Food Prices (Hansard, 19 October 1971)

§ 1. Mr. Carter
asked the Minister of Agriculture, Fisheries and Food how much the cost of food has increased since 18th June, 1970.

§ 3. Mr. Skinner
asked the Minister of Agriculture, Fisheries and Food by what amount food prices have increased since 18th June, 1970.

§ 6. Mr. Greville Janner
asked the Minister of Agriculture, Fisheries and Food by what percentage food prices have risen between 1st June, 1970, and 30th September, 1971, and by what percentage during the year ended 30th September, 1971.

§ 14. Mrs. Renée Short
asked the Minister of Agriculture, Fisheries and Food how much the cost of food has risen since 18th June, 1970; and if he will make a statement.

§ 23. Mr. Willey
asked the Minister of Agriculture, Fisheries and Food by how much the Food Index has risen from June, 1970, to the latest available date.

§ The Minister of Agriculture, Fisheries and Food (Mr. James Prior)
Between 16th June, 1970, and 17th August, 1971, the latest date for which information is available, the Food Index rose by 11.6 per cent.

§ Mr. Carter
Is the Minister aware that that is a scandalous message for the nation? Is he further aware that his belated recognition of the fact that people have been profiteering and fiddling over decimalisation is in itself a contribution to this rise in prices? What action does the right hon. Gentleman intend to take to stop these spivs carrying out these practices?

§ Mr. Prior
The hon. Gentleman uses extravagant language about the decimal currency with which I do not think anybody will agree. I am sure that once housewives become fully accustomed to the new currency they will he as keen shoppers as ever they were. Meanwhile extra vigilance is required.

§ Mr. Skinner
Is the Minister aware that these figures show only too clearly that this Government were elected as a result of the biggest confidence trick in history? Since entry into the European Economic Community will aggravate the position, why does not the Minister, as the Prime Minister's side-kick and messenger boy, tell his right hon. Friend to set British housewives free and to give them a chance of a free vote on this issue?

§ Mr. Prior
I think the right answer is to get prices under control if we are to have a prosperous and competitive economy. Our policy, which has low taxes and high economic growth as its aim, will do that, in sharp contrast to the six wasted years of Labour Government.

§ Mr. Janner
Is the Minister aware that the main burden of the scandalous increases falls on people least able to bear them, particularly the old? Is he also aware that these increases will well nigh use up the small increase in pensions which has been made to old people? What does he propose to do to keep up the buying power of what little money our old-age pensioners get?

§ Mr. Prior
I share the hon. and learned Gentleman's sentiments. Of course higher food prices, as other increased prices, bear most heavily on the old. The Government have this matter very much in mind, but the House will know that the retirement pension has recently been raised to bring the pension in real terms to the highest level it has ever reached

§ Mrs. Short
Why does not the Minister come clean with the House and the country and accept full responsibility for this appalling increase in the cost of living, rather than follow the line of all the rest of the lame ducks on the Government Front Bench who blame it all on the Labour Government? Furthermore, is he aware that this is only the first instalment of what will happen to the cost of living, and to food prices in particular, if the steamroller comes out and we are pressed into the Common Market on 28th October?

§ Mr. Prior
When the hon. Lady talks about the steamroller, I do not know which way she is looking.

§ Sir G. Nabarro
While dissociating myself from the extravagant nature of the four preceding supplementary questions, may I ask my right hon. Friend, rubbing his nose in realities in doing so, whether he realises that the great British public believes that he is deliberately trying to raise food prices in this country to Continental levels in order to lessen the blow of going into the Common Market? Will my right hon. Friend disabuse the public in these matters and assure us that he is trying to bring down food prices, not push them up any higher?

§ Mr. Prior
I hope that my hon. Friend, who is a known anti-Common Marketeer, will have been explaining to his constituents during the Summer Recess that prices in the world outside the Common Market, where he wishes to remain, have been rising at a considerably faster rate than prices inside.

