§ 7. Sir G. Nabarroasked the Minister of Agriculture, Fisheries and Food what estimate he has made of increased retail food prices to the consumer, consequent upon the increase of £340 million in taxation in the full year in the Budget and whether he will seek to re-imburse farmers for these losses.
§ Mr. Cledwyn HughesWhile no precise estimate can be made of the total effect of the Budget changes on food prices, it is estimated that the extension of purchase tax to additional food items will increase retail food prices, as measured by the food index, by between 0.3 per cent. and 0.4 per cent.
As regards the second part of the Question, the effects of taxation apply generally.
§ Sir G. NabarroLike all the other Answers given today, that is half-baked. There is nothing in my Question that alludes to purchase tax. Will the right hon. Gentleman now apply himself to all the taxation increases in the Budget—selective employment tax, purchase tax, corporation tax, petrol duty and the rest—and say what effect they are likely to have? Is it not a fact that retail food prices will rise by about 1s. 4d. in the £ during this year, due solely to these budgetary increases in taxation?
§ Mr. HughesAs always, the hon. Gentleman's calculations are different from everyone else's.
§ Sir G. NabarroThey are right.
§ Mr. HughesThe hon. Member should know that the Budget will have little direct effect on farmers—
§ Sir G. NabarroReally.
§ Mr. Hughes—and that the increased costs arising from the Budget will be taken into account at the Annual Price Review.
§ Mr. Alfred MorrisCan my right hon. Friend say what the effect would be of imposing levies on imported food, as proposed by the right hon. Member for Grantham (Mr. Godber), and of introducing an added-value tax applying to food?
§ Mr. HughesThe hon. Member for Worcestershire, South (Sir G. Nabarro), in asking this Question and in putting his supplementary to the previous Question, conveniently overlooked the fact that his party's policies would result in much higher food prices.
§ 32. Mr. Biffenasked the Minister of Agriculture, Fisheries and Food how many proposed increases in food prices have been notified to him under the early warning voluntary arrangements since the recent Budget and what is the policy of Her Majesty's Government towards these price increases in the light of the balance of payments strategy propounded in that Budget.
§ Mr. HoyTen notifications have been received from food manufacturing firms, many of them covering more than one item. It continues to be our policy that such proposals should be examined against the criteria set out in the current White Paper on Productivity, Prices and Incomes Policy (Cmnd. 3590).
§ Mr. BiffenAs the hon. Gentleman's colleagues are having such difficulty in persuading the International Monetary Fund that the Budget is really having the effect upon domestic consumption that the Chancellor alleged that it would have, would it not be much more satisfactory if the Minister totally abandoned this attempt at veiled price control?
§ Mr. HoyI would not care to comment on the first part of the supplementary question. If the hon. Gentleman really wants an answer to that, he should address it to the Minister concerned. I 1380 have answered the Question which is on the Order Paper.