Prices (Hansard, 19 December 1972)

§ 1. Mr. Ashton
asked the Minister of Agriculture, Fisheries and Food what is the latest percentage increase in the price of food since June 1970.

§ 13. Mr. Skinner
asked the Minister of Agriculture, Fisheries and Food what has been the increase in food prices since June 1970.

§ 15. Mr. Carter
asked the Minister of Agriculture, Fisheries and Food what is the increase in the cost of food since 18th June 1970.

§ The Minister of Agriculture, Fisheries and Food (Mr. Joseph Godber)
Between 16th June 1970 and 14th November 1972, the latest date for which information is available, the food index rose by 23.1 per cent.

§ Mr. Ashton
Is the Minister aware that that is 3 per cent. more than in the answer he gave in the middle of November? Is he aware that his predecessor used to blame the pay increases of farm workers and shop assistants and that he himself blamed world prices? What is his latest excuse for the increase now that we have had a freeze?

§ Mr. Godber
It is not a question of excuses. In any case it is not a 3 per cent. rise. The hon. Gentleman has his 1093 figures wrong. I said last month that it was 172.8. It is now 174.3. That is a rise of 1.1 per cent. over this period.

§ Sir G. Nabarro
Is it not a fact that in recent weeks there has been plenty of evidence that retail prices of food are beginning to stabilise themselves?

§ Mr. Godber
I am grateful to my hon. Friend. That is certainly true regarding manufactured food. However, world shortage has caused a substantial rise in the price of fresh foods.

§ Mr. Peart
Is the Minister aware that the Prime Minister gave a specific promise about this matter at the last General Election? The simple fact is that the Government's prices policy has failed.

§ Mr. Godber
I do not accept that. As the right hon. Gentleman well knows, the main cause of the present rise in prices of fresh food is the world shortage of meat—particularly beef—and the very large purchases of cereals which Russia and other countries have been making.

§ 4. Mr. Hardy
asked the Minister of Agriculture, Fisheries and Food what increase in food prices has occurred during the last two months; which six foodstuffs showed the greatest increase in this period; and what was the extent of the increase in each of the six cases.

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

§ Mr. Hardy
While those figures will show that the situation in recent weeks has been bad enough, does the right hon. Gentleman agree that there is much worse to come?

§ Mr. Godber
I do not accept that the information is "bad enough", to use the hon. Gentleman's phrase. The latest information is that manufactured food prices are much steadier; they are relatively stationary at present. But the figures I have given relate to the position up to 14th November, a period which covers only one week of the standstill. Therefore, the figures I shall be circulating show the facts before the Government standstill order came into effect.

§ Mr. Sydney Chapman
How do the costs of the foods we normally associate 1094 with the festive season compare with those a year ago, on average?

§ Mr. Godber
The indication is that there is an ample supply of turkeys, and prices on average should not require to be higher than they were this time last year.

9. Mr. R. C. Mitchell
asked the Minister of Agriculture, Fisheries and Food how many complaints of food price increases since 6th November have been received; how many of these complaints have been investigated; and in how many cases action has been taken to remove the increases.

§ 3. Mr. Leslie Huckfield
asked the Minister of Agriculture, Fisheries and Food how many telephone calls he has now received about food price increases.

§ 29. Mr. Dormand
asked the Minister of Agriculture, Fisheries and Food what is the current number of staff involved in dealing with food price increases.

§ 30. Mr. John Grant
asked the Minister of Agriculture, Fisheries and Food if he is satisfied with the working of the machinery for monitoring food price increases; and if he will make a statement.

§ 32. Mr. Strang
asked the Minister of Agriculture, Fisheries and Food how many price increases have been the subject of complaints to his Department; and how many of such increases have 1095 been rescinded as a result of the intervention of his officials.

§ The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mrs. Peggy Fenner)
The Food Prices Units have received 5,703 telephony calls about price increases. All these calls are being followed up and 3,151 cases are currently being investigated. Investigation is complete in 2,311 cases, and all the 128 higher prices which were inconsistent with the standstill have been reduced. My right hon. Friend is satisfied with the working of the monitoring arrangements. Thirty-six officers in the Ministry are directly concerned with the monitoring of, and applications for, food price increases.

Mr. Mitchell
Is the hon. Lady aware that since 6th November there have been substantial price increases in almost every shop in every town throughout the country? Does not that mean that the so-called price freeze is a complete and utter farce?

§ Mrs. Fenner
No, Sir, this is not so. As my right hon. Friend has already said, the prices of manufactured foods, which represent over half the commodities bought by the housewife each week, are subject to the standstill. We recognise that there have been increases in prices of fresh food, because of external factors beyond our control and seasonal fluctuations.

