Milk Marketing Board

Bills Presented – in the House of Commons at 12:00 am on 24th November 1953.

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Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Kaberry.]

9.12 p.m.

Photo of Sir Charles Taylor Sir Charles Taylor , Eastbourne

This evening I want to raise one small matter, small though not small in substance, on the White Paper on the decontrol of food and the marketing of agricultural products. I think it would be right for me first to say that, in general, I support the Government's White Paper. I am, indeed, sorry it has not received from the agricultural community and from the farmers the universal blessing I think it deserves. There may, however, be two reasons why it has not been universally blessed.

First, I submit that my right hon. Friend the Minister of Agriculture has not put over his proposals sufficiently well—with a blare of trumpets and a roll of drums as being largely the answer to the farmers' prayers. Secondly, I feel that the political byplay of the present President of the National Farmers' Union has not helped. I believe that, as an individual, he would be rather loath to support any scheme put forward by the present Government. But let me say that I do believe that farmers, generally, who have read this White Paper, have welcomed it and infinitely prefer it to any scheme which has been put forward as an alternative involving the continuation of the Ministry of Food and of Government bulk buying.

The point I want to raise tonight is contained in paragraph 10 of the White Paper which deals with milk and with the Milk Marketing Board. I hasten to tell the House, as I have done on occasions in the past, that I am associated with companies concerned with the production of milk, the manufacture of most milk products, and the distribution of milk, both wholesale and retail. But, when disclosing my private interests, I feel I should also dissociate myself, in the strongest possible terms, from that preposterous letter which was written by Mr. Clifford, the chairman of the Milk Distributors' Committee, which, I believe, was sent to most Members of Parliament.

I understand that that letter was sent by Mr. Clifford entirely on his own responsibility and that he did not even refer it to the members of his committee. We all regret that anybody outside the House of Commons should be so ignorant of our procedure and so stupid as to try to make threats of that nature.

The plans of the White Paper to which I have already referred envisage that the Milk Marketing Board will once more assume control in 1954 over nearly all the milk industry. There are some temporary exceptions. Once again it is to be given statutory powers. Not only this, but it will control the price paid for manufacture to all industries which use milk as a raw material, such as the chocolate biscuit manufacturers and cheese makers. Every industry which uses milk as a raw material, as I understand it, will be controlled as to price by the revivified Milk Marketing Board.

I submit that the Milk Marketing Board will be a monopoly—a monopoly of producers only—and I do not believe that any absolute monopoly, whether a producers' monopoly or any other, is good. I cannot help feeling that the Minister of Agriculture—I am glad to see the Joint Parliamentary Secretary is here—having failed to produce an entirely satisfactory meat scheme for farmers, then gave way to unreasonable demands to please the agricultural community about milk. I wonder whether, in their heart of hearts, the Minister of Food or the Parliamentary Secretary really agree with the Minister of Agriculture in this matter.

There are those who say that the Milk Marketing Board before the war did a good job of work, and I am not going to dispute that, but at that time when the Milk Marketing Board was vested with arbitrary powers, distributors were forced to resort to a committee of investigation if they wished to contest any decision that was made by the Milk Marketing Board. This was a very cumbersome and expensive procedure, and on one occasion at least the Minister had to intervene to tell the Milk Marketing Board that they were being arbitrary, and persuaded them to alter their decision.

In addition to this, although the Milk Marketing Board is a statutory body which is given very great powers by this House, it has power to enter into direct competition with those engaged in the milk industry. They are empowered to set up their creameries and to use their wholesale bottling depots, and there is nothing to prevent them going into the retail trade.

They have their statutory powers and access to records that they are able to get from the industry, which is highly privileged information and they have also got power over the allocation of the raw material in this industry. For example, if the powers were carried to excess, they could say to a factory, "You shall have no raw material to put through your factory. We are going to set up a factory next door to you. You will not get any allocation of milk and the factory which we shall set up will get all the raw material."

I submit that this is a wrong in any statutory monopoly. The manufacturers and the distributors probably have as much money as—and certainly far more men employed in the industry than—the milk producers. If that is so, the various parties engaged in this terribly important industry should be treated as partners. I ask the Minister of Agriculture to reconsider this matter. I suggest that this revivified and reconstituted Board should be composed of producers, manufacturers, distributors and consumers, together, perhaps, with a number of independent, Government-appointed persons who might be able to hold a balance.

