§ [1ST ALLOTTED DAY]
§ Considered in Committee.
§ [Sir CHARLES MACANDREW in the Chair]
§ CIVIL ESTIMATES, SUPPLEMENTARY ESTIMATE, 1953–54
§ CLASS VIII
§ VOTE 9 (MINISTRY OF FOOD)
§ 3.46 p.m.
§ The Minister of Food (Major Lloyd George)
I beg to move,That a Supplementary sum, not exceeding £126,843,450, be granted to Her Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1954, for the salaries and expenses of the Ministry of Food; the cost of trading services, including certain subsidies; a grant in aid; and sundry other services, including certain expenses in connection with civil defence.A Supplementary Estimate for this sum has been presented under Class VIII, Vote 9, Civil Estimates, the Vote for the Ministry of Food. As the Committee will see, it is a very considerable sum both in itself and in relation to the original Estimate, and I feel certain that it is the desire of the Committee that I should give some explanation of the way in which this Supplementary Estimate arises.
The Supplementary Estimate of £126.8 million is made up by increased subsidies, £68 million, increased stocks, £52 million, and nearly £7 million for variation in debtors and creditors. The Ministry's original Estimate for 1953–54 under Class VIII, Vote 9, was for £109.6 million, and the Supplementary Estimate now presented is, as I have said, for £126.8 million, bringing the total cash requirements of the Ministry, fox 1953–54, to £236.5 million. Apart from relatively small items such as flood relief in Subhead K, the increase arises substantially on subhead H, which finances the still considerable trading operations of this Ministry.
If the Committee will glance at the details of that subhead on page 3 of the Supplementary Estimate, the magnitude of these operations will at once become apparent. It will be seen that purchases, food storage and so forth now amount 1167 to £1,614,600,000, and sales to practically £1,391,900, leaving a net excess of payments over receipts of £224,000,000, as against the £96 million excess originally estimated.
The explanation of this cash trading deficit is to be found lower down on the same page:The above figures represent partly the difference between selling price of commodities and their cost to the Ministry, including expenditure on distribution and other incidental expenses, the deficiency being incurred in order to keep down the cost to the consumer of basic foodstuffs; and party payments in implementation of the guarantees given to farmers in accordance with Part I of the Agricultural Act, 1947.This is the subhead which finances the bulk of the food subsidies of one kind and another.
The excess of payments over receipts is now estimated to be close on £128 million more than was originally estimated, which is a considerable sum. The Committee will, I am sure, appreciate that, in view of the very large sums of money involved in these operations, an error of 1 per cent. one way or the other in the figures throws the estimate of the excess of payments over receipts out by as much as £30 million.
I should like to make another general point on the difficulty of the estimating process. It may not be generally realised that the preparation of the original Estimate which we are now discussing was begun last November, over 12 months ago, and related to a year, the current financial year, then three or four months ahead. If conditions of world trade had remained stable, and if the organisation of the import and distribution of food had not varied throughout the year covered by the Estimate, it would still have been far from easy to forecast with any precision for a year, the end of which was then 16 months ahead, what would be the outcome of the large trading activities which my Department is still carrying on, the figure for which is over £1,600 million.
But the task was even more difficult than that. The year was to see such major changes of organisation as the decontrol of eggs, of feeding stuffs and cereals. A great change was to come over the world markets for grain. Meat and bacon were to become relatively 1168 plentiful earlier than had been expected, with consequences to both cash and subsidy figures. In these conditions, it will, I think, be fully appreciated by the Committee that the formation of the Estimates presented unusual difficulty for this current financial year. One has only to look back over recent years to appreciate the difficulties of estimating procedure in a trading department. There has, in fact, been only one year, 1950–51, since the war, when the Ministry of Food has not had to present a Supplementary Estimate, and in that exceptional year there was an over-estimate of about £121 million.
I should like to examine some of these problems of estimation in greater detail. I will take as my first example the restoration of private trading in cereals and animal feeding stuffs, a large and very delicate operation which was successfully accomplished in the course of this year. The change-over from Government procurement to private buying had to be so planned as to avoid even the possibility of interruptions of supply, which would have threatened, on the one hand, the supply of bread itself, and, on the other hand, the agricultural expansion programme. We had, therefore, to provide for the holding of Government stocks at the moment of transition large enough to ensure the country against these risks.
I frankly admit that we provided for larger Government stocks than proved necessary. We expect now to be holding at the end of the year about £5 million worth of imported stocks which we had every reason to expect would have been sold by that time. In the event, we over-insured. But after 14 years of State trading there could be no certainty of conditions in a free market. Indeed, fears were expressed in this House that the transition might result in a shortage, and in this case, as in all others, where the Government have the responsibility of honouring a ration level right up to the point of decontrol, we could do no other than cover every possible eventuality. Moreover, of course, we shall realise these stocks next year.
Another cause of the increased expenditure giving rise to this Supplementary Estimate is the special purchase of one million tons of sugar from Cuba which, added to an increase of about half a million tons from Commonwealth 1169 sources, made derationing possible. Twelve months ago none of us, I suggest, could have foreseen the favourable circumstances which made the Cuban purchase possible. We could not have foreseen—at least, we could not have been certain—that the balance of payments would so improve as to allow us to devote the necessary dollars to this purpose. The derationing of sugar was most welcome to the housewife, but we now have to finance it. The Cuban purchase and the increased Commonwealth arrivals account for £36 million of the Supplementary Estimate. Here again, the money from the sale of this sugar on the commercial market will come back to us.
§ Mrs. Barbara Castle (Blackburn, East)
Could the right hon. and gallant Gentleman tell the House the cost in dollars of this Cuban sugar purchase?
§ Major Lloyd George
I think it is something like 62 or 63 million dollars. I think it is 62 million, but I will check the figure.
The abundant supplies of meat this summer, particularly of pork, have involved more in subsidy and, therefore, a larger cash expenditure. Hitherto, the emphasis has been mainly on pigs for bacon, the pork trade in effect getting what was left. The increase in pig production as a result of the Government's agricultural expansion programme has thrown up more and more pigs for pork, but until this year the price schedules did not directly encourage the production of pork pigs. The last Farm Price Review after the original Estimate was framed revised the price schedules in favour of better quality bacon pigs and lighter weight pigs for pork. The price of heavy weight pigs was reduced, and the result is that producers now market their pigs at an earlier age and, owing to the quicker turnover, the Ministry is receiving greatly increased numbers which fall into the higher price categories.
This increase of close on 2 million pigs for sale as pork, most of which fall within the high quality price ranges, has brought us over 110.000 tons of pork of improved quality. Much of this increased tonnage came forward in the summer months, when there is a certain element of consumer resistance, particularly in certain parts of the country, to pork. The price had to be adjusted to 1170 meet this situation. These two factors combined have increased the estimated deficit on pigs for pork by £18 million. We also found that with the expansion of bacon production, coupled with the increased arrival of bacon from overseas, it became commercially necessary to reduce bacon prices, involving some £13 million on this Supplementary Estimate.
Another major source of this increased expenditure which the Committee is now invited to cover is the implementation of the guarantees on home-grown cereals under the 1947 Act. When the original Estimate was prepared, wheat and coarse grain prices were buoyant. It is always dangerous to speculate about the trend of grain prices, but at that time there was no justification for assuming that there would be any significant fall. We had to assume that world prices of wheat and coarse grains during the period for marketing the 1953 home-grown crops would be sufficiently high to ensure a ready market for those crops through normal trade channels, at or above the minimum prices guaranteed to growers at the 1952 Farm Price Review.
However, during the current year world prices of cereals steadily declined. The market value of the home crops harvested in 1953 was, therefore, below the guaranteed minimum prices to which the farmers were entitled in fulfilment of the Government's obligation under the Agriculture Act, 1947. So the Ministry is having to take delivery of substantial quantities of home-grown grain offered at the guaranteed minimum prices, and these will have to be disposed of at the ruling market price. It is now estimated that approximately £20 million will be required to meet the trading deficit on the resale of such purchases of home-grown grain.
Approximately another £20 million is also estimated to be required for increased stocks. These will consist mainly of home-grown grain purchased at guaranteed prices, which, on present estimates, will remain unsold at the end of the financial year. There will also be some Ministry stocks of imported grain which will remain for disposal at that date. The proceeds of such stocks will accrue to the Exchequer in the next financial year.
During the year the subsidy on bread and bread baking has been affected by the decontrol of cereals and flour in 1171 August of this year. It has been found necessary, for instance, to provide some measure of relief to small bakers, and provision has had to be made for this in the Supplementary Estimate. There is also an item of £2.9 million, in the £7 million increase in the subsidy for bread and bread baking, which reflects the public's continued taste for the national subsidised loaf. After 14 years of control no reliable estimates were possible as to how the public would react on the re-introduction of a variety of different types of bread. As yet it is apparent that there has been no very significant change of demand.
Having said that, most of the balance of the £7 million to which I have just referred is due to the increase in baking costs, including wages, during the year. These have risen to a greater extent than was provided for in the original Estimate.
In passing, I can now give the hon. Member for Blackburn, East (Mrs. Castle) the information for which she asked in connection with the purchase of Cuban sugar. The cost was approximately 65 to 70 million dollars.
There appears in the Supplementary Estimate a subsidy on the production of home-produced eggs which was not originally expected. When the Estimate was first prepared it was thought likely that no net expenditure on the Exchequer would arise from the Ministry's activities in importing shell eggs and implementing the guarantees to the British producers, but the level of retail prices on the free market has at times been lower than the forecast. Thus, the cost of implementing the guarantee under the Agriculture Act, combined with reduced proceeds from the sale of imported eggs, accounts for the loss on home-produced shell eggs, which is new estimated at £3 million. The potato subsidy has risen by nearly £5 million.
§ Mr. Gerald Nabarro (Kidderminster)
Before my right hon. and gallant Friend leaves the subject of eggs, may I ask him if it is not the fact that, whereas there might have been an increased subsidy of £3 million in respect of shell eggs over and above the Estimate, that must largely arise from quite a substantial increase in the consumption of eggs?
§ Major Lloyd George
The real fact is that one bases one's estimate of what the subsidy will be on the average price of eggs. As it happens, in the event it has been lower. We could have avoided this altogether if we had had eggs at a very high price, but that is the reason the figure is higher than estimated. I am referring only to what was said on so many occasions in the Socialist Press and in the House—that the l0d. egg was on its way. Had the l0d. egg arrived, we should have had a very good profit now. The fact is that it is below the estimate we have made, which is all to the good. We thought that it would be slightly higher than it has turned out to be, and the result is that it has cost the Exchequer more.
§ Mr. Brown
If the right hon. and gallant Gentleman wants to make the point that the egg never reached a price of l0d. because some millions of pounds of that price are being borne by the Exchequer, will he tell us what this represents per egg? We can then add the two together and see how near we get to it.
§ Major Lloyd George
I can easily give the right hon. Gentleman the figures. If he had been here at Question time he might have heard them. I have not the time to do that division now. I am sure that the hon. Member will be able to do it some time this evening.
The potato subsidy has risen by nearly £5 million. The expenditure is largely governed by weather and yield, given our liability under the Agriculture Act. This year we have had a record potato crop. I believe that it is a record for all time. The yield is 7 per cent. higher than the average for the preceding five years, which were themselves remark able years. That accounts for the £5 million.
The balance of the increased cash requirements is accounted for by variations in debtors, creditors, etc., amounting to just under £7 million. As the transactions of the trading departments vary in this period of transition, so the amount owed to or by the undertaking 1173 at the end of the financial year varies. It so happens that the effect of this is an increase in cash requirements of just under £7 million.
There have been some economies as well as increases in expenditure since the original Estimate was put forward, and savings include £1 million on staff. An appreciable proportion of the trading deficit for this year will not have to be incurred next year. The subsidy on sugar ran for a part of the year, until decontrol, but it will not have to be paid in the next financial year. The cash requirements next year will be similarly affected. The need for a Government trading stock of imported grain will vanish.
Stocks of raw sugar now held will be sold in the ordinary course. Home-grown cereal stocks from the 1953 harvest will be disposed of, and so will Ministry stocks of condensed milk and powder. The decontrol of butter, cheese, margarine, cooking fat and meat will give substantial relief to cash requirements as stocks are cleared or run down.
§ Mr. Frederick Willey (Sunderland. North)
The right hon. and gallant Gentleman is now dealing with the important subject of stocks. This is very early in the year to ask the Committee for a Supplementary Estimate. After all, this is only November. Can the right hon. and gallant Gentleman give an assurance to the Committee that he will not ask for a Supplementary Estimate on Vote 10 during this financial year?
§ Major Lloyd George
I am just pointing to the position which accounts for this large sum. I have referred in some detail to stock of grain—the £20 million—
§ Mr. Willey
Evidently I did not make my point clear. I want the Minister to give an assurance to the Committee that it is not his intention to ask the Committee for a Supplementary Estimate on Vote 10.
§ Major Lloyd George
I should hate to give an assurance about anything in this world, but I should think it is very unlikely that I shall.
