PRICES AND THE COST OF LIVING.

§ Mr. John Morgan (Doncaster)

I beg to move, to leave out from the word "That" to the end of the Question, and to add instead thereof: this House regrets that the prices of controlled foodstuffs have been fixed so high that large numbers of the population are unable to obtain their requirements, and is of opinion that energetic, measures should be taken forthwith to restore the balance between the purchasing power of the people and the cost of living generally. I see the right hon. Gentleman the Minister of Food in his place, but I shall not apologise to him for once again having him on the carpet, as it were, from this side of the House. We feel that this is a pertinent and timely occasion on which to review the working of the machine which he has inaugurated and which has such immediate effects and consequences on the lives of the masses of our people. We hope from this 53 Debate to secure some modification of his attitude towards the problem of the cost of living and to find that such changes as may be made will be in the interests of that section of the community which is out of touch with and out of the range of essential foods and utilities of life by reason of the prices fixed or the supplies available. This relates in particular to the most needy section of the community.

We have had a most useful reminder from that eminent authority who is so often quoted, Sir John Orr, of the fact that we still need to deal with the condition of at least one-third of the people of these islands. If the right hon. Gentleman will revise his rationing and price-fixing with his eyes on that section of the community he will spread his benefits well in all quarters; but we are not satisfied that that will be the case at the present time. Therefore, this Amendment is brought forward to ventilate certain aspects of that approach to the problem. As I indicated at the outset, I have not come here—to misquote Shakespeare—to badger Caesar but to raise him in the public esteem of this country. [Interruption.] Well, at least, to raise his office in that way. I do not necessarily mean the right hon. Gentleman himself; but, having accepted his office as an inevitable concomitant of the war situation, we have to make the best possible use of it.

There are certain directions in which I would ask for his attention. I suppose that the object of the existence of the Ministry of Food is that we may at least do better than we did last time, and that we may improve our hold upon the food situation as compared with that of the last war. Actually, taking into consideration all the factors now operating—and I will discuss them in a moment—the cost of living has risen at a greater rate during the period of this war than on the last occasion. Fortunately for us, the figures for last time are recorded in Sir William Beveridge's great book "British Food Control," and they show clearly that food prices rose in the first few months of the war by 24 per cent. That is in relation to the same period from the beginning of the war as that with which I am now dealing. When we look at the Board of Trade Journal for March, we find an estimate for the food position in August last. Taking the food position in 1930 as the 54 index of 100, it is there stated that wholesale food prices stood in August last at 90.4 per cent., and that by this February they had risen to 126.4 Per cent. That is to say an increase of 36.4 per cent. in that period. Hidden behind those figures is also the fact, which was announced by the Chancellor of the Exchequer, that subsidies began to operate in this war at an earlier stage than in the last war, and that 12 points in the cost of living were accounted for by the hold that the Exchequer had placed upon certain price levels. If that hidden factor in the cost of living were removed or disturbed, it would disclose that the position is actually considerably worse than it was in the last war.

The Board of Trade Journal shows that the cost of industrial materials has risen by about 27points;and there are, of course other factors working in favour of the right hon. Gentleman at the present time which were not operative on the last occasion, in spite of the already adverse comparison. The Ministry has had the advantage of the storage policy which has been developed. We thought that storage had been practised to a greater degree than it actually was. Unfortunately, we discovered that we were very soon out of our wheat, and that we were borrowing from France at quite an early stage in the war. We are now busily paying her back with frozen meat, and this fact must affect the price position at the present time. Then there was the matter of control, which was not brought into existence until at least the middle of the last war. Whether the machinery of control is more effective now than it was then must be related to the outcome. In regard to sugar, this was a very difficult problem during the last war. Then, at the outset, we were drawing 80 per cent. of our supplies from Central Europe, but this time our sugar supplies are fully assured and we have been able to start off without any disturbance. We have had the benefit of the Treasury subsidy.

§ Mr. Holdsworth (Bradford, South)

The hon. Gentleman is comparing one period with another and claiming that things are worse. Why not compare other things in the same period? We have had fewer sinkings.

§ Mr. Morgan

We have had more control of the sea this time. I am not trying 55 to put up a bad case but to take a thoroughly balanced and reasonable view in approaching this question. I take it to be the function of this House to do so, and I have no intention of attempting to exaggerate the position, but to present a balanced view of the situation. This time, the Minister has drawn more rapidly upon home stocks. The meat position is being maintained at this moment entirely by the home supply. I am not talking of the Services. He is exhausting the pig and poultry population. It is true that he has great reserves upon which to draw. He has twice the number of pigs and a very largely augmented poultry population, but he is taking a big bite out of the national larder. He will find this out six months from now. Against all this he has to deal with his two problems of shipping shortages and the sterling position in coping with the food problem.

The extraordinary thing is that these food increases are not due to the prices paid to farmers. There is a lag in this matter, related in all probability to the Minister's own policy. While the general rise in wholesale prices is about 40 per cent. the fanners' prices are up only about 26 per cent. Price levels have risen from 93 points to 116 per cent. compared with a year ago, when they had risen from 88 to 116 per cent. The farmer is actually about 14 per cent. down in his returns at the present time. I have taken that aspect of the matter as being a matter of deliberate policy. The Minister has made it clear to farmers and to other bodies who approached him for price increases that the price level of food commodities in this country as paid to the farmer affects his capacity for negotiating with other countries, and that if undue rises were to occur here his bargaining power would be affected. That may be true but I am sorry that we cannot all share that view.

One of the changes that have become essential is that at the earliest moment we should offer indisputably permanent and well-founded prices to our home suppliers. They should be sufficiently remunerative to attract labour and to draw out supplies. A farmer put it to me yesterday in the country when we were discussing what was being done; he said: "You cannot flog a bony nag into a gallop if it has been starved of oats for 56 years." That is hew the matter appeared to him. The two difficulties in the way of the Minister in relation to shipping and sterling have to be dealt with, but you must take a risk. You must, at an early stage, secure an increased home output of foodstuffs without eating into your reserves. In other words, a vast reserve of home supplies would be the most effective supplies that you could have. An abundance of supplies would do more to check an upward movement of prices than all the controls.

If there is a sufficiency of supplies in the market, you have at your disposal a factor that can control those tendencies from other quarters. I do not mean that farmers should be given this, that or the other, but I warn the House from these benches of a fact of which the Ministry should become aware. The announcement that 1,300,000 acres have been ploughed up may awaken in the town mind the idea that something has happened to the land, but the Minister may still have to accept the consequent fact that he will probably have fewer potatoes in the ground than was the case last season. One can enumerate other commodities. There is an abundance of meat in this country. The Minister has had to make two price corrections, one, to prevent a large number of sows finding their way into his slaughterhouses, and the other to deal with the position of cows. He will find that his meat supply is being augmented by supplies that will not be renewed. That is something which he has to take into full account. Sugar beet is also a factor which must be taken into account; there will not be the sugar from the home acres, unless the season is favourable and the labour is there.

This is nothing but a sober survey of what I feel is in front of us. On 8th February the Chancellor was in the House and told us that he was putting up £50,000,000 a year in subsidies to keep down the price levels of bread, milk and meat. I have sometimes wondered why either Minister in charge of the food situation did not seize on that opportunity, with the Treasury in that mind, to ask for the use of such a vast sum or some part of it to capitalise a real drive in home production. A sum of £25,000,000 in the hands of some kind of home food trust would have done more to hold prices down, because it is not only 57 what you have in hand but also what you have in prospect which affects price conditions very often. Farmers are still asking what is to happen to feeding-stuffs. They want to know what the Minister means when he says "66 per cent. assured." Does that mean 66 per cent. as for cattle, pigs and poultry which were on the farms in September, or does it refer to the depleted cattle, pigs and poultry in the next few months? It makes a difference. If the Minister refers to what was on the farms and in the byres in the autumn, the farmers will be able to have a full ration, but if they are to be rationed on the basis of the present livestock population, then the position of the farmers is not necessarily improved. That point should be cleared up as soon as possible, because it will make an enormous difference. The farmer is also alive to the fact that whatever the Minister was able to say a few months ago about the difficulty of getting feeding-stuffs; the Argentine has a bigger maize crop than it has ever had in its history, and the farmer would like to know what arrangements are to be made to get it at something like the price of 15s. to the 480 lbs. now being quoted.