§ Mr. Cledwyn Hughes
Is the Minister aware that one of the more disquieting aspects of this matter is that he, as Minister of Food, during the weeks and months following decimalisation said that the introduction of decimal currency was having no effect on food prices? Will he admit now that it was a cardinal error to abolish the early warning system and the system of scrutinising food prices day by day, as was done under the Labour Government? Furthermore, will he recommend to the Prime Minister and his Cabinet colleagues that retirement pensions should be increased, since they 522 have been eroded by the increased prices for which he is responsible?

§ Mr. Prior
No, Sir—and that is not true. The pension is now at a higher rate in real buying power than it has ever been in the history of the country. As for the right hon. Gentleman's charge on decimalisation, there is no inconsistency between what I said earlier today and what I said in September. However, it is clear that many people are still confused about the real value of the new money, and it would be unreasonable to suppose that some of the less scrupulous traders have not sought to take advantage of the situation

§ 9. Mr. William Hamilton
asked the Minister of Agriculture, Fisheries and Food what has been the percentage change in food prices in the last 14 months as measured by official indices; what were the figures for each of the previous six comparable periods; and what steps he is now taking in relation to the trend revealed.

§ Mr. Prior
As the answer contains a number of figures, I will, with permission, circulate the information in the OFFICIAL REPORT.

§ Mr. Hamilton
Will the right hon. Gentleman tell the House when the housewives may expect that stroke to occur which was promised just prior to the General Election? Will he tell us whether he expects food prices to fall, to stay as they are, or to rise in the next 12 months? In view of the advice which he gave to the housewives at an earlier date, will he tell us the state of the market in peaches and pigeons at the moment.

§ Mr. Prior
As I have already explained this afternoon, it is difficult to give a forecast of food prices in the next 12 months. Certainly we can see some signs of world food prices stabilising and not going on increasing, at any rate at their present rate. What happens on the home side depends to a large extent on how we tackle inflation and get it under control.
Another factor for the hon. Gentleman to consider is that the increase in agricultural output at home, brought about by the Government's expansion programme, will be of great help in future years in keeping prices under control.

§ 2. Mr. Ashley
asked the Minister of Agriculture, Fisheries and Food if he is satisfied with the recent trend of food prices; and if he will make a statement.

§ Mr. Prior
No, but I am confident that the measures taken by the Government, together with the Confederation of British Industries' initiative to restrain price increases, will help to combat the rate of inflation.

§ Mr. Ashley
After that vague answer and the equally vague comments which preceded it, can the Minister tell us how his future policy on food prices will contribute to the Prime Minister's promised period of unparalleled prosperity and growth—or did he not take the Prime Minister seriously?

§ Mr. Prior
The answer is that the combination of the C.B.I. initiative, which the Government welcomed, the restraints imposed by the Government on nationalised industry price increases, which are very valuable, and the reductions in purchase tax and selective employment tax will all help to keep prices under control.

§ Mrs. Renée Short
When?

§ Mr. Prior
This Government reduce taxation. The other lot put it up.

§ Mr. Ridsdale
Will my right hon. Friend say how much of the percentage increase in food prices is due to higher costs as a result of wage inflation in terms of transport in particular and costs in general?

§ Mr. Prior
In assessing increases in food prices, between 30 and 50 per cent. is due to higher world prices, and the balance is due to inflation.

§ Mr. Barnes
Does the Minister agree that the worrying feature of the latest figures in the food index is that there is no evidence of any moderation in the rising trend of food prices? At this time of the year, we must look at the nonseasonal subsection and not at the seasonal one, which remains fairly stable Is the Minister aware that the non-seasonal group shows an increase of 2 per cent. between June and August, 1971, which is the same disastrous rate of 12 per cent. a year which occurred during the first year of Tory Government?

§ Mr. Prior
As I have said, world food prices account for between 30 and 50 per cent. of the increases in food prices. However, there are signs that the storm is blowing out a bit, and that we may expect a little better later in the year. With regard to inflation, which is the other side of the cost increases, the quicker and the sooner that wage settlements come down to realistic levels, the quicker we shall get on top of it.

