HC Deb 09 February 1971 vol 811 cc253-9
3. Mr. Eadie

asked the Minister of Agriculture, Fisheries and Food what is his estimate of the effect of the increase in oil prices over the last six months on retail food prices.

Mr. Prior

I assume that the hon. Member is referring to hydrocarbon oil products. Any such effect would be very small, but all increased costs militate against stable prices.

Mr. Eadie

Since we are told that there are about six months' oil supplies in the country, can the right hon. Gentleman assure us that when prices are increased, as they will be, he will not allow profiteering on the existing supplies, which would mitigate against the consumer and increase the cost of living?

Mr. Prior

It is not for me to give that sort of assurance. The increase in prices which will result from any increase in oil prices will be very small.

Mr. Evelyn King

In his capacity as Minister of Food, will my right hon. Friend consider whether differential taxation in respect of transport, rates, selective employment tax or anything else that he can think of can bring relief to food retailers, who need help?

Mr. Prior

I agree with the last part of my hon. Friend's question. The first part of it is not a matter for which I am responsible, but I will draw it to the attention of my right hon. Friends.

5. Sir G. Nabarro

asked the Minister of Agriculture, Fisheries and Food whether he will now make a further statement on the level of food prices and how much they have risen compared with the general level of incomes since June, 1970.

Mr. Prior

Between June and November, the latest date for which comparable figures are available, the Food Index increased by 0.6 per cent. and the Index of Average Earnings by 3.4 per cent.

Sir G. Nabarro

Will my right hon. Friend bear in mind that there is still a good deal of concern about retail food prices? Will he step along his corridor, see the Chancellor of the Exchequer and ask him to abolish selective employment tax in his next Budget, since it makes such a significant contribution to all retail food prices?

Mr. Prior

As I have said already, these are matters for my right hon. Friends. But we are pledged to abolish S.E.T. within the lifetime of this Parliament, and, unlike right hon. and hon. Gentlemen opposite, we keep our election pledges.

Mr. Wellbeloved

Is the right hon. Gentleman aware that the Bexley Housewives' Protection League is gravely concerned at the way in which food prices are soaring? If he receives representations from that body, will he undertake to give them proper consideration?

Mr. Prior

That was a supplementary question which the hon. Gentleman wished to ask on the previous Question. But, of course, I will always give due attention to the Housewives' League or any other body which contacts me.

Mr. Scott-Hopkins

Is my right hon. Friend aware that the percentage of its income spent by the average family on food has decreased over the past 12 months?

Mr. Prior

Yes, Sir. That is perfectly true. The process has been going on now for a number of years.

Mr. Barnes

Is not the price of manufactured food products likely to go up by at least 10 per cent. in 1971? In view of that, would not the Government be in a better position to secure the co-operation of sections of the community like the Post Office workers if they acted directly to restrain increases of this order, as they said they would originally?

Mr. Prior

I do not want to be tied to any figure that the hon. Gentleman offers as being the likely increase in the prices of manufactured food products. However, it is true that by far the largest element of costs in manufactured food products is the price of labour. If we can get inflation under control, we shall be able to reduce these prices.

10. Mr. Barnes

asked the Minister of Agriculture, Fisheries and Food what analysis he is making of the effects of competition in stabilising food prices.

Mr. Prior

I would refer the hon. Member to the reply I gave the hon. Member for Sunderland, South (Mr. Bagier) on 8th December.—[Vol. 808, c. 59.]

Mr. Barnes

While the claim that competition will stabilise prices may be an important part of the Government's new philosophy, to which the Minister frequently refers, is it not the case that it has little relationship to the realities of the food marketing situation at present? The trade itself is forecasting a likely increase of 10 per cent. on the retail price of manufactured food products during 1971. Will the Minister tell us what has to happen to prices before he is prepared to act directly to restrain increases of this order?

Mr. Prior

We hear all this talk about acting directly on food prices. This is what the previous Government tried to do by the early warning system, but prices rose during the last five years more than twice as fast as in our last five years.

Mr. Bowden

I accept my right hon. Friend's contention that competition will affect prices. However, will he ask his right hon. Friend the Secretary of State for Social Services to look at the case of the old-age pensioners, who have been hit particularly hard by food price increases in the last 18 months?

Mr. Prior

I agree with my hon. Friend. The old-age pensioners and those on fixed incomes suffer most as a result of inflation. As we deal with inflation, we shall help to get the position under control.

11. Mr. Barnes

asked the Minister of Agriculture, Fisheries and Food if he will make a statement on the operation of the information service on essential key food prices, which he has introduced in place of the previous early warning system.

Mr. Prior

The purpose of the new arrangements is to keep me informed of prospective movements in the prices of certain major products with which I am concerned. I am circulating a full list of the products in the OFFICIAL REPORT. The industries concerned have agreed to co-operate.

Mr. Barnes

Will the Minister also circulate in the OFFICIAL REPORT, or let us know, what information is being asked for from the firms concerned? As the Minister is so pleased that he has dismantled my right hon. Friend's warning system, may I ask what is the point of getting this information? What will he do with it when he has got it?