§ Mr. Strang
Will the Minister confirm that the answer she has given makes absolutely clear, if it was not clear before, that this so-called elaborate prices mechanism is totally irrelevant in the context of current food prices and that less than 5 per cent. of the 2,000 prices have been reduced significantly? Is it not the case that farm gate cereal and beef prices are shooting up and that none of the Government's measures can stop them or prevent the increases being passed on to the consumer?

§ Mrs. Fenner
As my right hon. Friend has already said, increases in beef and cereal prices are caused by world shortages. We made clear that there were difficulties about containing prices of fresh food, which was exactly the position which faced the Labour Government when they introduced their prices and incomes policy.

§ Mr. Body
Can my hon. Friend confirm that the Department has asked a large number of retailers and co-operative societies to sign a voluntary declaration and that they are keeping to the terms of that declaration? Will she emphasise, if that is the case, that it is a voluntary declaration and, moreover, will she give an undertaking that the Government will not seek statutory powers to enforce it?

§ Mrs. Fenner
I can confirm that large retail organisations are showing evidence of their adherence to the standstill by presentation of their cash margins.

§ Mr. Concannon
What is the Minister doing about the practice of changing the packaging of commodities in order to introduce a price increase? An example can be found in pats of butter that used to be 2p each and now, after a change in the packaging, are selling for 3p. The Minister has only to look in at the Members' tea room to confirm what I am saying.

§ Mrs. Fenner
The Government have said that any reduction in quantity could be regarded as the same as a price increase.

Mr. Edward Taylor
Will my hon. Friend accept that one of the principal complaints has been about the removal of reductions on recommended prices for certain prepackaged food such as Nescafe and so on? Will she remind the general public that if a price reduction was given before the standstill, it should continue?

§ Mrs. Fenner
Yes, I confirm what my hon. Friend has said.

§ Mr. Buchan
Is it not the case that only one in 20 of the cases reported to the Department led to any control being exercised over the price, leaving the other 19 uncontrolled and not dealt with? Is it not quite impossible for the shopper to do the job which the Minister should be doing? He still allows manufacturers to use misleading labels such as "6p off" and "2p off". It cannot be left to the shopper to take action over this matter. Action must be taken by the Government.

§ Mrs. Fenner
The issue of "6p off" offers has been clarified. We have said that promotional offers which return to their recognised price must be balanced 1097 by promotional offers throughout the shop so that the customer receives the same value as before.

§ 18. Mr. Duffy
asked the Minister of Agriculture, Fisheries and Food if he is satisfied with the operation to date of the standstill on prices since 6th November; and if he will make a statement.

§ 16. Mr. Dykes
asked the Minister of Agriculture, Fisheries and Food what is his estimate for the movement in retail food prices between 6th November and 6th December 1972.

§ 25. Mr. Grylls
asked the Minister of Agriculture, Fisheries and Food if he will make a statement on the effect of the prices freeze on the Index of Retail Food Prices.

§ 27. Mr. Sydney Chapman
asked the Minister of Agriculture, Fisheries and Food by how much food prices have risen or fallen since 6th November; and in which main categories movements have taken place.

§ Mr. Godber
The food index figures for mid-December are not yet available but it is clear that the standstill has been fully effective with manufactured food and drink products. With the exception of certain lines of sausages, fresh meat pies and one line of biscuits for which I have approved limited price increases, the changes which have occurred in this sector have been generally due to the introduction or ending of special promotional offers, the broad value of which the trade has undertaken to maintain.
In the case of certain fresh and imported foodstuffs there have been unavoidable price increases for some items as a result of seasonal or external factors. Meat has risen in price but most fresh fruit—notably dessert apples—are cheaper.

§ Mr. Duffy
Is the right hon. Gentleman aware that at the outset of the standstill the Prime Minister pledged what he called the deployment of the sanction of public opinion? Will he tell the House, first, how many breaches there have been of the prices standstill; secondly, how many companies have had their prices reduced as a result of discussion with him: and thirdly, when will the Prices Unit reveal 1098 the names of the products and the companies involved? Otherwise, how does he hope to get consumer co-operation?

§ Mr. Godber
We have publicised the fact that certain companies—

§ Mr. Duffy
Not names.

§ Mr. Godber
—had put up prices. We have published the names.

§ Mr. Duffy
You have not.

§ Mr. Godber
Those companies have reduced them in conformity with the instructions we have given. The number is strictly limited because there have been very few breaches of the standstill arrangement in manufactured food prices. The manufactured food industry has a good record here and the operation of the standstill has been most effective in this sector.