§ 16. Mr. Dalyell
asked the Minister of Agriculture, Fisheries and Food what estimate he has now made of the effect on food prices of the reduction in selective employment tax; and if he will make a statement.

§ Mr. Prior
I have nothing to add to the reply I gave to the hon. Member for Manchester, Gorton (Mr. Marks) and others on 20th July.—[Vol. 821, c. 1240–4]

§ Mr. Dalyell
Which all adds up to the fact that the "dear old" S.E.T. was a very effective way of raising public funds.

§ Mr. Prior
The reduction of it by half is a good way of reducing taxation.

§ Mr. Barnes
Has the right hon. Gentleman any evidence to make him disagree with the estimate which the Grocer, the trade magazine, produced earlier in the year, that, for a typical supermarket, the general reduction in price across the board made possible because of the reduction in S.E.T. was less than ½p in the £1.

§ Mr. Prior
The Grocer is a popular document for Oppositions to quote at Governments, and both sides of the House have experienced that. The effect on food prices is difficult to estimate, but there have been a good many reductions, particularly by leading food retailers, as a result of the reduction of S.E.T.

§ 19 and 32. Mrs. Doris Fisher
asked the Minister of Agriculture, Fisheries and Food (1) what has been the increase in the average weekly food bill paid by shoppers over the past nine months; and if he will make a statement;
(2) what percentage increase has been spent by housewives on food and groceries comparing the first nine months of 1970 with 1971.

§ Mr. Prior
The most recent information available from the National Food Survey relates to the second quarter of 1971 when average weekly expenditure on food was £2.32 per head. This was 16p. or 7.4 per cent. higher than in the last quarter of 1970. The increase between the first two quarters of 1970 and the first two quarters of 1971 was 18p or 8.7 per cent.

§ Mrs. Fisher
Will the Minister tell housewives categorically that he has been unable to keep down food prices? However much they shop around, they cannot save money. What they are concerned about now is the effect that V.A.T. will have on food bills. Will the right hon. Gentleman give a categorical assurance that the Government do not intend to put V.A.T. on food?

§ Mr. Prior
Yes, Sir. The Chancellor of the Exchequer, in his Budget speech, made it plain that V.A.T. would not be charged on food, or that it would have an exempt rate, except for those items of food which already bear purchase tax, where he reserved his position. The answer to the first part of the hon. Lady's question is that the figures which I have given bear out the fact that housewives have a knack of being able, as it were, to beat the cost-of-food index.

§ Sir G. Nabarro
Will my right hon. Friend he explicit about this matter? We all accept the undertaking that V.A.T. will not be applied to food itself, but it will certainly be applied to the distributive processes for food, which will have 526 the same effect generally as the levying of S.E.T.

§ Mr. Prior
I think that my hon. Friend would be well advised to put down a Question on that to my right hon. Friend the Chancellor of the Exchequer.

§ Mr. Greville Janner
Is it not correct to say that the trend is that the housewife is now buying less food for more money than she did in the past? Will the Minister give us some assurance that food prices will be held clown in future?

§ Mr. Prior
The hon. Gentleman is not right, because the National Food Survey shows that one-fifth of the higher expenditure on food is attributable to increased consumption, particularly of meat and citrus fruits.

§ 20. Sir G. NABARRO
To ask the Minister of Agriculture, Fisheries and Food what increase in retail food prices has taken place between June, 1970 and September, 1971, or the latest convenient date, expressed per centum increase; and what further steps he is now taking to stabilise food prices.

§ Mr. Speaker
Sir Gerald Nabarro.

§ Sir G. Nabarro
Mr. Speaker, you called my Question earlier, with Question No. 1.

§ Mr. Speaker
No. Mrs. Butler, to ask Question No. 21.

§ Mrs. Joyce Butler
rose—

§ Sir G. Nabarro
On a point of order, Mr. Speaker. There is so much noise in this part of the House that I thought that you had called my Question No. 20 with Question No. 1. That was not so, but as you at that time gave me the opportunity to ask a supplementary question, I will not ask Question No. 20.