I now want to look at the instrument which the Minister is using and which he himself has created. Is it capable of carrying out its policy of food control? In the Estimates I see it is a token Vote of £10. Does that mean that the cost of maintaining this Ministry is to be thrown entirely upon the consumer, that it has to he made to pay its own way, that in the end the Treasury will have a profit-and-loss account and will take the profits if they are there and will pay up if the losses are there? In the meantime the cost of the whole administration is £5,000,000 a year, with thousands of employés; is that to be inserted in the price levels which the consumers are having to pay for butter and bacon? Is that what is behind the token Vote to-day? I want to know what classes of consumers are really sharing in this cost. Are the Services really getting their supplies at net cost—supplies, for instance, of meat from the Argentine and other commodities? What loss is incurred by selling on that basis? Is that also being inserted into the cost of the butter, bacon and meat of the needy consumers whom I have in mind? It would be interesting to know what is the price policy of the Ministry of 58 Food in regard to the Service Departments.

I should also like to know who is paying for the kind of machinery which has been created. We find, for instance, that the commodity departments of the Ministry are all manned by wholesale interests. They are predominantly lifted out of the trade into a Government Department but on a fixed remuneration basis; that is to say, the trade they represent starts off with the agent importer, who gets a maximum percentage of all that comes into the country on a percentage basis of his own turnover before the war. He maintains his percentage interest in the transaction, and he will get up to 2 per cent. on that commodity, whether it passes through his books or not. Say the Ministry's turnover is £800,000,000 a year and there is 2 per cent. on that; halve it and call it £400,000,000 and you are soon running into £8,000,000, £10,000,000, £15,000,000 or £16,000,000 a year as commission to people who are secure for the whole of the war, as if they were still in business but on a better footing than they were before.

There is then the wholesaler type who can have margins such as they did not enjoy before the war. Take bacon as an example. I have seen this week a circular asking the trade to take up Canadian backs. Stocks have accumulated to such an extent that this bacon is being offered at 118s. per cwt., and the second wholesaler is to get it at 130s.; that is a margin of 12s. to the first wholesaler, who before the war was ready to work for 5s. or 7s. per cwt. margin. If he is being paid 5s. too much, he is being paid ½d. a lb. on the prices of bacon which the people are too poor to buy. It is not right that we should have a hierarchy of wholesalers and agents who are having the first pull, with their positions assured, when other people are having their businesses sold up. There must not be these assurances and guarantees to the wholesale interests in the country at the present time. I have seen butter in shop windows at 1s. 6d. a lb. when other shops are selling it at 1s. 7d. It is a clear indication that a penny a lb. can be saved by doing away with a certain kind of transaction inside the organisation. That is an aspect of things which should be dealt with before it develops too far.

Here is an extreme case which happened in Somerset last week. The 59 Ministry of Food have worked out to a nicety the cost of driving a pig to the station. If you take it so many miles, you get so much, and if you take it further, you get an increase. A farmer had 82 calves taken from a Somerset market. I think they were going to Bristol. The contractor used to make a charge of 30s. but to his amazement he found that on the basis of so much perhead per calf he got a cheque for £16. That was a matter which was in the hands of the National Farmers' Union Committee last week. That is the type of cumulative effect of these charges. It is this kind of thing which we have really to discuss, because it has its bearing upon the charges made to the housewife and to the inability of the Minister to meet the position without loss if he has to cut the trading in a commodity with which he is dealing. This will prove to be a test of whether or not the Ministry is effective. In referring to what is known as the Rhondda Ministry, there the trade was not put in the heart of the Departments; it was a Civil Service institution. The present Ministry will have to be judged in comparison by results.

Let us take margarine as an example. There is Mr. H. Davies, formerly a director of Lever Brothers and Unilever; he is the chief. The director is Mr. J. P. Vandenburg. The director for cooking fats distribution is Mr. J. L. Salter, and the director of oils and fats is Mr. Knight, also of Unilever. That is the department which is dealing with margarine. The margarine department is doing its best to keep butter prices up. It has obtained a price of 9d. when the Minister was originally suggesting 6d. The sales of margarine are just double. The Department in the Ministry is manned by members of the margarine trust. That is a simple fact and should be looked into. We should assess whether that kind of machinery is likely to have the influence on the position that one would like.

Next let us take bacon. Here is an amazing story. At the head of the bacon department of the Ministry is Mr. Bodinnear, who was the brains behind the bacon scheme and who did his best to get the bacon industry into his hands at that time. His concern then secured the bacon control by nine votes out of 14. Now he is in charge of the bacon scheme. The first thing he did was to 60 put out of business 500 men whom he had been wanting to put out of work for a long time. He may not have wanted to do it; he may have done it in the interests of the Ministry, but that is precisely what he was trying to do before he entered the Ministry. The two events may not be related, but I would like an explanation from the Minister. Under Mr. Bodinnear we have another gentleman, Mr. Louden, handling imports. These people are serving in these departments with as high motives as any hon. Member in this House, but it is a dangerous principle to introduce into a business, because the gentleman in charge of imports, Mr. Louden, who was in charge of the Canadian bacon before the war, is now surrounded by bacon from Canada. Yet in London to-day there is a deputation of Danes facing a mandate from the Government that they should cut their bacon imports by 30,000 cwts. a week to make room for Canadian bacon. That is precisely what they were doing before the war to get the Danish bacon out of the market. The Danes will take coal or war loan in payment but the Government say they do not want the bacon.

There is a long-term contract with Canada. Canada is represented in the Ministry by the man who was in charge of Canadian bacon before the war. In charge of distribution is a Mr. Warren. He is the head of a great distributing house, and he is anxious to keep the distributive margins as high as possible. He may think that that is the only way to do business satisfactorily, but the fact is that margins in bacon distribution are unduly high compared with pre-war. This head of a great distributing house has prescribed the price; nobody can budge from it, but if they do, they lose their licence to sell. They are given no limits in which to move. They would work for less than a 12s. margin, but they are prescribed. That is not the way to preserve the integrity and structure of the wholesale machine which some people have in mind after this war is over. It is worth while looking into, because it does affect the price of bacon. It makes it difficult for people to buy bacon. I say, without hesitation, that the moral effect of all this sort of thing on the trade is distinctly bad. There is uneasiness, not only among the public but among members of the trade. It is felt that little men may be 61 driven out, and that discrimination may creep in. One must allow for such people having as honest a standing in this matter as I or anyone else could claim to have, but the "Economist" the other week reminded us that: For a number of important trades one dominant personality is learning how his competitors run their businesses. There is not the slightest need to suggest that any of the controllers are consciously grinding their private axes; most of them are keenly anxious to avoid anything of the sort. But it will be so fatally easy at the end of the war to suggest that an official control shall merely be transmuted into an unofficial 'ring'— without any hampering duty to a supervising State. To endow the representatives of a trade with legal powers inevitably creates suspicion in the minds of his customers. That element is entrenched in the Ministry of Food at present; and the time has come for some kind of overhaul. The Minister has laid down his own price policy. He said, in the Debate on 8th February: so to work prices that you avoid as far as you can the instability and the sudden jump which upset budgets and put out the calculations of the housewife. It is essential to try and retain the stability of the whole price structure of these essential foods."—[OFFICIAL REPORT, 8th February, 1940; col. 544, Vol. 357.] That is precisely opposite to the policy of the Prices of Goods Act. According to the Minister, that, you must not give the customer any advantage of a day-to-day change; you must take the long view, and peg prices to the figure at which you mean to hold them. But according to the Prices of Goods Act people are told that they must have no regard to the future position, but must sell on a day-to-day basis. That raises an aspect which comes more into the province of the Board of Trade. In bacon before the war, you could get Canadian backs at1s. 1d. wholesale, and at between 1s. 2d. and 1s. 3d. retail in the shops. Now they are about 1s. 3d. wholesale, retailing at anything from 1s. 8d. to 1s. 10d. The Minister has withdrawn certain cuts, and has also reduced the price by about 2d. per lb. But the net result has been to reduce rationing to a farce. You could take rationing off butter and bacon tomorrow, and it would not make a pennyworth of difference, because your price levels are serving as the corrective. Yon have the well-to-do of this country authorised to cat up the crumbs that fall off the poor man's table; that is the extraordinary situation. They can take the 62 rations that the poor man cannot get. That is not a satisfactory working out of the Minister's price policy. He has lost sight of one-third of our people, who are not getting what should be the minimum amount for everybody.

