1211 STANDING COMMITTEE B Thursday, 12th March, 1925.

[Mr. SAMUEL ROBERTS in the Chair.]

BRITISH SUGAR (SUBSIDY) BILL.
[OFFICIAL REPORT.] CLAUSE 1.
—(Rate and Conditions of Payment of Subsidy.)

(1) Subject to the provisions of this Section and to the satisfaction of such requirements as to proof and otherwise as may be prescribed by rules, there shall, out of moneys provided by Parliament, be paid in respect of every hundredweight of sugar or molasses manufactured in Great Britain during a period of ten years beginning on the first day of October, nineteen hundred and twenty-four, from beet grown in Great Britain (in this Act referred to as "home-grown beet"), a subsidy at the rate prescribed by the First Schedule to this Act.

(2) The subsidy shall not be payable—

  • in respect of any sugar or molasses unless it is shown to the satisfaction of the Minister that the price paid or agreed to be paid for the beet from which the sugar or molasses was manufactured represents a rate not less than the minimum price per ton (if any) prescribed as respects that beet by the Second Schedule to this Act; or
  • in respect of sugar or molasses manufactured in any particular factory, unless it is shown to the satisfaction of the Minister that not less than seventy-five per cent. of the plant and machinery installed in the factory for the manufacture of sugar and molasses consists of plant and machinery wholly manufactured in Great Britain:
  • Provided that the provisions of this paragraph shall not apply in the case of any factory in respect of which the Minister thinks fit for any special reason to direct that they shall not apply, and in the case of a factory which was used for the manufacture of sugar or molasses before the date of the passing of this Act shall apply only in relation to plant or machinery installed in the factory on or after that date.
  • 1212
  • The percentage aforesaid shall be ascertained on the basis of the value of the plant and machinery as delivered into the factory.
  • (3) The Minister may, if he thinks fit, in the case of sugar or molasses manufactured during the year beginning on the first day of October, nineteen hundred and twenty-four, withhold payment of any subsidy payable in respect thereof unless and until he is satisfied that all duties of excise payable in respect thereof have been duly paid.

    (4) Subject to the provisions of this Section, the subsidy shall be paid to the person by whom the sugar or molasses was manufactured and the amount thereof payable to any person shall be calculated in respect of the amount of sugar which is manufactured by that person in each week and in respect of the amount of molasses which in each week is delivered from the factory or used therein in the manufacture of food for stock, and payment shall be made from time to time as soon as may be after the amount payable in respect of each week has been ascertained:

    Provided that where, subject to and in accordance with any rules, sugar or molasses which has been manufactured in one factory is removed into another factory for the purpose of being therein subjected to a further process of manufacture and no claim is made for payment of subsidy in respect of the article as manufactured in the first factory, the subsidy shall be payable in respect of the article as it exists when finally manufactured in the second factory and to the person by whom the article was manufactured therein.

    (5) All claims for payment of subsidy shall be made to and determined by the Minister in accordance with rules, and any decision of the Minister given with respect to or in connection with any such claim shall, subject to the provisions of this Act, be final and conclusive.

    (6) If any person acts in contravention of or fails to comply with any rule he shall, in respect of each offence, be liable on summary conviction to a penalty of fifty pounds.

    Amendment proposed [11th March, 1925]: At the end of Sub-section (5), to insert a new Sub-section— "(6) The accounts of any undertaking qualified to receive a subsidy under the provisions of this Section shall be audited each year by a public auditor and laid before before Parliament."—[Mr. Barnes.]

    Question again proposed, "That those words be there inserted."

    Mr. BARNES: I was stating yesterday that I thought it desirable, in a case of this description, where the State is giving a subsidy, that the Treasury should have some information to enable them to follow the development of this industry, for one or two reasons. In the first place, I think 1213 it is a legitimate request in regard to this subsidy, which is periodically renewed, that the Treasury should have some guidance as to whether it is too much or too little. Again, I think it is difficult to stop a subsidy to an industry once you commence it, and one can easily foresee that possibly, at the end of 10 years, considerable interests will have been built up. There will be a large amount of private capital involved, there will be the interest of the labour employed, and there will be the crops of the farmers in the respective neighbourhoods, so that it is easy to see that at the end of the 10 years period under this subsidy, which, of course, places an industry in a favourable condition to operate, if by any chance the full advantage had not been taken of the subsidy and the industry was not in a very strong position, there might be considerable pressure exerted on the Minister of Agriculture, and, through him, on the Treasury to continue the subsidy in some shape or form. If there was any system of public auditing during this period of 10 years, the Treasury would be building up a sound knowledge of what was taking place in the industry. I think it would be to the advantage of the Minister, of the Treasury, and of everyone engaged in the industry, and, therefore, I move this Amendment. Some one might say that in the ordinary way a firm would have their accounts audited, but the provisions of the Industrial and Provident Societies Act, which lays down certain requirements for public auditors, ensure returns in more detail than prevails with an ordinary chartered accountant operating in the usual business way, and I think the accounts would be more full and useful to the Minister, if my Amendment were agreed to.

    The MINISTER of AGRICULTURE (Mr. Edward Wood): I am afraid that I cannot see my way to accept the Amendment in this form, but I have considerable sympathy, and I think the hon. Member, if I may say so, has made out a very fair case in support of the general plea that Parliament, which is responsible for finding public money for this business, should have as full information as is possible and reasonable with regard to the way in which that money is going. I think it is also reasonable, from the point of view of Parliament and 1214 the taxpayer, that they should have as full information as possible on which to base their judgment of the success or otherwise of the enterprise at the end of the 10 years period, and I think there is considerable force in the argument that, without such information, at the end of the 10 years it will be less easy perhaps, either for the then Minister of Agriculture or for the House of Commons, to feel that he is on absolutely secure ground in standing firm on the policy on which we are to-day engaged of a firm 10 years' subsidy, and no more. Therefore, I am disposed to think it is reasonable to afford to Parliament such information as would enable them, first of all, to keep in intelligent touch with the progress of the business throughout the 10 years and, at the end of that period, to have reasonable information as to what the position is. I do not think, with all respect to the drafter of this Amendment, however, that it will really give the information that we want, and I suggest, although I do not pretend to be technically qualified to discuss the details of these matters, that the terms in which the Amendment is drawn are rather too general to be a very precise guarantee of result. "The accounts of any undertaking"—I suspect that that hardly defines what hon. Members themselves would seek to have. What they seek, I suggest, and what it is reasonable that Parliament should have, is that, in addition to the ordinary returns that have to be made under the Companies Acts, they should have a general statement of the profit and loss account of the company during the progress of the subsidy, so that they can judge how the thing is progressing. Therefore, if it will meet the views of the supporters of the Amendment, I should propose, with the permission of the Committee, to move a new Clause when we come to it. I have a draft here, and I apologise for not having been able to put it on the Paper, but it was impossible for me to arrive at a draft, in consultation with the Financial Secretary to the Treasury, in time, but I can tell the Committee what it is. It is a very simple proposal to re-assert the provisions of the Companies Consolidation Act, 1908, with regard to the form of balance sheet audited, and so on, containing a summary of the share capital, 1215 liabilities, and assets—words out of Section 26 of Part II of the Companies Consolidation Act, 1908, with the addition of words that such a statement should include a statement of profit and loss, that these statements should be made to the Minister, and that, as and when made, they should be laid before Parliament. I think that is the best way of doing it, and I think the thing is reasonable, and I hope, with that undertaking, the hon. Member will see his way to withdraw his Amendment and allow me later to move my Clause.