I was referring to the non-recurring cash requirements. The decontrol of the fats group, butter, cheese, margarine, and also the meat will give substantial relief 1174 to the cash requirements as the stocks run down. There will be further economies, obviously, in the staff.
The Committee may like to have an explanation of another point. Whilst the original Estimate and the amount of this Supplementary Estimate total some £236 million, the total food subsidies, which are shown on page 6 of the Supplementary Estimate, amount to some £294 million. The Supplementary Estimate, like the original Estimate, is, of course, an estimate of cash requirements, that is, the money needed by the Department from the Exchequer within the financial year primarily, though not entirely, for trading purposes. Subsidised food bought within the year and remaining in stock at the end affects cash requirements, but it does not affect the subsidy figure because it has not been sold. On the other hand, subsidised food bought in the preceding year does not increase the cash requirements in the current year, but if sold in the year obviously affects the subsidy. I am sorry to be complicated, but that is the only way in which I can explain it. As long as it is in stock it does not affect the subsidy. If it is sold from stock it does affect the subsidy.
In a period, therefore, when the Ministry and its stocks are running down by comparison with previous years it would be normal for the subsidy figure to be higher than cash requirements. There are other reasons why this should be so. There are some items included in the subsidy calculations which do not affect the cash figure because they are notional, that is, not settled in cash. Examples are the inclusion of the notional interest on Exchequer advances to finance the operations of the Department, amounting this year, as it happens, to £11.6 million, and the services provided by other Departments without cash payment, for example, rent, stationery, telephone and postal services, which amount this year to £5.3 million.
Finally there are five subsidies, those for the attested herds scheme, fertilisers, white fish and calves, and the ploughing grants, which are included in the food subsidies although the payments under them are made by the agricultural Departments and shown on their Votes, swelling their cash requirements and not those of the Ministry of Food.
1175 It would be improper in this debate on a Supplementary Estimate for cash requirements to get involved in a discussion on the future of consumer food subsidies. There is nothing in this Supplementary Estimate which can be construed as implying future changes in retail prices, whether upwards or down wards, and anything I said on that subject would be irrelevant to the question of Supply, which is the one before the Committee.
I should like to make it clear that this Estimate of the cash required by the Ministry to finance its operations is not and cannot of its nature be a trading account. The trading accounts for the Ministry will be published in due course after the close of the trading year in accordance with the best commercial practice. No trading undertaking would dream of publishing trading estimates before the trading year had opened, or even in the course of the year, since to do so would obviously prejudice its trading operations. The same considerations apply to the Ministry of Food as to a trading undertaking.
I readily admit that this is a very complicated subject, and I am sure that nobody in the Committee will disagree with me, for there are very great difficulties in estimating cash requirements for a trading organisation with a turnover of well over £1,600 million per annum. I have done my best to explain the various items, and to make them as simple as I possibly can to the Committee. I hope I have succeeded, and I ask the Committee to approve the Supplementary Estimate.
§ 4 15 p.m.
§ Mr. Maurice Webb (Bradford, Central)
The Minister has had a very difficult job to do. I compliment him, before I come to the critical things I have to say about what he said, on the dexterity with which he made the most of a very bad case. Because it is a case which really is indefensible. We on these benches have always known the difficulties of estimating in advance the activities of a trading Department, and I very well recollect, when I held the office that the right hon. and gallant Gentleman now holds, being charged with all sorts of crimes because—compared with the figures the right hon. and gallant Gentleman has now presented to the Committee—of quite 1176 minor inaccuracies in the Estimates. We recognise those difficulties, and we have never made a lot about that, but here is something very serious.
A Supplementary Estimate that is more than the original Estimate for the Department is a very rare event and it is something to which the Committee must look with very great concern, because we are dealing with the taxpayers' money. A sum of £127 million compared with an original Estimate of £109 million is a change which, I think, calls for a most searching examination. I remember the fuss there was when the party opposite took office about their discovery that we were spending on subsidies £20 million a year more than the ceiling that had been fixed. What a fuss there was about that.
The Parliamentary Secretary to the Ministry, who is not here, kept trotting it out with all the horror of one who, in his medical capacity, had discovered an outbreak of smallpox and continued to do it in every debate we had about food. But £20 million is chicken feed compared with what we are facing today, this £127 million extra money asked for in early December, long before the end of the financial year.
It is not the first Supplementary Estimate. Every Government had to bring in Supplementary Estimates, but this was a Government who said they would cut down taxation. This was a Government who said that they would make it possible, through budgetary action, for Income Tax and all the other taxes to be reduced, so we have to consider this £127 million against the background of the assurances and promises and claims that were made by this Government.
Dr. Edith Summer skill (Fulham, West)
Of so-called business men.
§ Mr. Webb
Yes. It is not working out as they said. It is working out as we said.
In earlier debates we have had on food questions, when we complained about the way in which the Minister was just dismantling his organisation recklessly, without any regard at all to the obligations the Government had to support the prices of the farmers, and all the rest of it, our arguments were dismissed. However, it is working out exactly as we said. We cannot provide producer support and also save money. That is precisely what we 1177 said at that time, and this bill is the evidence of it—this bill of £127 million, which has to be paid by the public of this country. I hope the public will take notice of it.
This Estimate makes nonsense of the Budget, and much more nonsense will be made of it when the effects of the meat scheme are felt. This £127 million is only the beginning of the price we shall have to pay for the ramshackle and reckless way in which our economic and financial affairs are now being administered. When the meat scheme comes along and when the price has to be paid to the farmers which they are demanding—and which they hope to get, according to the vague assurances which they have to accept—there will be an even worse bill to pay than the one which we are facing today.
But my real condemnation of this Supplementary Estimate is based on this ground: that the money is going to the wrong people. The case against the subsidies used to be based on the allegation that the rich and well-to-do got them. That was what was argued. I have taken part in many debates in which it was argued that a food subsidy was a bad thing because the rich were the people who got it although they did not need it. It was described as a bad instrument of economic organisation.
The truth is that the rich and well-to-do are getting this £127 million. When the people in what the economists call the lower income brackets—I call them the poor people, the ordinary folk, who have to struggle to make ends meet every week—are not taking up their rations according to the figures given by the Minister himself, then it is quite clear that the subsidy is going into the pockets of the well-to-do and the rich. They are the only people who are getting it.
§ Mr. Webb
The hon. Member should come to talk to the old age pensioners of Central Bradford and find out what they have to say about things of this sort.
The point is that the Government's economic policy has not added up; it has not made sense and cannot make sense. 1178 We cannot save money by cutting subsidies and handing the food trade over to the free working of the private market—and the Minister has admitted this, for there were various phrases in his speech which were a confession of the uncertainty of the private market and private purchase—and yet, at the same time, maintain the farmers' subsidies and the guarantees which the Government are committed to give to them. It just cannot be done. It does not make sense, and the proof of that is this Supplementary Estimate for £127 million.
I want to raise one or two detailed points. First of all, not enough information has been given. The Minister gave more information than had previously been made available, but certainly not enough has been given yet to justify the Committee in passing a Supplementary Estimate of such unprecedented figures. I hope that the Financial Secretary to the Treasury will give a little more information which will help us to form a more accurate judgment on this matter than we are able to form at the moment.
Among the detailed points which I wish to raise is that of Cuban sugar. I wonder whether the Minister has read of the anxiety expressed in the newspapers in the Caribbean areas about the effect on sugar growing there of his purchase of sugar from Cuba.
I am not complaining about that purchase, because it has helped us to get rid of sugar rationing, and we on these benches are not in favour of rationing for the sake of rationing.
§ Mr. Webb
Points rationing, the tea market and all the rest of it. I could give a long list of things, but I do not want to be diverted into that argument, because it is not relevant to the point I want to make.
Is the Minister, or are the Government as a whole, giving any consideration to the effect of this purchase from Cuba on the sugar producers in our own Empire? 1179 Serious anxiety has been expressed by the people there. Those in the trade, who know all about it, believe that the sugar could have been provided by them and ought to have been bought from them and that a very grave mistake has been made by the Government in buying sugar from Cuba. That is the kind of detailed point on which we should like more information than we have been given so far.
My general complaint is that the Government are, as I have said, doing something which does not make sense. They cannot keep the producer of food in this country underpinned and supported by public money and yet save money. That point has been made over and over again from these benches, and this Supplementary Estimate is the most graphic evidence we can have of how fatuous is the view that it is possible to do both things at once.
The trouble is that the public pay both ways. The poor old public, the housewife and the husband who has to give her the money at the week-end to pay the grocery bills, pay both ways; they have not only to pay much more for the food they are getting but they have now to pay much more in taxation, because this Supplementary Estimate has blown the prospects of a decrease in taxation to smithereens. There is no possible chance of the next Budget bringing down taxation. The public have to pay by increased prices and by increased taxes.
In my view, this Estimate is a glaring example of muddle. I do not like to use words recklessly. When I was a Minister I always felt rather resentful of my opponents using words recklessly about my policy and I was always grateful when they used words usefully, even though critically, and tried to say things to me which I thought were helpful. Often I was helped by criticism.
I say, quite honestly and sincerely, that this Supplementary Estimate, which is the largest Supplementary Estimate which has been brought in in relation to the general costs of this Department since the end of the war, is a glaring example of indefensible muddle, and it will be a happy day for Britain when those who are responsible for it are removed from the benches on which they sit.
§ 4.30 p.m.
§ Mr. Denys Bullard (Norfolk, South-West)
I think that all of us on this side of the Committee are, naturally, very concerned about the size of this Supplementary Estimate, and that those of us who represent rural constituencies, and who are, therefore, perhaps more concerned with the producing side, are no less concerned than those who represent town constituencies. I wish to confine my remarks primarily to the items under subhead H—trading services—and particularly to the item concerned with cereals, including cereal feeding stuffs.
I should like to say a word on the item relating to potatoes, which shows an increase of about £5 million on the estimate under that heading. We must always be prepared to regard the potato, whether in war or in peace, as a necessary insurance to our food supplies, and be prepared, in the case of that very high cost crop, to meet the farmer, if nature provides a surplus for us, and I do not think that this figure is unreasonable in that very important respect.
To pass on to cereals and cereal feeding stuffs, which is the single biggest item in the detailed statement given on page 3 of the Supplementary Estimate, this big figure, combined with the difficulty of moving the home crop of cereals this year and with the heavy importation of cereals, especially barley, is causing a good deal of apprehension and misgiving among growers, and has given rise, for instance, to the recent correspondence on this matter in "The Times." We ought to examine the implication of this figure very carefully.
I should like to ask a question about this figure, because I imagine that it includes chiefly wheat and barley. I should like to have information of the respective figures for these two crops. I am mystified about the wheat figure. We heard the figure for the bread subsidies, but I am not able to discover what is going on with regard to the trade in wheat. The Minister is, presumably, still purchasing wheat because the farmers are able to obtain the guaranteed price for what they sell, but presumably the millers are obtaining their wheat both from abroad and from the home supply much cheaper than they were. I should have thought that that would have been reflected, before long, in a lower price for 1181 what the millers produce, namely, the flour and ultimately the bread.
The right hon. Gentleman the Member for Bradford, Central (Mr. Webb) said that the consumer was paying both ways. I would have thought that in this matter, and also in regard to barley, the consumer would eventually, and, we hope, before not too long, have felt the opposite effect of this increased payment. If that is not so, there must be something very wrong with the system because, clearly, we are getting the advantage of cheaper supplies from abroad, which should be reflected in decreased prices to the consumer.
In the case of barley, we have been confronted this year with great difficulty in getting the crop moved, despite the fact that the Ministry of Food has, quite rightly in my opinion, been purchasing the home crop at the guaranteed price of 25s. per cwt. I believe that that is absolutely the right policy and, in fact, inevitable if the guarantees are to be fulfilled. The question we have to ask ourselves is: could this object have been achieved with less expenditure to the Exchequer, which, again, was a point raised by the right hon. Gentleman?
It could have been done, I think, with less expense to the Exchequer if the Ministry of Food, when it was buying barley abroad, had bought less in June and July, that is, immediately before decontrol took place on 1st August. Actually, the buying, particularly of Canadian barley, was heavy. In defence of my right hon. Friend's action I must say that he was under very heavy pressure to make these purchases. I well remember the debate which we had in this House in February, which was opened, I think, by the right hon. Gentleman the Member for Greenock (Mr. McNeil), in which the burden of the whole debate was that the decontrol of feeding stuffs would cause a rapid rise in prices which would be reflected in very heavy costs to the farming community, and which would dislocate the whole programme of increased livestock production.
I remember especially a speech by the hon. Member for Chorley (Mr. Kenyon), to whom we always listen on agricultural matters with very great respect because he speaks from knowledge, particularly of hill farming, and he was considerably 1182 worried in case no feeding stuffs at all reached his part of the world on account of the great shortage which was likely to come upon us. I believe, also, that the National Farmers' Union made strong representations to the Government. I do not know in what terms, but I know that after the White Paper on the Decontrol of Cereals and Feeding stuffs was issued on 22nd January, they pointed out the greatly increased cost which was liable to come on the farmer, particularly the small farmer using these feedingstuffs, and asked the Government to do whatever they could about it. I think that the Minister of Food was under very considerable pressure in this respect. As he said today, this was a matter of insurance, and it may have been, and probably was, a case of over-insurance.
