Orders of the Day — British Sugar Industry (Assistance) Bill.

– in the House of Commons on 14th July 1931.

Alert me about debates like this

Order for Second Reading read.

Motion made, and Question proposed, "That the Bill be now read a Second time."

Photo of Mr Herbert Samuel Mr Herbert Samuel , Darwen

On a point of Order. Would you perhaps be good enough, Sir, to give direction to the House as to the scope of the Debate on this Bill. I presume that it will not be in order to consider the general policy of the sugar subsidy? Would it be in order to point out the somewhat lavish expenditure that has taken place under this subsidy, as indicating that this further payment may not be necessary?

Photo of Lieut-General Edward Fitzroy Lieut-General Edward Fitzroy , Daventry

I should certainly say that it would not be in order to discuss the merits of the Sugar Subsidy under this Bill. The subsidy was granted, as the right hon. Gentleman is well aware, in an Act of Parliament, and it cannot be reviewed, unless the question before the House is that of its renewal or repeal. As regards this particular Bill, I understand that the proposal is that certain circumstances have arisen which may make it necessary to make advances to the sugar industry. The only subjects that would be in order in the debate on this Bill would be whether circumstances justified the proposed advances, and the conditions under which they should be made. I think that reply will meet the right hon. Gentleman's point of Order.

Photo of Dr Christopher Addison Dr Christopher Addison , Swindon

I do not think it necessary to detain the House very long, because we had a good discussion on this subject when I moved the Financial Resolution in Committee. Then I gave a full explanation of the reasons for this additional grant and the machinery which we have devised to administer it. I would just like to remind the House that this year the subsidy on sugar manufactured in the factories from beet grown in Great Britain falls from 13s. per cwt. to 6s. 6d. That great fall in the subsidy happens to coincide with the tendency to low prices of sugar in the world. So much so that sugar is 4s. or 5s. less per cwt. than it was in 1913. As a result, it was found to be impossible for the factories and the growers to conclude any arrangement to secure crops of beet in any adequate measure. After prolonged negotiation, the arrangement which was embodied in the Bill was arrived at. The particulars that I will give the House now, and which I was not able to give before, will provide ample justification for the expedient that we have adopted.

The arrangement is that, taking sugar at a basis of 6s. 6d., we allow an extra subsidy up to 1s. 3d. per cwt. for a maximum amount of 300,000 cwts. for each factory. But, if the price of sugar at the manufacturing time rises above 6s. 6d., for every penny that it rises above that figure one penny is deducted from the extra advance which we have provided. The maximum extra advance is 1s. 3d., so that the maximum amount which can be provided is 7s. 9d.—that is 1s. 3d. and 6s. 6d. We were not successful in inducing all the factories to make the extra offer to the growers. The whole of the extra amount provided by Parliament must be passed on to the growers and cannot be kept by the factories. It is entirely different from the original method of this subsidy scheme. I need not trouble the House with all the details of the scheme, but it is thoroughly sound, and we can administer it with certainty. It provides that, up to 7s. 9d., the whole of the additional amount shall be passed on to the growers, and in that way the factories were able to pay 38s. a ton for sugar-beet of 15½ per cent. sugar content, rising half-a-crown for each 1 per cent., which is the usual increase. In that way we are able to secure for the grower of sugar-beet with 17½ per cent. content that 43s. a ton will be paid.

That figure is, of course, a large reduction on what was paid last year, which means that the industry is much more nearly approximating to an economic position. It was clear, however, that, unless some step was taken, the country would be deprived of the employment available from an immense acreage of beet. Last year the acreage was about 320,000. The effect of this arrangement is that the factories, which have accepted this offer and agreed to offer these prices to the growers, have been able to secure 152,000 acres, which is only 18 per cent. less, although they paid last year much higher prices. The factories which did not accept the offer and which are making an offer to the growers of a more speculative character and a much more unsatisfactory offer, in which the whole of the risk is borne by the grower, have obtained an acreage of 80,000 acres, or a decline of 44 per cent. That has proved that this expedient will enable us, where it has been adopted, to maintain a very large acreage of beet in cultivation. Without traversing at this stage the numerous figures which the right hon. Gentleman adduced at the last stage of this matter, it is perfectly evident that this has secured an immense volume of employment in these districts and at a very conjectural public cost, because, if the price of sugar rises to 7s. 9d., there will be no extra cost to the Exchequer at all. Even, apart from the price that has to be paid, if the price of sugar was a little above the 6s. 6d. basis, there would be pro tanto a reduction from the amount of the extra assistance. It is fair to claim that here we have an arrangement which directly benefits agriculture. We have stopped up the, leakages or possible leakages very effectively by our arrangements, and whatever benefit is derived goes direct to the cultivators and to those who work upon the land. The figures which I have given as supplementary to those I gave on the Financial Resolution are sufficient to commend the Bill to the House.