The danger of a producers' monopoly fixing prices for the whole industry must be apparent to everybody. If they fix the price too high for British manufacturers it is only going to mean that, as happened before the war, this country will be used as a dumping ground for low-priced products from Denmark, Holland and other Continental countries. That will inevitably lead to hardship, not only to the producers but to the manufacturers and all others concerned in the industry. It is also bound to lead to an unsaleable surplus of milk on the market.

During the debate on the White Paper to which I have referred, I asked the Minister of Agriculture what opportunity the House would have to consider the safeguards mentioned in Paragraph 10 of the White Paper before the Defence Regulations and the Statutory Instruments were revoked. Paragraph 10 of the White Paper says that full marketing powers are to be restored to the Milk Marketing Board in 1954. It goes on to say: The exercise of these powers must, of course, be subject to necessary safeguards for the Exchequer, the consumer and other interests. I took a certain measure of hope when I saw the words, "and other interests." I thought that in the reconstituted Board the other partners in this great industry might be consulted, and that consumers, manufacturers, distributors and all the other people engaged in this great industry would be included.

I should like some assurance on that matter, and I should like to know whether the assurance which was given by the Minister of Agriculture—that this House will have an opportunity to consider the safeguards—still holds good. The Minister of Food knows only too well that, during the war, the milk trade was carried on in the most difficult times, during the period of flying bombs and the bombing of Britain, and that it was a great help to the Government. It served the public faithfully through times of great danger of those who were distributing milk. This side of the industry deserves a little more attention than it has been given. In addition it invested large sums of money in order to try to help the Government bring about their safe milk policy.

If I ask the Government to reconsider this matter, it is not with any idea of being unfair to the agricultural community, but because I believe it should be a truly British tradition to say that all sections of any particular industry shall be represented on any statutory board, invested with such power. Not only should the producers, the manufacturers and distributors be represented on it, but the consumers, too, and this will provide a more equitable arrangement for all parties interested in this industry.

There is another point, on which I shall not dwell at great length, and it concerns the Report of the Committee of Public Accounts, Session 1952–53. The Report draws attention to the fact that about £1,300,000 has been handed over by the Government—presumably taxpayers'money—to the Milk Marketing Board to compensate it for any loss it may incur through the collection of debts due to the Ministry of Food. The bad debts amounted to £19,000, yet over £1,300,000 of taxpayers' money was handed over to the Milk Marketing Board as provision against bad debts and as commission. I should like to know what happened to that money.

I feel that this question deserves the greatest consideration by the House and I make no apology for raising it. I have more consumers in my constituency than I have farmers, and I only want to see fair play all round not only for the farmers but also for the manufacturers, distributors and consumers.

9.27 p.m.

Photo of Mr Denys Bullard Mr Denys Bullard , South West Norfolk

I had no intention of intervening in the debate until I heard the speech of my hon. Friend the Member for Eastbourne (Mr. C. S. Taylor). I rise to disagree with most of what he said about the Milk Marketing Board. It is true that I represent a constituency which is not normally recognised as one of the chief milk producing constituencies in this country; those constituencies, I suppose, are chiefly situated in the West of England. But milk production in Norfolk has made very great strides and I believe that at least some of those strides have been due to the activities of the Milk Marketing Board. I believe that the Government are entirely justified in the step they are taking to restore the powers of the Milk Marketing Board, both by the history of the Board and by present circumstances.

The Board did an extremely good job for the efficiency of production before the war, and I believe it did a very good job for the improved efficiency of distribution. It made one of its chief aims reducing the costs between the producer and the consumer. There can be no doubt that in pre-war years it achieved a considerable amount of success in that direction.

It is argued that circumstances have changed and that, since there is now a guaranteed price for agricultural products under the 1947 Act, the situation of the Board has entirely altered. There is, of course, some truth in that suggestion, but the Board is an extremely responsible body which has been carrying out a great deal of the mechanics of the organisation of milk distribution. It did so even in the war. The accountancy has been entirely in the hands of the Board, and there is no doubt that it has done its job efficiently and well and has exercised its powers in the interests of the consumer as well as the interests of the producer.