    Mr. BARNES: Would it meet the convenience of the Minister if I were to withdraw my Amendment now and he were to consult with Members on this side to see if it is possible to get an agreed Clause for the Report stage of the Bill?

    Mr. WOOD: Yes. I should be quite agreeable to that, in which case I would not move any Clause at this stage, but I would take an opportunity of consulting with hon. Members opposite and on this side in order to see if we could get an agreed Clause for the Report stage.

    Mr. RADFORD: I believe the expression "public auditor" limits the selection very considerably, as many chartered accountants are not public auditors.

    Mr. WOOD: I was not proposing to have "public auditor."

    Colonel COURTHOPE: I am entirely in sympathy with the object of the Mover of the Amendment, but I would like to draw attention to the fact that some of the companies which are now building factories are public companies and some are registered as private companies. I draw attention to that, so that the Clause may be drafted to cover both cases.

    Mr. BARNES: I take it that, if there be no agreement, we shall be free to move this Amendment on the Report stage?

    Mr. WOOD: Certainly.

    Amendment, by leave, withdrawn.

    Clause ordered to stand part of the Bill.

    Clauses 2 (Charge of excise duty on sugar and molasses made from beet grown in Great Britain or Northern Ireland), 3 (Repayment of amounts improperly obtained and penalty for false statements,M 1216 etc.), and 4 (Short title, interpretation, and repeal) ordered to stand part of the Bill.

    NEW CLAUSE.
    —(Fair wages to be paid by employers in receipt of subsidy.)

    The wages paid by any employer to persons employed by him in connection with the manufacture of sugar or molasses in respect of which a subsidy is payable under this Act shall not be less than would be payable if the manufacture were carried on under a contract made between the Minister and the employer containing a fair wage clause which complied with the requirements of any resolution of the House of Commons for the time being in force applicable to contracts of Government departments, and if any dispute arises as to what wages ought to be paid in accordance with this Section it shall be referred by the Minister to the Industrial Court for settlement.—[Mr. Wood.]

    Brought up, and read the First time.

    Mr. WOOD: I beg to move, "That the Clause be read a Second time." This Clause concerns the wage question, and hon. Members who were present yesterday will recall the discussion that we had on that point, in which I think it was made clear that there was a very general wish on all sides to make some provision for the question of wages paid by these factories. Although I think the Committee was a good deal impressed by the figures quoted by my hon. and gallant Friend the Member for Rye (Colonel Courthope), which went, as far as I was able to follow them, to show that there was certainly no case at the present moment for suggesting that the wages paid were not adequate, and, indeed, I think went further to show that there was not much likelihood of any such danger arising, I think the general feeling of the Committee was, as it was indeed his own, that that was not adequate reason for passing by the attempt to make such provision as we might be able in this Bill. I gave reasons to the Committee why I was unable to recommend them to accept the proposal made by the hon. Member for the Forest of Dean (Mr. Wignall) and his friends on the other side of the Committee. I have done my best to meet the general instinct of the Committee in this matter by applying the principle of what is known as the Fair Wages Clause, which is in common vogue in Government contracts. That is a principle which is very familiar to Par- 1217 ment and to which Parliament has been accustomed in matters such as this, where public money is concerned. I think I may safely say that, almost universally, that principle has worked smoothly and beneficially. Therefore I commend it to the Committee. The Clause will work on all fours with an established principle to which Parliament is well accustomed, and I think it avoids the dangers, as they seem to me, at any rate the objections, implicit in the suggestion made from the other side of the Committee yesterday. I commend this Clause as the best contribution I have been able to make, after due consideration, to meet the general desire of the Committee.

    Mr. NOEL BUXTON: I need not take up the time of the Committee in repeating the reasons which I gave yesterday for thinking the plan we had concocted was the best. One point does impress itself on me; it appears to be more adaptable to the peculiar conditions which will attach to these factories, some of them in the depth of the country. However, we gave our reasons yesterday. I am glad the Minister thinks we can agree on the principle involved, but we shall certainly feel that the case for the joint industrial council should be argued on the Report stage, and we shall move it there. Therefore, I do not propose to vote either way on this Clause, but as we have thrashed out the principle involved, look to a discussion in the House at a later stage.

    Mr. NEVILLE: I should like to say one word on behalf of the agricultural labourers who will be affected by this Clause. Cantley is in my constituency, and therefore I come across a great many of the people who are engaged in this industry, and I think they will feel they have been looked after. There has been a general feeling that this sugar beet subsidy was for the benefit simply of the farmers and the sugar makers, and not for the benefit of the agricultural labourers; there was a feeling that they had been left out; and this Clause, suggested by the Minister of Agriculture, will do a great deal to allay that feeling, and I welcome it on behalf of those who work in this industry. If the Clause does not work as it should, I think there is no reason why Parliament should not alter it.