Photo of Sir Patrick Hannon Sir Patrick Hannon , Birmingham Moseley

rose in his place, and claimed to move, "That the Question be now put," but Mr. SPEAKER withheld his assent, and declined then to put that Question.

Photo of Mr Herbert Samuel Mr Herbert Samuel , Darwen

Some hon. Members are very unwilling that this subject should be ventilated, and it is somewhat unfortunate that it is not being discussed in the daylight, for it is most necessary that a great deal of daylight should be thrown upon it. The scope of our Debate this evening is, under the Ruling of Mr. Speaker, very limited, and I shall confine myself strictly to the limits that are imposed. The House of Commons is in somewhat of a difficulty this evening, because the Government have made a commitment to the growers and to the factories, subject, of course, to the approval of Parliament; but it is the case that a considerable number of farmers have, on the strength of the assurances of the Government, undertaken the planting of sugar-beet this year and, if they were deprived of the sum now proposed, it would be somewhat in the nature of a breach of faith. It is a question whether the House of Commons should now reject this Bill, but it is right that our opinions should be freely expressed, because I have no doubt that on future occasions other and more costly demands may be made by this industry, and hon. Members who have made a study of this subject, have a right and indeed a duty to express their opinions on this occasion.

1.0 a.m.

The question is whether it is necessary to add to the enormous expenditure already made from the public purse this further sum which, according to the estimates given to us, may reach from £200,000 to £300,000 for the present year. We have already spent, according to the report just presented by the Minister of Agriculture, a sum of £27,500,000. That has gone very largely in profit to the beet-sugar companies. The question which arises now is whether those companies ought not to have been in a position to carry on their business in this time of exceptional low prices out of the large profits they have already made without coming to the State to vary the agreement originally made and asking for this large additional subsidy. The profits already made by the companies have been very large. We have been unable to ascertain what dividends have been declared. The report just published by the Minister of Agriculture, a very able and comprehensive report, does indicate the total amount spent in dividends by those companies as a whole, but, when I asked the Minister of Agriculture a few days ago what was the amount of dividend paid on preference and ordinary capital by each of the beet-sugar companies receiving subsidy from the Government in each of those years, he was not in a position to give the information required. Such of them as were public companies had published their balances, but as some of them were private companies he was not able to say what the dividends were. Considering that all these dividends had, in fact, been paid by public money one would have thought we were entitled to know what the amounts were. Taking them as a whole, we find that the latest figures show for last year that the sugar-beet companies paid 10 per cent. tax free. That is equivalent to an all-round dividend of 13 per cent. In addition these companies, during the six years in which the subsidy has been paid and rebates have been given from taxation, have been able to put aside for depreciation, in reserve, and in unallotted balances a sum equal to no less than 50 per cent. of the whole of their capital. Their capital is £8,700,000 and these sums amount to £4,494,000. Half of this capital has been amortised at the public expense in these six years. In these circumstances, is it reasonable that they should come forward and ask for this amount of £200,000 or £300,000, and threaten that if they do not get it they will not give an outlet for the farmers' sugar-beet crop?

The real reason why we are called upon to pay these enormous sums is that for one reason and another this industry is an unsuccessful competitor in the sugar production of the world. It has to compete with Continental countries growing sugar-beet. The report shows that our farmers have been paid for their beet roughly double what the Continental farmers receive. In spite of higher wages here, the cost of cultivation is not higher than in foreign countries. The reason they had to ask such high prices is the production of so much less per acre. We produce 8.7 tons to the acre while the production on the Continent is 10.7 tons per acre. We are told in the report that the effect of the subsidy has been that a great deal of unsuitable land has been used for sugar-beet cultivation and that inexperienced growers take part in the industry. For all this the British taxpayer has to pay, and Parliament is asked to give this additional subsidy. The distance beet has to be transported from the farm to the factory is on the average twice as far in this country as it is upon the Continent, and the cost of transport is three times as much as it is on the Continent. The British taxpayer has to make that good. The sugar produced per acre is half as much again on the Continent. We have not only to compete with Continental beet-sugar, but with cane sugar.

Photo of Lieut-General Edward Fitzroy Lieut-General Edward Fitzroy , Daventry

The right hon. Member is now considering the whole question of the subsidy which does not arise to-night.

Photo of Mr Herbert Samuel Mr Herbert Samuel , Darwen

I am sorry if I have trespassed too far. The point I was endeavouring to show was that this continually increased demand, such as the demand now made this evening, is due to the fact that our industry has found that it canont compete successfully, even with the most lavish expenditure from the public purse, That is evidenced now by this new demand. It cannot compete with countries producing six tons of sugar to the acre while we only produce one ton. That new employment may have been given by this industry is no doubt the case to a very limited extent, but it has been at enormous cost. I presume I cannot this evening go into the question whether the employment given is in any degree commensurate with the £30,000,000 spent and with the £200,000 or £300,000 which is being asked for to-night. That is a point which must be examined in close detail when the right time comes. Meantime, the fact remains that we have made this perfectly colossal expenditure equal to 2½d. on every pound of the sugar sold in the shops for the period of six years—much more than the actual value of the sugar at the present time. The House ought to view with concern any further expenditure or extension of the sugar subsidy.