I should like to look at the deficiency on the barley transactions, and ask whether this figure could have been less if the Ministry had bought less of the home crop because it is frequently argued that the reason why this figure is as big as it is is that, first, the Ministry and, later, the importers bought largely increased supplies from abroad against which the Ministry had to sell its own buying, or is about to sell its own buying, with the result that the merchants have been stocked up with supplies from abroad and the Ministry, therefore, has had to handle largely increased quantities over and above what it otherwise would have done.
I have always been a little apprehensive, perhaps more than a little, about these extra imports. The White Paper issued on the Decontrol of Cereals and Feedingstuffs said:The rate of imports authorised after decontrol will, in any case, be sufficient to maintain the present supply of feedingstuffs.It went on to say:For this reason, during the first year after the end of feedingstuffs' rationing, the Government will be prepared, in the event of any critical shortage of supplies leading to a serious upward tendency of prices, to consider authorising such additional imports as may be needed to maintain a livestock population which is expanding in conformity with the White Paper programme.We cannot help admitting that the matter has gone rather further than that.
Although I have certainly no quarrel with the increased Canadian trade—in so far as we have done more trade in the 1183 barley business with Canada rather than with Russia, that seems to me to be very good indeed and I am glad to see it—there is probably ground for supposing that the figure in the Estimate is higher as a result of the increased imports. In addition, the Ministry might have made clearer to the trade its intentions with regard to the barley that it bought. I know now that it is to release it in accordance with its programme, but importers probably would have bought less from abroad had they known the ultimate intention of the Ministry in regard to the disposal of the barky.
Despite these criticisms, which may be because it is extremely difficult to forecast what will happen in a trade like the grain trade, I still believe that the broad principles on which, my right hon. and gallant Friend has acted have been right. It is far better that the cost obligations to the farmers under the 1947 Agriculture Act should be made plain than be hushed up and passed through in other ways.
We have to face this item, and I believe that it is easily possible to justify it from the results which eventually will accrue, not only to farming but to the consumer. As a result of these increased supplies of feedingstuffs at cheaper prices, it will be possible, in the long run, for the consumer to have cheaper supplies of pork and other meat and all the things to which the feedingstuffs eventually will lead. The picture, therefore, is not half as dark as hon. and right hon. Members on the other side wish to paint it, and I am sure that the Committee will approve this Supplementary Estimate.
§ 4.42 p.m.
§ Mr. Norman Dodds (Dartford)
The hon. Member for Norfolk, South-West (Mr. Bullard) wound up his remarks by speaking about painting. Listening to his speech on the two points that he raised, I thought he was himself an artist of no mean attainment. While the Minister dealt with this most unusual Supplementary Estimate by skating over the surface and getting away with it quite easily, his hon. Friend raised a number of points.
The hon. Member said that he thought the figure of £5 million for potatoes was not too bad a figure in view of the fact that it was essential that in peace as well 1184 as in war we should have big stocks of potatoes. I remind the hon. Member, however, that it has been obvious for some time that the consumption of potatoes had been falling. Despite this, by agreement with the National Farmers' Union there has been an increase of 5s. a ton for potatoes, which seems to have resulted in many potatoes being produced on soil that was unsuitable for them, and at a time when what seemed to be needed was a policy of fewer, and not more, potatoes.
My right hon. Friend the Member for Bradford, Central (Mr. Webb) painted a very gloomy picture of the future.
§ Mr. Nabarro
Is not the hon. Member pointing to the fact that people prefer to eat more red meat than the large quantities of potatoes with which his party, when in office, supplied them?
§ Mr. Dodds
That may be so, but I was discussing a point raised by the hon. Member for Norfolk, South-West. The expert in carpets seems to have ignored that I was dealing with a specific point raised by one of his hon. Friends. No doubt, the Chair will give the hon. Member a chance to speak later. I noticed his disappointment when he was not selected earlier.
My right hon. Friend the Member for Bradford, Central said that bad as the picture is, it is likely to become worse. Potatoes are one of the commodities that might, lead to that result, because the potatoes have to be bought, then dyed blue, and then sold back to the farmers as food for cattle.
§ Mr. Bullard
Is the hon. Member suggesting that the guaranteed price for potatoes, which must involve buying up any remaining surplus, should be discontinued?
§ Mr. Dodds
Certainly not. But I queried the point that at a time when fewer potatoes were needed, the price had been increased by 5s. a ton, which in itself must make the figures higher than otherwise would have been the case. The reflection of all this is a bad deal for the consumer, from whose viewpoint I am speaking.
I was surprised that the hon. Member should express concern at the barley that was coming in increased quantities, but did not worry as long as it came from 1185 Canada. The figures are very revealing, and I am wondering whether hon. Members are in possession of them. In the first nine months of 1952, the importation of Canadian barley amounted to 559,000 cwt. In the same period in 1953, however, the figure was 8,861,000 cwt, or 16 times as much as last year. These greatly increased quantities with which we are now faced arise from the policy of the Government in trying to ride almost three horses at one time and in dealing with a policy in contradictory terms.
§ Mr. Bullard
Will the hon. Member give the total figure for the barley imports? While the Canadian figure has increased—I do not know whether it is 16 times higher, but I agree it is considerably more—he should bear in mind that the imports from other countries have fallen, so that the total is not of the order that his figures would represent.
§ Mr. Dodds
Barley has been imported at an alarming figure. This is part of the policy to leave the buying of food to private interests who are concerned with private profit, and is largely why we are faced with this problem today.
In his performance at the Box, the Minister did his best to give a lot of information, but as representative of a businessmen's Government, it was a deplorable confession of mistakes. His picture shows that he has indulged in incredible guesswork, when policies which he has instituted are responsible for his coming here today to say that a colossal sum of public money is required for this Supplementary Estimate.
I ask the Financial Secretary to the Treasury, who is to reply, to say whether it is not possible for bacon to be de-rationed in view of the fact that stocks are high and the freeing of this commodity would be likely to lead to cheaper prices for the consumer. The Government are a party who believe in freedom and in getting rid of controls, and here they have the opportunity of giving something that the public need and which, in the normal flow of free competition, would mean cheaper prices for the consumer.
In dealing with pork, the Minister explained that it came on to the market in big quantities in the summer months 1186 and at a time when there was consumer resistance to pork; but is it not the fact that one of the major reasons for this is that production of the wrong type of pork was encouraged by the flat price that was given? Consequently, much of the pork was too fat, and a good deal of it could not be sold unless great slabs of fat were removed before it was sold. I ask this businessmen's Government to take a greater interest in the types of food that are being given guaranteed prices, and to bear in mind what the public will buy.
I cannot help thinking that my hon. Friend the Member for Wednesbury (Mr. S. N. Evans) is on a very good thing when he asks for a thorough inquiry into the business of the procurement of food, because this Supplementary Estimate clearly indicates that the consumers' interest is not being studied, and certainly that is the case when it comes to the prices that the consumer has to pay. As I have already explained, I am speaking this afternoon from the consumers' angle, and also as a Co-operative Member of Parliament. The Co-operative movement appreciates the great value of guaranteed prices and assured markets, but the movement hopes the Minister and the Government understand that such schemes should not be a cover for gross inefficiency which will force the consumers to pay unreasonable prices.
I should like, in dealing with this Supplementary Estimate to make the point that there is the possibility that these prices may rise even higher. It is one thing for the farmers and the Government to decide in February what the prices are to be for certain foods, but it is quite another thing to ensure that the consumers will pay those prices and consume the quantities of foodstuffs produced. The policy that is being followed by this Government results in prices being too high for many items, so that people cannot purchase the goods which they so badly want. Therefore, there is a need, in view of the shock of this Supplementary Estimate, to have a thorough inquiry into the whole business of the procurement of food.
It cannot be over-emphasised that some of the guaranteed prices are too high. Some of them are too high in the light of world prices. Some of them are too high because in some cases British farmers are inefficient and are being 1187 cushioned in one way or another. The result is that the consumer has to pay the higher prices or do without. If these prices are not looked at and controlled, then it is inevitable that they will reduce the standard of living for over 50 million people in this country.
§ 4.54 p.m.
§ Captain J. A. L. Duncan (South Angus)
The hon. Member for Dartford (Mr. Dodds) seems to be an ally of the hon. Gentleman the Member for Wednesbury (Mr. S. N. Evans).
§ Captain Duncan
I would ask him in his co-operative capacity to visit the Co operative society's farms before he makes any more speeches like the one to which we have just listened. The reason why prices have had to go up in the last few years is because of increased costs. If we can only get the costs down no one will be more pleased to accept lower prices than the farmers of this country. I will welcome the support of the hon. Member for Dartford in any attempt to stabilise or reduce farming costs after he has informed himself about the Co-operative society's farms.
The hon. Gentleman also had something to say about potatoes. With some of what he said I agree, but I should like him to look up the figures for the acreage under potatoes, because that will show that the acreage has gone down in the last two or three years, and for the first time this year is below one million acres. So the popular tendency in consumption has been matched by the acreage planted.
What one cannot allow for, as has already been said by one of my hon. Friends, is the yield from a given acreage. In some areas it goes up, in some it goes down. My right hon. and gallant Friend the Minister told us there has been a record crop this year, but he was speaking of England. Actually, in my part of Scotland, namely, the North-East of Scotland, there has not been a record crop. The yield there has been about 2 tons to the acre down, which shows how difficult it is, when talking about farming, to generalise on anything.
§ Mr. F. Beswick (Uxbridge)
The hon. Gentleman has just given us a warning about generalising in these matters, but 1188 he did make a general statement himself about the increase in prices arising from an increase in costs. He did not give us any particular example, but I should like to mention the increase in the price of eggs. What particular increase in the costs of production are responsible for the price of eggs going up?
§ Captain Duncan
I am not an egg farmer and I do not know the details, but I should like to give one figure. Increases in farm wages have added £13 million to production costs generally and some of it must apply to the egg farmer.
§ Captain Duncan
My hon. Friend evidently knows more about eggs than I do.
The right hon. Gentleman the Member for Bradford, Central (Mr. Webb) made a most extraordinary speech for an ex-Minister of Food, and, in particular, his ignorance of budgeting seems to me to be colossal.
§ Captain Duncan
The right hon. Gentleman said there was no hope for the taxpayers next year because of the Supplementary Estimate this year. Could anything be more illogical and foolish for the Supplementary Estimate we are discussing today will be added to the Budget figures this year and will have no effect at all on the Budget figures next year.
Then he said that the rich are getting away with £126 million, and my hon. Friend the Member for Kidderminster (Mr. Nabarro) was issued with a challenge to go to Central Bradford and talk to the old age pensioners. If I were not a Scotsman, I would be tempted to go to Central Bradford and show up the hollowness of the right hon. Gentleman's claim that all this £127 million is going to the rich.
How does this £127 million work out? As I understand, £52 million represents stock and that stock will be liquidated over this year and next. Therefore, instead of increasing the Budget next year, there will be a credit from it in the Budget if we can sell the £52 million worth of stock for £52 million or more. The rich do not get that. That goes into next year's Budget, and we hope as a 1189 result all will share in the benefits of a reduction of taxation to the tune of £50 million.
The next slice of this £127 million will go to producers in producer subsidies and grants. I do not think it is contested on either side of the Committee that these producer grants should not be given. Some people object to one of them and other people object to another, but they are accepted in their general application. The object of these subsidies is to ensure a steady and rising increase of agricultural production in the best interests of this nation, and to enable us to play our part in our balance of payments difficulties. I do not think we need argue about that.
The third slice of this £127 million consists, broadly, of consumer subsidies, for instance, the 1d. a pint on milk. That has been generally accepted and put into effect both by this Government and the preceding one. This subsidy has been reduced by this Government, but still appears in these figures. So it is no use the right hon. Gentleman saying that the rich are getting it all, because it represents a saving on next year's Budget through the disposal of Ministry stocks, and the producer and consumer subsidies.
There is one other aspect of this matter, the increase of about £56 million on cereals. The sooner we can alter this situation the better. When the Estimates were framed, the world price of cereals was higher than the price paid to the British farmer. Now we have the situation that the world price has, for the first time since the war, gone below the guaranteed minimum price paid to the British farmer. We still have the guarantee under the Agriculture Act, 1947, which was produced by the party opposite, and this Government have pledged themselves to continue that policy, so the guaranteed minimum price remains.
What is happening today? My hon. Friend the Member for Norfolk, South-West (Mr. Bullard) mentioned wheat and rye. I want to talk about oats. At present, there is only one buyer for millable oats, the Minister. The guaranteed minimum price under the Act, as fixed at the February Price Review, is 66s. 6d. a quarter. No miller will give that price today because he can buy imported oats on the free market for dollars or sterling 1190 or other foreign currency at a lower price. Millers have all they want, they know that the Ministry are buying because they must, and they are waiting for the Ministry to unload. That seems to me to be an astonishing situation and explains the increase of £20 million.
