HC Deb 20 June 1972 vol 839 cc214-21
2. Mr. Strang

asked the Minister of Agriculture, Fisheries and Food what representations he has received with respect to the measures he has announced aimed at containing the recent increases in beef prices.

58. Mr. Ewing

asked the Minister of Agriculture, Fisheries and Food what representations he has had from farming organisations regarding the limiting of beef exports; and what reply he has sent.

Mr. Prior

I have received a number of requests that exports of cattle and beef should be controlled. I have said that I am keeping the situation under review.

Mr. Strang

Surely even the Minister is aware that housewives are outraged at the present level of beef prices. Will he come clean with them and tell them that not only is he unwilling or unable to intervene to reduce these prices but that any reductions which may occur will be of a temporary and minor nature because Common Market beef prices are still higher than British beef prices?

Mr. Prior

Prices in the Community are now at about 120 per cent. over their target prices. If they come down, as they now show signs of doing to 113 per cent., the tariffs will have to be reintroduced. In that case, over the next succeeding five years tariffs will be phased out by one-fifth at a time. This gives us ample opportunity to adjust our prices, as the Government have said would happen, in the transitional period.

Mr. Ewing

Is the Minister aware that many people, not least the farmers, regard what has happened over the last few weeks as merely a sample of what we can expect once we enter Europe? Though the farmers might welcome the idea, does not the Minister appreciate that housewives will be in utter despair, as was so well illustrated the other evening when the Minister met a well-informed housewife on television?

Mr. Prior

No doubt she was heavily prompted by the Labour Party, but I shall not go into that matter now. I turn to the serious point made by the hon. Gentleman. At the moment there is a free market operating in beef between this country and Europe, yet our prices are still about £3 a hundredweight lower than Community prices. This is very significant for the future.

Mr. Brewis

Does not the situation show the need to increase home production of beef, and is this not exactly what my right hon. Friend has been doing during the last two years?

Mr. Prior

Yes, Sir. Every pointer over the last 18 months shows that we are now moving agriculture forward at a faster rate than at any time for a great many years, probably since the war. This is exemplified by the figures of calf slaughterings, by animals coming forward for calf subsidy and by the increase in the breeding herd. This is all very satisfactory.

4. Mr. Milne

asked the Minister of Agriculture, Fisheries and Food if, in view of recent policy changes in regard to meat prices and the increase in cost to the consumer, he will now introduce legislation imposing price control to protect the interests of the housewife and those employed in the retail and distributive trades.

Mr. Prior

No, Sir.

Mr. Milne

Is it not unfortunate that the Minister has no answer to give to a Question of this kind, and will not measures which exclude any question of price control be meaningless in dealing with the present situation? Does the right hon. Gentleman realise that his very brief answer gave the game away about Common Market legislation, because when we are in the Community not only will prices escalate even further but Britain's Minister of Agriculture will have no control over them?

Mr. Prior

The last part of that supplementary question is not true and the hon. Gentleman knows it. As for the first part, calling upon me to put controls on the price of meat, I must point out that the Labour Government found this impracticable to carry out and I agreed with them.

Mr. Hugh Fraser

Apart from any party political points, may I ask my right hon. Friend to look at the meat situation in this country which is very serious? The facts are that in Europe meat is selling on the hoof for £22 a hundredweight and is down slightly in this country, but there certainly is a meat shortage. Surely what my right hon. Friend should do is to make arrangements overseas to obtain long-term contracts. How does he explain the shortfall in red meat this year? Will he say whether rumours in the trade to the effect that there will be less red meat available this year than last year are true or false?

Mr. Prior

My right hon. Friend should do his homework. He would then know that there is nothing to stop meat coming to this country at the moment. We are entitled to take all available steps, but there is a world shortage of red meat. I can give my right hon. Friend the absolute assurance that home-produced red meat supplies this year will be more than they were last year, and that next year they will be at least 50,000 tons more than they are this year.

11. Mr. Dykes

asked the Minister of Agriculture, Fisheries and Food if he will make a statement on the latest trend of beef prices at the wholesale and retail stage.

18. Mr. Marten

asked the Minister of Agriculture, Fisheries and Food if he will make a statement on the price of beef sold to the British housewife.

33. Mr. R. C. Mitchell

asked the Minister of Agriculture, Fisheries and Food what fall in beef prices has taken place since the removal of the 5 per cent. tariff.

Mr. Prior

Auction prices for cattle reached a peak at the beginning of the week beginning 5th June and last week were in the region of £1 per cwt. below the previous week. The price of United Kingdom beef on Smithfield has also eased and yesterday was as much as 4½p per 1b. lower than a fortnight before for hinds, and up to nearly a 1p per lb. down for forequarters. Information on retail prices suggests that these also have steadied.

Mr. Dykes

I am grateful to my right hon. Friend for that reply which confirms that beef prices have long since "peaked out" and are stabilising at a better level for the housewife. Will he confirm three important points: first, yet again, that the rate of rise of food prices as a whole over six-monthly periods under Labour was far worse than it has been under the present Government; secondly, that in recent weeks a large number of key food products have either remained at the same level or fallen in price; and thirdly, and even more important, that the storm in the Socialist teacup about beef prices three weeks ago was an irresponsible attempt to alarm housewives unnecessarily?

Mr. Prior

We have been through a rough time on beef prices—

Mr. Peart

You have.

