§ 7.58 p.m.
§ Major Sir Thomas Dugdale (Richmond, Yorks)
I will detain the House for only a very short time on these Supplementary Estimates to say a few words about the Petrol Duty rebate and the grassland fertiliser subsidy, for which additional sums are required in these Supplementary Estimates.
Let me deal first with the Petrol Duty rebate. The House will recall that in his Budget Statement of April last year the Chancellor of the Exchequer indicated when he increased the Petrol Duty that grants would be made to agricultural vehicles. Following that statement legislative form was given to these proposals under the Agriculture (Miscellaneous Provisions) Act later in the summer. During his Budget Statement the Chancellor indicated that this concession would cost the country between 2½million and £3 million a year. To use his own words, he said:I provisionally put the cost of this concession at between £2½million and £3 million a year. The expenditure on these new grants 1855 will of course form the subject of a Supplementary Estimate in due course."—[OFFICIAL REPORT, 18th April, 1950; Vol. 474, c. 76.]That is the Supplementary Estimate we are now discussing.
I wish to ask whether in fact the £1,100,000 asked for today is the total cost of the scheme for one year or only for the period up to the end of the financial year 1950–51—that is, up to the end of March of this year. We must relate this Supplementary Estimate to the statement made by the Minister of Agriculture on 22nd February, when he said that after the settlement of claims from the first year's operation of the scheme, the Government would cease payment of the grants in respect of farm tractors and other machines using petrol. The House would like to have it made abundantly clear exactly what the position is and up to what date claims can be submitted by individual farmers.
Perhaps the Parliamentary Secretary will tell us the cost of the scheme which has been operating for one year. I ask hon. Members to remember that during the Second Reading debate on the Agriculture (Miscellaneous Provisions) Bill many of my hon. Friends expressed their dislike of this scheme. It was specially referred to by my hon. Friend the Member for Newbury (Mr. Hurd) who said:If this Bill is given its Second Reading today, its life should be limited to one year."—[OFFICIAL REPORT, 30th June, 1950; Vol. 476, c. 2664.]Others of my hon. Friends took up the point. My hon. Friend the Member for Thirsk and Malton (Mr. Turton) and my hon. Friend the Member for Leominster (Mr. Baldwin) took the view that the scheme was a bad one and that the additional cost should be taken into account, either in a special price review or at the annual price review. Today there is on the Order Paper a Motion in the name of the Minister of Agriculture to revoke this scheme. How much better it would have been if the Minister had taken the advice of my hon. Friends at the time of the debate in June and if we had proceeded straight away on more satisfactory lines.
We are now saying farewell to this scheme, with no regrets, but on the assumption that the resulting increases in the farmers' costs of production will be taken fully into account in the price re- 1856 view negotiations which are now going on. Because they are now in process, I shall make no further reference to them. The House would like an assurance from the Minister on this subject.
I turn to Subhead P, which refers to the grassland fertilisers subsidy for which I see that the Minister is asking for £500,000. Before dealing with the policy of the Government with regard to fertilisers subsidies as a whole, I wish to ask a question about the marginal production scheme, under which the House will recollect that occupiers of certain types of agricultural holdings who agree with their county agricultural executive committees to carry out a definite improvement of their holdings may, under certain circumstances, be supplied with goods and services at less than normal charges. Under this scheme as it was introduced in 1949, fertilisers were among the goods available at reduced prices.
Is the cost to the Exchequer of these supplies included in the Supplementary Estimate now under discussion? If so, my hon. Friends would like to know why there is no mention of the new feeding-stuffs subsidy introduced as a supplement to the marginal production scheme under S.I. 1094, of 1950? It would be of interest to be clear on that point. It may be that subsidies of a particular nature are included in the trading services of the Ministry which, owing to the fact that they show a profit and not a deficit, are debarred from discussion. It would be interesting to know what the exact position is.
I turn to the problem of the subsidy on fertilisers as a whole. I wish to remind the House of the comings and goings of fertilisers subsidies in recent years. First, we had the general fertilisers subsidy introduced in October, 1940. That was reduced last year from £15 million a year to £7,500,000. This remaining £7,500,000 a year is due to cease altogether on 1st July of this year. Having taken a decision to abolish the general fertilisers subsidy, the Government decided that there were cases where a subsidy is still needed. Under the Agriculture (Miscellaneous Provision) Act, a new fertilisers subsidy scheme was introduced, and it is with that scheme that this £500,000 is connected.