Last year I do not suppose that a penny was paid for the guaranteed price because that was obtainable without any subsidy. There is another £20 million for the increase in stocks. I hope those figures are adequate, but if this is going on in wheat and barley as well as in oats, with the Minister being the only buyer, unless he can realise some of these stocks at a reasonable price this year he may find himself in difficulty in meeting the estimate of £55 million extra for the cereal crops.
I am only too happy that my right hon. and gallant Friend and the Government have done away with the bulk purchase and Government trading system of cereal buying, because if this is what it leads to when world prices are below the guaranteed prices the charges in future years on the taxpayer by a Government which goes in for this kind of system would be phenomenal. I warn hon. Gentlemen opposite, particularly the policy makers on the Front Bench, that a return to bulk purchase in cereals when world prices are below the guaranteed price—
§ Captain Duncan
There must be an Election within two or three years and, being a friendly sort of chap, I am giving hon. Gentlemen opposite a warning as to what will happen if there is bulk buying and Government trading in grain when the world price is below the guaranteed price. The sooner we get away from that system the better. If there is one thing I am glad of above all it is that nearly all these figures are non-recurring. We shall not have this vast figure, or the details of it, to worry about next year. We shall be back into the private purchase of grain, cereals, meat, sugar and all the other agricultural articles mentioned under subhead H. It will not only save the taxpayer money and not increase the cost of food, but will be a benefit to the people.
§ 5.6 p.m.
§ Mrs. Barbara Castle (Blackburn, East)
We have had a most remarkable speech from the hon. and gallant Member for South Angus (Captain Duncan). What the hon. and gallant Gentleman has been treating us to in the last 10 minutes has been a most effective exposure of the confusion into which the policy of this Government have got us, but he has drawn from it an inverted conclusion.
As I listened to the hon. and gallant Gentleman it seemed to me that he was demonstrating, with all the expertise of the practical man-in-the-know, that we cannot hope to combine a system of guaranteed prices to British farmers with an attempt to restore a free market in grain. Indeed, I was hoping modestly to point out that little dilemma to the House myself, and I was grateful to the hon. and gallant Gentleman for doing it for me so effectively, because it has saved me a good deal of time and effort.
But that the hon. and gallant Member should then go on to draw the opposite conclusion is most remarkable. What he has proved to us this afternoon is that the reason why we have in this country at the moment such high prices for home-grown food, such high costs in British agriculture, and such heavy subsidies and costs as are represented in this Estimate, is that instead of getting—I am sorry. Sir Austin, but I cannot continue.
§ 5.8 p.m.
§ Mr. Gerald Nabarro (Kidderminster)
I regret that the hon. Lady the Member for Blackburn, East (Mrs. Castle) has not been able to complete her argument and I hope that she will have an opportunity later in our deliberations of resuming what would undoubtedly have been a most interesting exposition of the policy of the Labour Party for agriculture.
If one thing has become more certain than another in the passage of the last few months it is that the erstwhile "black sheep" of Labour agricultural policy, represented by the hon. Gentleman the Member for Wednesbury (Mr. S. N. Evans), has now secured so many adherents to his party that he now has a majority support. For the right hon. Gentleman the Member for Bradford, Central (Mr. Webb) and many other hon. Gentlemen opposite evidently take the 1192 view that all farm prices are too high and that the profitability of farming has risen to a much too high level.
The hon. Lady who was, unfortunately, unable to continue her speech, was evidently developing that theme. [An Hon. Member: "That is quite a wrong conclusion."] This is a most remarkable transformation and I hope it continues until the next Election, for the country will then be able to realise exactly where the Socialist Party leads us, and that is really towards the destruction of British agriculture. [Hon. Members: "Nonsense."] Oh, yes, the destruction of British agriculture by letting in floods of foreign imports.
§ Mr. Nabarro
And by ensuring that farmers' profits are cut down to such an extent that they are unable to provide for legitimate and desirable replacement of plant, equipment and buildings and the expansion of their enterprises. But if I continued that argument it might lead me rather wide of the food Supplementary Estimate which is before the House.
§ Mr. Frederick Peart (Workington)
The hon. Member has made a very strong accusation. After all, it was the Labour Government that introduced the 1947 Act and gave guaranteed prices in peace-time for the first time, and the policy of cheap food was a policy which prevailed in the inter-war period when the hon. Member's party was in power.
§ Mr. Nabarro
The hon. Member is clearly neglecting the change of emphasis which has taken place, as is shown by the fact that the hon. Member for Wednesbury is now in the ascendant and the Right Wing Socialist opinion, represented by the hon. Member for Workington (Mr. Peart), is in the minority.
§ Mr. Nabarro
My right hon. Friend referred to the fact that there are still considerable trading activities in his Ministry represented under the subhead H. Certainly, they are considerable, but they show a marked diminution compared with the extent and scope of State trading activities which we discussed on 18th March last when the Ministry of 1193 Food Estimates were last debated. The end of cereal rationing, the end of the rationing of tea, sweets, eggs and sugar and so on, have all had a profound effect upon the scale of State trading operations and that diminution is very warmly welcomed on this side of the Committee.
I believe that within the passage of 12 to 18 months, given pursuance of the policy which we have followed during the last two years, there will be two important results most vitally affecting the consuming public. First, food will be abundantly available for all and at much more reasonable prices than have prevailed in the last few years. Secondly, we shall be rid of the very heavy burden of consumer food subsidies which successive Ministers of Food have been obliged to place before this House since 1945.
When I talk of the elimination of these consumer food subsidies I do not in any way confuse them with the very legitimate desire on this side of the Committee to continue the generous measure of agricultural production subsidies to furnish increasing incentives for a rising scale of home food production. I am sorry that the right hon. Gentleman the Member for Bradford, Central (Mr. Webb) has momentarily left the Chamber. I was fearing that he had become a party casualty after his salutary experience at Leeds, which was relayed on television. He was missing from the fifth and last day of the debate on the Address in reply to the Gracious Speech. The right hon. Lady the Member for Fulham, West (Dr. Summerskill) deputised for him and even the right hon. Gentleman the Member for Easington (Mr. Shinwell) had to be called in to wind up that debate on the price of food.
We welcome the return of the right hon. Gentleman the Member for Bradford, Central in spite of his nauseating hypocrisy today when he tried to tell us that it was the policy of the Socialist Party when in office to abolish food rationing. It was nothing of the sort. In six years when they ruled this country they managed to abolish one item, other than the points rationing scheme, and that one item was sweets, and, of course, a few weeks later they put sweets back on the ration again. The fact is that the policy of the Socialist Party was to continue rationing forever.
§ Mr. Nabarro
The policy of the Socialist Party was to continue food rationing forever, which would mean a bigger and bigger burden on the taxpayers' shoulders and a larger and larger Supplementary Estimate presented to the House of Commons.
I turn now to one or two items in the Estimate. [Hon. Members: "Hear, hear."] What I have been saying was a general exposition of the problem and I am now concerning myself with the individuals items. As former speakers have already pointed out, a very large item in this Estimate is on account of sugar. The original Estimate was a credit of £900,000. The revised Estimate shows a debit of £36,600,000. The amount of the increase, therefore, is exactly £37,500,000. This is the outcome of the exceptional and non-recurring purchase of dollar sugar, mostly from Cuba. That was announced by the Chancellor of the Exchequer when he presented his Budget last April.
I congratulate my hon. Friend the Financial Secretary to the Treasury on the most perfect poker face which he was able to present in the House when he replied to me on 6th February last and I appealed to him to do just that and make an emergency non-recurring purchase of sugar, if necessary from dollar areas, because we were purchasing at that time, and we have been continuing to purchase and we shall continue to purchase, the maximum available supplies of sugar from the sterling area under the Commonwealth Sugar Agreement, 1951.
The right hon. Gentleman the Member for Bradford, Central endeavoured to draw a red herring by suggesting that there is disquiet in the Caribbean arising out of this exceptional and non-recurring purchase of dollar sugar. Nothing is further from the truth. There are a few agitators, generally of Communist origin in the Caribbean, as elsewhere, who would have people believe that Britain is walking out of the Commonwealth Sugar Agreement and not purchasing Jamaican, British Guianan and other West Indian supplies. There is no truth whatsoever in that. All the figures and facts which are available show that we have been purchasing under the Commonwealth Sugar Agreement every ton of sugar that has been made available and produced in the sterling area.
1195 We are, of course, not alone in the Commonwealth Agreement. It is not only a question of Britain. We have a lasting commitment to provide large supplies annually to Canada and large supplies annually to Pakistan. We are under contract to provide for the whole of the British Empire within the Commonwealth Sugar Agreement of 1951. It is, therefore, false, misleading and hypocritical on the part of the right hon. Member for Bradford, Central to introduce this innuendo—for that is what it is—that Britain is contracting out of the Commonwealth Sugar Agreement and not honouring her contractual bond.
§ Mr. Nabarro
On the contrary. The Minister of Food made an exceptional, non-recurring and final purchase of dollar sugar to safeguard against any sudden increased demand for sugar when it was derationed. In fact, the demand for sugar after derationing has not been as great as had been expected and sugar refiners in this country have had excess stocks, but I commend my right hon. Friend not only upon his prudence, but also upon his caution and perspicacity.
§ Mr. Beswick
Now the hon. Member has made matters worse and says that the agreement to purchase the output was exceptional and final.
§ Mr. Nabarro
That is quite untrue. What I said was that there was an exceptional and non-recurring purchase of 1 million tons of dollar sugar in addition to this country having taken the entire available supplies under the Commonwealth Sugar Agreement. I know I shall carry my right hon. and gallant Friend and the Treasury Ministers with me when I say that it is the policy of the Conservative Party to buy in the Empire every ton of sugar that is available before we seek dollar sources of supplies.
I have a particular constituency interest in this, because when hon. Members opposite sat on this side of the House the Worcestershire fruit-grower was in a very parlous condition. [An Hon. Member: "Is the hon. Member one of them?"] I do not grow fruit; I represent the fruit-growers. A large part of the 1196 crop was wasted, because sugar for the housewife was strictly rationed and because the machinations of hon. Members opposite resulted in an artificial shortage of tinplate.
§ Mr. Nabarro
It is no good the right hon. Member muttering and shaking his head as he was principally responsible at the Treasury. Today, as a result of the enlightened policy of the present Financial Secretary to the Treasury, we have abundant tinplate, and abundant sugar. The result is that the Worcestershire fruit-grower is selling his crop again.
§ Mr. Nabarro
I have given way twice to the hon. Member and I hope that he will be able to speak in a few moments, because I shall want to interrupt him quite a lot.
§ Mr. Beswick
I am interested in this argument. The hon. Member is now complimenting the nationalised steel industry on providing the tinplate which we wanted.
§ Mr. Nabarro
That is a specious argument. What has occurred is that, as a result of the promise of denationalisation, there has been an upsurge of productive effort and supplies of tinplate have more readily become available for the canners and processors.
I wish to speak for a few moments on the item for eggs shown in the Supplementary Estimate—a subject of which my hon. and gallant Friend the Member for Angus, South (Captain Duncan) seemed to consider I have special knowledge. In the Supplementary Estimate for 1953–54 the figures show that the original amount in respect of eggs and egg products was a credit of £1,500,000. The increased, or revised, Estimate is a debit of £3,600,000 and, as the first figure was a credit and the second figure a debit, there is, in fact, an increase in the sum to be provided of £5,100,000.
Before rising today I took the precaution of turning to the last Supplementary Estimate for the Ministry of Food presented on 18th March, in respect of the financial year 1952–53. I found that the figures for eggs were then much bigger. 1197 Then they showed that the revised amount required was £15,500,000. In other words, one of the results—one of the salutary results—of the policy of my right hon. and gallant Friend has been to reduce the commitments in respect of consumer subsidy for shell eggs from £15,500,000 to £3,600,000.
§ Mr. Nabarro
I shall deal with the price in a moment. That is a saving of no less than £11,900,000. I said "one salutary result"—there are many more. Not only has the burden on the taxpayer been reduced in respect of subsidy, but, so far, the elimination of controls on shell eggs has saved no less than £900,000 in a full year in respect of administrative costs, a large part of which is reflected in the extraordinary saving in Ministry of Food salaries, shown in this year's Estimates, of £1,032,500, under item A. Not only have we a large economy in respect of subsidy but also an economy of £900,000 in a full year in respect of administrative costs and, thirdly, the consumer is getting 6 per cent. to 7 per cent. more eggs and getting them through legitimate channels—that is, over the shop counter instead of from under the shop counter.
§ Mr. Nabarro
I will give way in a moment. It is no good the hon. Member for Dunbartonshire, East (Mr. Bence) saying "Nonsense." What my right hon. and gallant Friend has done is to eliminate the black market in eggs.
When, on one occasion last year, I pressed him to reveal what percentage of the total output of eggs in this country went through the packing stations and from there to holders of ration books, he was compelled to admit that about 50 per cent. of the eggs produced in this country never went on to the ration books. Fifty per cent. fell by the wayside;50 per cent. was the extent of the black market. That is why the policy of the right hon. Member for Bradford, Central and his hon. Friend the Member for Sunderland, North (Mr. Willey) resulted in one miserable, stale, shell egg per ration book, per consumer, per week.
