Debate on the Address

Part of Orders of the Day — Queen's Speech – in the House of Commons at 12:00 am on 3 December 1954.

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Photo of Mr Charles Fletcher-Cooke Mr Charles Fletcher-Cooke , Darwen 12:00, 3 December 1954

But there are private coal industries in Tanganyika and in Rhodesia as well.

I wonder whether that suggestion was put forward by the Labour Party officially. The suggestion that my right hon. Friend is looking chiefly to the interests of the people of this country so far as the development of the Colonial Empire is concerned, is, if I may say so, nonsense.

In one respect I shall perhaps excite the animosity of hon. Gentlemen opposite, by saying that I do not think that the right hon. Gentleman is regarding our interests quite sufficiently. It is within the knowledge of hon. and right hon. Gentlemen in all parts of this House that the area, part of which I represent, the great county of Lancashire, is having great difficulty in selling textiles to its traditional markets in West Africa. When I read, at the same time, that the products of West Africa are fetching sometimes as much as 15 times the price which they used to fetch before the war, in the days when there was a good market for Lancashire goods in West Africa, I began to make some researches into where that greatly increasing purchasing power may be going, because it was not being spent sufficiently, in my view, on the good textiles of Lancashire.

Although the prices of Lancashire textiles have increased, they have not increased as much as have the prices of cocoa and other goods produced in West Africa. I wondered why it was that we were not getting quite the "kick back" one would have expected from the greatly increased prices that West Africa was getting for its products, because Lancashire had hopes of an expanding market in West Africa, and these hopes have not been justified.

The short answer is, as many hon. Members know, that the producers of these products, the countrymen in West Africa, are not being allowed to get the full benefits of the higher prices which their products fetch. This, as my right hon. Friend said, is a very complicated matter, and I raise it today chiefly because it has not been raised for five years in this House, according to my researches, and because it does relate to the rights and wrongs of statutory monopoly in these matters.

The right hon. Gentleman knows more about it than I do, and I hope that he will not think that I am criticising him or my right hon. Friend if I ask some searching questions about its operation. The object of this statutory monopoly in the marketing of West African agricultural products, and particularly in cocoa, was originally set out in the White Paper of 1946, Cmd. 6950. It was to produce stabilisation in place of the short-term fluctuations in prices of agricultural products, particularly cocoa—and I shall refer only to cocoa for the sake of convenience.

At the same time, in that White Paper, these words, relating to the funds of the statutory monopoly which has the monopoly of selling in the world the products of West Africa, were used: The primary purpose for which it is proposed that these funds should be used is to serve as a cushion against short and intermediate term price fluctuations in the world market price of cocoa; … There will be no question of their making a profit at the expense of the West African cocoa producers. Thus on the average of a period of years, it is to be expected that, apart from the allocation of funds"— for the use and direct benefit of the cocoa producers— the average price paid in West Africa will be substantially equal to the average net price realised on world markets, and that the Boards' buying and selling transactions will therefore approximately balance. That is the old phrase which we have governing so many statutory bodies that "accounts shall balance, taking one year with another," a phrase that no doubt rings in my right hon. Friend's head. That is not what is happening. The boards have not taken one year with another and merely cushioned out short term variations in prices. That was the pledge made in 1946 as their object, and my researches show that they have done no such thing. They have, in fact, accumulated very large surpluses, which have not been passed on to the producer and the country districts of West Africa.

These are very large surpluses. I notice that in the Report on the Nigerian Board there seems to be a slight shame at the size of the surpluses, and, in the case of the Gold Coast, there is a certain gloating about it, because in the Reports—I have here the Report for the year ended 30th September, 1953—there is a great deal of credit being taken by the Board for the strength of its investments, and for how it is investing more and more of this surplus.