Photo of Mr Brendan Bracken Mr Brendan Bracken , Paddington North

This is the greatest ramp of our time. I am in entire accord with what has been said, but in accordance with your Ruling, Mr. Speaker, I will not enter into the general policy. We are asked to-night for a large sum, although it may be a small sum in comparison with what we have spent. When we are asked to spend a large sum on subsidising the sugar industry, one must ask the Government what is the basis of their sugar policy. In the present condition of the country we cannot afford to go on cashing out these large sums in support of an industry which has shown itself incompetent.

Photo of Sir Albert Braithwaite Sir Albert Braithwaite , Buckrose

This industry is not incompetent or incapable. It is a very efficient industry. I resent the remarks of the hon. Member.

Photo of Mr Brendan Bracken Mr Brendan Bracken , Paddington North

The hon. and gallant Member says that is a competent industry. If it be so, why does it require a Government subsidy? The hon. Gentleman is roaming round the country preaching economy, and at the same time lashing out money on an industry which is so incompetent as to require to be supported by the Treasury.

Photo of Sir Louis Smith Sir Louis Smith , Sheffield, Hallam

The sugar industry has received subsidies in every other country.

Photo of Lieut-General Edward Fitzroy Lieut-General Edward Fitzroy , Daventry

The hon. Member had better wait to make his speech.

Photo of Mr Brendan Bracken Mr Brendan Bracken , Paddington North

It may be true that the sugar industry has had a subsidy in every other country in the world. That is no justification for an hon. Member who goes round talking about economy. What we have to consider in this particular case is not the whole policy, but this very important question of how can two Ministers of the Crown come down to Parliament and support two diametrically opposite policies. The Minister of Agriculture asks for this subsidy for the sugar-beet industry, and the Secretary for the Colonies talks about the necessity for supporting the West Indian sugar position. We are asked to subsidise sugar in Great Britain and also to subsidise sugar in the West Indies. Those policies are diametrically opposed, and both are contrary to the public interest.

Here you have the greatest glut of our time, and it is proposed to meet it by subsidies. I, personally, have been converted to the general system of Protection, but a policy like this is going to ruin Protection in the eyes of this country. Does the Minister think that the financial position of the country at the present time permits of this additional subsidy? If he holds that opinion, then it is directly against the point of view expressed by the Chancellor of the Exchequer. Does the Minister think that a subsidy of this sort, when it has been accepted by all parties in this House, except the remnants of the Liberal party here present, does he think that it is possible for us—[Interruption.] There are a few Tories who stand up for the principle of economy, but I intend to do so. Does the Minister think that, when we have spent this money, that is the end of our liabilities? It obviously is not. The sugar industry is slowly but surely building its nets about all parties in this House. [Interruption.] It is said that you are encouraging a healthy native industry. But you are also supporting the West Indian sugar industry. This is not a party matter at all, but a vital matter raising the whole question of public expense.

There is intense lobbying by interested companies and we have been persuaded to support these subsidies, but I think that the time has come to make a very strong protest. You cannot go on giving large sums from the public purse to an industry that is not only unsuitable to this country but is being carried on while the Secretary of State for the Colonies has stated in another place that he is weeping about the financial demands of the sugar industry in the West Indies. The taxpayers here are asked to support the sugar industry of the West Indies and, at the same time, a large number of sugar companies in this country. I think this is the greatest ramp of our time, and that we ought to look very carefully at the list of shareholders in these various companies. I would remind the Minister of Agriculture, who has recently written a history of British politics in the last 10 years, which included some ferocious insults to the Liberal party—[Interruption.]

Photo of Dr Christopher Addison Dr Christopher Addison , Swindon

I never insulted anyone.

Photo of Mr Brendan Bracken Mr Brendan Bracken , Paddington North

Well, it had a very large circulation, because it said, "Revelations about Lloyd George!" I ask the Minister to look at the composition of the list of shareholders in these various companies. As has been said before, In matters of commerce the fault of the DutchIs giving too little and asking too much. In this case the taxpayers, who are finding it very difficult to live, and the workers, who are being told that no funds are available for anything promised by this magnificent Government which says, "We have no money to clear slums or fulfil any of our promises"—[Interruption.] The Lord Privy Seal may laugh, that is about the only way in which he can relieve his conscience.

Photo of Mr Thomas Johnston Mr Thomas Johnston , Stirlingshire and Clackmannanshire Western

We have spent all day discussing a Bill to relieve slums.