After all, the liquid milk market in this country is the one to which the Board is bound chiefly to look and I think it is bound to watch the interests of the great milk consuming public in all the actions it takes. There are, as the House knows, under the 1949 Act various checks—and very considerable checks they are—which the Minister of Agriculture can exercise on the activities of the Board. He has power, I believe I am right in saying, under the 1949 Act to appoint four independent members to the Board if he so desires. They may represent trade interests, they may represent consumer interests, but they are appointed as people who take an independent view of the matter.

I believe that those checks are sufficient to ensure that the Milk Marketing Board does not exert monopoly powers against the interests of the consumers. Therefore, from all points of view, because of the work the Board has done on the producers' side and because of the good work that, I believe, it will do on the distributive and consumers' sides, I hope that the Government will not have second thoughts about the decision on the Board.

9.31 p.m.

Photo of Mr William Coldrick Mr William Coldrick , Bristol North East

On previous occasions I have participated in debates of this character to express the general opposition of the Co-operative movement to the setting up of these producer boards, and I want to reiterate some of the arguments that we think should be adduced on behalf of the consumers against conferring these monopolistic powers on a body of people who have an interest of their own in any decisions the Board may take.

I am not unmindful of the fact that when the Milk Marketing Board was established there was a pathetic state of things existing among the small producers, but I think it is particularly unfortunate that the farming community, being incompetent themselves to create an organisation to do the work they should do, have the audacity to come to this House and ask us to confer upon them statutory powers in order that they may exercise monopolistic privileges.

That they are monopolistic is evidenced by the fact that we had to make special provision to exempt this particular Board from investigation by the Monopolies and Restrictive Practices Commission. Therefore, there can be no question at all but what these self-appointed people are able to exercise a complete monopoly in this direction.

There was apathetic state of things, with unco-operative, unco-ordinated activities, so that a large number of small farmers were reduced to a state of penury, because of the undue influence exercised by some of the larger distributors who took advantage of that much vaunted virtue competition, forcing the small farmers to sell at uneconomic prices. Unfortunately, however, when we conferred upon the producers themselves the right to create a Board, instead of limiting its function to the production of milk and the selling of that milk at a certain stage to another body that would be responsible for the distribution, we gave to that Board the power to determine the prices and the agencies through which it should be distributed.

Milk is a very important article of Food and we are proud of the work which the Ministry of Food did during the war and afterwards in supplying the people, and particularly the children, with that very nutritious drink of food. But, unfortunately, we know that the Milk Marketing Board was not altogether concerned merely with the consumption of liquid milk. As has been stated in this House on many occasions, before the war we had the anomalous position where millions of people could not afford to drink good liquid milk and at the same time the Milk Marketing Board was selling surplus milk at about 3½d. per gallon in order that we should have umbrella handles and things of that kind made.

I know from experience that it was much more profitable to get that cheap milk and turn it into casein and sell it to manufacturers than to supply good raw milk to the people. Therefore, I think it positively dangerous to confer on a body which is not responsible to Parliament and the people of this country the powers invested in the Milk Marketing Board.

When the White Paper was put before the House I asked a Question about subsidies and their payment in future. I understand that up till now the subsidy on welfare milk and school milk has been paid after the auditing of the accounts of the people who supply the milk. I received no answer to my Question, but I am entitled to assume from the White Paper that if the Milk Marketing Board again receives these powers, then in future the Board itself will be empowered to carry out an audit or an investigation into the accounts of distributors before it determines what the subsidy should be. That is conferring on that body rights which it should not exercise.

It seems to me quite reasonable to suggest that a commission should be established which would enjoy universal confidence in its decisions. That commission should consist not merely of producers of milk, who have everything to gain from fixing prices by themselves, but also of representatives of the consumers and the distributors. I believe that such a body would enjoy far greater public confidence than ever any producers' marketing board is likely to enjoy in this country.

I suggest, for these reasons, that just as this House has declared very firmly that it is not prepared to hand over the mines to the miners or the railways to the railwaymen or any other great service to people who have in their power the right to make decisions profitable to themselves, so we should say emphatically to the milk producers and the whole farming community that we will no longer invest them with powers that should be invested in somebody responsible to this House, whose activities could be called to account.

9.40 p.m.