§ Mr. Willey
Would the hon. Member compare like with like? Surely he appre- 1198 ciates that egg production varies according to climate from year to year and a proper comparison is with 1950. Will he make the comparison with 1950? As he is now talking of fresh eggs, will he explain why the Ministry prevent the retailer getting them to the consumer quite fresh and cheap?
§ Mr. Nabarro
The hon. Member shows himself extremely ill-informed. We should not be concerned with the exact process of distribution so long as ultimately the consumer gets fresh eggs readily, and at a reasonable price. Under the rationing system it was one egg per person, per week. Today, eggs are relatively abundant. Hon. Members keep taunting me on the question of price, but in my part of the Midlands eggs average 6s. 3d. to 6s. 6d. a dozen. They may be bought readily in the shops and, if one is near a farm, they may be bought at the farm gate.
§ Mr. Nabarro
That might be a good pun in Scotland, but it is not a good pun here.
The fact is that, all political considerations apart, my right hon. and gallant Friend has put a fresh shell egg back on the breakfast table and made it readily available at what is not an excessive price although I am quite prepared to admit that for a short time eggs reached a phenomenally high price. But they never went as high as was predicted in the "Daily Herald," which said that the 1s. egg was on the way.
What did the right hon. Member for Bradford, Central announce as his policy to cure the troubles of egg distribution that were confronting the late Government, and again advocate during the period of office of the present Government? He wrote in "Reynolds Sunday News"—a newspaper amply supported by the hon. Member for Uxbridge (Mr. Beswick)—that one of the things we ought to have done was to retain the old rationing system for eggs and make it much more stringent. Instead of allowing any producer who had fewer than 25 hens to sell eggs off the ration, that provision should be reduced to 12 and we should allow any person with fewer than 12 hens to sell eggs off the ration.
In other words, there is precisely the contra-distinction between the policy of 1199 the right hon. Gentleman the Member for Bradford, Central and that of my right hon. and gallant Friend. The right hon. Gentleman the Member for Bradford, Central believed in more and more controls and decreasing food supplies. My right hon. and gallant Friend has gone in for a policy of freedom. The result has been, of course, an abundant supply of all foodstuffs, and without any very substantial increase in price—
§ Mr. Nabarro
I agree with the hon. Gentleman the Member for Uxbridge, there has been a great increase in con sumption—46 per cent. more meat this year; 38 per cent. more bacon this year—
§ Mr. Nabarro
"What about milk?" says the hon. Gentleman. There has been a very slight decline in milk, which is referred to in the Supplementary Estimate. It is a very slight reduction. And why? Simply because the consuming public can today buy the food on which traditionally the British people have been bred and reared—that is beef, bacon, eggs, good body and sinew building food—instead of liquid refreshments.
Let me turn for a moment to the question of bacon and ham, which is shown in the original Estimate as £4,500,000. Now, the new Estimate is £9,700,000. The first point I would make in that connection is that during the last 12 months the bacon consumption in this country has risen by 38 per cent., in spite of the fact that the price of bacon on 16th August last was arbitrarily reduced by my right hon. and gallant Friend.
Under the old system of subsidies and the ration book, what happened was that the bigger the consumption of rationed foods the bigger the subsidy burden for the taxpayer to shoulder. It is, therefore, hypocritical for hon. Gentlemen opposite to complain about the increase in the subsidies, and the sum that this Committee is to vote upon under this Supplementary Estimate, when, at the same time, the people are being provided with vastly increased supplies of the food that they most legitimately desire.
1200 Last year, the comparative figures for bacon were much higher. This year, we are asking for an increase from £4,500,000 to £9,700,000. Going back to the Supplementary Estimate for 1952–53, the figure asked for then was £17,100,000. In other words, in regard to bacon alone, we have succeeded in reducing the subsidy liability by an amount in excess of 80 per cent. In addition, we have given the consumer 38 per cent. more bacon, and the price has not rocketed above the level that the great majority of consumers can afford to pay.
Those are salutory achievements. I welcome the fact that on the completion of the second year of a Conservative Government we are now within measurable distance of abolishing the Ministry of Food and ending food rationing. I liked the statement made in the recent White Paper on the future of marketing arrangements—the short, crisp assurance, no "ifs" or "buts," no caveats, nothing of that sort—those few, short, telling words:food rationing will end in 1954.Just as I would have expressed it myself had I written the White Paper. It could not have been a more faithful representation in a few words of everything for which I have been campaigning in the last few years. It is the exact opposite of the Socialist economics of calculated scarcity.
I wish to say a final word about the farmers. A good deal of scorn is poured, politically, by hon. Gentlemen opposite upon Her Majesty's Government's recent statement of policy for the future of farm prices and the methods of implementing the price and market guarantees under Part I of the 1947 Agriculture Act. I advisedly used the word "politically." In fact, there is a good deal of criticism remaining, and I have no doubt a good deal more forthcoming, from the farming industry itself—
§ The Temporary Chairman (Sir Austin Hudson)
I hope the hon. Gentleman will not develop that argument too far, as the question does not arise upon consideration of this Supplementary Estimate.
§ Mr. Nabarro
I am grateful for your guidance, Sir Austin.
I will pass quickly from a general consideration to those items which do arise 1201 under the Supplementary Estimate which are, of course, the five items referred to by my right hon. and gallant Friend for direct agricultural subsidies on page 6, Class VIII, of the Supplementary Estimate.
A large part of this £127 million which we are voting today is the price we are paying to the farming community for guaranteeing their markets under Part I of the 1947 Act. I believe that those subsidies are necessary. I believe that in the passage of time they will prove highly productive. But I wish that a few more members of the farming industry would appreciate the very high cost to the taxpayer which the present subsidy arrangements involve. I wish they would be a little more appreciative of the Conservative Government's efforts, which are genuinely trying to reconcile facts that are not irreconcilable by any means. They are reconcilables, the fact of a free market while still giving the necessary support prices and guarantees to the farmer under Part I of the 1947 Act.
I compliment my right hon. and gallant Friend on the progress of his policy in the last two years. Last year, I told the Parliamentary Secretary that the sooner he cut his throat—metaphorically—the better. Now I tell my right hon. and gallant Friend today that the sooner he cuts his throat—metaphorically—the happier I shall be. The merit of their food policies in the last two years will assure them, not only of esteem and generous support in the country, but also the support of every hon. Member on this side of the Committee. Their policy has been attended at every stage by signal and outstanding success.
§ 5.38 p.m.
§ Mr. Cyril Bence (Dunbartonshire, East)
I was struck by some of the statements of the Minister. He explained that this extraordinary Supplementary Estimate has been brought about by taking action to decontrol. He also pointed out that heavy purchases have been made in order to provide an insurance. When one takes out an insurance policy, for whom does one provide? Who are the beneficiaries? I noticed in one newspaper this week a statement that the futures grain market is to be re-established—
§ Mr. Bence
—and I wondered to what extent heavy purchases by the Ministry 1202 of Food were an insurance to importing merchants because they had not had the benefit of a futures market. Here is the Ministry of Food restoring bulk buying to private interests. Private importers are not in a position to take advantage of the futures market to cover themselves. So this Government of businessmen, acting in the interests of businessmen, cover them by buying excessive quantities of imports to assure regular supplies for the importers and to offset them.
§ Major Lloyd George
That really is not so. I said that it was vital that there should be a complete insurance for the producer of fat stock and so on and for the consumer with regard to bread. If the hon. Gentleman will ask his right hon. Friend the Member for Belper (Mr. G. Brown) to refer him to the speech he made last February, he will find from that speech that the right hon. Gentleman was very much concerned in case there were not sufficient supplies when we de-rationed. That is the purpose of insurance.
§ Mr. Bence
We move on from that. [Hon. Members: "Oh."] I have not finished yet. We move to the hon. and gallant Member for Angus, South (Captain Duncan), who said that importers are importing oats, barley and wheat at prices far lower than those the Ministry is paying to the British farmer. The importers, who have had handed to them a free trade in grain, are importing at lower prices—getting the benefit of lower world prices—whereas the Ministry is buying from the British farmer at higher prices, and the taxpayer is paying for that.
It would have been far better if the Government had acted in the interests of the whole community. They should have imported at the lower prices and sold at the prices they were obliged to pay the British farmer. That would have avoided a great deal of the Supplementary Estimate. It would have shown a profit to the Treasury.
§ Captain Duncan
The British farmer would still get his guaranteed minimum price, higher than the world price, and the taxpayer would still have to pay.
§ Mr. Bence
The British Government would have been buying at the world price, which is lower than the guaranteed minimum price, and then selling at the 1203 minimum price to British users of grain. That is fair. Now the user of imported grain is buying at a low price and the taxpayer is being asked to make up the difference. That is implicit in the statements of the Minister and the hon. and gallant Member for Angus, South. The Government are paying a high price and the trader is paying a low price. I do not see why the procedure could not have been reversed. This only shows that we have a Government of businessmen's friends.
§ Mr. P. Wells
Does my hon. Friend realise that, in addition to the guaranteed price, there was also a guaranteed market?
§ Mr. Osborne
Is the hon. Gentleman in favour of implementing the guarantees given by his Government in the 1947 Act? Will he answer "Yes" or "No" to that?
§ Mr. Bence
Yes, I am in favour of implementing the guarantees to the British farmer; but in implementing them why should the British taxpayer be compelled to buy all the crop when the trader who uses the product can buy in the free world market as a lower price? Why do not the British Government buy in the world market and let the users of the grain buy from the British farmer?
§ Mr. Osborne
I am sure that the hon. Gentleman is anxious, as I am, that the old age pensioner should have as low a a cost of living as possible. Does he want to force the British trader to buy in the dearest market, and so put up the cost of living?
§ Mr. Bence
No. I want the British trader to pay the same price to the British farmer as the British Government have to pay. Then, by the Government buying the cheaper grain in the world market, we could use the profit to increase the subsidies or to give free milk to old age pensioners. We could use in a great many ways the profit gained by trading.
I have heard the hon. Member for Kidderminster (Mr. Nabarro) talk many times about consumer and producer subsidies. If a subsidy is provided for a 1204 working man—say, a boilermaker in a shipyard—so that he can get the basic foods, which I venture to suggest he needs quite as much as the hon. Member for Kidderminster, then that is a consumer subsidy. But if a farmer or a producer gets a subsidy to enable him to obtain the raw material he needs, that is called a producer subsidy. To the farmer a subsidy given for grain or fertiliser is a consumer subsidy. It is an encouragement to him to consume more in order to produce more.
§ Mr. Bence
That is a different proposition. I said that a subsidy for fertiliser was as much a consumer subsidy to the farmer as is a subsidy on meat, milk, eggs or bread to the worker in industry. The calf subsidy is not the same. It is dishonest far anyone to get up and talk about separating consumer from producer subsidies. Every subsidy encourages people to consume even if it is a subsidy on raw materials used in the process of the manufacture of another product.
The demands for wage increases demonstrate that the subsidies on basic foods were obviously a stimulus to further production, thus stabilising wage levels. The hon. Member for Kidderminster talked about unlimited imports ruining British agriculture.
§ Mr. Bence
I am not like the hon. Member for Kidderminster. I am not an expert on every subject raised in this House. I have made no claim to be an expert on agriculture, but I cannot accept the statement that unlimited imports would be the ruin of the British industry. The reputation of British agriculture was made on the production of livestock from freely imported cereals and coarse grain, linseed cake, cotton cake, and so on. Those who know anything about farming would not deny that statement.
The hon. Member wants to put a tax on the import of tomatoes and all sorts of horticultural products in order to bolster up the production of those commodities 1205 in this country; but he must not make the general statement that unlimited imports would do serious harm to British agriculture, because they would not.
§ Mr. Nabarro
The hon. Gentleman may represent an industrial constituency. I represent one which is largely horticultural. I am interested to ensure that Worcestershire fruit and horticultural producers should be able to sell their crops. To do that they need a reasonable measure of protection in the form of tariffs to prevent Continental imports from flooding our markets, which was the policy of his party and which is still advocated so misguidedly by the hon. Lady the Member for Blackburn, East (Mrs. Castle), who was obliged to withdraw from the Chamber.
§ Mr. Bence
The hon. Gentleman must realise that the situation has changed. We do not live in a static world. We live in a dynamic world. What may have been a reasonable policy between 1945 and 1951 may not be a reasonable policy in the years to come. I know a little about agriculture. It would be far better if our farmers were encouraged to produce more livestock than tomatoes in Worcestershire. There are other agricultural products which are of far more value to this country.
I repeat my conviction—I hope I may be convinced that I am wrong—that the excessive Supplementary Estimate has been made necessary because the present Government were determined to compel importers to take over responsibility for importation and the heavy purchases were a guarantee to them that they would not lose and that the British taxpayer would bear the loss because there was no futures market.
§ Mr. M. Follick (Loughborough)
On a point of order, Sir Austin. Ought not the hon. Member for Kidderminster (Mr. Nabarro) to withdraw the remark which he made about my hon. Friend the Member for Blackburn, East (Mrs. Castle)?