The scheme was divided into two sections. Under the first section, a subsidy 1857 was made available for the improvement of land under grass. I shall not weary the House with details of that scheme. We have considered it often before. It was estimated in the financial provisions-of the Agriculture (Miscellaneous Provisions) Bill that this part of the subsidy would cost £4 million a year. The House is asked today to approve a Supplementary Estimate of £500,000. It would be appreciated if the Parliamentary Secretary could marry those two figures together and tell the House whether it is that there has not been a demand for this subsidy, whether it is that they overlap for the financial year, or exactly what the position is. It is difficult to tell from the Estimate.
We understand from the statement by the Minister of Agriculture on 22nd February, that this part of the new subsidy will cease to be available after 1st July, 1951. Presumably, claims can be put in for part of the subsidy for the period between now and 1st July, and they will come on the Estimate for the year 1951–52. Now I come to the second subsidy which was estimated to cost £1 million a year. That was to be paid towards the cost of fertilisers applied to land which has been continuously under grass for at least seven years at the time of ploughing and has been ploughed since 1st December, 1949, which is the date when the grants for ploughing up of grassland cease.
Therefore, the position, as I see it, is that the agricultural industry will have lost by 1st July of this year the £15 million general fertilisers subsidy, which will have been removed in two stages, and the £4 million fertilisers subsidy for the fertilisers applied to grassland which was introduced under the Agriculture (Miscellaneous Provisions) Act. The industry will retain the £1 million grants for the application of fertilisers after the ploughing up of grassland of at least seven years standing. I hope the Minister will confirm whether that calculation is correct. I note from the Estimates, and I would say in passing that my hon. Friends take no objection to it, that, just before the end of the scheme for plough-up up grassland, there was a rush to plough up old grassland to such an extent that we have been asked today to approve this additional sum of £1½ million on that account.
1858 From what I have told the House, I think it will be agreed that, whatever the merits of these particular subsidies on fertilisers may or may not be, the Government have certainly had no clear and constant policy with regard to fertilisers in order to assist our farmers in their efforts to fulfil the agricultural expansion programme of 1947. My hon. Friends are certainly not surprised that the Government have found it necessary to abandon the scheme introduced under the Agriculture (Miscellaneous Provisions) Act to pay grants towards the cost of fertilisers applied to grassland.
I must refer to the fact that, during the Second Reading debate, it was pointed out again and again by my hon. Friends that the scheme in its proposed form was unworkable, and once again, as so often happens in these matters, the Government have come to the conclusion that we were right. On the other hand, we regret the departure of the general fertiliser subsidy itself, and I believe that many of my hon. Friends on the other side of the House will agree with me that the principle of trying to keep down the cost of fertilisers must, in the national interest, be right in order that we may secure the maximum production from the land of Britain.
The House may perhaps remember that, on behalf of my hon. Friends, I expressed this view on 8th March last year during the debate on the Address, and, today, I hold that view more strongly than ever, and I believe that a subsidy to lower the price of fertilisers is, if anything, going to be more necessary now than ever it was in the past. There is a general rise in prices, and it is to be feared that the prices of fertilisers will go up. That is bound to act as a disincentive to farmers to increase their use of fertilisers.
As we look round the world today, no factor leads us to think that, without them, we can succeed in our policy to expand British agriculture and integrate it with the needs of our defence programme in order that we may become more and not less self supporting. To achieve this we must increase our yields from our own already highly farmed land, and bring more marginal land into cultivation. A greater use of fertilisers is an essential part of this policy, and a simple and constant scheme for encouraging their use, such as the overall 1859 fertiliser subsidy, would appear to my right hon. and hon. Friends to be the most effective way of fulfilling our objective.
§ 8.14 p.m.
§ Mr. Nugent (Guildford)
I want to raise a small point concerning subhead O. In common with the right hon. Gentleman who has introduced a proposal for bringing to an end this scheme of relief in respect of petrol used by agricultural machinery, I am wondering what will be the position of petrol-consuming agricultural machines used on horticultural holdings. I understand that the case of those machines on agricultural holdings will naturally be taken into account in the price review which is now in progress, but the Parliamentary Secretary will recognise that petrol-driven machines used on horticultural holdings will not be taken care of.
