IS DOCUMENT I S THE PROPERTY OF HIS BRITANNIC MAJESTY * S GOVERNMENT)
S E C R E T
C P . (51)
253
34TH SEPTEMBER.
COPY N O O
1951
CABINET
AGRICULTURAL WAGES AND PRICES
Memorandum b y t h e M i n i s t e r o f A g r i c u l t u r e
and
Fisheries
The N a t i o n a l F a r m e r s ' U n i o n o f E n g l a n d and W a l e s h a v e
a n n o u n c e d i n t h e P r e s s and h a v e g i v e n me a d v a n c e n o t i c e o f
t h e i r i n t e n t i o n to ask for a S p e c i a l P r i c e Review t o meet
t h e e x t r a c o s t s which w i l l he i n c u r r e d i f t h e p r o p o s a l s
o f t h e E n g l i s h A g r i c u l t u r a l Wages B o a r d f o r a n i n c r e a s e
i n t h e minimum r a t e o f 8 / - p e r w e e k f o r men a n d 6 / - p e r
week f o r women w i t h a n a d d i t i o n a l f i v e d a y s a n n u a l h o l i d a y
w i t h p a y a r e c o n f i r m e d by t h e B o a r d on 1 0 t h O c t o b e r .
2,
They h a d p r e v i o u s l y (on 5 1 s t J u l y ) a d d r e s s e d formal
r e p r e s e n t a t i o n s t o me a b o u t t h e h e a v y and c o n t i n u e d r i s e s
i n o t h e r c o s t s s i n c e t h e l a s t Annual Review i n February
w h i c h t h e y c l a i m w i l l amount t o £ 2 0 m i l l i o n s i n a f u l l
y e a r , o f w h i c h £9^- m i l l i o n s w i l l b e due t o a n e x c e s s o f
i n c r e a s e d c o s t s o f f e r t i l i s e r s o v e r t h e sum a n t i c i p a t e d
and. a l l o w e d f o r a t t h e l a s t A n n u a l R e v i e w .
In that
communication t h e y s u g g e s t e d that a course which would
avoid f u r t h e r i n c r e a s e s i n the p r i c e s of a g r i c u l t u r a l
p r o d u c t s w o u l d he f o r the Government t o r e c o n s i d e r t h e i r
d e c i s i o n on the removal o f the s u b s i d y on f e r t i l i s e r s
( w h i c h was d i s c o n t i n u e d a f t e r 1 s t J u l y l a s t ) .
5.
The S c o t t i s h A g r i c u l t u r a l Wages B o a r d i s m e e t i n g t o d a y
( 2 4 t h September) to c o n s i d e r a c l a i m f o r corresponding
i n c r e a s e s i n t h e minimum a g r i c u l t u r a l wage a n d a d d i t i o n a l
h o l i d a y s w i t h pay.
I f - a s i s p r o b a b l e - s i m i l a r awards
a r e made i n b o t h S c o t l a n d a n d N o r t h e r n I r e l a n d t h e
i n c r e a s e d c o s t s i n t h e U n i t e d Kingdom w i l l b e , o n a n a n n u a l
b a s i s , of the order o f £20 m i l l i o n s .
4.
In view of the terms of S e c t i o n 2 o f the A g r i c u l t u r e
A c t , 1 9 4 7 , and. t h e a g r e e d p r o c e d u r e , i t w o u l d be d i f f i c u l t
t o contend t h a t the p r o s p e c t i v e i n c r e a s e i n l a b o u r c o s t s and
t h e u n f o r e s e e n and s u b s t a n t i a l r i s e i n p r i c e s of f e r t i l i s e r s
were not s u f f i c i e n t l y "sudden and s u b s t a n t i a l " t o j u s t i f y
a S p e c i a l Review,
I t w o u l d h o w e v e r be p o s s i b l e t o r e j e c t
as i n a d m i s s i b l e f o r the purpose of a S p e c i a l Review the
a g g r e g a t i o n o f a number o f l e s s e r i t e m s o f c o s t i n c r e a s e s
such as t r a n s p o r t c h a r g e s , p e t r o l (owing t o the Budget)
a m o u n t i n g t o £lOf- m i l l i o n s .
