§ There is one other item of expenditure upon which I must say a word and that is the food subsidies. As the Committee know, the Ministry of Food Estimate is simply for the net cash which the Ministry require for their administration and their trading operations, and its amount will vary from year to year with any change in stocks, up or down, over the year and with the amount fixed for the food subsidies.
§
Last year the maximum for the food subsidies was fixed at £465 million and I stated that
whatever happens to prices, we must not allow the subsidies to rise above that level"— [OFFICIAL REPORT, 6th April, 1949: Vol. 463, c. 2086.]
This year, I propose to continue that same ceiling, as modified by the economies introduced in the autumn. As the Committee will remember, these were the elimination of the Exchequer subsidy on animal feeding stuffs, the increases in the prices of dried and frozen eggs and raisins, the removal of the fish subsidy and certain administrative savings, which decreased the subsidies without having any adverse effect on prices to the consumer.
§ Taking into account all these items which had previously been included in the £465 million, we arrive at a ceiling for 1950–51 of £410 million, and on that figure the Ministry of Food estimate has been based. The £465 million has not been reduced at all except by the deductions I have just stated, which were all included in last autumn's measures of economy. In the light of the prospects of prices and quantities over the year some small price increases were necessary to 61 keep within that ceiling and these have already been announced by the Minister of Food.
§ We hope that no further increases in prices in the basic foodstuffs will be necessary, anyway for some time to come, but we shall have to watch the situation and to see that the subsidies do not exceed £410 million. If, as we hope they may, the prices at which we buy our supplies should be less than we have assumed, I should propose to pass the benefit on to the consumer so far as necessary to cancel out any rise in the cost-of-living index whether from the increased prices recently announced, or from any other source. Thus, the figure of £410 million can be regarded as a floor as well as a ceiling, in this sense. that subsidies will not be reduced below the floor in such a way as to raise prices.
§ As I pointed out last year, many of our social services are expanding automatically so that the cost increases every year, as for instance with national insurance and education. We have to bear this fact in mind when we look forward to the prospects for the future, and we must also bear in mind what I have already said about the likely falling off in the yield of certain important taxes. It will, I hope, be perfectly clear both to this Committee and to the country that the very greatest care and restraint must be exercised as to any new charges which it is suggested might be imposed upon the Exchequer. We have in the last four years taken on by way of social services and benefits all that we can possibly afford until such time as there is a large increase in our national production, and even then I have no doubt that the individual will want to retain a very considerable portion of that increase for his own spending.