HC Deb 27 January 1955 vol 536 cc418-9
37. Miss Burton

asked the Chancellor of the Exchequer whether he is aware that profits of tea firms have risen from less than £1,750,000 in 1952–53 to more than £7 million last year and that shareholders are receiving bonuses of up to 300 per cent.; that this is having a disturbing effect upon his plea for moderation in the matter of dividends; and if he will make a statement upon the action intended by Her Majesty's Government.

The Economic Secretary to the Treasury (Mr. R. Maudling)

I cannot confirm the figures contained in the first part of the hon. Member's Question but I understand that they relate to the profits of companies producing tea in India, Ceylon, and elsewhere. Such profits were certainly much higher in 1954 than in 1953 but 1953 was a year of abnormally low profits and dividends. Moreover, future profits will have to bear the recent increases in the export taxes imposed by the Governments of India and Ceylon.

As to the high prices which have led to these profits, tea is sold freely at auction in Calcutta, Colombo, and London, and the prices realised reflect the current strength of international demand in relation to supply. Producers are, therefore, not able to control prices. In my view no action is called for by Her Majesty's Government. I should add that there does not appear to have been any significant increase in profits from the blending, packing, and distribution of tea in this country.

Miss Burton

Is the Minister aware that we realise that that answer was rather heavy going even for him? Might I ask him whether the Government would agree to an inquiry into the profits of the tea companies so that, really and truly, we can know the position in this matter?

Mr. Maudling

I see no reason whatever for an inquiry. I have given the hon. Lady the information for which she asked. If there is any more information which she requires I shall be delighted to give it to her, if I can.

Mr. Gaitskell

Is the Economic Secretary really in no way concerned about the astonishing rise in the price of tea in the last three years? Is he aware that the price is nearly double what it was when the present Government came into office? Is not this a clear case where price control would be effective and would keep the price down to the consumer?

Mr. Maudling

I am of course very concerned at the rise in the price of tea. I am also concerned that the true reasons for that rise in price should be better known to the Opposition.

Mr. Albu

On a point of order. May I have your guidance, Mr. Speaker? We have had two answers from Members of the Government on the same subject. First the President of the Board of Trade said that the rise in price was not due to the tea export duty. We have now had an answer from the Economic Secretary to the Treasury saying that it is. May we have your guidance as to which of these answers we are to take as correct?

Mr. Speaker

The hon. Member must use his own judgment in that matter.