Photo of Mr Ian Orr-Ewing Mr Ian Orr-Ewing , Weston-Super-Mare

The House will be interested in hearing such a speech from an hon. Member on the other side of the House. We can well understand his detestation of monopoly rights. No doubt the hon. Member for Bristol, North-East (Mr. Coldrick) has been completely logical in what he has said tonight compared with the way in which he cast his votes many dozens of times since 1945. He voted against nationalisation of coal, nationalisation of transport, of electricity, of gas and all those things. I feel quite sure he did, but perhaps he can confirm that because, if I am wrong, I would not like that to go down on the record. Would he please tell the House if I am wrong?

Photo of Mr William Coldrick Mr William Coldrick , Bristol North East

Surely the hon. Member will distinguish between an organisation that embraces the whole of the community and an organisation set up to serve an exclusive number of the community.

Photo of Mr Ian Orr-Ewing Mr Ian Orr-Ewing , Weston-Super-Mare

I still have not had an answer to the simple question I posed to the hon. Member. Am I right in assuming that he voted against nationalisation of the enterprises of which I have been speaking? I want to establish that perfectly simple point. It is a little difficult to get a definite answer. Quite obviously, the hon. Member is a little evasive on that point.

Photo of Mr Frank Hayman Mr Frank Hayman , Falmouth and Camborne

Surely the hon. Member is aware that the miners themselves have not been entrusted with power to run the mines.

Photo of Mr Ian Orr-Ewing Mr Ian Orr-Ewing , Weston-Super-Mare

I entirely agree. Nor has it ever been suggested that the farm workers should be entrusted with the control of the Milk Marketing Board.

Mr. W. M. F. Vane:

Nor the cows.

Photo of Mr Ian Orr-Ewing Mr Ian Orr-Ewing , Weston-Super-Mare

Nor the cows.

The hon. Member for Bristol, North-East complimented the Ministry of Food, but did not compliment the farm worker on the work he did to encourage the cow to produce milk. The hon. Member did not, in fact, oppose nationalisation of coal, iron and steel and the rest but, by supporting those Measures of nationalisation, he supported a very large measure of monopoly.

It is no use saying that the community owns the coal, the railways and iron and steel. What about the consumer who is affected by the activities of these nationalised industries? Is the hon. Member really satisfied with the consumer organisation protecting consumer interests? Is the consumer able even now to choose the coal most suitable to his industry? Is he able to choose the train which will be fast enough for him?

Photo of Mr Ian Orr-Ewing Mr Ian Orr-Ewing , Weston-Super-Mare

When hon. Members opposite—I do not think there are many of them—abuse the proposal to give back powers in a modified form to the Milk Marketing Board, they should examine the question of how, otherwise, we are to get a suitable milk market in this country, how we are to help supply milk to be distributed at a reasonable price and by a reasonable organisation unless we have something of this nature.

The hon. Member was also assuming that this House was not to be in the picture in regard to the structure of any future Milk Marketing Board. He has entirely forgotten what are the rights of this House in this matter. I am sure my hon. Friend the Parliamentary Secretary to the Ministry of Food will correct me if I am wrong; the rights of this House consist in the perfectly simple fact that we can strike out any marketing scheme and it cannot be put into operation until the Minister has given final approval.

It is necessary for the House to give approval before a scheme can operate. That would be the time for the hon. Member to make his speech against monopoly. We shall look forward to resounding speeches at the big conferences of the Co-operative movement telling members of that movement that they should not get together to protect themselves nor to get better training because that is a crime.

Photo of Mr William Coldrick Mr William Coldrick , Bristol North East

I am most amused at the argument the hon. Member is putting forward, but it has no relevance to the Milk Marketing Board. It indicates a lack of knowledge of the Co-operative movement as that movement is prepared to accept, and must accept, everyone as a member. Will the hon. Member address himself to the fact that these boards are exclusive? They are confined to those who produce milk and the producers themselves determine the price, and so forth. What relationship or comparison that has with the Co-operative movement, which is open to all to join, just baffles me.

Photo of Mr Ian Orr-Ewing Mr Ian Orr-Ewing , Weston-Super-Mare

I do not think that all the members of the Co-operative movement would agree that they entirely control the price structure of the Co-operative movement, but that is another matter. Nor would I agree that the users of the services supplied by nationalised boards can control the prices they charge for those services. Of course they cannot do so. But in this case I do not think that the House—one cannot prophesy—would ever begin to agree to approve a marketing scheme where the interests concerned, including the consumer interests, were not represented on any board responsible for the management of a milk scheme.