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    Mr. WIGNALL: I have given considerable consideration to this new Clause, and I look upon it as a very complicated and difficult one to apply. I have had something like 35 years' experience as a trade union official, and have had to meet all sorts of difficulties and problems, and have had a good deal to do with industrial courts, with arbitration, and with all the other things that arise in a wicked agitator's life. I have been looking at this Clause as it stands, and I think it would be the most fertile Clause for creating disputes that could be suggested, particularly as it applies to what is known as a new industry. If it applied to any stabilised trade, or some industry where you could base it on comparisons, it would be a very good Clause. The Fair Wages Clause is supposed to apply to the conditions that prevail in the district among similar trades or similar industries, and if there is no similar industry in the district there is no comparison which can be made, and that is going to create no end of difficulties. I was not quick enough to catch all the valuable information contained in the short speech of the hon. Member who gave us the wages records yesterday, and I am not in a position to analyse it or criticise it, or say much about it, because I do not quite know what it applies to or who it applies to, but surely we could not take that as a guide in the Fair Wages Clause. If it were agreed that we could do so, I should be inclined to increase the lower and leave the higher rate as it is; but I only say that to point out how difficult it would be to apply this Clause. No doubt it is right in principle, and judged from the office chair or Departmental aspect there is a good deal of good matter in the new Clause; but my fear is that you cannot apply it with satisfaction to the persons who will be concerned. There is, in the last line, a reference to the Industrial Court, but when I look at this proposal in contrast with what the Committee rejected yesterday, I have a serious doubt as to the mentality of the Committee regarding the application of these proposals to industrial matters. Our proposition yesterday was an absolutely sane and sensible proposal to set up a means of applying wages, with a later Clause in it that if we failed we 1219 could go to an arbitration court. The Committee rejected that, however. My position this morning is that I do not feel disposed to vote against this Clause, because there is something in it that you may get out of it, with a lot of trouble and a lot of struggling, and probably a lot of heart-burning; but, still, I would rather have this than nothing at all, and there is some foundation that one can work upon later. I still prefer the method we suggested yesterday of an industrial council being set up, and that system being applied in settling wages, and I must reserve myself to advocate it on the Report stage. Therefore, if I voted in favour of this proposal, I should be voting myself out on the Report stage, because one cannot advocate both sides. I am not going to vote against the present suggestion, as I would rather have it than nothing at all, and to be consistent with what I believe to be right I will not vote at all this morning, leaving the Committee to carry the proposed new Clause, as they undoubtedly will, and keeping to ourselves the right to contest the position again when the subject comes up on the Report stage.

    Lieut.-Colonel Sir F. HALL: I have a great deal of sympathy with the position of the hon. Member for the Forest of Dean (Mr. Wignall), and I quite see the difficulties that are likely to take place. At the same time, I think he will admit the Minister of Agriculture has gone out of his way to endeavour to meet those difficulties.

    Mr. WIGNALL: I have said so.

    Sir F. HALL: Figures were given yesterday by my hon. and gallant Friend with regard to the position of the labourers. I am speaking from memory, and he will correct me if I am wrong, but what I could not understand was this: He said a labourer working 56 hours a week would be getting a matter of 57s. per week; on the other hand a labourer working 48 hours was getting only £2. If the labourer working 56 hours is getting 57s.—I am not saying he is getting too much—why should a labourer working 48 hours, instead of getting 1s. an hour, be getting only 10d. an hour?

    Mr. RADFORD: The other is overtime.

    Sir F. HALL: That was not stated yesterday.

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    Colonel COURTHOPE: I think it is accurately reported in the OFFICIAL REPORT of our proceedings yesterday. The employment in this industry divides itself into two quite distinct periods. The £2 a week men belong to the lowest grade of unskilled labourers, a very few of whom are employed round about the factory during the off-season, when the factory is idle, and the wage paid to them—I took a particular week in my frgures—was at the rate of £2 a week. There is an entirely different and very much larger class of men employed for about three months of the year when the factory is busy. Then there are 400 or 500 men working particularly long hours under very strenuous conditions, and the lowest grade there received 57s. They are not the same men, they are men brought in from outside, and I do not think a sound argument can be drawn from a comparison of how the pay works out at so much per hour.

    Sir F. HALL: I am very grateful to my hon. and gallant Friend for the explanation he has given, and I think it will be of use to the Committee, and of use also when this subject is discussed in the House. I have only just had a copy of the OFFICIAL REPORT given to me. I understood from him yesterday that he was dealing with labour, and I took it as "like for like," but the explanation he has given showed there was a considerable difference between the two classes of labour. With regard to my hon. Friend the Member for the Forest of Dean (Mr. Wignall), he suggested that the industrial court should deal with this matter and that it should be left entirely in their hands.

    Mr. WIGNALL: The Whitley Council first.

    Sir F. HALL: The Whitley Council and then the Industrial Court—the ordinary sequence. I am one of those who is a great believer in industrial courts when you cannot come to an amicable arrangement and settlement between employer and employed; but if you can work harmoniously, capital and labour going hand in hand, as it is to the advantage of all industries that they should go, I think it is a great deal better to come to a satisfactory arrangement between the two parties; hours of labour and rates of pay being settled in the sympathetic manner which generally 1221 obtains. I have only seen this Clause this morning, and I think it meets the situation as far as it possibly can be met. In a new industry there are bound to be all sorts of questions cropping up. If there is a desire on both sides to meet the difficulties, I cannot help thinking that the Fair Wages Clause is the best, especially in the case of a new industry. I hope that between now and the Report stage my hon. Friend who moved the Amendment, and those who act with him, will come to the conclusion that the Minister of Agriculture has done all he can to meet the situation, and I hope this new Clause will have the unanimous support of the members of this Committee.

    Mr. BARNES: I think the trend of the discussion shows the danger underlying this proposal. Although we are dealing with a new industry, the class of labour we are dealing with is not at all new, because it is very much the same as is performed in the town refineries. Therefore, the problem is not some entirely new type of labour which we are linking up with agricultural labourers' rates; the real problem is to see a rural industry developed so as not to undercut similar labour employed in town refineries. Although I am thoroughly opposed to the principle of the Bill, my attitude is not one of useless and unnecessary obstruction. One could comment a good deal on the wages read out yesterday. While they may compare favourably with agricultural rates prevailing, they do not compare favourably with a similar kind of labour per formed in the town refineries. I think it is essential that the Committee and the Minister should make up their minds, when dealing with the wages in these rural refineries, what is their intention. Will the Minister interpret this Clause from the point of view of the wages prevailing in the district? If he does, then a wage of £2 per week may be quite adequate; but, on the other hand, it should not be overlooked that this industry is being created, first of all, by a very substantial state subsidy, and that a fair proportion of the capital is being obtained on advantageous terms through the Trade Facilities Act. Again, if Parliament, from the point of view of wages, is going to permit a rate to be paid in a rural refinery less than is 1222 naturally demanded and obtained by organised labour in industrial areas, I submit that the rural refineries have distinct advantages over the town refineries. The scheme which we put up yesterday, I think, was more practical and fair, and would have met the conditions better. Although it only represents a small advance, and, I think, an insignificant advance, I shall adopt the same attitude as my colleagues, and I shall not oppose the proposal of the Government, because I think that is useless, in view of the large majority the Minister has behind him. On the Report stage, I think our plan is a much better one.