Photo of Mr Brendan Bracken Mr Brendan Bracken , Paddington North

I have been in the House a certain part of the day, and I have noticed that that Bill means very little and that the right hon. Gentleman's colleague, the Lord Advocate

Photo of Lieut-General Edward Fitzroy Lieut-General Edward Fitzroy , Daventry

That has nothing to do with the Bill before the House.

Photo of Mr Brendan Bracken Mr Brendan Bracken , Paddington North

Here is the Lord Privy Seal, who has been in the House for many years and has made this interruption to put me out of order. [Interruption.] I do beg the Minister of Agriculture to reconsider the whole matter of this £200,000 or more, because we all know that in the past he has been the most extravagant Minister in all respects and that the Labour party took him in as a reformed child. What is the good of our going on spending this money? I should not have expected the Socialist party to have backed up a lot of Dutch capitalists. I cannot understand our subsidising the sugar industry in the West Indies and how that can be reconciled to this Bill, especially in the present state of the public purse. All that this incompetent Government can do is to shell out large sums of public money on an industry that is utterly incompetent to compete with industries in other parts of the world. You have nature against you, and you cannot compete with nature. [Interruption.] I know that hon. Members opposite do not care and that their point of view is that you can shell out any amount of public money, but I do not mind very much what they think.

I do appeal to the Minister to define the Government's policy. If it is a good thing to spend this money on a sugar subsidy in Great Britain, will he say exactly what is the Government's policy in spending large sums in the West Indies? The House of Commons, we are told, has failed absolutely as the guardian of the public purse, but that is not the least accusation against it and the Government to-night. All I can say is, that at a time of the gravest financial crisis—[HON. MEMBERS: "Tell us again!"], I did not tell you; your own Chancellor of the Exchequer, for whom you have practically no admira- tion, told you, and the excuse you have given for your failure in your constituencies is the same statement as I am making to-night. I do beg the Minister to get up and say what the Government are going to do. Would the Minister kindly give a little attention instead of colloguing with the Lord Privy Seal, and say what exactly is the Government's policy. Would it not be better, on the whole, to give every worker in the industry a maximum living wage for doing nothing? [Interruption.] Do hon. Members opposite, then, deny it 2 [HON. MEMBERS: "No!"] Then, instead of spending £1 per day on every worker employed in the industry, the Minister should make up his mind what policy he is going to follow. Will he close down the industry in this country to give relief to the West Indian sugar industry—a crazy sort of Empire policy—or will he go on battening up rotten industries in this country? It has been singularly inconvenient having this discussion without knowing which he is going to do, and I hope he will explain.

Photo of Mr Ernest Shepperson Mr Ernest Shepperson , Leominster

I am in total and absolute disagreement with my hon. Friend who has just spoken, because this subsidy, that has been given in the past and is asked for again, has been one of the most useful things that the present Government have done for the assistance of British Agriculture. I would like to compliment the Minister at once upon the action which he has taken. I have taken part in Debates on a great many agricultural measures, and I want to thank the Minister. This is the first time that I have really been able to appreciate the Government's action as something that will be of material good to British agriculture.

I would like to remind the House of the real cause of this assistance to the beet-sugar industry. It will be within the knowledge of the House that, in each of the three years following 1924, the subsidy was 19s. 6d., and that it fell 6s. 6d. in the following three years, to 13s. Last year, it fell from 13s. to 6s. 6d. At the same time, there was a drop of about one-half in the value of sugar, from about 12s. 6d. to 6s. To realise what that loss means, is to realise the need for the granting of the present assistance. There are 3 cwts. of sugar in one ton of beet. The drop in the price of sugar to 6s. means a loss of over 18s. on each ton, and the loss of subsidy of 13s. per cwt. means a loss of 39s. The industry loses to-day, as compared with 1924, 57s. on each ton of beet grown and consumed in the country. It is obvious that that loss is such that the factories cannot go on with the manufacture of beet-sugar unless further assistance is rendered them.

I do not think it is necessary to remind the House of the great value this new industry has been to arable agriculture. If the industry is brought to a close now, and the assistance is stopped, the whole of the money—assume it to be taxpayers' money—will be lost. Agriculture will lose the one crop that has been of great assistance to it, and the agricultural labourer will lose a job in the industry. We have to decide whether the expenditure of an additional £200,000 is worth while or not. I beg to submit that it is worth while. The House is fully aware of the difficult position of agriculture. The point we have to decide is whether this expenditure will give satisfactory assistance to the industry. The other night, on the Financial Resolution, the right hon. Member for Darwen (Sir H. Samuel) gave many figures, and one of those figures was given to suggest that every man employed on the land in the sugar-beet industry had cost in subsidy a figure of £1 per day.

Photo of Mr Herbert Samuel Mr Herbert Samuel , Darwen

Every additional man.