Equally, I do not think that the farmers themselves—or the farm workers, whose livelihood and standard of life is dependent on a sound economic structure in the milk industry—would accept being dictated to by consumers and trade interests about what should happen within the marketing board. Of course they would not. It would be quite crazy.

Some people say we have had too much farming from Whitehall. I hope that we are not to get too much farming from the back benches in this House. I want to see good farming carried on by good farmers with the help of a sound organisation for their milk production, with the smallest possible gap between producer and consumer. Unless we have that I for one, and I think the majority of hon. Members, would never accept a marketing scheme and that scheme would never be allowed to go to the milk producer to give a single vote upon it. I think that the hon. Member for Bristol, North-East, with all his background, must have had several nightmares when he thinks over his past.

9.47 p.m.

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

My hon. Friend the Member for Bristol, North-East (Mr. Coldrick) can take some consolation from the fact that apparently it is the Parliamentary Secretary to the Ministry of Food who is to reply and it is the Parliamentary Secretary to the Ministry of Agriculture who is to remain silent.

I do not think I can intervene without passing some comment on the disintegration which is taking place on the benches opposite. We had a savage attack on the Prime Minister today from Conservative back benchers. Last Friday there were hon. Members who failed to support their Government, and Ministers and Parliamentary Secretaries who ought to have been within 90 minutes call of this House, but who were not there. The week before the Government were de-feated, because the back benchers would not rally to their support. Tonight, so far as I can see, this matter has been raised only to provide an opportunity to criticise the Government.

Photo of Sir Charles Taylor Sir Charles Taylor , Eastbourne

It is not a savage attack.

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

This disagreement between hon. Gentlemen opposite is becoming endemic. If it goes on, clearly the Government cannot last much longer and the marketing proposals contained in this White Paper do not merit our serious consideration. But I wish to say a few words on them in case this Government should survive the attacks being made on it from behind.

After all, the hon. Member for Eastbourne (Mr. C. S. Taylor) has called attention to the troubles this Government have got into. Hon. Gentlemen opposite ought not to say anything about the N.F.U. I spent last week in the countryside, and I was appalled at the feeling which has arisen over the Government's policy. I know people who are friendly disposed towards the Minister—and so they ought to be—who cannot understand what is happening.

The hon. Gentleman referred in general to this White Paper. Let me mention some of the things which are dealt with. Take eggs for example. Why on earth have we no scheme about eggs? What is more preposterous than, with eggs costing 6¾d., they are being subsidised? Where on earth are we getting to? We are getting an interim scheme introduced and—just as the hon. Gentleman says about milk—we have everyone concerned with eggs saying that it is hopeless and the Government have fallen down and there is still nothing being done.

Just before we started this Adjournment debate we had a short debate on sugar beet. What could the Parliamentary Secretary say? "Well, we are thinking about it."

Photo of Sir Charles Taylor Sir Charles Taylor , Eastbourne

On a point of order. I thought that this debate was on the Milk Marketing Board. I drew attention to the references to the Milk Marketing Board which appear in the White Paper. I did not refer to sugar beet or eggs.

Photo of Mr William Morrison Mr William Morrison , Cirencester and Tewkesbury

The Question before the House is "That this House do now adjourn." Within certain limits almost anything is in order, but it is not in order to revert to a previous debate on the same day.

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

I am obliged, Mr. Speaker. I shall not revert again. I apologise for having done so. Nor shall I refer to the nationalisation of coal. What does the Parliamentary Secretary intend to do about bacon? What about the vast difference between the price of imported bacon, on which the Ministry make a tremendous profit, and the price of home-produced bacon on which the Ministry make a considerable loss? What does the hon. Gentleman intend to do about that? We ought to know.

It is no good the Government trying to appease the back benchers by saying that they intend to decontrol, unless the hon. Gentleman has made up his mind what he intends to do. What about meat? Is anyone satisfied with the proposals about meat? I have not met anyone who is. The proposals have upset everybody. This White Paper has appeased the unthinking back benchers who had been pressing for decontrol. It has exposed the Government who have given no serious thought to the matter and it has upset every quarter of informed opinion. There is not one proposal in the White Paper which has brought any satisfaction to anyone in the trades and industries affected.