Now the Minister is facing the possibility of his stocks deteriorating. His Department have sent out a notice asking firms to deal with these accumulated stocks of slimy Canadian bacon. These people are offered a price to do the Minister's washing. But the advantage is not to be passed on to the public: it is the second wholesaler who is to get the advantage of the reduced price; that is the only conclusion one can draw from the Minister's statement that he does not want to disturb his price levels.

Let us take sugar. Somebody is getting 3¼d. a lb. on sugar. Sugar is well in the grip of a great combine; of course, they have their representatives in the Ministry. Sugar to-day costs about 1d. a lb. in the world markets; we are paying 4¼d. Part of the object of this Amendment is to persuade the Chancellor to take off food taxes, to whatever degree he finds it possible, in the next Budget; for food is necessary to the running of the war, and it seems farcical for the State to tax itself in such a manner. But sugar is one of those things which are not dietetically necessary in large quantities, and it may be found desirable to allow the present position in regard to sugar to continue, provided that the money is used for some good purpose. You have something like £30,000,000 from sugar; and, if the Government are sincere in wanting to avoid the stimulation of this dread spiral, they might use that money for such a purpose. The Chancellor of the Duchy of Lancaster, on 8th February, told us that he wanted to stop increases in the price of bread, milk and other things; but the Minister has now announced an increase in the price of milk, in order that the farmers may have another 2½d. a gallon. Does that mean that the Chancellor of the Duchy of Lancaster has withdrawn his offer to subsidise milk to the consumers? Is he going to take back his £230,000 a week?

Milk is already as dear as it was in the last days of the last war. That fact is not sufficiently realised. You cannot afford to make it any dearer than it is now. But there is an indication of a change in Government policy in regard to milk. I hope 63 that the Minister will clear that matter up. He is getting at the housewife in two ways, by raising the price of milk. Not only is the price of liquid milk being raised, but the manufacturer will have to pay the full price. Butter and cheese are going up in price. A certain proportion of housewives have been getting very cheap milk from the farmers in order to make these processed foods; and the increase in the price of milk, therefore, will hit them twice. At the risk of conflicting with some people's views, I say that the milk margin is already too high. Some great institution—I do not care whether it is combine or co-operative—should be put in charge of the milk distribution of this country, because in that way the cost could easily be cut by 4d. per gallon. The Minister has a faint smile on his lips, because this is reminiscent of something which happened about 15 months ago. I wished he had stuck to his guns at that time, because if he had, we should now be in a better position to deal with this matter.

I come to butter. The Minister once associated my name with a piece of news which appeared in a paper. I had nothing to do with what has occurred to-day. I had no idea that something was being put into a certain journal. I wish it were true, and that the Minister would announce a cut in price, because he would then cut his stocks. The manager of a large store told me that he had a ton of butter in his store. He said, "I approached the local food controller about it and asked him whether I might get rid of it in some way." He said, "No, you cannot do that; you must cut down your orders for supplies for your registered customers." This man said, "Not blue-pencil likely; I will stick to what I have got, or you will have me down on a lower allocation in the future." "Then," said the food controller, "when this stuff looks like getting rancid, come and see me again." That is going on in scores of towns all over the country.

The price of butter is 1s. 7d. a lb. If the butter goes bad, the Minister will lose the whole 1s. 7d. If a loss has to be faced, it would be better that the loss should be through cheapened consumption. If the price of butter were cut by 3d. a lb., you could sell six lbs. to the present one lb., and still be in pocket. 64 You would also save a 1s. worth of margarine, which does not spread as well as butter. Also, butter will be made available to a type of consumer who ought to be met in this matter. It is a glaring outrage on the social conscience to think that the only way you can deal with surplus butter stocks is to put up an announcement that it is a patriotic thing for the well-to-do to eat the butter that the poor cannot buy. It is a dreadful thing, and a damaging thing for the people of this country.

§ Mr. Holdsworth (Bradford, South)

Where has such a notice been put up?

§ Mr. Morgan

If that statement is related to the facts of the situation, it is as good as a fact. It is a well understood thing that such a notice has been put up.

§ Mr. Holdsworth

Where?

§ Mr. Morgan

The Minister knows where the allusion was made, and the idea that was given.

§ The Parliamentary Secretary to the Ministry of Food (Mr. Lennox-Boyd)

If the hon. Gentleman was referring to me, may I refresh his memory? I was dealing with the question of whether the State would be justified in subsidizing butter when there was an alternative available, in contrast to the position in respect of other commodities which had been subsidised. I made no plea to the well-to-do to eat up the butter that the poor cannot afford. To say that, is completely to misrepresent what I actually said.

§ Mr. Morgan

I think that the general understanding of what the Minister said was to the effect that the well-to-do should keep off margarine, and let the poor have it, while they themselves have butter. I have done no more than paraphrase. That is the impression that was given.

§ Mr. Lennox-Boyd

I do not quarrel with the hon. Gentleman's summing up of the situation in his second statement. It was the first statement to which I took exception.

§ Mr. Morgan

My first statement was as to what I know to be the impression left on the public mind. That is not a satisfactory way of dealing with the matter. We should approach this butter question quite seriously, get these stocks cleared up, and have a fresh start.

65 Look at what has happened with regard to meat. You have taken all the best meat for the Services, and have told housewives that they must take the poorer cuts of home-produced meat if they are to feed their families at 1s. 10d. a head per week. Home-produced meat is dear, and the price of that affects the whole lot. It is a pity that there is no representative of the Board of Trade present. [Interruption.] I beg the Parliamentary Secretary's pardon; I am pleased to see the hon. Gentleman here in that capacity. Take the announcement which was made in this House the other day by the Minister of Supply. He announced frankly—and we like him for it; it is exactly the sort of thing we wanted to hear—that the home market must make up its mind that it was to have only half of the supply of wool available. I feel about that matter in this way. If it is a good thing to keep luxury articles out of the country, we should not import them, but we should also keep luxury articles out of our shop windows. If there is to be only half the wool supply, I suggest that there ought to be a limit—I am not saying that we ought to have the German system of rationing the number of suits—put upon the cost of a suit of clothes to say five guineas or six guineas or something like that as the maximum.

§ Mr. Holdsworth

It would be made of as good wool as the better ones.

§ Mr. Morgan

And it would do them good, but that is only an idea. I went into a shop yesterday and said, "What is the position with regard to blankets?" and the shopkeeper replied, "Last year I paid 25s. a pair wholesale, and I am now being asked to pay 60s., not for the same kind of blankets, but because the others have been pushed out." I asked why and he replied, "Because under the machinery of the Prices of Goods Act it pays to make the higher grade stuff because the turnover is sure, and if your prices increase you may pass them on. They are not making the low grade stuff. Sheets were 6s. 6d. a pair last year, and the same kind of sheets are now 13s."

This is the kind of thing that is beginning to show itself in the homes of the people. Agricultural labourers boots, which were formerly 12s. 11d. per pair, are now 17s. 6d.; and children's boots, formerly 3s. 11½d., are now 5s. 7d. That 66 is the kind of thing that is happening in the country districts. If there is to be only half wool, half cotton, or half of anything there must be a maximum price for a shirt of, say, 15s.; a suit five guineas or six guineas; and a pair of shoes, 30s. There must be maximum prices so that the same kind of stuff that we on these benches wear or that is worn in the streets shall apply all the way round. Conditions should not exist such as those of which a boot manufacturer told me. It was announced that the price of "K" boots was to go up, and I was disgusted to learn of people going into his shop and buying five pairs of "K" boots at a time because the word had gone out that leather was to go up in price, so much so that the "K" people in Kendal refused to take any more orders. The Prices of Goods Act is a farce. It will not function. The Government will have to approach the problem in a new way. If it is true that the Ministry of Supply has got us down to half our wool supplies, and we are to be cut down in these various directions, they will have to adopt another method to meet the position.