Photo of Mr Ernest Shepperson Mr Ernest Shepperson , Leominster

The present subsidy received by industry is 6s. 6d. per cwt. of beet. To-night we are adding to that another 1s. 3d., and the subsidy will therefore be 7s. 9d. per cwt. There are 3 cwts. of sugar in a ton of beet, and the subsidy on a ton of beet will amount to 23s. 3d.

Photo of Mr Herbert Samuel Mr Herbert Samuel , Darwen

There is also the rebate of taxation.

Photo of Mr Ernest Shepperson Mr Ernest Shepperson , Leominster

Yes, which took place in 1924 and will take place again this year. I think there is a rebate of taxation. In the report which the right hon. Gentleman is reading, he will find that the labour costs of each acre of beet are given as £7 10s., but in the speech he made the other week he gave a figure to show that the factory labour costs amounted to £2.

Photo of Lieut-General Edward Fitzroy Lieut-General Edward Fitzroy , Daventry

The hon. Member is going far beyond the scope of the Bill. The question we have to decide is whether the circumstances of the industry-justify this additional expenditure, and that is all.

Photo of Mr Ernest Shepperson Mr Ernest Shepperson , Leominster

I regret that I was led away in trying to answer the right hon. Gentleman's speech of last year, but I will not proceed in any way further with that subject. I shall only say that, if the subsidy to this industry were allowed to stop to-day, the agriculturists would suffer, the agricultural labourer would suffer, and the country would suffer, in that the displaced agricultural labourer would be obliged to go on to the Unemployment Insurance Fund. Agricultural labourers would be displaced to the extent of about £7 or £8 per acre. I would like to remind the House that it is often assumed that, if you place 100 acres under beet, it is only—

Photo of Lieut-General Edward Fitzroy Lieut-General Edward Fitzroy , Daventry

The hon. Gentleman is making the same mistake again. What he is saying now has nothing to do with the Bill at all.

Photo of Mr Ernest Shepperson Mr Ernest Shepperson , Leominster

I was trying to show what the effect would be upon British agriculture if the industry were allowed to come to a stop.

Photo of Lieut-General Edward Fitzroy Lieut-General Edward Fitzroy , Daventry

That is not in order on this Bill.

Photo of Mr Ernest Shepperson Mr Ernest Shepperson , Leominster

Then I will simply conclude by saying that I give my whole-hearted support to the Minister on behalf of British agriculture, in the action that he is taking in maintaining this great industry for one more year.

Photo of Mr James de Rothschild Mr James de Rothschild , Isle of Ely

The right hon. Member for Darwen (Sir H. Samuel) has pointed out that it is difficult at this stage to object to the Bill because of what it would mean to the farmer, who has been much harassed. So little consideration has been given to the farmer, that one appreciates any effort to help him. This Bill will give a breathing space for the reorganisation of the industry for the want of which there can be no doubt that the £30,000,000, which have been spent on the sugar-beet industry by the Treasury, will be almost entirely lost. But this does not mean that I personally am satisfied with this Bill. No doubt it is necessary, because, without this additional subvention, a number of the factories and of the companies, which are at present functioning in the beet-sugar industry, would have to close down.

It is not true to say that this crisis is entirely due to the fall in the value of sugar. State assistance at the present time comes to 13s. 1d. The present price of sugar is 19s. 6d., and, according to the report published by the right hon. Gentleman, the price of sugar will have to reach 24s. before the industry can be placed on a proper footing. Such prices have not been reached since 1928, and it is doubtful whether they will ever be reached again. Unless something more is done to reorganise the industry, than the Bill is doing, this is only throwing good money after bad. The Bill is only justified if it can save something from the wreckage of the £30,000,000 which has already been spent. It would have been far better if the right hon. Gentleman had amended the Act of 1925. Under that Act, the companies, which have refused to come within the ambit of this Bill, have in the last six years declared dividends of between 12 per cent. and 20 per cent. Their reserves are almost equivalent to the total paid-up capital, and they have put huge sums to depreciation. At the present time the Dutchmen, who are running this show, are preparing to retire gracefully, while as to the farmers—

Photo of Dr Christopher Addison Dr Christopher Addison , Swindon

They are not getting any of this money.