In those circumstances, if there is to be no recoupment, since the Chancellor of the Exchequer recognised, when he adumbrated this scheme, that the use of petrol for machines engaged in food production would be considered as in a special category and deserving special treatment, I am wondering how the Parliamentary Secretary intends to recoup the owner of petrol-consuming agricultural machines used on horticultural holdings. It may be that he will refer to the Supplementary Estimates now before us and say that it is proposed to cover those machines that would not be recouped, under the price review now in progress. If that is so, perhaps he would say so, but I feel that this is a point which he should explain when he replies to the debate.
§ 8.16 p.m.
§ The Parliamentary Secretary to the Ministry of Agriculture (Mr. George Brown)
We have had a very short, and in some ways amusing, debate, in which the hon. and gallant Baronet the Member for Richmond, Yorks (Sir T. Dugdale), enjoyed himself to some extent with the story of "I told you so." In fact, if one looks at the record, one finds that he did not do anything of the sort, but was merely trying to do what nearly all of us try to do without any great success, which is to be right whichever way the cat jumps. The right hon. and gallant Baronet is a very wily bird, and he took the precaution to make his re- 1860 marks so wide that, whichever way the cat jumped he could find some quotation that would help him. I congratulate him upon the skill and charm with which he did it.
He asked me some specific questions, and I thought that it would be convenient to the House at this time if I confined myself to answering specific points rather than making a general speech on the Estimates. The hon. and gallant Gentleman asked me whether the £1,100,000 shown in the subhead for these petrol-driven machines was, in fact, the amount for the whole of the year for which the scheme now ending will run, and the answer is that it is not. There is no departure here from the original Estimate, which was given as somewhere round about £2 million for a year, and it looks as if the cost will still run round about that figure. What in fact this does provide for is the payments that will actually have to be made before 31st March of the current financial year. Our estimate is that the payments we shall then make up to that point will be roughly about one half of the total which we shall be called upon to make for the whole scheme.
The hon. and gallant Baronet also asked me what was the final date for making claims, and I hope that we might have the assistance of hon. Members who are in touch with the agricultural community on this point. The final date set down is 31st March. We often run into difficulties on this matter, and I am always having letters from hon. Gentlemen putting in a plea for some constituent who, in regard to a certain subsidy, had mislaid the form and had not claimed by the required date. One always hesitates to stick to a closing date, but it does make a very great difficulty in administration if these claims continue to trickle on afterwards. We have to integrate this work with other work of the staff concerned and it would mean that we would have to have two or three staffs to deal with it.
I hope we may have the co-operation of hon. Gentlemen representing agricultural communities in making it clearly known that 31st March is the final date, and that the rule will have to be that claims not in by that date will be time-barred, since we have to work in this scheme with some other payments that will come later in the year.
1861 The right hon. and gallant Gentleman also referred to the order revoking the scheme, and said how much better it would have been if we had taken his advice then. With great respect, how much worse it would have been for the industry. What we have, in fact, done is exactly what we set out to do from the beginning. Far from our now taking the advice of the hon. and gallant Gentleman, what has, in fact, happened is that in the course of the last 12 months or so he has got round to taking our view. What we said was that we had had a price review just before the Budget was introduced which gave effect to this increased Petrol Duty. Had we done nothing in the way of providing a special scheme, then the price settlement at the annual review would have held, and the industry would have been mulcted of a sum of money.
What we did was to have a scheme which held the price review, and to consider what was the best thing to do on a long-term basis. Quite frankly, we cannot even now visualise any other special scheme which it would be worth while or practical to run on this basis, and we have come to the conclusion that, as this was a temporary holding of the position, the best way of dealing with it on a long-term basis is to merge it in the price review, and to deal with it in that way. Therefore, we are not departing from the view we held then. We had to hold the position for a time while we examined the whole field. We have done that, and I am very glad we are carrying hon. Members opposite with us, because it is so good for them to be carried with us along the right road. [HON. MEMBERS: "The right road?"] Yes, because what hon. Members opposite do not understand is that the right road in this country is the left of the road.