As the hon. Member for Eastbourne said, this White Paper has upset the milk distributors. I do not know what authority Mr. Clifford had for writing his letter to us, but I know that he expressed the feeling common among milk distributors throughout the country. Milk distributors are worried about the simple fact that the amount of milk which is distributed has fallen, and looks likely to fall considerably further as a result of these proposals.

Milk distributors want to make their profits fairly by distributing more milk. They do not want to argue, as they have been arguing with the Ministry of Food, that they should be compensated for their lack of profits owing to reduced volume of milk they are distributing. Is not that the position which they are now in? There was a drop of 30 million gallons during the first year of this Government and there is likely to be a similar drop this year. That is what the distributors are worried about.

They are also worried about the further decline that there will be if the proposals of the White Paper are implemented, as they fear that they will be. The crucial issue is not whether there will be a producers' monopoly or not. There are arguments about what form milk marketing should take, but I hope that hon. Members in all parts of the House accept the proposition that there must be the orderly marketing of milk.

The only people who oppose that are backwoodsmen in the Tory Party. According to their doctrinaire beliefs, there should be freedom for the operation of the law of supply and demand. That proposition is not accepted in intelligent circles even within the party opposite.

The Parliamentary Secretary to the Ministry of Food (Dr. Charles Hill):Will the hon. Gentleman clear up the main point? Is he in favour of the policy of restoring powers to the Milk Marketing Board?

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

I shall come to that point. I am in favour of the restoration of orderly marketing provisions. That is not begging the question. When the hon. Gentleman asks me whether I am in favour of restoring the powers of the Board, I want to know upon what conditions that is suggested. I want to know what the White Paper means.

Photo of Sir Charles Taylor Sir Charles Taylor , Eastbourne

Surely the hon. Gentleman does not say that he supports me?

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

I might serve a worse cause than could be served by supporting the hon. Gentleman when he happens to be right. It is obvious that the hon. Gentleman has profited by a study of the Lucas Report, and that is commendable.

The Parliamentary Secretary, in putting a question to me, is really asking me if I advocate a return to the pre-war position. The answer is "No," and it must be "No." Why? This is where the distributors are concerned and upset. Before the war the price support of the farmer depended upon the retail price support. That was most unfair to my constituents. The larger the family, the more milk they consumed and the greater the subsidy they gave to the farmer. I believe the subsidy should be supported by the taxpayers. My reply to the Parliamentary Secretary is that I support a return to orderly marketing, provided that that can be done while maintaining the present retail price levels or even restoring the former levels. If that cannot be done, we have to reconsider the position.

First of all, therefore, I want the Parliamentary Secretary to answer a question. I asked it of the Minister of Agriculture, but he could not reply, and later the Chancellor avoided answering it. What does the White Paper mean? This is a simple question. Are we to have a continuation of the present subsidies and the present level of subsidies on milk? I want a fair and frank answer to that question.

To develop the reply, it seems to me that, if the Parliamentary Secretary is not going to evade saying "Yes" to that answer, we face the question which faced the Select Committee on Estimates when it inquired into the Ministry of Food Estimates. That is why I could not give such a simple reply as some hon. Gentlemen opposite expected me to give. If there is a very large or, at any rate, a substantial element of subsidy, particularly if it is supported by taxation, it is unreal to talk about the restoration, simply, of the powers of Milk Marketing Board. The view of the Select Committee on Estimates was right that it would be wrong—I am not entering into any argument about producer boards and commodity commissions—for it simply to be left to a producer board if a large element of taxpayers' money was concerned.

It is for this reason, among others, that we ought to have something better than the White Paper. It is no use saying, as the White Paper does, that the exercise of this power must be subject to necessary safeguards. We want to know what is the essential problem before the Government. If they tell us tonight that they simply do not know, the sooner they get out the better, because we cannot have agriculture left in this way. It is unfair to the Minister of Agriculture and his Parliamentary Secretary. We cannot have this improvisation, because it is destroying the essential confidence of the guarantees. The farmer is entitled to security, but that security depends upon a settled policy. I ask the Parliamentary Secretary tonight to tell us, first of all—and it is a reply to which we are surely entitled—the amount of the subsidy on milk which is to continue under these proposals.

It being Ten o'Clock, the Motion for the Adjournment of the House lapsed, without Question put.

Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Kaberry.]