Photo of Mr James de Rothschild Mr James de Rothschild , Isle of Ely

That is exactly what I am complaining of. They are not getting any of this money, and they are not giving any of this money to the farmers. These people, who at the present time are engaged in liquidating these vast concerns out of which they have made huge sums, are going back to Holland to drink Schiedam at Rotterdam and Amsterdam. In answer to the right hon. Member for Darwen (Sir H. Samuel), the Minister said that he was going to hurry up the publication of the report in order that it should be at hand for the discussion of this Bill. The report has taken two years to publish. It was hurried up in the last fortnight, and it is important that we should consider it, because the Bill anticipates this grant to be refunded in subsequent years. It is to the report that we have to look in order to know if there is any chance of this advance, which we are making to the factories, ever being returned to the Treasury. I remember 3½ years ago the right hon. Gentleman, who is now sitting opposite, the present Lord Privy Seal, who was sitting on this side then, made an impassioned appeal to the then Minister of Agriculture for an inquiry into the whole beet-sugar industry. Not only he, but the present President of the Board of Trade and the present First Lord of the Admiralty did so. I am quite sure that, if the right hon. Gentleman was sitting on this side now, he would not be as complacent as he is to-night. He asked for an independent inquiry. What the right hon. Gentleman has given us is not an independent inquiry—we shall have to go back upon the data- which he has given us to judge how this Bill is going to work—but a volume composed by two directors of factories and only one minor official of the Markets Department of the Ministry.

Photo of Dr Christopher Addison Dr Christopher Addison , Swindon

The gentleman who has laboured very hard to prepare this report is quite independent and is one of the most efficient servants of the Ministry. No director has taken part in it, though I believe that the secretary of the Sugar Association was brought in because of his knowledge of the factories. The chief author of this report is a civil servant, who is independent, as civil servants always are, and it is not fair to make such reflections upon him.

Photo of Mr James de Rothschild Mr James de Rothschild , Isle of Ely

I make no reflection upon the civil servant. The other two are engaged in the industry. One represents the Anglo-Dutch syndicate and the other the Anglo-Scottish syndicate. The right hon. Gentleman says that he is not responsible for anything that appears in this book, but it is published by him. A lot of money has been spent upon it; yet he disclaims all responsibility for it, and says it is not his child but that it is merely a changeling. He says that this report is an impartial report and that we can take the statements that it makes in order to judge how far this Bill should be approved. In order to test that, I shall quote to the right hon. Gentleman a typical remark from this report, which appears on page 262: On the average, the proprietors of the factories cannot be said to have withdrawn more than a reasonable return on their capital. Then it goes on to give profuse praise to the factories for providing voluntarily information about the factories, although this information was given "confidentially" and not put into the report. It will be seen from page 103 of the report that only general information is given and separate details are not given for each factory. The piece de resistance of the report, however, is on page 182, where it is stated that the disclosure of the factory accounts might not be good for the farmer. The report might be called the Dutchman's apologia. That is all we have got to go upon to judge whether this Bill is worth supporting or not. The Bill anticipates that the grants which we are making will be refunded in subsequent years. I suggest that under Clause 2, Sub-section (3), the provision as regards liquidation is totally insufficient. What the Treasury will gain by the refund they will lose by the debenture guarantee.

I shall quote the case of the Second Anglo-Scottish Company, which has a Treasury guarantee of £740,000, or three times the ordinary capital, and, besides that, they have the Cupar factory, which has cost £400,000, and which has never had enough beet to run a campaign. The original guarantees of the Treasury for all these companies, which have undertaken to subscribe to this agreement was £2,215,000 and the amount outstanding on 31st March was £1,396,500. I submit that the House is only asked for this new grant because, unless it is granted, these factories will close down and the Treasury will have to pay up £1,300,000. The right hon. Gentleman is hoping that the situation will right itself, but I very much doubt it. I wonder if he has studied the position of the Anglo-Scottish factories which are going to benefit under this scheme. The First Anglo-Scottish Company had a paid-up capital of £442,910 and began with an additional £610,000 of Government guaranteed debentures. Of these, £408,500 are still outstanding. The Second Anglo-Scottish Company has a paid-up capital of £250,500 and guaran- teed debentures outstanding to the amount of £741,400.

The Government are responsible not only for the guarantees, not only for the debentures, but also for the interest on these. This Bill is only a makeshift Measure. I have pressed for two years for an independent inquiry. That inquiry is not forthcoming. This report does not satisfy me that these companies would be able to repay the advances. Had the truth about this industry been revealed it would not have satisfied this House. The House would have demanded a thorough reorganisation of the industry. Now, or never, is the time if anything is to be saved from the wreckage. I hope the agriculturists of the country will realise that the fault lies equally on the shoulders of the Minister of Agriculture and his predecessor in office, who have constantly neglected agriculture in favour of doubtful finance, whether it comes from abroad or is home grown. Take the Anglo-Scottish factories. They were built and equipped by Duncan Stewart. The gentleman who controls this company is a director of the sugar companies. The machinery is almost entirely made by companies in which this director and another director are interested. I should like to know whether it is not a fact that the terms of the contract for building and equipping the factories were that the price should be the cost of the material plus wages, plus 10 per cent. There was a guaranteed profit to the contracting company of 10 per cent. This is dubious finance, and the Government should have looked into it. A public inquiry should look into it. That being the case, I can only hope that the agricultural population of this country will realise that both the party sitting opposite and the party above the Gangway are only looking after these shady financiers and paying no attention to the fate of the agriculturists. I hope the agriculturists will wake up and realise that there is still one party which considers their real interests.