My last word is on rents, and I will quote the view of a leading magistrate who has recently been transferred from Greenwich Police Court to Tower Police Court. This was in last week's "Times." He said: There is one thing which worries me—the question of rents. It was a serious problem before the war, but since it has been aggravated. I think the only solution is an Act of Parliament which would require landlords to be satisfied with a rent giving interest at 5 per cent. on their capital invested in property. Why 5 per cent., if other people will take 3 per cent.? Why not a cut in rent? The Halifax Building Society—all honour to them—have made the first move. They have told all investors in their building society that the interest is to be 3 per cent. Why not extend the payments of the Sinking Funds by 10 years to enable the charges to fall?

§ Mr. Quibell (Brigg)

They have not said that to the poor borrowers.

§ Mr. Morgan

I know, and I am coming to that point. They have left it consequentially as the logical deduction from their first move, that they must now make their second move and make some 67 kind of reduction to the borrower. It is the building societies which have put up the rents all round. People have to pay large sums of money for repayment and rent, while leaving too few other houses available for people who only want to rent. Rents are now over 60 per cent. higher than during the last war. If we had a cut in rents, it would save a good many of the inquiries that we have to make from these benches.

§ Mr. Holdsworth

I am sure that the hon. Member is misrepresenting certain movements. It is impossible to make a reduction in mortgage rates, because the difference between the two is taken by the Chancellor of the Exchequer. That is the reason, and the only reason for the proposed change.

§ Mr. Morgan

I accept the hon. Member's explanation, because I am speaking to the Front Bench opposite, who need to be told the hon. Member's point. Here is a direction in which the proper treatment of the rent position would be a very great help. Corporations and municipalities come in here, and the Government must meet them. If there were to be a cut in rents, it would mean a new series of hardship cases, but there would be fewer landlords or landlords' wives coming before hardship committees than there were soldiers' wives or recipients of public assistance over the question of rent. The system that we have now of giving relief to hardship cases all round is doing little to straighten out the position, but is rather putting a premium upon high rents. We want everybody to work, and if the country as a whole benefits, then the community must benefit. There must be a more original approach to the question. Mr. Keynes may have his schemes, but we also have to approach this cost-of-living business with more ideas in our heads than we have hitherto had.

I have about finished, and I must apologise to the House for taking so long. I hope that both Ministers realise that if they fail in these two directions there may be no withholding the demands that must rise from organised labour for increases of pay. Whether or not this vicious spiral is set in motion is very largely in their keeping, plus, of course, the fact whether or not their representations to the Government are heard and acted upon. Nothing 68 could withstand such a demand if it has to be made. With the initial momentum of food prices rising at a greater momentum than during the last war, we have our warning. I hope that the Minister will be able to clear that up. But if that is the case, plus the original percentage of increase, plus the figures the Chancellor of the Exchequer gave us that he was cutting down the cost of living by 12 points by his policy, which was questioned on this side of the House, the Minister will have to take such steps as I have indicated to keep prices down within the means of people who need to buy the essential commodities, in order that his own rationing scheme shall not become a farce. Sugar is the only thing we are not really rationing at the moment. And even there a large number of people are not buying their full ration. You are not selling your full 12 ounces of sugar per head. And in particular, if the Minister would at an early date announce cuts in price by which to clear his butter stocks, he would find that it was the most economical way of meeting the situation instead of disturbing a lot of people, including the trade itself.

§ Mr. Dobbie (Rotherham)

I beg to second the Amendment.

It deals with the cost of foodstuffs, the difficulties of certain people in meeting and obtaining their requirements and the policy of the Government to take measures to restore the balance between the purchasing power of the people and the cost of living limit, and I desire to congratulate my hon. Friend the Member for Doncaster (Mr. J. Morgan) upon the admirable way in which he has placed the case before the House. If hon. and right hon. Members go into the Lobby to-night to vote in accordance with the merits of the case, the Government will have sustained their first defeat in the Lobby since the commencement of hostilities. The first charge of the Government in all the circumstances is the protection of the standard of life of the people of the country with the lowest monetary resources, and up to the moment the Government undoubtedly have lamentably failed, which I believe to be the opinion of the overwhelming majority of the people of this country. There has been a serious muddle in the system of control and a large amount of 69 waste of valuable food, which would have been a crime even in peace time. The cost of living has been allowed to rise at a much greater rate even than during the last war, when there was far less pretence at control. I estimate that the workers' food supply has risen in price from the level of last August by over 23 per cent., and a considerable amount of that increase is due to the muddle and chaos caused by the inadequate and inefficient action of government control.

One remembers the unfortunate effect of the Government's muddle in connection with the marketing and distribution of fish. Here the position was so bad that the marketing scheme had to be abandoned, but not until a very large amount of public money had been wasted. My hon. Friend the Member for Doncaster has dealt pretty exhaustively and thoroughly with the scandal of bacon, but there have been instances quoted in the Press of large consignments having been commandeered and immediately invoiced back to the dealers at an increase in price of from 20 to 30 per cent. I am informed that there have been large quantities of bacon transferred to the Smithfield Animal Products Company at Stanwell for destruction. That is a scandal, especially at this time, when, as has been so well illustrated, the price of bacon is such that the overwhelming majority of the working classes of this country are unable to buy it at all. Bacon need not be rationed at all so long as it remains at its present price. It was recently reported in the Press that stocks of bacon and butter were in danger of rotting because so many workers are unable to afford these foods at present prices. There must be something radically wrong with the efficiency of Government control. There ought to be an immediate inquiry into the whole of the circumstances, but the country does not want any further exposures of waste and extravagance such as were recently made in the organisation of the Ministry of Information. I hope that as a result of this Debate, the Government will take the necessary steps to hold some kind of inquiry that will instil some degree of confidence into the minds of the workers of this country. I can assure the House that the Government are slowly losing the confidence of the people in regard to the control of the food supplies of the country.

70 A timely warning was given by Sir John Orr in his admirable little book, lately printed, which I believe the Minister will have read. If he has not, I advise him to do so. Sir John Orr says that unless the Government devise a system by which the one-third of the population which has to go short of essentials can get the food which is at present denied them there will be trouble on the home front. This war, he says, will be lost or won in the houses of the people. Time after time, from this side of the House, we have warned the Government that the home front is equally as important as the overseas front, and unless the Government realise this, there is great danger confronting them. The depressed one-third of the population about whom Sir John Orr talks gets no benefit at all from rationing, because, as the hon. Member for Doncaster so well illustrated, prices make it impossible for them to buy butter or bacon. Hence the surplus of these foodstuffs. The Government should fix prices in relation to the purchasing power of our poor people and pin them at that level. We should produce or import milk, vegetables, potatoes, bread, butter, margarine and oatmeal in abundance to ensureour people getting a reasonable supply of food. The depressed third of the population are the wives and dependants of the men overseas who are standing in the valley of the shadow of death; they are old age pensioners, unemployed, casual workers and the low-paid labouring class of this country. Sometimes I think members of the Government, especially members of the Cabinet, are too far removed from the struggle through which the working class of this country have to live. I hate to think they do not care, but I sometimes think they do not, and I know that they do not know of the struggles of the poorer classes. These people are reading and thinking about the struggles they have to make to keep body and soul together, and it is making them take a keener interest in politics.

Last week I was talking to a meeting of soldiers' dependants, old age pensioners and people who could, generally, be classed among the depressed one-third about which Sir John Orr talks. To my surprise, the wife of a soldier who has six children produced to me a list of things that are necessary for people so that 71 they may live. She showed me the increased prices for sugar, butter, margarine, bacon, cheese and potatoes and then showed me her wages. She told me that her husband was oversea and that she would probably never see him again, and then she told me of a speech made by a Member of Parliament. On 19th October last, according to the OFFICIAL REPORT, the hon. Member for Cambridge University (Mr. Pickthorn) said: as long as prices inside this country do not reduce us to actual starvation or to riot and revolution they do not very much matter…"—[OFFICIAL REPORT, 19th October, 1939; col. 1155, Vol. 352.] This woman said to me, "Is that the opinion of the Conservative Government?" and I said, "I do not know." Then she said, "Is it the opinion of the Opposition?" and I said, "No." She then said, "I will believe you if you will make that statement in the House, and challenge the Government, and in the name of the Opposition repudiate a statement like this or anything approaching it." This statement by the hon. Member for Cambridge was read to me by a woman with a Government allowance of 17s. a week, an allotment of 7s. a week from her husband, 4s. for her second child and 3s. for each of her two remaining children, making a total of 39s. a week. I would ask hon. and right hon. Members of the House how they can expect people, having read speeches of this character, to keep quiet for very long when they have such allowances, and the prices of needful commodities are so high. This woman was expressing, not merely her own opinion, but the opinion of many hundreds of thousands of women whose husbands are serving and upholding the great traditions about which we have heard the Prime Minister, the Chancellor of the Exchequer and other Ministers talk since the war started.