§ Mr. Nabarro
Further to that point of order. The hon. Member for Loughborough (Mr. Follick) was not in the Chamber at the moment concerned. It will be within your recollection, Sir Austin, that I sympathised with the hon. Lady the Member for Blackburn, East, who was obliged, for reasons of health evidently, to withdraw from the Chamber. 1206 The hon. Member for Loughborough should inform himself before he makes such wild accusations.
§ Mr. Follick
I was not in the Chamber at the time, but I listened to what was said by the hon. Member for Kidderminster in his intervention, and I understood it to be not a nice statement to make about an hon. Lady who was taken ill during a speech in the Chamber.
§ The Temporary Chairman
What the hon. Member for Kidderminster (Mr. Nabarro) said was perhaps unfortunately phrased. We were all sorry that the hon. Lady the Member for Blackburn, East had to withdraw because of illness.
§ 5.52 p.m.
§ Dr. Barnett Stross (Stoke-on-Trent, Central)
I am very happy to have caught the Chairman's eye, because I regard these debates as very important. I have always thought the Ministry of Food was one of the greatest and most important Ministries that we have had. Its work since its inception has been of the greatest value to the country. That makes it all the more regrettable to me that the Minister has apparently accepted that his Department is to die at some time in the future. If the hon. Member for Kidderminster (Mr. Nabarro) had his way, it would be as soon as possible in the future, even though it meant felo de se by the Minister himself.
The speech of the hon. Member for Kidder minister was very attractive, and, I thought, unusually modest for him. The first part of his speech could be summed up in a phrase in an editorial in "The Times" this morning which said:Subsidies are not needed now to keep prices down for consumers, but to keep them up for producers.That symbolises the first part of the hon. Gentleman's speech.
My view is that if food of the right type is not made available, and cheaply available, to the public at large, then the detriment to us nationally is as serious as it could be. The hon. Member for Kidderminster made a point of the fact that we should be brought up not on liquid refreshment but on meat, and he specified all the meats that he could think of at the moment. No doubt what he felt was that everybody was brought up on protein foods of that type in the coun- 1207 try's heyday and that we wanted to return to that. He pointed out that the consumption of milk was falling. He said that that was of no moment because increased amounts of bacon and meat were available. I want to deal with that point of view, and I shall try to do so dispassionately. I do not believe that, if I could help it, I have ever made a party point on this subject.
The Minister will agree with me that the benefits which have sprung from his Department are based upon new knowledge gained only this century, really in the last 30 years, by the advisers whom he has had in plenty, whose quality is exemplified by people like the late Jack Drummond. In 1900 our people had lots of meat, red meat, white meat and all kinds of meat. They lived on cadaver because it was very plentiful and very cheap. Years ago in my constituency my constituents who were really poor were compelled, when they were out of work, to buy "slink" meat, which was known in North Staffordshire as "cag mag" which they could get for 1d. or 2d. per lb. However slink and diseased the meat was, its protein content was not affected. If the hon. Member for Kidderminster was right scientifically in his views, those constituents should have been in robust health. But they were not. Thirty years ago the infantile mortality rate in my constituency was more than 90 per thousand children born, whereas today it is only 26 or 28.
These improvements have not been the responsibility of medical men or the growth of medical science alone. In part. at least, they have been due to improved knowledge about nutrition and what the Ministry of Food has done to improve the nutrition of our people ever since its inception.
The Ministry has not been able to do anything very wonderful. Although it had been planned earlier, it came into existence in 1940 at a time of great scarcity. Really all that it brought about was an improved quality of bread and more milk. The only other factor was what was termed "fair shares" at a time of great stringency. But we had less food during the war than is available today. It was much more monotonous because there was less variety. However, we began to get a greater supply of milk, 1208 and the people benefited by it. Today milk consumption is nearly 60 per cent. greater than before the war.
The bread changed and became coarse. Nearly all its constituents were left in and were not taken out to feed fowls, pigs and cattle. We ourselves ate all the constituents of the grain. It was not very palatable to our people, but they had to get used to it, and they did their best. We cannot get away from the fact that one or two simple things like that made all the difference in the world to the health of our people.
People who have visited this country have seen the effect upon our children of the welfare foods, the cheap milk and the kind of bread provided for them, although they have had less meat than was consumed a generation previously. They have found the children now very much taller, heavier and brighter, and certainly very much better looking. The hon. Member for Kidderminster, who showed great capacity for making out his case, none the less based it on gross ignorance of the facts.
§ Mr. Nabarro
I am not qualified to quarrel with the hon. Member on dietetic values, but I would remind him that it was his right hon. Friend the Member for Bradford, Central (Mr. Webb) who coined the phrase, "A little of what you fancy does you good." [Hon. Members: "It was Marie Lloyd."] The right hon. Member for Bradford, Central coined the phrase in this context. My hon. Friends and I believe that "a lot of what you fancy does you good." The trouble with the right hon. Gentleman the Member for Bradford, Central was that it was such "a little of what you fancy" that he reduced us all to a mere starvation level
§ Dr. Stross
I will forgive the hon Member that intervention.
I wonder if the Minister will allow me to say that I must quarrel with him on the principle of what he is doing? If he will look at the Supplementary Estimate and see how it is framed, he will appreciate that I am not going to complain of the fact that more money is being spent or that the subsidies are greater. I will, however, quarrel with many of the actual items in the Supplementary Estimate. After all, when we look at it, we find that the increases are in those things 1209 which I have already pointed out were in plentiful supply in 1900, 1910 and 1914; namely, chops, steaks and cadaver generally; that he is spending more and more money on such things, and that there is a fall in the amount of money being spent on what we call the health foods, particularly milk and milk products.
When I put a Question to the Minister not long ago, I suggested that milk consumption had fallen by 2 per cent., but that the cows had been very generous to us, and that there was an increase in production of about 2 per cent., so that the gap was now 4 per cent. Since I asked that Question, we have had further figures showing that that trend is increasing.
§ Dr. Stross
I promised not to speak for long. I know that the hon. Member for Louth (Mr. Osborne) would like to intervene, but it is a fact that one hon. Member on the other side took an awful long time and was interrupted a great deal.
The trend of milk production today is such that we have a milk surplus greater in extent than the amount to which I referred in my Question a month or two ago, and I should like to ask the Minister or the Financial Secretary to the Treasury, when he answers the debate, whether he has read, as I am sure most of us have, the suggestion that surplus milk might be evaporated down and packed in containers so that it has the consistency of rather thin cream? It need not be sweetened, and it keeps for an indefinite time. In that way, we could be certain of putting it into consumption again. If he will promise to look at that, I think it would be helpful, because I think it would be a better use of surplus milk than making it into cheese. It would not be expensive, and lots of people, irrespective of income levels, would be able to get some of it. If he adopts that suggestion, the Minister will be acting the part of physician and nutritionist, and will be helping us all.
The only other thing I want to say, although it is on a subject on which one could speak at great length, is that we are going to have complete derationing and the end of all subsidies, if the Government have their way, either next year 1210 or shortly after. That means that the foods in which I am interested most, namely, butter, milk, cheese and eggs, will become more expensive, which I think will turn back the clock entirely. If, in addition to finding these foods expensive—and the Minister has told us that, if he derations butter, he cannot do it without allowing the price to rise to such an extent that people in the lower income groups will not be able to buy it; he admits that that must be the case—if, in addition, we get a period of unemployment or short time working or cuts in wages, the Minister will have to take the blame for having done the very thing which, I am sure, when he thinks about it, he hates the most. He will have injured the very people who cannot defend themselves—the aged who are poor, the sick who cannot work, and the young children who cannot protect themselves. I implore him, therefore, before he leaves his present office, to watch this situation.
Lastly, may I ask him this question? The cheapest part of his service, which does so much good, is the propaganda department. Why should that be entirely rejected, and all teaching disappear?
§ 6.4 p.m.
§ Mr. Cyril Osborne (Louth)
I have promised to take only five minutes of the time of the Committee. Both sides will agree that in this Supplementary Estimate of £126 million there is a sum of £60 million or £70 million on extra subsidies, and about £50 million or £60 million for extra stocks. We are not arguing about the stocks, because they will come back next year, and therefore we are arguing about the £60 million or £70 million extra subsidies, and that is the point at issue.
I should like to ask this question. These extra subsidies will either go, as one hon. Gentleman opposite said, to the farmers, or, as my hon. Friend has said, to the consumers. We must face this dilemma. I ask hon. Members opposite whether they wish to eliminate these subsidies altogether. If so, where do they stand on the guarantees to the farmer, both of prices and markets, under the 1947 Act? They must face this question. If they wish to cut out the subsidies, I wish they would come to my constituency and tell my farmers that they intend to cut them and sweep away the guarantees given under the 1947 Act.
§ Mr. Osborne
We are not objecting to the subsidies. [Hon. Members: "Oh."] The question that all of us have to face is the dilemma of the conflicting interests of the consumer, the taxpayer and the farmer. As the hon. Member for Wednesbury (Mr. S. N. Evans)so often says in the House, the consumer wants the cheapest possible food, since we, as a great industrial nation, having to sell our exports in a competitive world, have to get our costs down as much as we can, and in any production costs the cost of food is a big factor. That is an undeniable fact.
If we drive this policy to its logical conclusion, we shall put the agricultural industry back where it was in 1921, and I do not think that anybody opposite wants to do that, although the hon. Member for Dunbartonshire, East (Mr. Bence) did say that "unlimited import of agricultural produce would not ruin British agriculture." I fear that it would, and I do not think that the hon. Gentleman's Front Bench would support his statement. I should like to hear someone from that Front Bench say whether they are in favour of unlimited imports of agricultural produce into this country.
I should like to ask whoever is to wind up the debate for the Opposition to face this dilemma, and to face it honestly. For goodness' sake, let us stop playing silly party politics over a very serious matter. Here is a very difficult problem of how far we can honour those promises that we made in 1947 with regard to agricultural prices and guaranteed markets. How can we, at the same time, honour our promise, which was given from both sides to the electorate, that we would try to bring down the cost of living, and how can we honour the promise given to everyone in the country that somehow we would reduce taxation?
These are the problems that we have to face, and if the hon. Gentleman who is to wind up on the Opposition side can help me by answering these question, I should be very grateful. I should like him to repudiate what his hon. Friend has said about unlimited imports of foreign agricultural produce, because I am sure he will be aware that at least 1212 my constituents, and most good farmers in this country, are doing their best to produce the maximum amount of food at the lowest price possible, and that they are naturally disturbed when they hear statements like that of his hon. Friends.
§ 6.9 p.m.
§ Mr. Frederick Willey (Sunderland, North)
I am sure that we all regret very much the indisposition of my hon. Friend the Member for Blackburn, East (Mrs. Castle). She shares the affection of everyone here, and we all hope that a speedy recovery will bring her back to us very soon.
We have been discussing this Supplementary Estimate in so far as it deals with trading services, but I should first like to say a word or two on the Supplementary Estimates at large. These Supplementary Estimates, in November, have already reached the figure of £150 million. Has the Financial Secretary to the Treasury forgotten that we debated this matter in March, 1950, when we had a debate on a Motion moved by the right hon. Gentleman the Leader of the House deploring the failure of the Chancellor of the Exchequer? This was in March, 1950, when the Supplementary Estimates were less than what they are already under this Government. There was a lot of wild talk about mismanagement by my right hon. Friend who was then Minister of Health. The right hon. Gentleman said that the Health Estimates had gone up 37 per cent. and how outrageous that was. The Supplementary Estimates are more than 100 per cent. above the original Estimates. Why is not the Leader of the House with us now?
We have had debates on previous Supplementary Estimates on food. We have a precedent for a large Supplementary Estimate, and that was in 1947–48. It was practically entirely explained by the Andes Agreement and the pre-payment which was made to Argentina. It is a very complete explanation, and in any case that was six years ago. What has happened since? Whilst I was at that Box, sharing with my right hon. Friend the responsibility for the Ministry of Food, we introduced one Supplementary Estimate, for £10. In fact, we made a considerable saving on our trading services.
The right hon. and gallant Gentleman the Minister of Food has already presented two Supplementary Estimates, one 1213 for £26 million and, as recently as in March this year, one for £21 million. The Committee will remember that on the first, the right hon. and gallant Gentleman, with pristine freshness, explained the Estimate away by saying that it was for increased stocks, which had been doubled by the previous Administration. He talked about vast stocks, but he had forgotten what he said about Christmas bonuses and the cupboard being made. I did not know whether he was deliberately misleading the House or was ignorant and incompetent, but under the rules of order I am obliged to accept the second ground.
The argument I raised then was that the Government were asking for increased money on the Supplementary Estimates because of their decreased receipts. In other words, they were distributing less food and building up stocks. Why? The right hon. and gallant Gentleman gave his reason, but this Estimate shows how right I was in saying that that was the time, when consumption of practically every foodstuff was lower than it had been before, when those stocks ought to have been released to the housewife.