    Sir GODFREY COLLINS: I would like to know if we can have any assurance that when the question of wages is being considered, the Minister will take into consideration the wages paid by the refineries in the towns. The cost of living in agricultural districts is less than in such places as Greenock, Liverpool and London, where the refining industry is carried on. If we could have some assurance as to the wages to be paid in the refining industry in the future, it would assist in the new competition with which they will be faced in the future.

    Mr. WOOD: Obviously, it is quite beyond my power to give such an assurance as the right hon. Gentleman has just asked for. I am afraid he has not had time to read my new Clause, because he will see that it proceeds on quite different principles, and applies the fair wages principle, and refers disputes to the Industrial Court. Why it is suggested that it should be the duty of the Industrial Court to establish a parity between the wages in refineries in various districts, I cannot understand. With regard to what has been said, I am entirely alive to the various difficulties that arise in any attempt to treat this question, and I have no desire either to overlook them or pretend that they do not exist. I think what I have proposed is the best I can suggest. What I was going to suggest to hon. Members opposite was this: I understand they feel unable to vote for this Clause, although they will not vote against it. We have arranged, between now and the Report stage, to endeavour by informal consultation to arrive at an agreement on the question of the audit. I should be very 1223 happy, if it be convenient to hon. Members on both sides interested in this subject, to extend our consultations, if possible, in order to see if we can suggest anything further to meet hon. Members on the Report stage. Although I am afraid that will not be possible, because I think the Fair Wages Clause is the best arrangement, I shall be happy to discuss the question with them, and if they are not satisfied afterwards, they can reserve their full liberty to examine the question again on the Report stage. We have had a full discussion of this proposal, and I hope the Committee will now be willing to adopt this Clause.

    Sir G. COLLINS: I would like to ask the Minister if he could see his way to meet us by adopting in his new Clause the words "shall be referred by the Minister to the Industrial Court for settlement, having regard to the conditions of labour which exist in the refining industry."

    Mr. WOOD: I am afraid I cannot give any undertaking of that sort, but I will certainly consider the point.

    Question put, and agreed to.

    Clause read a Second time, and added to the Bill.

    The following new Clause stood on the Order Paper in the name of Mr. Riley:

    NEW CLAUSE.
    —(Rents not to be raised in consequence of Act.)

    (1) That during the period for the payment of the subsidy provided for in the Bill the rent payable under any contract of tenancy made or varied after the passing of this Act in respect of an agricultural holding wholly or partly employed in the production of beet in rotation or otherwise shall, notwithstanding any agreement to the contrary, not exceed such rent as could have been obtained if this Act had not been in force and any question as to whether the rent payable under such a contract is in excess of the rent permitted by this Section or as to the amount of the excess shall be determined by a single arbitrator under and in accordance with the provisions of the Second Schedule to the Agricultural Holdings Act, 1923.

    Provided that the rent payable under a contract of tenancy shall not be deemed to be in excess of that permitted under this Section unless notice in writing requiring the question to be referred to arbitration has been served on the landlord within one year from the commencement or variation of the tenancy.

    (2) If on any such arbitration it is determined that the rent payable under the contract of tenancy is in excess of the amount permitted under this Section, 1224 the contract shall, as from the commencement or variation of the tenancy, have effect as if the rent payable under the contract was reduced by the amount of the excess.

    (3) This Section shall not affect any proceedings by a landlord for enforcing payment of any rent except so far as the rent has before the commencement of such proceedings been determined in manner herein-before provided to be in excess of the rent permitted by this Section, but any rent in excess of the rent permitted by this Section which is paid or recovered before the award of the arbitrator shall be recoverable by the tenant from the landlord by way of deduction from rent or otherwise.

    (4) In this Section expressions have the same meaning as in the Agricultural Holdings Act, 1923.

    The CHAIRMAN: The new Clause standing in the name of the hon. Member for Dewsbury (Mr. Riley) is out of order, because it is outside the scope of the Bill.

    Mr. BUXTON: I am aware that Mr. Speaker, on a certain occasion, ruled us out of order on a similar Amendment in connection with another Bill, but I submit that the case was different in character. As far as I remember, it was a Bill not conferring any direct public benefit of this kind. Is it not relevant to compare the case of the Corn Production Act, which did contain this provision in regard to the rentals? That is the strict legal aspect of the matter, but perhaps your judgment, Mr. Chairman, would be somewhat affected by the question as to whether this provision is an important one or not. While there is general agreement, and we are strongly in favour of the principle of the Bill, nobody wants to spend public money without good results, and if it be the case that it is possible that some of the benefit might simply go to the non-worker and the rent receiver in the end, that would represent a certain squandering of public money, which ought to be used in some more advantageous way. I submit that your judgment, Mr. Chairman, might be affected by the importance of this matter. There were cases under the Corn Production Act where it did produce an improvement from the landlord's point of view. I do not know a case where the Clause was actually put into force, but I know that, after the Act had come into force, there was a case of land in the occupation of the owner which was let at an increased rent owing to the subsidy, with the result that the tenant was ruined by being 1225 left in an impossible position later on. In regard to sugar, there certainly have been cases of which some hon. Members are, no doubt, aware, where farmers have, in the last two years, undoubtedly, been saved from disaster—perhaps that was really the alternative—and if there had not been in parts of East Anglia the opportunity of profits furnished by the remission of the Sugar Duty, there would have been disaster, and consequent injury to the landowner. This subsidy, I hope, will lead to improved profits for farmers, but I think it would be much safer if the State assured itself that there would be no waste of money through it being passed on to the non-worker in this connection. On that ground, I would like to ask you, Mr. Chairman, if you could possibly see your