The statements made by Sir John Orr, and the statements I am making now, are such as ought to make the Government understand that in present circumstances there is no justification of any kind for taxation on food, and I strongly appeal to the Chancellor of the Exchequer immediately to take off the tax on sugar, tea and other foodstuffs. The artificial increase in prices of essential foods, especially when the general cost of living has increased, imposes an unfair burden 72 on the poorer section of the community. One way of reducing the cost of living is to remove all taxes on prime necessities. There is no evidence that the Government have taken suitable action to replace the officials, who are guilty of serious mistakes. The tendency seems to be to cover up waste and extravagance, even when it involves hardship on the people and heavy losses on public and private funds. The Government must do something to remedy the situation or get out and make room for a Government that will.

I have here figures about women who are invalids and are sick and who were ordered certain necessities and delicacies by doctors. They are the wives and dependants of soldiers, old age pensioners, unemployed men, casual labourers and low-paid labourers, and there is no opportunity for them, in present circumstances, to get the things which will help them to recover. At my meeting last week wives were saying that the Government, or their representatives, were saying that we ought not to be asking for increased rates of wages. They think that is one of the reasons why the Government still retain the Trades Disputes Act and they believe that the hon. Member for Cambridge University unwittingly let something slip for which the Government feel very cross with him. The Chancellor of the Exchequer, dealing with the question of wages, said on 29th November, 1939: I think that one of the chief contributions that we can all make here in our democracy towards winning the war is within the limits that are possible, to do without rises of wages and not to assume that if there should be, as world conditions may bring about, some rise in costs therefore, automatically, our remunerations must all go up on a sliding scale."—[OFFICIAL REPORT, 29th November, 1939; col. 168, Vol. 355.] The Chancellor of the Exchequer was asking the working classes not to make demands for increased wages owing to the increased cost of living. He was asking the working classes to be content to pay increased prices but not to make any effort to get wages to compensate them for these increased prices. We say that if the Government are really serious in their request to the trade unions and workers generally not to make any effort to increase the rate of wages, they should give some demonstration that they are 73 really serious in their endeavour to prevent people making big fortunes. The Excess Profits Tax is not enough. We want to stop the making of these big profits at the source and keep the price of commodities at something like a normal level. From information supplied in the "Ministry of Labour Gazette," it is fair to assume that 7,500,000 people have received an increase in wages of an average of 6 per cent., amounting to £1,500,000. That is an average of 4s. per week per head of those employed. There are still some 6,000,000 who have not received anything at all. The increase in the cost of living is considerably greater than that, and I estimate that the workers are probably about 10 per cent. worse off in their standard of living than they were before the war started.

We ask the Government to review the whole situation. We will support what they are doing in the way of rationing in order to secure equality for the whole of the people and to get a reasonable supply of food. But it is not equality if the rich people are able to buy all that they need and the poor people are unable to buy things which are needed to keep body and soul together. We ask the Government to take these steps in order that the people of the country will understand that the statement of the hon. Member for Cambridge University does not reflect the policy of the Government and is certainly repudiated by every right-thinking man and woman.

§ Mr. Mander (Wolverhampton, East)

I should like to support the Amendment, although not on such a wide front as did the proposer, who dealt with these matters from a profound knowledge and in a very interesting way. The increase in wholesale prices between now and a year ago may be said to be about one-third to one-half, and the increase in the price of retail goods as from the beginning of the war is officially estimated at 16 per cent. On the other hand, the ordinary householder who goes out to buy goods will estimate the increase as something nearer 20 per cent., perhaps even more than that. I appreciate that a good deal of this increase is absolutely inevitable, although some of it, I think, is due to the foolish schemes which the Government have put in operation, schemes like the fantastic fish control scheme, for which the Minister was not perhaps responsible, but which 74 was a Government scheme and had to be hurriedly abandoned as putting everything into a hopeless tangle.

I have had an opportunity during the last 10 days of meeting a large number of women from different parts of my constituency, and as this Debate was coming on I asked them, as typical householders, how they viewed rationing and how it was affecting them. I found that the necessity for rationing was fully accepted as required by the need for winning the war. They had no objection in principle to it, but there were objections in practice. With regard to shopkeepers, I think far too many forms are being used and that economies should be made in this direction. No doubt the Minister may have under consideration the periodicity of forms and the number of items which have to be filled in. They are excessive and not needed by the requirements of the rationing scheme. From what I heard I am certain that a good deal of improvement might be made there.

There are two rationing schemes. There is the automatic rationing caused by high prices, which has a profound effect, and there is also the Government's rationing scheme. The increase in prices has affected rationing to a great extent. Even where the article appears to be the same in price, it really is much smaller in bulk, and people, I think, quite well realise that they are buying a smaller quantity, although the price may be the same. The one item in regard to which I found universal objection and dissatisfaction was sugar. They all say that the sugar ration is not enough, hardly enough to sweeten a cup of tea, and in view of the uses to which sugar is put in a household, I hope the Government will do what they can to make more available, particularly when it is necessary for the preservation of fruit. Many poor people go into the market and buy fruit which they cannot grow in their own gardens and which they want to preserve. I hope this will be encouraged in every way. It is true that the increase in the price of sugar is largely due to taxation, and, therefore, I hope the Government will give consideration to the point whether it is wise to maintain sugar at such an artificially high price in view of the great demand for it throughout the country.

As to butter, what is happening in regard to butter depends entirely on the 75 income level of the person concerned. Some people do not buy butter at all; it is not within their purchasing power. Others have been buying their butter ration, and although it has been doubled it makes no difference, because poor people have not the money to buy it; the price is too high, and the Government should certainly bring it down. It may be true—I do not know—as some doctors say, that margarine is just as good as butter; some say that it is better than butter at certain periods of the year. Whether that is true or not, it does not meet the position. We are not ruled in our lives by purely scientific facts; we are ruled by habit, by custom and by tradition. People like to purchase an article which comes from the green pastures of the country, from the cows, rather than something which is made in a factory. Consideration must be given to the sentimental side of this question. I hope that the Government appreciate, as I think they do, that by doubling the butter ration they are not doubling the amount of butter which is available.

The same considerations apply to a large extent to bacon. The doubling of the bacon ration has meant that no more bacon than before was purchased in many cases. People cannot afford it, and the quality of the bacon is not high. It is very different from what was bought in normal peace-time conditions. I am afraid that there are many households where bacon has simply dropped out of the menu altogether. I do not mean that something else has taken its place; nothing else has taken its place. That is a deplorable situation; but from the information which has come to me it is a fact in certain cases. The price is certainly too high, partly because of the unsatisfactory nature of the Government's organisation of the industry. They are sending bacon not from Land's End to John o' Groats—that would be an exaggeration—but long distances, quite unnecessarily, and in a way which was never done in peace-time. If they would only get back to the well established custom in peace-time of sending out goods from certain centres, they would be able to deal with it far more effectively and far more cheaply and efficiently than is the case now.

Let me give one example of the ignorance of an official dealing with this 76 particular problem. He was told one day that the miners were finding that they could not get bacon to take down in the mine for their dinner. He said, "Let them take meat." It is well known in mining circles that meat is not suitable to take down the mine; it does not keep. It reminds one of Marie Antoinette's saying that if the people cannot get bread, let them have cake! But that is only a small point. There is undoubtedly in certain parts of the country widespread dissatisfaction in regard to the question of meat. I do not say that it exists in my own neighbourhood to the same extent as it does in other parts of the country. The effect of the Government scheme has been that people who have been in the habit of buying home-killed meat cannot get as much as they want or as much as they have been accustomed to have in the past. In the case of those who buy imported meat, the complaint is that they get too much mutton, and they would rather have more beef. The result of the restriction on imports means that the poorer people are having to buy more of the expensive home-produced meat. A question I want to ask the Minister is why rabbits have not been rationed, as they were during the last war. This is a meat that is very much appreciated by a large number of people, and the price of rabbits has gone up by about three times. There seems to be a case for considering the imposition of some control over the price of rabbits.