The hon. and gallant Baronet then addressed himself to the question of the grassland fertiliser subsidy. He made a fairly lengthy speech, which I was delighted that he got through, though a little surprised that he did, on the question of the worthwhileness of a general fertiliser subsidy. When he did it before, I quoted to him "The Times" Agricultural Correspondent—I hope for his general good—who had something very useful to say on the subject, which was, if I may repeat it again, as follows:No doubt the nation will gain if fertilisers are used more generously on grassland. This, 1862 however, has become a plain matter of good business for the farmer… It is hard to see why it should be necessary to provide a subsidy as well as sound advice to induce farmers to do what it is in their own interests to do."—[OFFICIAL REPORT, 30th June, 1950; Vol. 476, c. 2720.]There is, of course, no particular reason why the hon. and gallant Baronet should take notice of it, but it is good advice, and I recommend it to him.
With regard to the special scheme, he asked me whether this Supplementary Estimate covered the costs of any or of all the goods and services schemes under the main marginal production scheme. The answer, as I understand it, is "No." This Supplementary Estimate covers only that part of the cost of this particular provision under the Miscellaneous Provisions Bill which has come in, or will come in before the end of the financial year. It does not cover, on the one hand, the costs of any other schemes which are provided for in our general Estimates—that is why they are not here—and has nothing to do with profits. This was not presented at the beginning of the year because it was not a scheme, and, once again, in order to marry the two figures, the Estimate and the Supplementary Estimate, it only refers to that part of the costs which will, in fact, be paid by the end of the financial year.
We have not, of course, even got in this £500,000 all the claims of the last calendar year for fertilisers supplied in the autumn. We do not think that we have more than three-quarters of those claims, so there will be something there to be paid, and it is virtually certain that we have none of the spring costs, because the fellow who buys his fertilisers in the spring will hardly have got his bills and put them in before the end of the financial year. Therefore, we anticipate that the whole spring application has still to come.
I think those were the points raised by the hon. and gallant Baronet on that matter, except, again, for one of those high-flown passages in which he said that the Government had no consistent policy in abandoning schemes, and so on. The answer to that is, if I may say so—it sounds a harsh word to use, but it is difficult to avoid it—that it is just charming nonsense. We have had a consistent policy with regard to this, and we have done our best to persuade farmers to use 1863 these fertilisers, to understand their sound business value, and the great increase in crops they will get from using them.
We put on these two special schemes, one of which remains, as the hon. and gallant Gentleman said, on old seven-year grassland ploughed up for a special reason. I would remind the hon. and gallant Gentleman that there has been a considerable change since we were discussing this. There has been Korea and the very considerable increase in rearmament costs which the country has to bear, and obviously our position is that in this industry and in this Department, as in any other, we have to bear some part of the unpleasant necessity of helping to find some of the money to pay for that. What we have tried to do here is to seek to make economies where they will do least harm and where, on the whole, the good has already been done.
The hon. Member for Newbury (Mr. Hurd) asked one short point. [HON. MEMBERS: "The hon. Member for Guildford."] I could really have said nothing worse to the hon. Member for Guildford (Mr. Nugent). I ought never to have thought of the two hon. Members in the same context. The hon. Member for Guildford asked about horticultural machines. There, of course, he has put his finger on the whole weakness of the case of the hon. and gallant Baronet and his hon. Friends when we first discussed this matter, and now. The Government were heavily attacked for introducing the scheme. We always had in mind that there were certain sections of the industry which it was difficult to cover unless there was a scheme of that kind. We have not been able to devise, with all the help we have had, any other scheme for doing this which will stand up to Revenue, Treasury and practical checks. We have decided, with all its attendant disadvantages for some folk, to put it into the Price Review. This remains, like many other things for horticulturists with their non-guaranteed price products, a problem of how to find ways and means of giving them the same kind of security which others have got.
We all agree that this is a very difficult problem, but this does not make it any greater. I have many times, in this House and in other places, explained 1864 ways in which we think that the horticulturists could put their industry on a better basis. I do not think I had better go into that now, but this merely emphasises to a limited degree the need for that to be done. I think those were all the points raised, and I am very grateful to the House for giving us the Supplementary Estimate in such an harmonious mood.