    FIRST SCHEDULE.
    RATE OF SUBSIDY.
    Article. Rate per cwt.
    If manufactured between 30th Sept., 1924, and 1st Oct., 1928. If manufactured between 30th Sept., 1928, and 1st Oct., 1931. If manufactured between 30th Sept., 1931 and 1st Oct., 1934.
    s. d. s. d. s. d.
    Sugar which when tested by the polariscope indicates a polarisation exceeding 98 degrees. 19 6 13 0 6 6
    Sugar of a polarisation—
    Exceeding 97 and not exceeding 98 17 11·2 11 11·5 5 11·7
    Exceeding 96 and not exceeding 97 17 5·6 11 7·7 5 9·8
    Exceeding 95 and not exceeding 96 17 0·0 11 4·0 5 8·0
    Exceeding 94 and not exceeding 95 16 6·4 11 0·2 5 6·1
    Exceeding 93 and not exceeding 94 16 0·8 10 8·5 5 4·2
    Exceeding 92 and not exceeding 93 15 7·2 10 4·8 5 2·4
    Exceeding 91 and not exceeding 92 15 1·5 10 1·0 5 0·5
    Exceeding 90 and not exceeding 91 14 7·9 9 9·3 4 10·6
    Exceeding 89 and not exceeding 90 14 2·3 9 5·5 4 8·7
    Exceeding 88 and not exceeding 89 13 8·7 9 1·8 4 6·9
    Exceeding 87 and not exceeding 88 13 4·0 8 10·7 4 5·3
    Exceeding 86 and not exceeding 87 12 11·3 8 7·5 4 3·7
    Exceeding 85 and not exceeding 86 12 7·1 8 4·7 4 2·3
    Exceeding 84 and not exceeding 85 12 2·9 8 1·9 4 0·9
    Exceeding 83 and not exceeding 84 11 10·7 7 11·1 3 11·5
    Exceeding 82 and not exceeding 83 11 6·5 7 8·3 3 10·1
    Exceeding 81 and not exceeding 82 11 2·7 7 5·8 3 8·9
    Exceeding 80 and not exceeding 81 10 11·0 7 3·3 3 7·6
    Exceeding 79 and not exceeding 80 10 7·2 7 0·8 3 6·4
    Exceeding 78 and not exceeding 79 10 3·5 6 10·3 3 5·1
    Exceeding 77 and not exceeding 78 9 11·8 6 7·8 3 3·9
    Exceeding 76 and not exceeding 77 9 8·0 6 5·3 3 2·6
    Molasses—
    If containing 70 per cent. or more of sweetening matter. 12 4·7 8 3·1 4 1·5
    If containing less than 70 per cent. and more than 50 per cent. of sweetening matter. 8 10·9 5 11·3 2 11·6
    If containing not more than 50 per cent. and not less than 45 per cent. of sweetening matter. 4 3·8 2 10·5 1 5·2
    If containing less than 45 per cent. of sweetening matter. Rates bearing the same proportion to the rates provided by this Schedule in the case of molasses containing not more than 50 per cent. and not less than 45 per cent. of sweetening matter as the percentage of sweetening matter bears to 50 per cent.
    Note.—Where the amount of the sugar or molasses is less than one hundredweight, the rate of the subsidy shall be proportionately reduced.

    1226

    way to allow this Clause to be moved, because I think it might probably meet with general agreement.

    The CHAIRMAN: I have gone into this matter very carefully, and feel that I am bound by the latest precedent under the Agricultural Rates Bill of 1923, where a very considerable sum of public money was to be used for the benefit of agriculturists. An Amendment was moved in Standing Committee almost in the same terms as the present Amendment, and it was ruled out by the Chairman. Then it was put down in somewhat different wording, to achieve the same purpose, but when the matter came up on the Report stage, Mr. Speaker again ruled it out of order. In view of those precedents, I think I am bound to rule this Clause out of order.

    1227

    Sir G. COLLINS: I beg to move, to leave out Columns 2 and 3. The Committee decided, in Clause 1, to grant a subsidy to this new industry, and the effect of my Amendment would be that the amount of the subsidy would be according to Column 4 of the Schedule. I am anxious to move this Amendment, but I am in a little difficult position, because the Minister has already committed himself to this subsidy, and so has the late Minister of Agriculture. I venture to appeal to Members of the Committee. I would ask the Minister, first, how is this subsidy arrived at? On what basis did he decide on this very large subsidy? I think we have had no information upon that point. If my information be correct, the late Minister of Agriculture decided on the subsidy before consultation with the refining industry, and before the refiners had had the opportunity of stating their views. I may be incorrect on that point; if so, I speak subject to correction. If I am correct, then this large subsidy was granted before the refining industry was consulted, and I think the Committee will take that into consideration in respect to the Amendment. Also, having regard to the price of sugar to-day, the amount of the subsidy corresponds, roughly, with the price of the raw material. You have the State offering this large subsidy for a commodity, the price of which is equal to the amount of the subsidy. We have had sums granted by the Trade Facilities Committee to the new industry which places it also in a very advantageous position. It may be said that the amount of 19s. 6d. is a decreasing quantity. Undoubtedly it is so in the Bill. But our former experience tends to show that once this large subsidy of 19s. 6d. has been granted, pressure will be brought to bear upon succeeding Governments to maintain the high rate of 19s. 6d., as in Column 1. All former experience of this subject, I think, tends to show that that may well happen. The new industry will bring pressure to bear, and point out that they have had great difficulty in organising their new business. Undoubted difficulties will occur in instituting this new industry. That is the experience in all new industries. They will bring their balance sheets forward, and point out that, unless 19s. 6d. is granted, they may well drop 1228 out of the race. That may well happen. It has happened already What has happened in the last five years in this new industry may well occur in the next few years. While we have the State granting this subsidy, this new industry is not fully occupied. These new refineries, one remembers, will be working only three months every year. During those three months they will be working night and day. New factories are being created in Great Britain, Greenock, and other centres. The refineries have a large potential capacity for an increased output which is not fully employed to-day. That is the situation. Side by side with that they are faced with extreme foreign competition, and at this particular moment this new industry is being subsidised to this very large extent. I submit that we might well hesitate before granting this very large subsidy to our fellow-workers, men who have invested all their capital in this and have withstood foreign competition successfully for many years. It may be said that in the case of the refineries there has been exaggeration. Men have invested their capital and we cannot blame them if they are nervous as to the future if this Bill becomes law. There are large interests—I am not complaining—who are anxious to push this new industry. I wish them well, if they were not getting this large subsidy from the State, but getting it as they are, the refiners feel that this matter has been rushed through the House of Commons. When the statement was made, I think last July, that the State had decided for the first time to grant a large subsidy to an industry, they were not really consulted. They feel aggrieved. They feel that the taxpayer's money is being used in the way of a subsidy as stated. If hon. Members had the fortune, or been unfortunate enough, to have their money invested I think they will agree with me that the fears, though they may be exaggerated, are well grounded. In moving the Amendment to restrict the subsidy to 6s. 6d., they will feel they are starting this new industry under good conditions, but, at the same time, not weighing the scale heavily against the present refining industry.