That is not the explanation of the present Supplementary Estimate. In fact, this Supplementary Estimate reflects greater receipts to the Ministry of Food in this financial year. As far as it represents more food it is welcome, and as far as it means that the right hon. and gallant Gentleman has failed in his intention to reduce consumer subsidies it is again welcome; as far as it is necessary in order to implement the guarantees to farmers, it is not unwelcome. Unfortunately for the right hon. Gentleman, this is not in the main the explanation for this Supplementary Estimate. As he said, we are dealing with two different matters this afternoon, the question of the subsidy, which is the cash deficiency over sales during the year, and the cash statement, which is the cash required to finance the trading operations of the Ministry. Let me take the subsidy first.
Apparently, the figures show that the subsidy has increased by £68 million. I make that adjustment because, as the right hon. and gallant Gentleman has explained, it covers also service charges, notional charges and the like. It represents an increase of £4 million in the agricultural subsidies. How much longer is this going on? In 1952–53 the original 1214 Estimates showed £28 million for the agricultural subsidies. This Supplementary Estimate shows that they are now £40 million. How long is this miscalculation going on? What is the basis of this miscalculation? I further want to know how much longer this disproportionate subsidy is to be paid. I want some declaration of policy about it.
Now I turn to the Ministry of Food subsidy. We have the particulars about this subsidy, because I asked the right hon. and gallant Gentleman a question on Monday. It shows, in this total figure, decreases of subsidy on sugar, milk, margarine and cooking fats, on which the right hon. and gallant Gentleman is making a profit. He promised and boasted about decontrol. What is deterring him from decontrol of margarine and cooking fats is that he is anxious to retain his fortuitous profit.
These commodities are not taken up, they are not subsidised, and they are still rationed by the right hon. and gallant Gentleman. Why? Because he is making this fortuitous profit, which he is anxious to hold. There is an increased subsidy on bread of £7 million because the right hon. and gallant Gentleman's plot failed; people were not taken in by white bread. The price differential was too great. This shows how right I was in accusing the right hon. and gallant Gentleman of having that intention in mind. He admits it now, in this Estimate.
That leaves £73 million to be accounted for. How is it accounted for? Firstly, by £18,700,000 on meat. That is not due to increased consumption. [Hon. Members: "Yes."] Oh, no, it is not. Make a comparison with the original Estimate. We know what the right hon. and gallant Gentleman estimated to be the consumption of meat his year, and it has not increased. In fact, this year we consumed in six months out of nine less meat than we did in 1950. That statement is based on figures published by the Ministry. It has not been increased supplies. There has been no fortuitous increase in supply. We are receiving this year 63,000 tons of beef less from the Argentine, as the right hon. and gallant Gentleman told the House. That made his Estimate 63,000 tons down. We are receiving 60,000 tons less from New Zealand. We are receiving much more 1215 than we estimated for from Australia. That was the Australian ewe mutton. We have received rather more home produced pork. The right hon. and gallant Gentleman revealed the cause of that increase this afternoon. It is pork that he found difficult to sell.
There has been no increase of consumption. There has been an increase in the supply of the particular meat we talked so much about, ewe mutton and fat pork, and the deficiency is entirely accounted for by the price that the right hon. and gallant Gentleman has had to pay for that pork. The right hon. and gallant Gentleman now realises that he was wrong about it, because he has adjusted the price. In the meanwhile it has taken £18 million of the taxpayer's money to account for the miscalculation that the right hon. and gallant Gentleman made and his failure to adjust the price.
There is another item: "Miscellaneous, £19 million." A pretty large sum for "miscellaneous," which covers a multitude of sins. It covers one sin in particular, and that is a £5 million subsidy on eggs. What a fantastic position to be in. What a fantastic position the right hon. and gallant Gentleman has got himself in. We have had a flush year in egg production, but we have had high prices throughout the year. The hon. Member for Kidderminster (Mr. Nabarro) is not here. If he were, I would remind him that in the flush of 1950 we were selling eggs at 3d., and that they have never been lower than 5d. this year.
We have a position today in which eggs are selling at 35 per cent. more than they were at this time last year, while production costs are falling—we have had a fall in the price of feedingstuffs—but the taxpayer is paying hundreds of thousands of pounds a week to stabilise the price. What can be more ridiculous than this? When the right hon. and gallant Gentleman set forth towards this fantastic conclusion, I warned him that he would land himself in a Marx Brothers' free economy. That is what he has done—eggs at 7d. and subsidised. [Hon. Members: "Which Marx?"] I said the Marx Brothers.
There are other items in this group of subsidies which are not food subsidies at all, as the right hon. Gentleman knows. Let me take the first item, which is 1216 "Animal feedingstuffs, £9 million." That is not a food subsidy. The right hon. and gallant Gentleman has claimed the credit for abolishing the subsidy on animal feedingstuffs. There is no price control and the £9 million is not to secure a decrease in prices. Indeed, the Ministry are hoping that there will be an increase in prices to offset this loss. This is a loss to the taxpayer, because the right hon. and gallant Gentleman is now obliged to realise stocks with a market falling against him. It is the cost to the taxpayer of a stupidly conducted measure of decontrol. That is all it is.
The next item is "Home-grown cereals," which shows a loss of £20 million. That is not a subsidy, and in fact it is not on home-grown cereals. It is on cereals generally, so that this is a misnomer anyway. There is no price control, and there is no subsidy properly so-called. The flour subsidy has been abolished. The right hon. Gentleman takes the credit for it. This is a straight forward commercial loss owing to the foolhardiness of the right hon. Gentleman, and in this financial year it will cost the taxpayer, on these two items alone, £28 million.
What a fantastic position. The money to be found by the taxpayer has been increased, while the benefits to the house wife have been taken away. After all, the right hon. Gentleman has reduced the subsidy to six commodities. He has abolished the subsidies on eggs, flour, margarine, cooking fats and sugar, all leading to price increases in the present year. Bacon bears a subsidy today of 3¼d. as against 7½d. 12 months ago, and butter a subsidy of 5½d. as against 8¼d, 12 months ago. Only the subsidies on bread and cheese have increased by very small amounts over the last 12 months. The housewife, therefore, is not getting the value for money which she was getting before.
But food prices in the world have decreased over this period. What did the right hon. Gentleman the Leader of the House say only a few weeks ago? He said:Food prices, on the other hand, have dropped by only a very small amount. The drop in the price of food imports has been something like 5 per cent., and more than half of that is in feedingstuffs, and we ordinary humans do not eat them either."—[Official Report, 10th November, 1953; Vol. 520, c. 898–9.]1217 We do eat the animals which eat the feedingstuffs, and it ought to reflect itself in cost. But here we have falling prices, no increase in domestic costs—because, after all, the Budget speech was made after the February Price Review—and yet increased prices to the housewife. Eggs up by l¾d., butter by 4d., margarine by 2d., sugar by 1d. and lard by 2d. This has caused the wage increases which are disturbing our economy today.
I can only say that I agree on this matter with the hon. Gentleman the Member for Aberdeenshire, East (Sir R. Boothby), who said recently thatthe housewife is dissatisfied because, although world prices are falling, retail prices in this country continue to rise. The farmer is anxious because he has seen it all happen before. He remembers only too vividly that the last time it happened he was sold down the river by the politicians.But the hon. Gentleman did not say that it was the same politicians who are doing the same thing again.
It is worse than this, because, against this background, the right hon. and gallant Gentleman has increased the charge on the taxpayer. We remember the Parliamentary Secretary coming to this House in March and explaining that the subsidy was then running in the region of £250 million. This is a straightforward additional charge upon the taxpayer. In fact, to quote the Leader of the House in a previous debate, it is a charge of 1s. on the Income Tax. What irrational, irresponsible behaviour by the right hon. and gallant Gentleman. Prices up, world prices falling, and, at the end of the day, the taxpayer has got to fork out another Is. in the £.
I now turn to the figures for the trading services. These figures, by and large, confirm the conclusions to which we have come on the subsidy figures. They also show an extra £5 million on potatoes. Where is the hon. Member for Kidderminster, because the last time we discussed this matter—in March—he rose from the benches opposite and asked, "Why are the Government mucking about with the potato trade?" It has cost another £5 million, and I hope that the Financial Secretary will explain to the hon. Member for Kidderminster why they are so mucking about.
But the main item is sugar, and the position about sugar is really too fantastic to believe. In forming his Estimate, the 1218 right hon. and gallant Gentleman allowed a credit of £900,000 for sugar. He was going to make a slight profit. He now comes to the House and says that the expenditure will amount to £36,600,000. In other words, £37 million more. It is all right for the right hon. and gallant Gentleman to say, "Oh, but this is in stock. We will release it next year, and it will then help the Estimates." But sugar has been decontrolled. Therefore, the Ministry of Food has upon its hands in a free market unprecedented, enormous stocks of sugar.
In April, the right hon. and gallant Gentleman told the House that the sugar cost £19 a ton, but, as usual, he was wrong. The Ministry has subsequently informed the public that it was not £19 but £24 a ton. What does this mean? It means that more than a million tons of raw sugar are going to be in the hands of the Ministry and undisposed of, not now, but at the end of the financial year. This is because the right hon. and gallant Gentleman was trapped into making a silly agreement with Cuba. We understood from him that it was to be spread over two years. We now know that there is a price variation which has induced him to take the sugar on immediate delivery. We know that, as the world market goes, he may be well above the world market price if he buys it next year.
In the first case, therefore, this was an enormous miscalculation. We have these colossal stocks of raw sugar at a time, when, as the right hon. Gentleman knows, we have closed the refinery at Greenock. At the end of the year, the Ministry will have more on its hands. It will have 250,000 to 500,000 tons of Commonwealth sugar on its hands, over and above the Cuban sugar. If that is not an enormous miscalculation, I do not know what is.
But the right hon. and gallant Gentleman has no adequate facilities for storing this sugar. It is now being dumped on airfields. There is going to be a grave risk of its physical deterioration, and that will mean a heavy loss to the taxpayer. The world market is falling, the price of Commonwealth sugar has fallen, and this is the explanation of what has happened.
The refineries are refusing to take the sugar from the right hon. and gallant 1219 Gentleman even for storing. Why? Because they are determined to break the hold of the Ministry of Food on the import of sugar. They also believe it is unfair that prices should be controlled to the refineries and not be controlled when the sugar leaves the refineries. This is something that is going to cost the taxpayers dearly in this financial year and the next. It is going to add another enormous burden to the already heavy burdens placed on the taxpayers through the foolhardiness of the present Government.
What about cereals? We understood from the original Estimate that these cereals were going to be disposed of, and that the Ministry would make a profit of £1½ million. Let us look at what the Chancellor of the Exchequer said during the Budget debate. He said:This reduction"—that is, in the expenditure of the Ministry of Food—flows from our policy, such has already been announced, of decontrolling eggs and cereals.He went on to say:But a large once-for-all reduction has been secured by the receipts expected from sales of Ministry of Food trading stocks of feedingstuffs and other grains. Here again the Exchequer benefits from cereal decontrol."—[Official Report, 14th April, 1953; Vol. 514. c. 43.]What has happened? There is not a profit of £1½ million. The right hon. and gallant Gentleman has admitted that this year alone there will be a loss of £20 million. The taxpayer will have to pay £20 million this year, and that is rather different from a profit of £1½ million. But subhead H, the trading services, shows that it can be worse than this. That subhead shows, again, that at the end of this financial year the Ministry of Food, out of the grain business, will have on its hands £59 million worth of cereals on a falling world market.
This is where the Ministry went wrong. It should not decontrol—at any rate it should recognise that it is a very difficult operation to decontrol—on a falling market. It should not decontrol on a market like the grain market which was falling very acutely. Moreover, in that situation, with world prices falling, one does not announce to the world, in January, that one is going to decontrol, 1220 because people, knowing that world prices are falling, just do not buy. In that situation one does not do what the Minister did—one does not panic, as he has revealed today; about stocks. The Ministry panicked. It held off and then went in and bought. Those stocks have now been depreciated.
Nor does one announce that control is to be brought to an end at the next harvest and, in fact, decontrol in August. To deal with this reasonably one finds out what the position is after the harvest and before taking measures to decontrol. But, in any case, this is a complicated transitional arrangement which should be made with the trade. There was no transitional period in this case but only straightforward decontrol. That is all it was.
What is the position today? I will give only one illustration—barley. The right hon. and gallant Gentleman has not yet sold his barley but is going to start some time this month. He is going to have on his hands one million tons of barley, but at the same time he has allowed to be brought into this country enormous quantities of dollar barley to the extent of 11 or 12 times the amount brought in last year, and has already spent £13 million worth of dollars on this cereal. This barley happens to be cheaper than the barley which the Ministry of Food is obliged to buy from the farmers.
The result is that there is a grey market and a black market. The grey market is that our farmers, of course, using their sense, are buying imported barley, which is much cheaper than the barley they sell to the Ministry. The black market is, as the Minister of Food knows from his own enforcement officers, that some farmers are buying imported barley and are selling it to the Ministry. What a fantastic position to have got oneself into.