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

Secondly, if the answer is that the present subsidy is to continue, then what is the form of machinery which is to operate the marketing control? I hope the hon. Gentleman will agree that these are fair questions, and, if the Parliamentary Secretary cannot answer them, it means that the Government have only added chaos to confusion by publishing this White Paper.

10.1 p.m.

Photo of Dr Charles Hill Dr Charles Hill , Luton

It was not unamusing to hear the hon. Member for Sunderland, North (Mr. Willey) referring to the disintegration which he saw in front of him, bearing in mind that the two speeches we have heard from the benches opposite—his own and that of the hon. Member for Bristol, North-East (Mr. Coldrick)—revealed a wide divergence even on the issue of the restoration of the powers of the Milk Marketing Board. I see that the hon. Gentleman is frank enough to recognise that difference.

First, the hon. Gentleman for Sunderland, North did his best to get as close as he could to the statement of his right hon. Friend the Member for Belper (Mr. G. Brown), pleading for the restoration of the functions and powers of the Milk Marketing Board to their old form. Again and again, his right hon. Friend prodded the Government upon its tardiness and apparent reluctance to restore these powers in their entirety.

But what does the hon. Gentleman do today? He hedges about a sound marketing organisation, and does his best to dodge around the White Paper from eggs to meat and then to bacon, because he has not the courage or consistency to face up to the commitments into which his own side had entered. Indeed, as I hear hon. Members opposite from time to time, I really wonder how deep is their devotion to the policy of guaranteed prices and markets.

I am not now referring to the unusual position of the hon. Member for Wednesbury (Mr. S. N. Evans), but to the statements that are made, and the questions that are put from time to time, which show that the party opposite is unwilling to face up to the domestic implications of that policy.

I want to deal, first, with the points raised by my hon. Friend the Member for Eastbourne (Mr. C. S. Taylor). He expressed, in temperate terms, a natural anxiety on the part of an important section of the milk industry, and I want to deal with his doubts and anxieties in terms of the White Paper. He referred to the difficulties before the war; for example, the cumbersome machinery of the committee of investigation. He referred to the fact that the Milk Marketing Board had begun, in pre-war days, to participate in manufacture, and was more deeply involved in manufacture and could be involved in such a way as to compete with those at present in that field.

I want to make this quite plain. The Government's policy is the restoration of full marketing powers to the Milk Marketing Board, subject to certain important provisos. It would be difficult in this changed world merely to return to the position as it existed before the war. There are many factors that lead to that conclusion. For one thing, the Milk Marketing Board, during the war years and since, has been the owner of the milk. Before the war, its position was one of a trio in a tripartite contract. That position has to be looked at again. There is the fact that over the last 10 or 12 years there has been compulsory allocation of milk by the Ministry of Food. That has to be looked at again in the light of post-war conditions.

Further, there is a subsidy of £90 million going to milk. It consists of two parts:the schools and welfare subsidy, £41 million, in round figures; and the general milk subsidy, £49 million. The very fact that £90 million of public money is passing to that industry as subsidy is a new circumstance which must be taken into account today.

Thirdly, there is the policy for which successive Governments have been responsible, the safe milk policy, and the expression that that policy has had in particular margins as rewards for achieving particular qualities. Other interests need to be safeguarded, including those of manufacturers and distributors.

The essence of what I want to say is that though the Government have made plain their policy of restoration, the task now begins of examining the safeguards which need to be instituted—to quote from the White Paper itself— for the Exchequer, the consumer and other interests. The White Paper goes on: Thus, the continuance of an element of consumer subsidy will involve approval by the Government of the level of prices and of distributive margins. The controlled retail price, and the price paid as the result of the February Review under the Agriculture Act, 1947, are obviously new factors in the situation.

We regard the next phase as one of examination and consultation with the bodies concerned, including distributors and manufacturers, of the problem of what safeguards are necessary in order to meet present conditions and circumstances within the framework of the policy of the restoration of the powers of the Milk Marketing Board. The Government attach real importance to this next phase. My hon. Friend put forward his own particular proposal of a board which would be predominantly a producers board, but there are all sorts of difficulties in the way of that. Other hon. Members put forward the suggestion of a milk commission, others a distributors board with some consultative arrangement between producers and distributors boards.

There is no commitment as to a particular way. The present phase is one of consultation and examination with the parties concerned of ways and means of achieving this end. Let us not assume that there is essential hostility between producers and distributors. Marketing boards in Scotland have achieved something quite close and friendly in the matter of liaison between them.