    Mr. HANNON: I beg to second the Amendment. 1229 I suggest, however, to my hon. Friend that, having stated his case in the admirable way he has done, he should now withdraw his Amendment. I make that suggestion, because he and I have taken the opportunity, during the process of this Bill in the House, below, and in Committee here, to state our profound objection to the whole process, to the whole basis upon which this subsidy is being made to one private enterprise in this country, as we conceive it to compete against another. I say at once that if the hon. Member persists, the Bill will be destroyed. Obviously, I shall be no party to the destruction of a Bill in that root and branch manner to which the Minister, the House of Commons and the Committee have given so much time and thought. I hope my hon. Friend will be satisfied in registering his protest in Committee, and then taking such action as may commend itself to him when it comes to Report. It would, I think, be an abuse—I say that for myself, as well as for my hon. Friend—of Parliamentary procedure if we were to sacrifice by the Amendment all the work that we have put into this great Measure, and which, I am bound to say, is calculated to produce great results in the better working of rural life in this country. In taking the opportunity to second the Amendment, in order to save that and without committing ourselves to what we may do on Report, may I say this: I think every Member of this Committee will appreciate warmly the kind and generous way we have all been treated by the Minister of Agriculture in the various representations we have made. He has had a very difficult and embarrassing task to perform. I am quite certain he would never have committed the great and profound mistake of his predecessor, which my hon. Friend has so well criticised, in leaving entirely out of account the other interests if he had had to deal with this proposal in its earlier stages. It will always be a reflection on the statesmanship of his predecessor that he did not see how important it was to consult all the interests concerned, instead of confining himself, in his enthusiasm, to the agricultural interest to which he was always so much devoted, and for which, indeed, he has done a great deal in the past year. I second the Amendment formally, but think it would be wiser, perhaps, for my hon. Friend to withdraw it. I do not 1230 propose to move the Amendments that follow in my name dealing with the first schedule.

    Mr. WOOD: Lest the hon. Member opposite thinks me discourteous, perhaps he will allow me to say a word or two. I hope, on reflection, he will feel that the course of action suggested by my hon. Friend to him, is on the whole, the wiser. The Committee is well aware how strongly he feels, and has felt, on the general case that he has argued again with great lucidity and force this morning, an opposition in which he has been ably assisted by my hon. Friend the Member for Moseley (Mr. Hannon). I am afraid, however, they must recognise that, on the whole, the opinion of this Committee and of the House is against them. I will not repeat the argument that I used earlier, but I can assure them—and my hon. Friend has just been generous enough to say so—we have not arrived at the decision on this policy, having regard to its effect upon the refining industry, without the most careful and exhaustive consideration of the case. That we have arrived at different conclusions I deplore, but I cannot think that the conclusions at which the Government has arrived, and on which it has been supported by the large majority of the House of Commons, and this Committee, are wrong. I do not argue the case against the refiners again, but I am satisfied that at this stage the Committee would not wish to reverse the broad course of action they have mapped out for themselves in this matter. I hope, therefore, the hon. Gentleman opposite will be able to feel content with having made his case once more to the Committee, and, having made it, will not think it ncessary to press his Amendment to a Division.

    Sir G. COLLINS: Following the expression of opinion by my hon. Friend the Member for Moseley (Mr. Hannon), who referred to the way in which the present Minister has carried this Bill through the House of Commons, may I say I share with him my respect for the right hon. Gentleman. I am not anxious to press this matter to a Division.

    Amendment, by leave, withdrawn.