Mr. Prior

—and housewives more than I. I feel very sorry for them at having to bear the burden in paying these higher prices. However, I do not think that the Opposition can take credit for the situation in that prices were rising far faster during their last six months in office than they are now. What is more, if the Opposition had done what they ought to have done for British agriculture we should not have been in the mess that we were three weeks ago.

Mr. Marten

Was not the fall in beef prices due in large part to the resistance of the housewife in switching from beef to poultry and lamb, which in turn forced up prices of both those commodities? If this should happen in the Common Market, what is the outlook for the British housewife in buying beef if we are in the Common Market? It is very poor, is it not?

Mr. Prior

My hon. Friend must not allow his prejudice to get the better of him and in doing so he must not try to push up the price of poultry. It has hardly moved at all in the last three weeks, and it is about 5p a pound cheaper than it was two years ago.

The increase in the price of beef brought a number of extra cattle forward on to the market at a time when there was a consumer resistance, and there has been a considerable fall in prices over the last three weeks. My one worry now is that consumer resistance may build up permanently, and I think that would be a danger for us all.

Mr. Mitchell

I wonder whether the right hon. Gentleman would answer my Question. What fall in the rate of beef prices has there been since the 5 per cent. tariff was taken off?

Mr. Prior

So far the fall, if any, is very marginal. This is because it takes two or three weeks from the time the cattle are sold at auction for the beef to coming through to the retail trade. Secondly, it is a reflection of the fact that butchers did not put up prices by the full amount of the increased prices they were paying for their beef.

Mr. Edward Taylor

Does my right hon. Friend agree that the price of beef is still too high? I wonder whether he would give an indication that he would consider further measures if there were an increase? Does he think that the decrease will continue?

Mr. Prior

I have already given an assurance to the House on various occasions that I am watching the position on a daily basis. If I felt that there was a need for further action I should not hesitate to take it, but I see no reason for it at this stage. On the question of beef prices being too high, prices will only reflect the supply and demand situation, and I expect the supply situation to improve considerably during the next few months.

Mr. Cledwyn Hughes

Does the right hon. Gentleman recall that the Labour Government held beef prices reasonably steady during a period of shortage when there was the worst foot-and-mouth epidemic in modern times? Is he further aware that he cannot claim credit for the increase in the breeding herd and at the same time refer to a three-year beef cycle?

Mr. Prior

Having looked carefully at the figures I should like to remind the right hon. Gentleman that in May, 1965, there was a seasonal increase in beef prices of over £1 a hundredweight. The fact that a foot-and-mouth outbreak occurs during the winter does not necessarily affect beef supplies coming forward in the early part of the summer.

12. Mr. Moyle

asked the Minister of Agriculture, Fisheries and Food what further steps he intends to take in order to reduce beef prices.

19. Mr. Biggs-Davison

asked the Minister of Agriculture, Fisheries and Food whether, having regard to the shortage of beef and the example of the United States of America in derogating from the policy of sanctions to meet special national needs, he will investigate the possibilities of importing beef from Rhodesia.

26. Mr. Greville Janner

asked the Minister of Agriculture, Fisheries and Food whether he will make a further statement about supplies and prices of beef.

30. Mr. Charles Morrison

asked the Minister of Agriculture, Fisheries and Food if he will make a further statement on beef supplies.

Mr. Prior

The problems which arose earlier this month were the result of a combination of factors including a world-wide shortage of beef and seasonally low supplies of home-produced beef. The suspension of our tariffs on beef and veal has afforded our overseas suppliers duty-free access here as well as in the EEC. Developments over the last 10 days indicate that the market is settling down and prices have steadied. Adequate supplies of home-fed and imported beef are available; and there are good supplies of other meats too. In present circumstances I propose no further action. I am however keeping the situation under close and continuing review on a daily basis.

Mr. Moyle

In view of that reply may we have a clear statement from the right hon. Gentleman that he regards the inflationary rates of pay to agricultural workers as in no way a cause of the recent high prices of beef?

Mr. Prior

I have never for a moment said that the rates of pay for agricultural workers are a cause of the high prices for beef.

Mr. Biggs-Davison

Is my right hon. Friend aware that in more than one sanctioneering black African State I have been regaled with deliciously tender, relatively cheap Rhodesian beef, and could not we have a cut off that joint?

Mr. Prior

That is not a question for me.

Mr. Morrison

As it is more than likely that the world-wide demand for beef will continue to increase, does my right hon. Friend think that increased home production resulting from the encouragement which he has given to the industry will be able to counteract the falling amount of beef which may be available for us to import from the rest of the world?

Mr. Prior

I think we shall be able to get from our own farms increased beef supplies of between 50,000 tons and 60,000 tons a year over the next few years. This is greatly to the credit of the whole of the agriculture industry. If on top of that we can go in for an export trade. what is so wrong with exports?

Mr. Peart

In his previous reply the right hon. Gentleman exonerated farm workers from increasing beef prices. Which section of workers is responsible? Whom does he blame?

Mr. Prior

The right hon. Gentleman knows that it is inflationary wage settlements throughout industry as a whole which have contributed more than anything else to increases in price. As regards the price of beef I have already said—and if the right hon. Gentleman had listened to my original reply he would have heard this—that it is a shortage of world supplies that has forced up prices.