Photo of Sir Louis Smith Sir Louis Smith , Sheffield, Hallam

Like the right hon. Gentleman for Darwen (Sir H. Samuel) I am sorry this Debate cannot take place in the daylight. This matter having been raised in the way it has been raised from the benches below the Gangway, it is a matter which should be carefully discussed in this House before a decision is reached. I am not one of those who spend money needlessly or advise the Government to do so. I certainly think that on the other side of the House they are liable to spend money when we should economise. In this particular case, I think the Minister of Agriculture has shown great wisdom in agreeing to this additional subsidy of £225,000. I realise that had it not been for this additional subsidy of small amount the sugar-beet industry would have had to shut down. One hears of the tremendous profits made by these factories. If they do make these profits it is very surprising to me how difficult it was for the Minister of Agriculture to get six of these factories in the best financial position even to accept the proposal which he put to them, and which was finally accepted by the other 12 factories. If these six Anglo-Dutch factories had been in the strong financial position which is suggested I am convinced the Minister of Agriculture would not have had difficulty in persuading them to come into line.

This additional subsidy of £225,000 only amounts to about 3s. per week per man to the men who would be thrown out of employment if the sugar beet industry were to die. It seems very extravagant to hear the strong language used by the Member for Darwen against this particular industry. Hon. Members below the Gangway, are willing at all times to support the Government in finding large sums for people for doing nothing. Here is a case where we have to find a little money to provide productive work of the most valuable kind. It is the production of work on the land which is the real source of wealth. The argument we have heard to-night against this small sum is really quite unreasonable. The Member for Darwen has said that the amount of the production of beet by the farmers per acre is far below that of the Continent. I think the difference is only 8.8 tons in this country and 9.1 in France where they have many more years of experience than we have in this country. It is certainly to be said for the farmers in this country, backed as they have been by the factories and organisers, that they have shown in a short time what can be done in England. I heard one hon. Member say that nature was against us in this industry. Experts say that our climate is ideal for growing beet. They say that because of our mild winters we can get more out of the industry than others.

With regard to the point of economy, it seems to me that there are two sorts of economy. We should consider whether we are to spend money wisely, for it is not economy sometimes not to spend money at all. This additional assistance is an excedingly wise Measure to put before the House. It would not have been necessary but for the collapse of the sugar market. The average price of sugar for 10 years has been double the present price, and the factories and growers have had to meet a fall in the subsidy from 13s. to 6s. 6d. per cwt. It was, therefore, impossible to carry on without some help. We are told by the Minister of Agriculture that every penny goes to the grower and that the factories cannot make a penny of profit. As the whole of the money paid through the factories goes to the grower there need be no hesitation on the part of any Member in agreeing to this small amount. The community as a whole have nothing to grouse about in connection with this sugar-beet industry. Sugar is sold in this country at so much lower prices than on the Continent that if they had to pay the same prices as in Germany we should be £13,000,000 a year worse off. The price here is 2½d. as against 3¼d. in Germany, and each farthing means four and one-third million pounds a year. If sugar is not taxed we can afford to help the farmer to grow it, and it is a very desirable industry to foster in this country. Not only do I think it is wise to agree to this small amount of money to keep the industry going, but I think also that it is most desirable to foster it and develop it in the future.

The right hon. Member for Darwen mentioned that there was a handicap on the industry, and he used that as an argument to show that we should not go forward. I quite agree that the railway rates are higher in this country, but surely that is an argument in favour of our lowering our transport costs in order to meet the demands of the industry. After the early experiences of this industry have already been paid for, it would be lamentable to allow the industry to go back, especially as all other countries have had to find far more money in subsidies than we have had to do. There is no reason why we should not agree with the Government in this Measure. We have an ideal climate for growing sugar-beet and there has been extraordinarily good organisation in the industry, the farmers and the factories working exceedingly well together. I feel perfectly convinced that it is undesirable for this industry to be let down. I congratulate the Minister on having brought the Bill forward.

Photo of Mr Godfrey Collins Mr Godfrey Collins , Greenock

I am anxious to put one question to the Minister in regard to a point that has not yet been touched upon in this Debate. A few months ago I asked the Minister whether he had powers to stop subsidised factories refining foreign raw sugar. He said that under the Act of 1925 he had not that power. I submit that, under this Bill and the conditions governing the payment of money to the subsidised factories, he could have taken the power in Clause 1, Sub-section (1), by simply adding the following words', "Provided that the refining of imported raw sugar is discontinued." He could have taken steps when making this bargain. That would have been a perfectly legitimate proceeding, because the Government are quite entitled, while paying out money, to take steps to see that certain conditions which have arisen in the last six years are stopped. The Minister may smile, but in Greenock a very grave situation has arisen. We are told, for the first time, that these subsidised factories are melting as much as 160,000 tons of sugar brought from abroad and competing against local industries in this country. These subsidised factories are melting, altogether, about 400,000 tons, according to his report. They have increased their output by 40 per cent. The Minister could have taken these powers and said to these companies, "Unless you stop the importation of raw sugar and melting it against the natural refining industries of this country, I will not give you the money you ask for."