    Mr. BARNES: I beg to move, at the end, to add the words "and for every increase of one shilling per hundredweight in the market price of sugar 1231 over the standard price of thirty-five shillings per hundredweight, the rate of the subsidy shall be proportionately reduced." I waited for the reply of the Minister to the hon. Member for Greenock (Sir G. Collins), because I was hoping that he would, at least, give the Committee some indication as to the basis for this subsidy. I must repeat that point, although my Amendment deals with it in a different and more practical way. When one takes the statement of the Minister on the Financial Resolution and on the Second Reading of the Bill, and in Committee, one may say there has never yet been any statement from the other side as to the basis upon which this subsidy was created. We are entitled to ask for the foundation of this scheme. We know the processes which are necessary from the growing of the beet right away through to the manufacturing stages, in relation to the foreign processes and the processes in this country, and the margin of difference. I claim that the only basis on which the subsidy should be given is to ascertain the margin of difference in the cost of production in this country, as against the cost of production in foreign countries. I wish to ask the Minister whether the financial scheme of this Bill has been based entirely and solely on the ascertainable margin between the cost of home production of sugar beet through all its stages, and differences at each stage, and that of foreign production. I do not suggest that the cost of production will ever come down to what it was before the War when you could purchase a cwt. of white sugar beet, refined sugar, for about 14s. or 15s. To-day, although we have not reached that figure, we have come down very near to it. When this financial Clause was introduced, the price of sugar roughly, on the London market—and a good class sugar, the London granulated sugar, which is a high grade sugar—was roughly 34s. If you eliminate the tax, the net cost works out at about 22s. or 23s. per cwt., so that, taking into consideration the difference in values to-day, sugar is down more or less to the same production cost as it was before the War. On the other hand, there have been considerable fluctuations in price. At one time in 1923, the cost of sugar in this country leapt up to 65s. a cwt. I do not suppose it will go up again like that, but we have 1232 had recent instances of increases in world consumption, as in America, when they adopted and enforced prohibition, it lead to an enormous consumption of sugar. Now there is a movement for prohibition in this country. How far it will be successful I do not think it behoves me to prophesy, but the temperance habit is growing, rightly so—I think no one disagrees with that—and all the indications are that the demand for sugar will increase. If that fluctuation has taken place in recent years, it has not been due to the cost of production. It is not production cost that is responsible for a variation of price in 18 months from 32s. to 65s. a cwt. The tax affected it a little, I think, but only a little. It shows the way in which conditions of supply and demand for sugar may bring about considerable fluctuations in price. My point is this, that obviously the net subsidy of 21s 5d., made up of the direct subsidy of 9s. 9⅓d. and the advantage of the Customs duty of 11s. 8d., was fixed on the current price of sugar at the latter end of 1924 and the cost of production prevailing then. If the price of sugar goes up above 34s. or 35s. a cwt., it means that the sugar-beet refiners net that addition in price over and above the subsidy, because the Minister has admitted that the quantity of sugar beet produced in this country will not affect world prices. Their plant and their land will be purchased at existing rates, their buildings will be erected at to-day's cost, their plant and machinery will be purchased and will all be installed, and one can easily foresee that there is not going to be any abnormal fluctuation in wage rates in, possibly, the next year or two, judging by the Resolution that the Minister has put in. That being the case, one cannot argue that the cost of production in this industry is likely to fluctuate to any great extent in the next year or two. Any marginal difference, such as changes in transport rates or things of that description, will not be considerable factors. Therefore, we have arrived at this position, that all the overhead charges will be incurred within the period while sugar is at its lowest figure. The subsidy has been created to meet costs as they are to-day, and I submit that they are generous. I claim that they are too generous, and if so, I do not consider that this industry should have any additional advantage if price moves upwards. I submit that, if 1233 price moves upwards, and the industry gets the advantage of a rising market and increasing prices, which the consumer pays all the time, certainly the Treasury and the community as a whole should gain some corresponding advantage in a decrease of the subsidy. I have taken 35s. a cwt., or 1s. more than prevailed when the Financial Resolution was introduced, as the stabilised price upon which this subsidy should be given, and I suggest that, with every increase of one shilling in the market price of sugar, which is the increase of the world price and does not mean an increase of production costs in this country, the Treasury should gain the advantage by a proportionate reduction in the subsidy. I think this is a perfectly fair, practical, and businesslike position, and I hope the Minister will accept it.

    Mr. WOOD: With the best will in the world to meet hon. Members opposite as far as I possibly can, I am afraid I cannot see my way to accept the Amendment. I leave aside the difficulty inherent in the wording of the Amendment over the standard price. The hon. Member for East Ham, South (Mr. Barnes) is far more technically qualified to discuss details of sugar prices than I am, but I do not think he will disagree with me if I assert that the price of sugar may on the same day vary in three or four different districts of England, that you may have one price in Liverpool, another at Greenock, and another in London. If that be so, it would seem to make it rather difficult to define what you are to call your standard price, but I do not rest my main opposition on that ground, although I think it is a real difficulty. The hon. Member suggests that the subsidy should vary with the price of sugar, and he quite truly says that the price of sugar fluctuates. Yet the first desideratum of the sugar policy, as experience has shown, is that the subsidy should be assured and fixed for a term of years, in order that those investing their money in the enterprise may know where they are, and the fact that it was not so assured and fixed was responsible for the lack of success that attended the earlier efforts to found the industry in this country. I have no doubt that all that was very fully considered and taken into account by the right hon. Gentleman 1234 opposite and those associated with him when they had the question of a scale under their review. The hon. Member asks me how the 19s. 6d. was arrived at, and it is, of course, a question that he is quite entitled to ask. It was arrived at, I imagine, in the first instance, as a result of prolonged conference and consideration of the costs that were present to the mind of those who were prepared to engage in this industry, and which were examined by the Treasury representatives in order to see whether on the whole they seemed reasonable and could be substantiated, but, more important than that, it had direct reference to what had been the rate of the Customs duty on sugar before the late Chancellor of the Exchequer reduced it, thereby cutting off a great part—about half—of the benefit that up till then the sugar industry had enjoyed by the Customs duty. The hon. Member will, of course, have it present to his mind that before that reduction of the Sugar Duty in the Budget of last year, the Customs duty had stood, I think I am right in saying, at 25s. 8d., and that, after making allowance for the one-sixth reduction on the ground of Imperial Preference, that brought the duty down to 21s. 5d. By the operation of the new plan as it is now, that is to say, substituting Excise for the Customs remission, it operates exactly the other way, and at the present moment you have a 19s. 6d. subsidy, and you have the difference between the Imperial rate of admission and the foreign, which I think is 1s. 11d., making 21s. 5d. That was designed to produce the same figure as had been enjoyed by the industry before the alteration in the Budget. Therefore, it was not without due deliberation that that figure was taken. The hon. Member made another point, which I think is deserving of reply. He says, and it is implicit in his Amendment, that if the price of sugar goes up, the rate of subsidy should be reduced, but, as I think he was conscious himself, the price of sugar may very well go up owing to causes over which, not only has the manufacturer no control, but which brings him no benefit. He said that, if the price goes up, the factories will net the difference, but they need not necessarily. The price of manufacturing costs may go up by an increased price of coal, or, as the hon. Member himself said, transport charges, labour costs, and 1235 so on, and it is not an equitable proposal, even if it was a workable one, to suggest that, because those extra costs have been imposed on the manufacturer, thereby causing the price of sugar to go up, at the very moment that those extra costs have been imposed on him you are going to come down at the other end and diminish his subsidy. That will be, from his point of view, a very bad example of "Heads you win, tails I lose," and I do not think the hon. Member, on reflection, will think that that is a proposal that he can seriously expect the Committee to adopt. For those reasons in the main, I regret that I cannot think that I ought to recommend this Amendment to the Committee, and I hope that perhaps, on reflection, the hon. Member himself will not wish to invite the Committee to divide upon it.

    Mr. BUXTON: As the question has been raised of the steps we took, in our day, to make sure that we were not paying too much, I might say that there was very prolonged and exhaustive examination of the costs as they had been and as they probably would be, and we did get very complete facts and figures in regard to past experience, but what they showed with apparent cogency was that we were not paying enough, and the problem for us was how we could produce a reasonable probability that investors would risk their money in the sugar industry. I was doubtful whether what we proposed would be enough, and I think experience shows that it has not been more than enough. There has been no frantic rush to get into the industry on these terms.

