Come off it, Mr. Cube
22nd January 1954 from the Tribune Magazine Archive
Topics
Business / FinanceOrganisations
Labour Government, Tory government, Individualist Society, House of CommonsPeople
Hyde, Winston Churchill, M CUBE, Bob MillarLocations
by Bob Millar
M CUBE, alias Lord Lyle, alias
IN - L Tate and Lyle Limited, held an annual general meeting last week. The following day a strip cartoon " advertisement" appeared in all the popular newspapers.
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Based on the well-known formula " I used to wake up feeling tired . .," it first presents Mr. Cube in bed, surrounded by money bags. He has a " feeling rich " hangover, as he thinks of his colossal £100 million turnover.
After a discussion with his accountant, however, he loses that Monday morning feeling. It seems he is not really rich. The £100 million is only a mirage. Why the change ? Because, as the strip cartoon shows, 19s. 44(1. in every of sales goes on running expenses, 41d. in taxes, and only 24d. is left as profit. And Mr.
Cube thinks, with relief: " No more feeling rich, thanks to facing facts." There are, however, some hard facts which the accountant conveniently ignores. They turn the cartoon into quite a different story.
Mr. Cube, in the guise of Lord Lyle, is President of the Individualist Society and a forthright exponent of free enterprise. But as chairman of Tate and Lyle he is head of a tight monopoly, set up by a friendly Tory government. Quite a Jekyll and Hyde, in fact ! The Sugar Agreement of 1937 allocated refining to a few companies.
Tate and Lyle owned most of them, controlling over . 80 per cent. of all sugar refined. No one could enter the industry in opposition to this great firm.
So Mr. Cube's investments are quite safe—except possibly from some future Labour Government, for sugar is an essential commodity. And whatever the strip cartoon says, sugar investments reap tidy rewards.
In 1945 Tate and Lyle's trading profits amounted to a mere £1,630,000.
By 1953 they had soared to over £4,600,000. Dividends kept pace, from 13+ to 16 per cent.
The net profit last year was £3,100,000, of which taxation took 63 per cent., leaving £1,150,000 as clear profit. This , is just apother way of saying 2+d. in the £ of sales—but it looks different, somehow Of the 24d., reserves took ld.—in round figures £475,000, which can be distribbted to shareholders at some future date. The remaining 14d. in the which is being distributed means £675,000.
Now let's go back to Lord Lyle, founder of Aims of Industry and the brains behind the most successful anti-nationalisation campaign ever carried out.
A great admirer of Winston Churchill, he once gave up his Epsom seat as Tory M.P. so that Churchill could take over and get back to the House of Commons.
With his family he controls well over 800,000 shares in the company, between one-eighth and one-tenth of the total. The Lyles are by far the biggest single shareholder.
With their holding and dividend at 16 per cent., the family get around £80,000 in dividends. But that is not all. Six of the fourteen directors are Lyles, including chairman Lord Lyle.
Directors' emoluments total around £145,000.
The Lyle family thus get around £150,000 a year from the business. It is a far cry from the £100 million turnover, and it is probably not enough to make . Mr. Cube feel rich— but it's quite a' comfortable income, all the same.
Mr. Cube's strip cartoon purports to give customers the truth about the Lyles. It suggests that the company, even with its monopoly position, does not make excessive profits.
How ironic that this kind of propaganda goes under the guise of " advertising " and, as such, is tax-free! So out of every 814, paid for a packet of sugar comes not only advertising but indirect anti-Socialist propaganda as well.
Forget about the strip cartoon's arithmetic. The industry is a profitable one and will be more so now that sugar is de-rationed. (Remember how the price went up immediately controls came off ?) But is it right that one company, or indeed, one family, should have monopoly control over the price, quality and service of a vital food ?