This, then, is the result of the right hon. and gallant Gentleman's three great measures of decontrol. Eggs substantially dearer and still subsidised, costing the taxpayer hundreds of thousands of pounds a week. Sugar decontrolled, so that the Minister is now facing enormous losses by physical deterioration, because he has not the facilities to store it, because of the fall in prices—and because he is facing a monopoly which is determined to exploit the position. Then there is the decontrol of cereals, which 1221 has brought really the biggest, most fantastic muddle we have ever experienced in national food affairs. It is not surprising that Mr. Oscar Hobson of the "News Chronicle," who is friendly disposed to the Ministry, says:This certainly comes as a shock to the City and indeed must do to the country at large.He continues:No wonder Mr. Butler has been so gloomy about tax reliefs next year.and he goes on to say:I do not want to exaggerate, I won't say the Budget is in ruins, but I say it is badly cracked and cannot stand any more rough treatment of this kind.Since his appointment, the right hon. Gentleman has treated this House with arrogance. It has been an arrogance born of ignorance. He is a Johnny Head-in-the-Air:Once with head as high as ever,Johnnie walked beside the river.……One step more! Oh sad to tell,Headlong in poor Johnnie fell.That is what has happened to him. The only thing he can do now is to resign. I bear him no personal ill will. We need not lose him from that Bench—he can displace the right hon. Gentleman the Leader of the House. In that position, incompetence is at a premium, and the right hon. Gentleman the Leader of the House, rather than be disturbed by the recollection of thing she said in the past, can be transferred to another place where the atmosphere is less critical.
§ 6.35 p.m.
§ The Financial Secretary to the Treasury (Mr. John Boyd-Carpenter)
We have all enjoyed the speech we have just heard and, if I may say so, no one more than the hon. Gentleman the Member for Sunderland, North (Mr. Willey) himself. Indeed, at times I thought my right hon. Friend and myself on this Bench were in serious danger of damage by blast, because the whole tenor of the hon. Member's speech reminded me of a newspaper report of a speech which ended "Loud cheering, in which the audience also joined."
During his intermittent references to the Supplementary Estimate, I thought I detected in the hon. Gentleman's speech, as in that of his right hon. Friend the Member for Bradford, Central (Mr. Webb), some concern for the taxpayers' money. There is, proverbially, more joy in heaven 1222 over one sinner that repenteth than over the 99 who need no repentance, and indeed it does not lie in the mouth, either of the hon. Gentleman or his right hon. Friend, when one recalls the administration of food under the late Government, to charge anyone else with lack of care of the taxpayers' money.
Nobody likes a large Supplementary Estimate, and I agree with the right hon. Gentleman for Bradford, Central that it is very proper that it should be subjected to serious examination. I would not quarrel with that, or with the methods by which this examination has been undertaken. In many ways it has been a very useful debate, marred only, as the hon Gentleman for Sunderland, North mentioned, by the unfortunate indisposition of the hon. Lady the Member for Blackburn, East (Mrs. Castle). I know that I express the views of both sides of the Committee when I express the hope that her indisposition proves purely temporary, and that she will soon be back in her place attacking Her Majesty's Government with her usual vigour.
A Supplementary Estimate of this size calls for examination. That is what it should be given, and given in full, but I know that hon. Members who have studied this question will agree that a Supplementary Estimate of a substantial size is, at any rate, more understandable in the case of a Department which is largely a trading Department, than it would be in the case of an ordinary, administrative Department. I hope that my right hon. Friends will not take advantage, in the future, of my saying that, but, of course, it is a fact that, when we are concerned with very large-scale trading operations, the outcome of which we have to attempt to forecast some 16 months in advance, it is really not possible to insist on the same precision in the original forecasts which, certainly in my view, it is proper to insist upon in the case of normal Departments of Government. Fluctuations in prices and supplies inevitably make a forecast of that kind imprecise, and I know that the Committee will consider this Supplementary Estimate with that thought very much in mind. It is certainly the case that the history of the Ministry of Food has not been wholly free from Supplementary Estimates. That perhaps confirms what I was saying.
1223 The right hon. Member for Bradford, Central (Mr. Webb) committed himself to the proposition that this Supplementary Estimate was of unprecedented magnitude. His hon. Friend the Member for Sunderland, North was more cautious, perhaps temperamentally, and phrased it in a different way, but the statement that this Ministry of Food Supplementary Estimate is of unprecedented magnitude is just not true. The righthon. Gentleman himself will recall that in the financial year 1947–48 the then Minister of Food presented a Supplementary Estimate for £142 million. Therefore, it simply is not true to discuss this matter on the basis that this Estimate is of unprecedented magnitude.
Equally, the right hon. Gentleman proceeded to argue that Supplementary Estimates generally, on the scale on which we have had them this year—I think his phrase was "make nonsense of the Budget." If that be true, then almost every Budget since the war has been made nonsense of. As the Supplementary Estimate itself shows, taking this one into account, we are so far this year concerned altogether—I do not seek to under-rate it—with the substantial sum of £150 million. But let us take previous years. In 1946, there were Supplementary Estimates of £218 million, and in 1948–49 Supplementary Estimates of £309 million.
It would really seem to indicate complete ignorance of the financial arrangements which have operated in this country since the war to suggest that a Supplementary Estimate of this size, important though it is—and I will not seek to argue to the contrary—is of such an extraordinary nature as to make nonsense of the Budget. It must be perfectly apparent to hon. Members that the possibility of Supplementary Estimates on this scale must inevitably be in the background of the minds of all Chancellors of the Exchequer. Indeed, if it were not, they would not be taking account of what has happened in this country during the years that have followed the war.
Then the right hon. Member for Bradford, Central used a curious expression. He said that the money was going to the wrong people. He did not pause to tell us with any degree of precision who the wrong people were. In a moment I shall indicate with, I hope, some detail, pre- 1224 cisely where this money is going. If I may anticipate that part of my observations, the money has gone mainly in two directions—first of all, into additional stocks; and, as to the greater part of the rest, into support for British agriculture.
Is it now the contention of the right hon. Gentleman that support for British agriculture in accordance with the policy of the 1947 Act necessarily involves money going to the wrong people? In fact, to put it bluntly, is British agriculture composed of the wrong people?
§ Mr. Webb
The simple point I made was that that part of this Supplementary Estimate which was involved in extra subsidies was due to the buying by the well-to-do people. The ordinary people—the people which the "Economist" calls the lower income brackets; indeed, I believe I myself used that phrase—are not buying their rations. They are not taking them up. [Hon. Members: "Oh."] Really, it is no good hon. Members opposite saying that, because the fact is that the rations are not being taken up. Meat and other things which are subsidised are being bought by the well-to-do, and, therefore, the money is going there.
§ Mr. Boyd-Carpenter
That intervention of the right hon. Gentleman is not only inaccurate but, what is far more important, wholly irrelevant.
The overwhelming proportion of the subsidy element in this Supplementary Estimate—to be precise, £55 million out of £68 million—goes in producer subsidies to the implementation of the Agriculture Act, 1947. The right hon. Gentleman pointedly did not answer the question which I put to him. whether his observation that the money so provided was going to the wrong people was or was not intended to be a reference to support for the British Agricultural community. [Hon. Members: "Answer."] The right hon. Gentleman's avoidance of that plain issue will not pass unnoticed in the country districts, though it will bring great joy to his hon. Friend the Member for Wednesbury (Mr. S. N. Evans), I am sure.
The hon. Member for Sunderland, North, during the course of one of the most physically energetic displays that I have seen in this Chamber—I do not necessarily attach the same adjective to 1225 the intellectual quality of his observations—was distressed that we had large quantities of sugar in this country, and took the more serious point that it might be stored in conditions in which it might deteriorate. My right hon. and gallant Friend authorises me to say that he has no apprehensions on that score. Sugar, as the hon. Gentleman may know, is a very durable commodity, and my right hon. and gallant Friend is quite satisfied that the arrangements made for its storage are adequate to secure that what the hon. Gentleman fears will not come to pass.
It is perhaps an interesting contrast between the administration of the Minis try of Food by my right hon. and gallant Friend and by hon. Members opposite that whereas, under their administration, the complaint of the nation was that there was too little sugar, now the hon. Gentle man complains that there is too much. I am sure what the housewives would prefer. When the hon. Gentleman referred, as did the hon. Member for Dartford (Mr. Dodds), who is not in his place—
§ Mr. Boyd-Carpenter
I beg the hon. Member's pardon. I hope he will forgive me, and that I shall not be thought to be prophesying if I say that in one sense he was in another place. I apologise to the hon. Gentleman who is, I know a most faithful at tender in our debates. It was my surprise at seeing the pile of books beside the hon. and gallant Member for Brixton (Lieut.-Colonel Lipton), instead of the hon. Gentleman's cherubic countenance, which caused me to overlook his presence.
Reference was made to the quality of the pig meat which is being produced, and to the question of fat pork in particular. It so happens that part of the additional provision called for in this Supplementary Estimate is required to deal with precisely that state of affairs. As the hon. Gentleman recalls, my right hon. and gallant Friend has made arrangements and varied the price schedule so as to encourage the bringing forward of the smaller, lighter and less fat pig.
That has meant that the little pigs have gone to market—more little pigs, and earlier. There has been a considerable increase coming into the market. That is the reply to the hon. Member for 1226 Sunderland, North who said that we were not getting more meat. The pigs have come into the market earlier in more substantial quantities, with the result that we can make increased provision in this Supplementary Estimate. Therefore, I do not think there is any need for us to quarrel on this point.
We are agreed that the wholly legitimate tastes of the consumer require greater consideration than they received under the previous arrangements, and I submit that they receive it under my right hon. and gallant Friend's arrangements. But part of the consequence of that generally welcome change is the necessity to come forward and, in this Supplementary Estimate, ask for certain additional sums.
§ Mr. Boyd-Carpenter
I have no time to give way to the hon. Gentleman. He will, no doubt, appreciate why. I have indicated that I know he is here.
As I have already said that this Supplementary Estimate breaks down into two large sections. One is the part which arises from the fact that stocks have either been bought to a greater extent than was forecast, or have been disposed of to a lesser extent than was expected. That accounts, in all, for £52 million of this Supplementary Estimate. That necessitates our coming to Parliament for that sum, but it would be quite unreal to suggest that that £52 million is gone.
Subject to possible variations in price we have the stocks. We have the articles represented by this money, with the consequence that in future years we shall secure some relief, either by their disposal—and my right hon. and gallant Friend indicated his intentions in that direction—or by diminished necessity for fresh purchases. Therefore, when talking of this very large sum of money, so far as the £52 million is concerned it is important that this Committee and people outside should realise that it is not money which has, to use a colloquialism, gone down the drain. It represents reserves held in the form of cereals and sugar and not in cash. That is an important aspect of the matter.
Then there is the other large item to which I have already referred—that involved in the subsidies—which accounts for about £68 million of the provision. 1227 About £55 million of that sum is involved in the support of British agriculture. Right hon. Gentlemen opposite must face the fact that this is at a time when the foreign price of certain commodities, notably cereals, has been falling.
The Committtee really must realise that whatever system we adopted—whetherit is the monopoly bulk purchase system favoured by hon. Members opposite or by the freer system which my right hon. and gallant Friend is working—we should be forced, inevitably, to face the problem of whether we are to maintain the guarantees to British agriculture by guaranteed prices, and so on, against a background of world prices which are varying, or whether we are to abandon the guarantees given under the Agriculture Act of 1947. If we are to maintain those guarantees in such circumstances, demands such as are made in this Supplementary Estimate are inevitable.
The right hon. Member for Bradford, Central made a very wise and penetrating remark when he said, "You cannot underpin British agriculture and save money." Where does the right hon. Gentleman go from there? Is he criticising this Supplementary Estimate because it does underpin British agriculture?
§ Mr. Boyd-Carpenter
I understand that that is his view. It is important that we should understand this. It is a point which may well be noticed outside. The essence of the problem facing us, as it faces anyone who criticises this Supplementary Estimate, is that we start from the basis—at least, most of us do—that the case for the expenditure of public money has to be made.
Now that the details of how this money is to be spent have been deployed with great clarity and force by my right hon. and gallant Friend, and now that the Committee knows that, broadly, this expenditure is either in support of British agriculture or is invested in stocks, hon. Members opposite must search their consciences as to whether they can say that they object to that expenditure and that it should not be made. That is the straight issue which arises on this Supple- 1228 mentary Estimate. I concede that the onus lies on those who ask for expenditure to show the need for it. We have tried to indicate the public purposes which we feel this Supplementary Estimate fills.
§ Mr. Boyd-Carpenter
I need only recall that when the right hon. Member opposite sat in my seat and asked for the renewal of the higher limit of the Civil Contingencies Fund, its use for this trading purpose was one which he commended to the House. I cannot do better than to say that on that point the right hon. Gentleman was talking very good sense.
§ Question put, and agreed to.
That a Supplementary sum, not exceeding £126,843,450, be granted to Her Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1954, for the salaries and expenses of the Ministry of Food; the cost of trading services, including certain subsidies; a grant in aid; and sundry other services, including certain expenses in connection with civil defence.
§ To report Resolution, and ask leave to sit again.—[Mr. R. Thompson.]
§ Resolution to be reported Tomorrow.
§ Committee to sit again Tomorrow.