We believe that with good sense and good will safeguards can be devised which will meet the proper representations of the distributors and of the manufacturers. We are very mindful of the valuable and important part played by the Milk Marketing Board and by the distributors. The latter's margin during the war years and since has been a very narrow one. Perhaps I could give the exact figure. The cost of milk has doubled since before the war, and the cost of distribution has gone up by less than one-third.

Apart from its other functions, the Milk Marketing Board has made great strides in artificial insemination, grass drying, milk recording, and other aspects of dairy husbandry. So we have, I think, to work out and think out ways and means of doing the two things—restoring powers to the Board in the light of current conditions and circumstances, and making the proper safeguards for the distributors and manufacturers.

My hon. Friend referred, somewhat fearfully, to the control that the producer board would have over the price paid for milk by the manufacturers. Let me say at once that such is the increased rate of production of milk that the manufacturer will tend to be in a stronger position in this matter. In any case, the rate of payment for milk for manufacturing purposes must stand as a matter of common sense to be determined between the producers and the manufacturers.

Of course, the hon. Member for Sunderland, North, perhaps in a moment of pardonable exaggeration, said that there was only one problem confronting the distributors, that of the fall in the consumption of liquid milk. His hon. Friend knows more about the subject, so he did not make that rather absurd point There has been a fall in consumption. In 1951–52, the amount of milk sold for liquid consumption was 1,569 million gallons. If we take the following year, we find that the figure was 1,535 million gallons. The difference of 34 million has to be related to over 1,500 million.

The hon. Member for Sunderland, North says that the drop in the consumption of liquid milk is wholly responsible for the difficulty in which the distributors find themselves. That is the sort of flippant nonsense we hear from the hon. Gentleman when he is scarce of material, and which we heard from him tonight in a typical speech.

There is only one other thing I wish to say and that is with reference to milk production. Production has gone up by over 30 per cent. The volume of liquid milk has gone up by almost 80 per cent., and most of the milk now sold is clean and safe. The welfare milk scheme and the milk in schools scheme have been of outstanding nutritional value.

I want to refer to the point made by the hon. Gentleman about the operation of the welfare milk scheme in relation to the restoration of powers. The word used in the White Paper is "operation." Let me point out to the hon. Gentleman that the Milk Marketing Board pays the money today as the agent of the Ministry. As we see it at the moment, the Board will continue to pay the money, but we shall look at the question of the identification of beneficiaries.

We will look at the question, which he himself raises, about the representatives of the Milk Marketing Board, and its auditors coming and gazing at the mysteries of the accounts of the distributors. We will look at that point, as we will look at the point of the identification of the beneficiaries. What is intended here is that, in the operation of that scheme, and that operation is essentially a payment of money to the retailers, the Milk Marketing Board is likely to continue to do what it has hitherto done as the agents of the Ministry of Food, and be the actual payer of the money.

I think I have dealt with the main points raised by my hon. Friend. I recognise his difficulties, but I assure him that there will be full consultation, and further, that if there is any modification of the scheme, as indeed there must be, it must run the full gamut of stages of the marketing Acts—public inquiry, producers vote, the phases in this House and the like. There will be ample opportunity for him, as for other hon. Members, to see whether, in fact, these safeguards that will be included are really effective from the point of view that he has raised tonight.

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

The hon. Gentleman has not cleared my mind on one point. He has mentioned the consultations that are to be held, but will an assurance be given in those consultations that there will be no reduction of the present subsidy on milk?

Photo of Dr Charles Hill Dr Charles Hill , Luton

The hon. Gentleman obviously asks an impossible question, in the hope that he will get a faulty reply capable of use for propaganda purposes. He wants me to say, I suppose, that there is no intention, now and for all eternity, to change the level of the milk subsidy; or he wants me, in more delicate terms, to hint at that possibility. In either case he will seek to use my answer for his own purposes.

There is nothing in that White Paper which indicates a variation in the subsidy. Indeed, the fact that I have referred to the subsidy as one of the elements of change may lead the hon. Member to draw inferences as to the present position. But I am going to give no hint as to the future, not because the future is either bright or dark, but because he will not get from me a statement of future Government intention in this field.

Question put, and agreed to.

Adjourned accordingly at Eighteen Minutes past Ten o'Clock.