With regard to milk, it is a lamentable fact that in many homes, in my part of the country and in other parts, the children never get fresh milk, but are given the sweetened tinned milk which has not anything like the same value in vitamins as fresh milk. I hope the Government will do everything they can to stimulate and develop the consumption of milk at a reasonable price in all the homes of the country. The people who feel the present position of high prices the worst of all are the soldiers' dependants, young wives, at one end of the scale, and at the other end, the old aged pensioners and the unemployed. These people find it difficult to carry on and to get the food required to maintain them in normal health. I should like to see a much greater consumption of fruit and vegetables in view of their nutritional value. Would it not be practicable to 77 introduce into the school life of the country a free distribution of apples, as well as the distribution of milk? This would get directly to the children a food of great value. I hope this will be considered.

I should like now to say a few words about fish and chips, a very popular food among the working classes all over the country, and certainly in my area. In the fish-and-chips trade, the position is very difficult. The price of fish has gone up by 150 per cent. on the pre-war price, although I think it is realised that the Government are doing their best in the matter of fish. The price of the paper used for wrapping the fish has gone up by 100 per cent., oils have gone up by 75 per cent.—and are very hard to get—and the lard and dripping have gone up also by 75 per cent. I am sure the Government realise the importance of keeping this trade alive and allowing it to go on rendering a service in the feeding of the people. I hope the Minister will have something to say on this matter.

Several references have been made to the great authority of Sir John Orr and his statement that 30 per cent. of the people of this country are undernourished. Some people go further than that. I notice that Mr. Seebohm Rowntree, a great authority, has said that it would be truer to say that 30 per cent. of the working classes are undernourished. That is a very sad reflection on this great country. I have been told by social workers who, in the course of their duties, go into the homes of the poorer classes, that when they go into those homes at the end of the week, they do not like to look inside the larder because they know that, in all probability, the cupboard will be bare. That is a state of affairs which must be borne in mind in considering this problem. These people lack particularly the protective foods, which are more expensive than the energy foods, such as white bread and sugar. I hope that consideration will be given to what has been called an iron ration, or a basic ration, containing the necessary vitamins for life, and that this will be made as cheap as possible.

The Government will have to deal with this matter of the cost of living either by subsidies or in some other way. I know they are giving a large subsidy at the present time, but I am afraid that more 78 in that direction will be required. I think they would be wise to consider whether they could not deal with the matter by means of family allowances which could be tacked on to the structure of daily life, altogether outside the wages question, with which they would not interfere. There could be a great national scheme on the lines of the schemes which exist in other countries—in France, for instance—where they are functioning very well. In some way or other, preferably on the lines of family allowances, this problem must be dealt with, and I hope the Government will give to it their urgent consideration, because to secure victory, and to secure it as quickly as possible, it is absolutely vital that we should have a well-nourished and contented people.

§ The Chancellor of the Duchy of Lancaster (Mr. W. S. Morrison)

From the three speeches that have been made in the Debate, I think the House will realise the extent of the front which it is incumbent upon me to cover in my remarks. The hon. Member for Doncaster (Mr. J. Morgan), who raised the question, need not have prefaced his speech by any apology, for there are few subjects more interesting to me than that of the prices of the food of the people, and I always welcome constructive criticism and advice as to how to maintain that steady level of prices which is such an important adjunct of our war effort. But there is criticism—and criticism. The hon. Member for Rotherham (Mr. Dobbie), who seconded the Amendment, made a speech which was full of general words, to which he seemed to attach a good deal of importance, such as muddle, waste, inefficiency, extravagance, scandals, and so on. I realise that the hon. Member was expressing sincerely what was in his mind, but I am sure he will forgive me for saying that I failed to detect in his speech that particularisation of complaints which would justify the very strong epithets he used.

The hon. Member for Doncaster dealt with a number of important points which were basic to his argument, and garnished his speech with a number of smaller points all of which were important and all of which must be dealt with; and I should like to deal first with some of those minor points. In the first place, the hon. Member seemed to detect in the organisation 79 of the Ministry as such and its personnel at least a possible cause of the increased prices of food. He asked how the cost of administration was to be borne. Speaking generally, the truth is that all these controls are exercised in the main by the very people who distribute the goods, and that in the main the cost of distribution is borne by the people who used to bear it in peace-time, although in some cases they are serving as agents of the Ministry. I should be very surprised if, in the arrangements that have been made, there is extravagance in costs of administration in the Ministry. In some cases, I believe that the cost under control is cheaper than the profit margin which in peace-time remunerated those concerned. In peace-time, those responsible for the distribution, the wholesalers and retailers, remunerated themselves by charging a profit margin. While it is true that the instrument of control requires a more elaborate system to meet war-time conditions, I think there is no extravagance of that sort. Certainly, the matter is one which we are always keenly watching, and with the development of the Ministry, if any cases of excessive costs of that character can be traced down, they will be dealt with at once. I should like to make one general remark about the personnel of the Ministry.

§ Mr. J. Morgan

Before the Minister leaves the question of margins, may I ask whether he justifies the fixing of a charge, as between the first wholesaler and the second, of 12s. a cwt. on bacon?

§ Mr. Morrison

That is a matter with which I will deal. The way in which these margins have been settled is by negotiations with the interests concerned. The negotiations were started in peace time and continued in war time, and in every case the best possible bargain was driven. At the same time, an elaborate costings inquiry into the cost of distribution and margins has been set on foot, and in the light of what is revealed by that inquiry, the whole matter will be reviewed. If the hon. Member for Doncaster thinks that the margins to which he has referred are excessive, I will tell him that that is not the view held in many sections of the trades which have to work the system. Although the margin, when stated as a simple figure, may appear to be a very large one, it 80 bears a different appearance when one deducts overhead charges and considers the difficulties involved in handling vast quantities. There is another thing about margins which the House ought to bear in mind. Whether we like it or not, the distributive trade in this country is one of the greatest employing trades. There is a vast number of people dependent for their livelihood and standard of living upon the distributive trade, and the margins of profits allowed are the source of these people's livelihood and standard of life. When one talks, or hears talk, about the ruthless cutting down of margins, one must remember that there are many people dependent upon these margins, and that a great wages fund depends upon them; and the whole matter, dealt with as a war-time expedient, must be dealt with in a spirit of justice and with a desire to do as fair a deal as is possible.

On the question of personnel, I repeat what I have stated many times in the House. The plans for the control of foodstuffs were inaugurated in peace time, and in order to get the best assistance possible, the trade advisers were consulted, and in some cases earmarked for positions in the Ministry. That has given rise to some criticism because people have felt that traders should not be put in charge of their own trades, but on the other hand, there has been the equally valid criticism against taking quite inexperienced civil servants and suddenly, on the outbreak of war, putting them in charge of vast complicated trades with many ramifications. Those are the two dangers and difficulties. The position which we have now achieved after six months of war is that, although we have in the Ministry these gentlemen who are assisting us in their trade capacity—and to whose great assistance I would pay a tribute—the real control is in the hands of a Civil Service staff which has been built up; and the House should disabuse its mind once and for all of the idea that there is any dis-service to the public interest in having the present judicious mixture of trading experience with administrative Civil Service control.

The main argument of the hon. Member who opened this Debate was founded upon figures which he gave of the varying movements of food prices in the first six months of this war and of their movements during a comparable period after 81 the outbreak of the last war. He took the present rise in the first six months of this war from the wholesale index, but what concerns the consumer is the retail index. It is what the housewife pays for food that makes the cost of living. The figure which the hon. Member gave from the wholesale index of an increase of, I think, 36.4, does not represent the increase in the cost of living of the people. The rise in the retail cost index in the first six months of this war has been 17 per cent. In the first six months of the last war it was 22 per cent., or 5 per cent. higher.

§ Mr. A. V. Alexander (Sheffield, Hillsborough)

Is that for food alone? Where does the right hon. Gentleman get the figure of 17?

§ Mr. Morrison

From the Ministry of Labour cost-of-living index.

§ Miss Wilkinson (Jarrow)

You know what that is.

