of hon. and right hon. Members below the Gangway who are opposed to this subsidy. I always considered they were particular friends of—
§ Vice-Admiral TAYLOR
There can be no doubt, from the Debate that has taken place that this subsidy has amply justified itself and has created this industry. In course of time the subsidy may be reduced—
The hon. and gallant Gentleman is again disobeying my Ruling. If he disobeys again, I must ask him to resume his seat.
§ Sir KINGSLEY WOOD
If I may intervene, I know the hon. and gallant Gentleman is not acquainted with our procedure, and perhaps you, Sir, might just indicate to him that it is more a matter of detail than principle.
I have on several occasions stated quite clearly and precisely that it is not in order to discuss the principle of the subsidy, either its continuance or abolition. The only question under discussion is whether this Estimate should be granted for this purpose.
§ Vice-Admiral TAYLOR
The Minister did make one very important remark, that the industry has shown a tremendous advance and that it has improved enormously during the time the subsidy has been in operation. I was 2205 glad to hear this, because so often it is argued that the operation of a subsidy tends to make—
§ Mr. MACQUISTEN
I would like to say that I entirely approve of the increase in the subsidy. I hope that is in order. I do not think the increase is large enough, and I wish it were possible to increase it still further.
§ Question put, and agreed to.