5.
The s i t u a t i o n w i l l o b v i o u s l y r e q u i r e v e r y c a r e f u l
h a n d l i n g in view of the p o l i t i c a l p o s i t i o n .
Continued uncer­
t a i n t y about the r e s u l t of the U n i o n s a p p l i c a t i o n f o r
a S p e c i a l P r i c e R e v i e w may r e s u l t i n a l o w e r s t a n d a r d o f
c u l t i v a t i o n t h i s autumn ( p a r t i c u l a r l y a s r e g a r d s t h e u s e o f
f e r t i l i s e r s ) with a consequent f a l l i n g o f f i n crop production
in 1952.
I f t h e r e f o r e we t a k e no a c t i o n o r r e j e c t t h e U n i o n ' s
a p p l i c a t i o n we s h a l l b e o p e n t o t h e c h a r g e o f i n d i f f e r e n c e t o
t h e f u t u r e f o o d s u p p l y , and t h e s i t u a t i o n e o L i l d c l e a r l y
he e x p l o i t e d , p a r t i c u l a r l y i n t h e r u r a l a r e a s .
1
6.
I t m i g h t b e p o s s i b l e and m i g h t i n d e e d b e d e s i r a b l e t o
n e g o t i a t e a compromise w i t h the Farmers' U n i o n s under
which i n return for t h e i r waiving t h e i r claim for a S p e c i a l
Review w i t h i t s consequent automatic e f f e c t on p r i c e s
o f a g r i c x i l t u r a l p r o d u c t s , the Government would r e i n t r o d u c e
a s u b s i d y on f e r t i l i s e r s which would take i n t o a c c o u n t n o t
o n l y t h e c u r r e n t i n c r e a s e d c o s t s o f f e r t i l i s e r s o v e r and a b o v e
t h e sum a l l o w e d a t t h e l a s t A n n u a l R e v i e w (£9-4- m i l l i o n s i n
a f u l l y e a r ) but a l s o t h e i n c r e a s e d c o s t s of p r o d u c t i o n
a r i s i n g f r o m h i g h e r w a g e s i f t h e p r o v i s i o n a l award i s
confirmed (about £20 m i l l i o n i n a f a l l y e a r ) .
An a n n o u n c e ­
ment of siich a p r o p o s a l d u r i n g t h e n e x t few w e e k s w o u l d ,
however, l a y us open t o the charge o f o f f e r i n g a p r e ­
e l e c t i o n bribe t o the farming community.
7.
I f t h e A g r i c u l t u r a l Wages Board, c o n f i r m s i t s
p r o v i s i o n a l a w a r d on t h e 1 0 t h O c t o b e r i t m i g h t h e p o s s i b l e
t o a v o i d s e r i o u s t r o u b l e b y an a n n o u n c e m e n t t h a t t h e G o v e r n ­
m e n t i s r e a d y i n p r i n c i p l e t o c o n c e d e t h a t a prima f a c i e
case for a S p e c i a l Review e x i s t s , ,
Disctissions might then
b e g i n i n t h e f o l l o w i n g week on t h e u n d e r s t a n d i n g t h a t a n y
d e c i s i o n s ?/ould h a v e t o he l e f t t o w h a t e v e r G o v e r n m e n t i s
i n o f f i c e after the General Election.,
8.
The a d v a n t a g e o f t h i s c o u r s e w o u l d be t h a t we s h o u l d
be a c t i n g i n a c c o r d w i t h o u r e x i s t i n g u n d e r t a k i n g s t o t h e
a g r i c u l t u r a l i n d u s t r y while l e a v i n g any d e c i s i o n u n t i l the
E l e c t i o n is over.
On t h e w h o l e I w o u l d recommend my
c o l l e a g u e s to adopt t h i s p l a n .
T.W.
M i n i s t r y o f A g r i c u l t u r e and
F i s h e r i e s , S.W.1.
24TH SEPTEMBER,
1951.