§ Mr. Morrison

The hon. Member for Doncaster used a similar index, and I know that when the cost-of-living index figure compiled by the Ministry of Labour does not suit hon. Members opposite and in other parts of the House, they throw doubt on its validity, but when it happens to reinforce some argument addressed by them to this side of the House, they are unanimous in upholding its validity.

§ Mr. J. Morgan

Does the right hon. Gentleman include the 12 points admitted by the Chancellor of the Exchequer on 8th February?

§ Mr. Morrison

I shall deal with that point.

§ Mr. Alexander

I want to be quite clear about these figures. The Ministry of Labour index figure for food alone—the last figure we had—showed an increase of 23 points. That is 23 points related to 100. It is very difficult to understand the Minister's statement that the rise is only 17.

§ Mr. Morrison

The right hon. Gentleman and I are talking about different things. I am speaking of the rise in the cost of living as expressed in the index, in terms of percentages, because that is the figure which the hon. Member for Doncaster used. That was the method of his argument, and it is with his argument I am dealing. I am pointing out 82 that the figure which he took was the wholesale index for the first six months of this war and that he compared it with the retail index for the first six months of the last war. If you compare like with like, however, you get a figure for the first six months of the last war of 22 per cent. and a figure for the first six months of this war of 17 per cent.

Let us go into it further in order to gain some idea of the vastness and difficulty of this problem of food prices in war time. When the Ministry of Food came into existence in the last war the rise in the retail cost of living was 84 per cent., and at the peak period in November, 1920, the rise had reached 191 per cent. I mention those figures in order to establish certain points. First, the problem of food prices in war time is bound to be serious and difficult to handle, and the experience of the last war proved that beyond doubt. Secondly, the Government on this occasion entered the war forearmed, with a Department and an organisation which could exercise control over these rocketing movements from the start. The result has been that there is a less rise now than that which occurred in the first six months of the last war. We have control already, at this stage of the war, without having allowed prices to rise 84 per cent.

§ Mr. J. Morgan

But can the Minister guarantee that they will not rise?

§ Mr. Morrison

No, Sir, I am not saying that. I am dealing with control, which is a very different thing. But that is not the end of the story. The hon. Member for Doncaster contrasted the position now with the position which existed at the beginning of the last war and estimated the problems which the Government have to face, drawing the conclusion that at this moment we have great advantages as compared with those which existed at the beginning of the last war. Is that so? Is the problem easier? I ask the House to remember three facts, all of which are of immense importance in getting a just view of the achievements of the past six months in this respect. In the first place, let the House remember that throughout the last war we were on the gold standard. In the prevailing uncertainty among the nations on the outbreak of war, there was a demand for our gold currency, and all the exchange movements in the countries from which 83 we purchased goods were in our favour. That was the tendency at the start of the last war, meaning that the sterling of that day appreciated in its power to purchase food from the start of the war until a later stage. In this war, the movement is the other way, thus providing an additional and a severe problem which had to be tackled by my Department.

The second fact is that there is a great difference at the commencement of this war from the conditions prevailing at the outbreak of the last war with regard to the forward movement of agricultural prices. At the beginning of the last war there were nothing like the same—"bull movements" shall I call them? or speculative movements in agricultural prices. The reason was, I presume, that traders then, viewing the world, with Germany and Austria excluded altogether from the buying ring, had no reason to be certain that forward purchases made in a hopeful spirit with the idea of a price rise would be justified by the fulfilment. In this war the fact that Germany and Austria were out of the ring did not matter, because they were out of the ring in peace time. The experience of all the primary producing countries in the last war was still fresh in their memories at the commencement of this war. They expected at once the same forward movements in price as that experienced in the last war. The result was that we had to meet, at once, a heavy forward movement due to speculation abroad in the prices of these primary commodities. I have on previous occasions given instances to show how the fact of the Ministry being in existence and having in its own hands the power to purchase commodities for the whole nation enabled us to arrest and to check that movement and to save the people from paying the speculative prices which undoubtedly they would otherwise have had to pay.

There is a third fact which I would ask the House to bear in mind, and on this there is a direct difference of opinion between the hon. Member for Doncaster and me. He said that less has been done in the sinking of ships at this stage of the war than was done in the comparable period of the last war. Exactly the contrary is the case. It was not until late in the last war, not until it had run for 84 two years, that the attacks upon our commerce developed. In the comparable period, in 1914, ships came and went freely, both ours and neutrals. In the first six months of this war the attack on shipping was delivered with energy and vigour from the first day, and although that attack has been conquered by the Royal Navy and the heroism of our merchant seamen, its very imminence imposes upon us the necessity of organising our shipping in convoys, of diverting cargoes, and of adopting a number of measures of that character for our own safety. All these were an aggravation and not an alleviation of the position as it existed in the first six months of the last war. If these facts are remembered and a comparison is made with a fair mind between the experience of our people in buying food during the first six months of this war, with the comparable experience of the last war, I do not think anyone can resist the conclusion that the activities of my Department have achieved a great saving for the people of this country in the cost of their food supplies.

Let us examine the problem in detail. Why is there a special problem of food prices in war time? The basic reason is the restriction of commerce—the fact that ships cannot move in and out as they would in normal times. In addition to that, we have to consider other matters, such as exchange. Consequently, for purposes of war, if the best use is to be made of shipping, it must be directed, and if it is to be adequately directed, there must be some central control to decide what cargoes are most required and where they are to be obtained. There are also natural rises in price which occur in the absence of control and even occasionally in spite of it, due to the fact that restricted supplies are available. That again is due to war conditions. When you come to home-produced articles—

§ Mr. Alexander

Hear, hear.

§ Mr. Morrison

The right hon. Gentleman, I know, disagrees with the prices which we are paying, but I take the line that my responsibility is towards the consumer, not only to secure his food supply, but to secure that he has abundant food, and I believe that in paying those prices and stimulating the home production of food in this country, free from all those embarrassments to 85 which I have alluded, such as shipping, exchange and other difficulties, we are making a good bargain for the consumers of this country if we look far enough ahead. All those difficulties call for an effective measure of control. I sometimes think that the position to-day is a little different from the position in the last war, when loud and powerful voices were raised against the idea of any control at all, pointing out the futility of any attempt to interfere with the law of supply and demand. That opposition was so powerful and so vocal that it was not until late in the war that food control was attempted at all. In this war I sometimes think we run the risk of going to the other extreme and of imagining that because you can do a lot by control you can do everything. Well, you cannot do everything by control. You can do a great deal, but there are certain factors which are outside your control. You can only use control to mitigate to the greatest degree possible the difficulties of the situation and to prevent certain things which would happen if control were not there.

What are the engines or the organs to be used by way of control? In the first place, by prohibiting the purchase abroad of prime commodities on private account, we are able to centralise our great purchasing power and to avoid those rises in price which would otherwise occur as the result of importers competing against each other for limited supplies. In the second place, by controlling shipping space and freights on our own ships we are able to control competition in freights and to secure the most economical use of the carrying space that is available. When, in spite of all these measures, conditions are such that a rise in price is inevitable, we can, as we have done, if it is judged to be in the public interest, stop the rise being passed on to the consumer, by means of a subsidy. The important thing is that by our distributive arrangements at home, backed up by rationing, we are able to check any tendency on the part of traders to profiteer and charge excessive margins, and thus to maintain a control of distribution which is a part of the whole machine.

How effective have these proved? I do not stand here to say that everything has worked perfectly, or that no mistakes have been made. I do not say that, but 86 I would much rather claim, as I think I can, that mistakes are corrected when they are discovered, and possible improvements are constantly being watched for and introduced as soon as they can be made practicable. I think we may claim that although we have, in some cases, had to pay an increase for products from overseas, the control of overseas purchasing has been successful in reducing these increased costs to the minimum. I would put it this way. I do not think it is an untrue claim that we have to a large extent passed on to the people only those increases which are inevitable, and that we have cut out entirely the elements of increased costs which would otherwise be due to speculation and lack of control and organisation in the supply of food.

