HC Deb 18 January 1972 vol 829 cc188-92
1. Mr. Farr

asked the Minister of Agriculture, Fisheries and Food what was the percentage increase in retail food prices in the six months ending June, 1970, and the latest period of six months respectively.

The Minister of Agriculture, Fisheries and Food (Mr. James Prior)

The Food Index rose by 6.1 per cent. between 16th December, 1969, and 16th June, 1970. Between 18th May, 1971, and 16th November, 1971, the latest date for which information is available, the Food Index rose by 2.4 per cent. But it should be borne in mind that short-term trends are considerably affected by seasonal factors.

Mr. Farr

I congratulate my right hon. Friend on that encouraging reply. Will he confirm that it shows that the rise in food prices has taken a marked turn for the better?

Mr. Prior

I am grateful to my hon. Friend. As I pointed out in my reply, short-term trends in the Food Index are affected by seasonal factors, but it is encouraging that in the period since July, when the measures of my right hon. Friend the Chancellor of the Exchequer and the C.B.I. initiative came into operation, the non-seasonal element in the Food Index, which accounts for about 83 per cent. of the whole, has risen by only 2.1 per cent.

Mr. Charles Morrison

In spite of the qualifications my right hon. Friend has made, will he also accept my congratulations on the figures? Do not they show, first, that my right hon. Friend's policies are working and, second, that we are coming to the end of the period in which we have been suffering from the adverse effects of the previous Administration?

Mr. Prior

The congratulations, such as they are, belong partly to the agricultural industry and partly to the Government for the joint measures they have taken.

Mr. Peart

Although the Question deals with the past, forecasting is very important, and the Grocer magazine has recently forecast a food price rise of "only" 7 per cent. this year. The magazine says "only", but 7 per cent. is quite large. Do the Government intend to introduce a value-added tax which will affect food? Are they considering that? When shall we have a decision on it? Have the recent price increases in the Community affected the forecasts in the Government's White Paper?

Mr. Prior

There is a later Question on the Order Paper about the Community and food prices. We have made it abundantly plain time and time again that food will be excluded or exempted from V.A.T. I would prefer not to forecast, but world prices have steadied down, and there are reasonable chances this year of greater stability.

6. Mr. Arthur Davidson

asked the Minister of Agriculture, Fisheries and Food if he will make a statement about the latest level of food prices.

Mr. Prior

There are some encouraging signs that the rate of increase in food prices is beginning to slow down. In particular the sub-group of the Food Index which covers manufactured foods rose by only 1.2 per cent. in the four months between July and November, 1971.

Mr. Davidson

Any decrease in the recent excessively high rate of increase in food prices is, of course, welcome, but can the right hon. Gentleman give any indication of what increases in food prices he expects if we enter the European Community?

Mr. Prior

That is a completely different question from that on the Order Paper.

Sir G. Nabarro

Will my right hon. Friend bear in mind that there is still a substantial element of selective employment tax in food prices at wholesale and retail stages? Will he try to persuade our right hon. Friend the Chancellor of the Exchequer to abolish selective employment tax in his forthcoming Budget this April instead of the following April, which would have a marked effect on stabilising food prices?

Mr. Prior

We are gradually dismantling the taxes on food and other commodities which were put on by the Labour Party when it was in office. I think that in 18 months we have done pretty well.

Mr. Peart

Is the right hon. Gentleman aware that all his former speeches show that he is a high-price man? He has always said so. That is on the record. What part has imported food played in the right hon. Gentleman's calculations? Can he give us any assessment of price increases?

Mr. Prior

The right hon. Gentleman has time and time again misquoted what I have said. I am not a high-price man, I am an end-price man, and there is a great deal of difference between the two. Imported non-seasonal foods for direct consumption have gone up in price by 5.1 per cent. since last July. This makes out the case for the policy that the more we produce at home the better we shall do, unlike the policy of the Labour Party.

16. Mr. Skinner

asked the Minister of Agriculture, Fisheries and Food what has now been the percentage increase in food prices since 18th June, 1970.

Mr. Prior

Between 16th June, 1970 and 16th November, 1971, the latest date for which information is available, the Food Index rose by 13.1 per cent.

Mr. Skinner

Does the right hon. Gentleman realise that these figures represent a total disgrace to the Government, and to his Department in particular? Is he further aware that the 46 Derbyshire miners' wives who have been to Downing Street and Hobart House today, some of whom are in the Gallery—[Interruption]—could use, and have used, more colourful language than that? [Interruption.] I will say what I want to say.

Mr. Speaker

Order. The hon. Member is out of order in referring to the Gallery. Will he please ask a question.

Mr. Skinner

It is on the record so it does not matter.

Mr. Speaker

Order. I call upon the hon. Member to finish his question.

Mr. Skinner

How can the right hon. Gentleman expect miner's wives to accept a 7½ per cent. increase in their husbands' wages when we have had a cost-of-living increase of the order which he announced?

Mr. Prior

The hon. Gentleman always uses extravagant language, and I do not think that he gets any further in the House by doing so. As I have pointed out, the Food Index is now coming under better control than for some time. Prospects are better than they have been, and I think that if we all accept a certain degree of reasonableness in our wage demands we may reach a situation in which the cost of food does not go up so sharply.

Mr. Peter Mills

In view of the increased production by British agriculture, would the Minister like to hazard a guess what the cost of food and the cost of living would be if we had a Socialist Government, bearing in mind the lack of confidence that agriculture had in the last Government?

Mr. Prior

We have only to look at figures for the last six months of the Labour Government to see which way things were going.

Mr. Bob Brown

Would the right hon. Gentleman agree that a fair percentage of this catastrophic increase of 13.1 per cent. resulted from decimalisation? In view of that, can he give us an assurance that, come metrication, sausage will continue to be sold by the pound and not by the length?

Mr. Prior

We are some way off metrication.

18. Mr. Wolrige-Gordon

asked the Minister of Agriculture, Fisheries and Food what weighting is given to butter in the calculation of the Index of Retail Food Prices.

Mr. Prior

The 1971 weighting for butter was 2.8 per cent.

Mr. Wolrige-Gordon

Does not my right hon. Friend's reply show the important effect on our prices of world prices over which we have no control?

Mr. Prior

Yes; this is one of the problems. Manufactured milk products as a whole account for over 5 per cent. of the Food Index and have accounted for as much as one-fifth of the increase in the index since June. 1970. The world shortage of milk products is due to factors outside our control and it underlines the importance of a healthy and confident home dairy industry.

Mr. Strang

When the common agricultural policy becomes fully operative here, does the right hon. Gentleman expect butter to have a higher or lower weighting than caviar?

Mr. Prior

Lower.