Mr. Prior

I consider that it is important that I should know what is happening to the prices of important items. That is the main purpose of obtaining the information. The early warning system did not stop prices rising. We shall stop prices rising in this country only if we do not pay ourselves more for doing no more work.

Sir G. Nabarro

Will my right hon. Friend tell the House whether under his revised system he will be able to detect the influence on food prices caused by such intangible but very important price advances as the proposed 6d. a gallon increase in the price of petrol?

Mr. Prior

Yes, Sir. We have a very full department looking at this type of problem the whole time, and we are able accurately to assess that type of increase, and a good many others too.

Miss Lestor

Is the right hon. Gentleman aware that in many parts of the country it is becoming impossible for retirement pensioners and others living alone to buy less than six eggs, large packets of pre-packed cheese and large packets of pre-packed bacon? Has the Minister any instructions for retailers and others about how they can help people in this predicament?

Mr. Prior

The hon. Lady has raised a very important matter. I should like to look into it to see whether there is anything which I can do to help. Certainly I feel that retail shops should do everything in their power to be of assistance in this kind of matter.

Mr. Cledwyn Hughes

Is the right hon. Gentleman aware that the early warning system was a deterrent over a long period? If the Minister finds that increases are not justified, what steps will he then take?

Mr. Prior

The early warning system was a singularly ineffective deterrent, because it resulted in prices going up 25.9 per cent. in the last five years compared with 11.4 per cent. in the previous five years. I am not prepared to come to the House and introduce what I consider to be merely public relations measures which have no bearing on the problem.

Following is the list of products:

12. Mr. Judd

asked the Minister of Agriculture, Fisheries and Food what information he has received from food manufacturers and distributors about price policy after decimalisation; and whether he will make a statement.

Mr. Prior

Pricing policy is a matter for the firms concerned, but I see no reason why decimalisation should affect their price policies.

Mr. Judd

and betrayal amongst a wide cross-section of the British public, particularly those on small and limited incomes, at the Government's doctrinaire refusal to intervene on price increases? Will the right hon. Gentleman assure the House that the Government will deal remorselessly with anyone who tries an inflationary and anti-social process by profiteering following decimalisation?

Mr. Prior

There are two parts to that question. On the part dealing with decimalisation, I am quite certain that vigilance and publicity of cases where perhaps retail shops are putting up their prices are extremely important and are the best safeguards. I have already covered the other part of the hon. Gentleman's question.

Mr. Peter Mills

Does my hon. Friend agree that decimalisation is not really the problem at the moment regarding increased prices? It is the Transport Act and all the other Measures which the previous Government brought in. They are the guilty people and they have a real nerve to come to this House and say what they do.

Mr. Speaker

Order. That sounded more like a comment than a question.

Mr. Prior

It was an excellent comment, Mr. Speaker, and one with which I agree.

Mr. David Steel

Will the right hon. Gentleman tell the House whether he is taking any special precautions or making any examination of the trend in prices in the period immediately following decimalisation? Is the Minister aware that in New Zealand three or four weeks after decimalisation there was an upsurge in prices? Should not the right hon. Gentleman be doing something about it of commending the efforts of the Young Liberals in this sphere?

Mr. Prior

I thought that the Liberal Party found it difficult to commend the efforts of the Young Liberals; so I should not be expected to do so.

We are monitoring prices in the next fortnight, as we always do; and the fortnight immediately after decimalisation comes in they will also be monitored. My advice to housewives is to complain to the shops, and, if not satisfied, to shop elsewhere.

Mr. James Hamilton

Will the right hon. Gentleman tell us what action he will take before, not only after, decimalisation? Is he aware that particularly in some supermarkets Marvel Milk, for instance, costs as much as 10d. more for the same size of tin and that when such matters are referred to his Department nothing is done? Will the right hon. Gentleman tell us what he is going to do about it?

Mr. Prior

It ill becomes hon. Gentlemen opposite to make this row now about decimalisation. After all, they dragooned their members through the Lobby for a Bill which they did not want, and now they are having to pay for it.

14. Mr. Strang

asked the Minister of Agriculture, Fisheries and Food if he will publish a full explanation of the assumptions and calculations supporting his estimate of the likely increase in food prices as a result of changing over to the levy system.

Mr. Prior

I would refer the hon. Member to the reply I gave to the hon. Member for West Ham, North (Mr. Arthur Lewis) on 7th December.—[Vol. 808, c. 39–40.]

Mr. Strang

Is the right hon. Gentleman aware that many people feel that he is deliberately understating the effect which his new policy will have on food prices? In view of his repeated claims for his new policy, does he not accept that he has an obligation to the House to publish a full and detailed explanation of the basis for these estimates?

Mr. Prior

I will, of course, consider what the hon. Gentleman has said. Since we are only in the process of introducing an interim levy system which is designed to limit Exchequer support, rather than go further than that, it would be premature to go further than I have been able to go at the moment. My assessment at the moment is that the levies which we propose would, over the next three or four years, add perhaps up to 5–6 per cent. to the cost of food during that time, an increase in the cost of food of just over 1 per cent. per year.