Whether it is right or wrong to do this, and to take the profit away from the producer on the grounds that perhaps he ought not to have it, because it would be inflationary or something like that, it is wrong, on the grounds of public morality, to take it away from him by a system which was expressed, when it was originated, as being for quite a different purpose. It said in that White Paper: There will be no question of their making a profit at the expense of the West African producer. I think that it is a matter for investigation whether, if this scheme is to continue, it should not be put on a different basis. The originally stated basis has turned out in the event to be a quite wrong prophecy. It was thought that the prices would fluctuate, and that the statutory board would take the middle price, and make adjustments to its accounts every year or two years as the case may be.

Instead of that, the boards have made a surplus every year, sometimes very large, and there has been no serious attempt to balance that income and pay over the surplus to the producers. This means that "stabilisation of prices" and "providing a cushion" has largely been abandoned by the people who advanced this system.

They have now produced new arguments in favour of it. The first is really a slightly unworthy one. They say that these surpluses are very useful to the producers because they enable research to be done into diseases, methods of production, and matters like that. Of course, that is so. But the amount of these surpluses that can be devoted to such work is relatively small, and I do not think that should be put forward as a reason for keeping a system which has produced surpluses far in excess of those requirements.

The second argument is, quite frankly, rather an old friend, which was heard a good deal more about some time ago in this House and in the country—the "syphoning-off" of purchasing power—the economists' device against inflation which very rarely works. Another defence given, which amuses me, is that it prevents the rising of the "kulak." I should have thought that hon. Members on both sides of the House would have liked to see the rising of a prosperous peasantry. I think that was the object which the right hon. Gentleman the Member for West Bromwich was advocating. The idea that we should stop that by reversing the process which prevents certain peasants from accumulating capital is very remarkable in the year 1954, when we have had some experience of these matters.

The final argument—and I think that this is perhaps the most important one, and the hardest to answer—is that it is probably true that the local Governments which are, of course, becoming increasingly independent of us, like these organisations. Here, I feel, we have a certain duty to the country people as opposed to the townspeople in the Gold Coast, Nigeria, Sierra Leone, and in other places.

Of course, the politicians who control the new Governments are, on the whole, educated men from the towns, and to them these large sums represent a great source of power and influence, whereas, in equity, they really belong to the illiterate and inarticulate countrymen who have, in fact, produced the wealth represented by those funds.

This being so, I suggest to my right hon. Friend that, if we are to fulfil our trust, it is not enough merely to say that this system must go on because the new politicians who are taking ever more power like it. That is preferring one type of Her Majesty's subjects to another, the articulate against the inarticulate, even though the latter has in equity more right than the former to the control of these moneys.

I ask my right hon. Friend to look at this matter again, because it seems to me that the system has not done what was claimed for it. As in so many other examples of State monopoly, it has certainly not stabilised prices. Indeed, as the boards themselves now increasingly recognise, they cannot do this forecasting business, which is so often claimed as being one of the great merits of compulsory planning in marketing of this sort.

In his Report for 1952–53, the Chairman of the Gold Coast Marketing Board made a very striking admission about this. He said: Those who choose to regard the board's trading balance in September as a logical consequence of its price decision 14 months previously, attribute to it a skill in prophecy that it would certainly never claim for itself. In other words, these boards have no greater—and in many cases, I think, considerably less—skill in prophesying the trends in prices than had the private system of marketing, purchasing, and selling. We have had the same experience in Lancashire with our Raw Cotton Commission.

I think that my right hon. Friend will be doing the cause which he and I certainly have at heart a service if he examines this matter again. As he knows only too well, it is very easy to start these statutory undertakings and to give them a monopoly, but very difficult indeed to unscramble the eggs once they have been scrambled.

Much of the defence of these undertakings is, I am convinced, due to pride in the organisations. It is difficult to blame people for having pride in an organisation, especially if it has a lot of funds, as these organisations have. I am sure that many of the excuses made in favour of these organisations are a mere rationalisation of the feeling of pride in them. I suggest that that is not enough.

I was delighted to hear my right hon. Friend's reference to the negotiations going on at Geneva, which will, we hope, enable the products of this country to regain some of their traditional markets in the colonial areas.