§ Mr. Grylls
Is it not a fact that the housewife has benefited considerably from the Government's firm action taken on 6th November to restrain prices?

§ Mr. Godber
The impact of the standstill on prices in the manufactured food area has been extremely successful. It is on the fresh food side that the facts are somewhat different, but that is due to matters outside our control.

§ Mr. Carter
Is the Minister aware that during the standstill we have seen the arrival of the prophecy made by the Prime Minister during the 1970 election campaign, namely, the 3s. loaf? Will the Minister now be equally honest with the House and the country and say that, with our entry into the Common Market, the Government's policy is likely to see the arrival in the last half of their period of office of the 4s. loaf—at the very least?

§ Mr. Godber
No. That is a gross exaggeration. The world supply position of bread grains at the moment is certainly one which gives cause for concern, but that is not a matter which comes under the control of the British Government but is the result of an extremely low harvest in Russia which led to buying on a large scale by that country. Prices in relation to grain have risen, but the price of bread has been maintained since the start of the standstill.

§ Mr. Chapman
If it is also a fact that the prices standstill policy for foods 1099 which are very much under the control of the Government has been successful, will my right hon. Friend confirm that the relatively small increase there has been on the average in prices since 6th November has been due entirely to world factors outside the control of any United Kingdom Government?

§ Mr. Godber
Yes, that is the point I have been making, that it is the massive world shortage both of meat and of grain which has led to these rises in prices, but on the manufactured foods side the record has been very good and prices have been maintained at the level of 6th November.

§ Mr. Buchan
Are we to take it that the permanent excuse of the Government is Reds under the bread?

§ Mr. Godber
No, it is not a question of excuses or of Reds under the bread or anything of that kind. It is simply, as I said on the last occasion when we discussed these matters, that had the party opposite when in power stimulated more food production, housewives would be in a much better position today.

§ 19. Mr. James Hamilton
asked the Minister of Agriculture, Fisheries and Food how much he now expects foodstuffs to change in price by April, 1973.

§ Mr. Godber
I do not think it helpful or appropriate to speculate about future movements in food prices.

§ Mr. Hamilton
Is the right hon. Gentleman aware that that is the sort of answer we expect from him and that housewives do not believe anything his Government tell them? Is he aware that the Grocer price index for fresh foods since the standstill shows an increase of 5.4 per cent. and a freeze-busting increase in the price of processed foods? Is he aware that the TUC is so deeply concerned about it that it is to ask for a meeting with the Prime Minister because it is firmly convinced that it is a wages freeze and a wages freeze only?

§ Mr. Godber
That is totally inaccurate. Prices have increased, as I have indicated, by 1.1 per cent. in regard to the change over the last month for which figures are available. That is the exact figure which has been given and it is correct. In manufactured goods there has been practically no increase since 6th November— 1100 only in the limited range to which I have referred. In fresh foods there have been increases for the reasons I have stated.

Mr. Edward Taylor
Will my right hon. Friend recall that April will be the time when VAT will be introduced, and as this will mean that the amount of tax on food will be substantially reduced because of the abolition of SET and exemption of food, will he ensure that the housewife will get the advantage of this cut in taxation?

§ Mr. Godber
Yes, I confirm that what my hon. Friend has said is right. The total tax on food in this country will be substantially less with the introduction of VAT. The changeover from purchase tax to a 10 per cent. VAT will result in a saving of about £30 million a year on food items which are at present subject to tax. In addition, the removal of SET on food distribution, currently yielding about £25 million a year, will still further ease the burden of tax on food, and we expect that the food industry will pass on these benefits to the consumer.

§ Mr. Peart
In reply to the Question the right hon. Gentleman said we should not speculate about prices. Is he not aware that his colleague, his boss, the Prime Minister, actually did speculate on prices and said that he would reduce them and control them? Why have they failed?

§ Mr. Godber
My right hon. Friend has explained many times the point he was making in the period to which the right hon. Gentleman is referring, but he has never, nor has any other member of the Government, attempted to forecast the precise level of food prices in future. There is no intention by the Government to do so.

Item	Percentage Increase in Average Price	Increase in Average Price^*
Medium eggs, per doz.	14.6	2.3
Dessert apples	13.7	1.7
Standard eggs, per doz.	10.4	1.9
Cod fillets	9.9	3.2
Cooking apples	9.4	0.8
Home-killed pork: leg (foot off)	7.7	2.6
^*In p per lb. unless otherwise stated.