    Mr. BARNES: There has, since the subsidy has been announced.

    Mr. BUXTON: I do not think there has, at all, more than the State desires in the way of a trial of the possibilities of the industry in this country. It was not solely on the information of the Ministry of Agriculture and its experts that action was taken. The usual test of Treasury parsimony was very stringently applied and the figure arrived at, after the fullest possible study, was the minimum figure upon which we could secure a good chance of success.

    Mr. NEVILLE: It seems to me that this proposal is entirely wrongly con- 1236 ceived. The object of this Bill is, first of all, to provide for the production of sugar in England, and, if that is successful, eventually, I hope, to decrease the price of sugar. If we are to have any sliding-scale at all, we ought to have a sliding-scale the other way. If they can sell their sugar cheaper, there should be a bigger subsidy. That would encourage two things, it would encourage the production of sugar and encourage the use of a great deal of labour in producing it. There are industries in this country where that plan is in operation to-day. In the gas industry there is a double sliding-scale, which enables the proprietors to have bigger dividends the cheaper they sell their gas. There is the double advantage, the people get cheap gas, and those who are engaged in the industry get an encouragement to produce cheap gas. If there is to be any sliding-scale—I do not suggest it in this case—it ought to be the reverse way.

    Amendment negatived.

    Schedule agreed to.

    SECOND SCHEDULE.
    MINIMUM PRICES OF BEET.

    Description of Beet. Price per ton.
    Beets grown in the years 1924, 1925, 1926, or 1927 44s.

    For the purposes of this Schedule—

  • The price means the price payable as in respect of beets properly topped and washed, delivered into the factory sidings or flumes and having a sugar content of fifteen and one-half per cent.
  • Where the sugar content of any beets is greater or less than fifteen and one-half per cent. there shall be made an addition to or deduction from the minimum price at the rate of threepence in respect of each 0·1 per cent. above or below fifteen and one-half, as the case may be.
  • The sugar content of beets shall be ascertained by means of the cold water digestion method.
  • Mr. ATTLEE: I beg to move, to leave out the word "or" ["years 1924, 1925, 1926 or 1927"]. The object of this Amendment, which stands in the name of the hon. Member for Shoreditch (Mr. Thurtle), is to bring the advantage to the farmer in line with the advantage to the industry as a whole. I should like to have an explanation as to 1237 why the fixed prices for beet extends only over the years 1924, 1925, 1926 and 1927, when the subsidy offered by the State is for a longer period. We ought to do our utmost for the agricultural industry, and while it is necessary to attract support for the refining industry, we want to hold the balance evenly between the growers of the beet and the refining interests.

    Mr. WOOD: I entirely appreciate the motive of the hon. Member in moving the Amendment out of regard for the interests of the farmers, but I have had the opportunity of discussing this question with the representatives of the National Farmers' Union, and they do not take the same view of their interests. They do not want this Amendment, for the reason that they are quite satisfied that at the end of the three or four years they will be fully able to make their own terms with the factories, and they do not wish to have any figure in the Bill which might even indirectly prejudice their free negotiations with the factories. They are astute enough and shrewd enough to recognise that in the negotiations with the factories all the best playing-cards are in the hands of the farmers. The factories are helpless without the raw material the farmers grow for them. The factories will have sunk a great deal of capital in the erection of buildings and the acquisition of permanent plant that cannot be removed or transformed at a moment's notice, whereas the farmer who produces the raw material can switch over at almost a moment's notice to the growth of another crop, and is therefore in a very strong position to use the lever of necessity against the factory. For this reason farmers are quite content with the Bill as it stands, and I would, on the whole, recommend the Committee to leave the Bill as it is.

    Amendment negatived.

    Schedule agreed to.

    Third Schedule agreed to.

    1238

    Motion made, and Question proposed, "That the Bill, as amended, be reported to the House."

    Mr. BARNES: Am I not in order in saying a word or two on the Motion that the Bill be reported?

    The CHAIRMAN: There is never any discussion on the question of reporting the Bill, as amended, to the House.

    Mr. BARNES: I thought it was customary for any Member to be allowed just to define his position.

    The CHAIRMAN: I will allow it now, but I will make further inquiries. I think I am right.

    Mr. BARNES: It is not my intention to delay the Committee very long. Personally, I have been opposed to this Bill all through, but had there been any serious modification in Committee, I should have been glad to have given the Bill support. There has been little modification, I think, and I simply desire to make it clear, although possibly it does not count for much, that I cannot withdraw my opposition to the Bill. As far as I can see the investors of capital and those interested in the industry get the advantage of the subsidy. Capital is also provided for under the trades facilities scheme. There has been no difficulty in giving the farmer his guaranteed price as long as he requires it. The manufacturing interests have now been met by the insertion of the Clause—

    The CHAIRMAN: I am quite clear that this Motion is never used as an opportunity for a sort of Second Reading speech or a general wind-up in regard to the Bill. I must, therefore, rule the hon. Member out of order in what he was saying.

    Question put, and agreed to.

    Bill, as amended, accordingly ordered to be reported to the House.

    1239

    THE FOLLOWING MEMBERS ATTENDED THE COMMITTEE:

    Roberts, Mr. Samuel (Chairman)

    Attlee, Mr.

    Balniel, Lord

    Barnes, Mr.

    Brown, Brigadier-General Clifton

    Buxton, Mr.

    Cautley, Sir Henry

    Courthope, Colonel

    Hall, Lieut.-Colonel Sir Frederick

    Hanbury, Mr.

    Hannon, Mr.

    Harvey, Major

    Henderson, Captain Robert

    Henderson, Mr. Thomas

    Holbrook, Colonel Sir Arthur

    Holland, Lieut.-General Sir Arthur

    Hurd, Mr.

    Iliffe, Sir Edward

    Jephcott, Mr.

    Luce, Major-General Sir Richard

    Macdonald, Captain Peter

    Nelson, Sir Frank

    Neville, Mr.

    Newton, Sir Douglas

    Penny, Mr.

    Perkins, Colonel

    Peto, Mr. Geoffrey

    Radford, Mr.

    Ritson, Mr.

    Sandon, Viscount

    Shaw, Mr. Reginald

    Sinclair, Major Sir Archibald

    Stuart, Lord Colum Crichton-

    White, Lieut.-Colonel

    Wignall, Mr.

    Wood, Mr. Edward

    1240