We have in this report some very striking statements, but I will not read many of them, owing to the late hour at which we are discussing this Measure. I reciprocate the opening remarks of the hon. Member who has just spoken when he said that he had hoped that this discussion would have taken place in the light of day. Week by week and month by month there is a flow of clever propaganda by these subsidised factories in the Press of Great Britain. Therefore, the only place in which these matters can be submitted is across the Floor of this House, even though it is very late. On page 269 of the report, it says: The problem of reconciling the purely home sugar interests and the purely refining interests is still unsolved. The Minister has forgotten, or omitted, to take powers under this Bill to solve that problem, as he could do, at least to a very large extent. The report says in another passage: The main object of the changes in taxation has been achieved, but the effect of these changes on the industry's income and their resultant influence on the beet price have left the factories at a disadvantage. That is the situation in which we find ourselves, and I submit to the Minister that he might give grave consideration to an Amendment of Clause 1, Subsection (1), line 4, by adding the words I have already mentioned. I am not anxious to detain the House at this late hour. The right hon. Member for Darwen (Sir H. Samuel) has said how unnecessary this Bill is. These companies have 50 per cent. of their capital in reserves. Hundreds of factories in other industries are buying their raw material and knowing full well that they will be unable to make a profit, but they do not come cap in hand to the Government and demand more money. The Anglo-Dutch Company, who have refused this subsidy, should be the last to complain. In some cases the reserves of these companies are larger than their capital. They have received so many favours from a kind Government in the past that when they get a small favour they sulk and will not come in. The last people who should complain are the Anglo-Dutch Company. Their profits have been enormous, and I only wish that the Minister would be a little harsher towards these favoured people and not allow them to get away with so much swag. If he adopted the attitude of the Lord Privy Seal of three years ago, when the right hon. Gentleman was in favour of an independent inquiry into what one hon. Member has to-night called the greatest ramp of modern times, he would have done much not only for public economy but also for something much larger—the interests of the House of Commons and the purity of our public life. He would prevent, too, these favoured people from being spoon-fed once again by an unfortunate House of Commons.

2.0 a.m.

Photo of Sir Albert Braithwaite Sir Albert Braithwaite , Buckrose

I wish to say a few words from the point of view of the farmers and not the factories. From that point of view, we appreciate what the Minister has done. It would have been a great injustice to the farmers and their farm workers if this Bill had never been presented. Whatever may be the merits or demerits of the main scheme, and however much there might be in the reference that has been made by hon. Gentleman below the Gangway, that is beside the point, in connection with this Bill. If you are going to refuse assistance to the industry, you must give longer notice to the people who are most intimately concerned; I refer to the farmers and their workers, for whom the special privileges were introduced by previous Governments. If something is wrong with the finance of the scheme and with the way in which it was organised in the past, that has nothing to do with the Measure that the Minister is presenting to-night. He is presenting a Measure to tide us over until such time as the industry can be reorganised on a proper basis, and farmers and their workers are deeply appreciative of it.

In my constituency, I was instrumental in encouraging the growing of a large acreage of sugar-beet, which has done more to help the farmer over a difficult time than any other crop he could have grown. The farmers have got into the way of growing that crop, and they must not be shut off at a moment's notice and their workers be disbanded. Far more disorganisation would be caused locally by such a course of action than if you were to give proper notice to everybody concerned, so that he might turn his activity to something else.

This is a Bill to tide us over our difficulties and to allow us to reorganise the sugar-beet industry in order to maintain a proper continuity of employment. No one is more bitter in his disappointment at the failure of the industry to rise above its circumstances than the agriculturist. There were great hopes when the subsidy was originally given that after a few years the industry would become self-supporting, and no one is more disappointed than those who have gone carefully into the problems associated with the growing of beet. It is not a matter of incompetence on the part of those who are engaged in the industry, either at the growing end or at the factory end. World conditions have altered since this subsidy was given. A vast change has occurred in the prices which regulate the profits of the grower and the factory. I think the Minister is perfectly right in bringing forward a Measure of this kind. It will not be a waste of public money, but something which is going to help us out of a difficult time in agriculture, and we are very appreciative of it.

Bill accordingly read a Second time.

Photo of Mr Brendan Bracken Mr Brendan Bracken , Paddington North

On a point of Order. Is not the House entitled to some reply from the Minister?

Photo of Lieut-General Edward Fitzroy Lieut-General Edward Fitzroy , Daventry

The Bill has been read a Second time.

Bill committed to a Committee of the Whole House for To-morrow.—[Mr. T. Kennedy.]