I could give the House a number of figures showing how these various elements of increased costs have affected us in our purchase of food—freights and so on. Perhaps I may indicate one or two of the matters. Of course, looking at the actual figures, it can be seen that the highest single item is that of insurance and freights. In many cases these have risen very considerably indeed. Prime costs themselves have risen. I have seen a list of a number of the more important food imports, which includes bacon, mutton, lamb, beef, butter, cheese, sugar wheat and maize, showing the increases which have occurred in the c.i.f. prices, landed prices, as we call it, and the extent to which this has been due to freights and insurance or higher purchasing prices in the country of purchase. There are 15 commodities altogether, and the average increase in c.i.f. prices, compared with the best comparable pre-war date, is 37 per cent. The average increase on the f.o.b. prices is 18 per cent., whereas the average increase in the cost of freights and insurance is no less than 232 per cent.

Mr. Lloyd George (Carnarvon Boroughs)

Does that include the neutrals?

§ Mr. Morrison

Yes, Sir.

Mr. Lloyd George

Is there any control at all of the freights which are paid to the neutrals? The right hon. Gentleman says there was control as far as British vessels were concerned, but is there any control as regards the neutrals?

§ Mr. Morrison

The right hon. Gentleman will appreciate—and I understand that certainly there is control so far as our own freights are concerned—that with regard to the neutrals such tonnage as we have through them is by arrangement and agreement; but I imagine that the Parliamentary Secretary to the Ministry of Shipping would be in a better position to give more information about that. I was referring to our own freights.

Mr. Lloyd George

Is that figure confined to our own ships?

§ Mr. Morrison

No, Sir. These figures are an average on freights in general. They are an average which we have to pay, whether we pay them to neutrals or to our own ship. In these 15 cases which I have mentioned there are actually only four in which the increase in f.o.b. prices abroad accounts for more of the increase in landed costs than freights and insurance. The greatest increase in the f.o.b. price is 60 per cent., but the increase in freights and insurance ranges from a minimum of 57 per cent. to a maximum of 700 per cent. I am not bringing this forward to give an accurate arithmetical idea of what is happening, but roughly to show the relative incidence of these costs on increased prices on our landed prices here.

I have already referred to the question of subsidies to prevent the cost of living rising. We produced this scheme at the outbreak of war in respect of certain commodities, particularly in regard to the purchases of the poorer sections of the community. The only disadvantage to us perhaps is that it costs a great deal of money. I wish to say something on the question of the retail price rise of 17 per cent. That rise compares with the rise in the agricultural price index of 40 per cent. in the same period and with a rise in the wholesale price index in the neighbourhood of 40 per cent. It looks as if these controls are to a large extent preventing the passing on to the public and to the house wives of the increase on wholesale goods. It is always difficult and fallacious to deal with averages, and it is necessary on such a wide subject as this to treat them rather as a sort of shorthand in expressing movements in general.

We have been asked to have regard in particular to the poorer interests. I do not want to go into that great controversy of the purchasing power of the 88 people, which is outside the subject under review. But we have tried, whenever possible, in fixing prices so to arrange that cheap and plentiful supplies are left for the poorer people. I can give an instance, for example, in margarine. I have been twitted about that on many occasions. The hon. Member for Doncaster was inclined to resent the fact that we did not stick to sixpenny margarine, but in reality the argument used against it was that to level down we also had to level up. That meant that you deprived people from getting cheap margarine at 4d. and 5d. Recently, on account of the increase in materials, we had to advance the price a penny a pound, but that advance was restricted to the two dearer varieties, and the 5d. variety was left with its price where it was. In addition, the 5d. margarine was vitiminised, an advantage which previously was possessed only by the more expensive brands.

§ Mr. Alexander

But the right hon. Gentleman will remember that the 5d. brand had been raised almost at the beginning of the war. It was 4d. pre-war.

§ Mr. Morrison

There are various views about that, but the point is that we had to increase the price of margarine, and we did limit it to the more expensive brands. I would like to say one more thing about this question of food prices in general. Some people may take too gloomy a view of the situation in dealing with the price of food. Memory is necessarily short, and comparison is made with the most recent ruling levels of prices in order to measure whether there has been an increase or not. The fact is that if we take a year of peace, and a year which many regard as a prosperous one, 1929, to which economists in dark years constantly hark back, and if we compare prices then ruling, of private products and manufactured goods with those for the six months of war, it will be found that the general level of retail food prices is now not very much more different from those which ranged in some of the months in 1928–29. There is a number of commodities whose prices to-day are still below those of 1929. We have heard a great deal of the rise in the price of butter, and a lot of attention has been properly directed to it. The price of butter, however, remains to-day on an average some 19 per cent. below 89 the level of December, 1929. Flour and bread are appreciably below the level for that period, and the same is true of both home-produced and imported mutton. In the case of cheese, although it has risen appreciably in recent months, it is new practically at the same price as in December, 1929. Margarine remains below the level of that period.

Much remains to be done in what will no doubt be a changing situation; but I think it is a wrong attitude to go forward in a war with the idea that conditions are to remain the same or that one can predict with certainty the shocks to which one may be exposed. The experiences of the last six months, very difficult as they have been, are sufficient, I think, to give us hope that we were right in introducing control at the outbreak of war, and that the measures we have built up rapidly, with a new staff in many cases rapidly augmented, have had the effect for which they were designed, namely, to impose a restraining hand upon the movement of prices of foodstuffs which otherwise would have been a source of great embarrassment in particular to the poorest section of the community. Much remains to be done. Many improvements require to be made in the organisation which was so hastily improvised with a staff so hastily assembled. We shall always be grateful for the help of hon. Members in pointing out where the machinery can be strengthened. A fair-minded review of what has been done by those who have worked so hard at this task in the Ministry, bearing in mind the factors working against the success of their efforts at the outbreak of the war, will show that they have made a not unpromising start.

§ Mr. A. V. Alexander (Sheffield, Hillsborough)

We have listened to another of those very able and pleasant speeches which the Minister of Food is always able to put before us. I am sorry, however, that he has not dealt with the Amendment moved by my hon. Friend the Member for Doncaster (Mr. J. Morgan). We desire by that Amendment to call the attention of the House to the cost of living and to regret that the prices of controlled foodstuffs have been fixed so high that some people cannot get their requirements. The Amendment also refers to the question of the adjustment of wages to purchasing power. The Minister has 90 not attempted to reply to it, and I hope that before the Debate ends the Parliamentary Secretary will fill in the blanks which, no doubt through lack of time, the right hon. Gentleman has left.

It is no use for the Minister to come before us with a defence of present prices based on prices in 1929. He must deal with the substance of the Amendment, which relates prices to wages and purchasing power. The Minister knows as well as anybody that from 1929 and the outbreak of the world economic depression wages constantly fell, right up to 1933. Prices, too, fell with wages. They fell very rapidly, and very often the fall of prices was the reason for a fall of wages. In consequence, up to 1933 we had a very low level of prices. It is curious that at the present time, when we are trying to deal with the position of the workers, millions of whom have, not had a penny increase since the war broke out, the Minister should trot out the high level of prices of certain commodities which existed in 1929, when wages were higher than they were at the outbreak of this war. There must be some other defence of prices than that. I could have given the right hon. Gentleman a better defence but I do not propose to do it. That is the job of his office.

There are one or two other points that he made which I think were very good. His reply to my hon. Friend with regard to the conditions which obtained at the outset of the war as compared with those at the outset of the last war was fundamentally right. I am sure that if my hon. Friend looks at the question again he will concede the point. When, however, the right hon. Gentleman deals with the forward movement of price and feels that the action of the Ministry has been such as to prevent substantial increases to the consumer, I think the point wants careful examination. I cannot from my own experience accept that view. Let us take the point I raised in the last Debate on this question of whether the Government's action in buying had in fact arrested prices to the consumer. Take wheat. I felt all the way through that if the Minister had had the power—and I am afraid he had not; that is the real trouble—to buy in bulk large and important consignments, either of wheat or feeding-stuffs, from the nearest ports, counting time as well as price, we would never have dropped into the situation into 91 which we have dropped in regard to feeding-stuffs or wheat. The Minister said that, in spite of the fact that countries like Germany and Austria were out of the ring, there was still a general rush to speculate with regard to the future. Let us take the case of Winnipeg May wheat. On 1st September the price was 68 cents; then it went to 80 and to 83, but it dropped by 4th November, at the time when conversations were going on between the Food Department and the Canadian representatives, to 74.5. Why did not the Government buy? The quotation yesterday was 89.

§ Mr. W. S. Morrison

We did buy at a lower figure.